Journal of the House of Representatives
of the Second Session of the 110th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 11, 1994

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| Printed Page 1590, Feb. 10 | Printed Page 1610, Feb. 10 |
Printed Page 1600 . . . . . Thursday, February 10, 1994
and Heyward McDonald in a plaintiff's practice. I handled criminal and plaintiff work and all kinds of things. By the time, I left six years later we were again back in defense work.

When I went to Oconee County, I did defense work. I've done hundreds of cases small and so I know how to do that and try to, when it's possible and the people want to, get those kind of cases settled with a pretrial conference. But it doesn't make any difference in terms of the trial of the case whether it involved a little bit or a lot. The basic mechanism is exactly the same.
Q. I guess I was asking more in the sense of just managing a larger number of different varied situations and cases and if -- what is now and has been your practice?
A. Well, I don't think that -- I think I'd be good doing that.
Q. On your Personal Data Questionnaire, you also mention some involvement with the Estate of S. Bruce Rochester?
A. True.
Q. And it indicates that you managed the business affairs for that estate, but you -- and there were a number of legal problems, but you did not handle the legal work for that estate; is that correct?
A. I did not handle any direct legal work for the estate. I did things -- maybe I did a deed and those kind of things and it all legally related -- a lot of it was related, but the litigation -- all the litigation, I farmed out to other lawyers.
Q. I'm a little bit confused about what the relationship to that estate was. What role or --
A. For me?
Q. -- capacity -- yes, sir.
A. Oh, yes. See, I was at a seminar -- briefly, I was at a seminar up in Wisconsin and one of the members of the family -- I had in the past represented the estate of a fellow who did, Bruce Rochester, but I was no longer involved in any way. It had gone to some other lawyer.

Anyway, they came to -- brought the materials up from Madison, Wisconsin, asked that I would function as
-- to take over and be general counsel, if you will, to the estate in trying to manage it and do whatever is necessary to be done and I fashioned a trusteeship. Really, had the -- had that done in Columbia as a matter of fact and it was before Walter Cox who now is on the Civil -- on the Military Court of Appeals.

We fashioned a trusteeship whereby under the direction of the court who would approve my fee and approve what was done, I would manage this estate. This estate owned an interest in a retirement community. It

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owned an interest in a plant nursery. It owned an interest in a construction company. It had a lot of debt on a 400 residential lot. It had -- this was the period of 21 percent interest. It had six houses on the market, that had been on the market for more than a year.

It was a big manageable problem and they wanted me to -- thought I could handle it and I agreed to do it and did do it under this fashion, unique hybrid trusteeship that I fashioned under the direction of the court whereby we handled the problems. We sold -- got the houses sold and did everything that you do to try to get the estate managed and finished and going. After a period of 22 months or something, then I resigned.
Q. In your PDQ you also mention that there was lawsuit associated with that, that you're named as a defendant --
A. Right.
Q. -- regarding a tax return --
A. Yes.
Q. -- for the estate?
A. The -- I was, as I said, the head general counsel. It was a unique position that I held under the supervision of the court responsible, though, for most of the activity, hire and fire and all that.

Before that time during the middle school case or sometime, we had hired in the firm a young lawyer from the trust department of a bank who we hired to do trust and wills and corporate work and that kind of thing. I turned the estate tax return and all those matters over to him and I didn't -- you know, I mean I selected people to do various work and it stayed principally based on who had time and who had extra needs.

A number of other lawyers, though, handled litigation involved in that. Not always my firm. A lawyer in Anderson handled a case in federal court involving a violation of the federal wage and hour law. Other lawyers in the community. There was enough legal work to go around. Anyway I assigned that work to him to handle it, do the estate.

After -- it was the last day before the -- I didn't
-- I suppose if somebody had assigned me the duty, if I had the duty of doing the tax return, I would have gone and taken whatever time, effort and energy it was to file the estate tax return, but I was not. I mean I had gotten out of that.

We had hired this young fellow from the trust department of a bank to do that kind of work and I got out of that business of trying to do -- file estate tax returns. And during this period of time, didn't have the time nor the expertise to deal with it and I turned it over to him.

Anyway after I got out of the estate after 22 months and on the day the statute of limitations ran, I was notified that the young lawyer who

Printed Page 1602 . . . . . Thursday, February 10, 1994
handled the estate and I were being sued because of mistakes that were made in preparation of a tax return and I main--- I didn't -- I was named -- well, I don't know why I was named, but anyway I was named, but I didn't prepare the tax return.

I didn't have the expertise or the time to prepare the tax return. Didn't file the tax return and so that was the -- how that went -- the way that was.
Q. How did you select -- I believe it was Mr. Merritt in your firm?
A. Right.
Q. Did you select him based on the time he had available?
A. Well, time available and we hired -- we had hired him out of a trust department of a bank. That was his expertise --
Q. Expertise?
A. -- was to do trust estates and file tax returns and that's why I hired him and he had the time to do it. And Mr. Stoudemire, my law partner here with me today, he handled some things involved in that estate. Jerry Fedder, a Senator, handled some things in that estate. Tom Cofield that I've -- a lawyer in Anderson handled the wage and hour law case that I tried in federal court. You know, there were a number of attorneys. Jim Williams, I think. Larry Brandon in my firm handled some other things.

There was a lot of legal business to go around and, you know, I picked him because I had confidence in his ability and we hired him to do that kind of work.
Q. On your PDQ, you mentioned that you had some interest in some buildings and that you would, if elected to circuit court, would divest yourself --
A. I would have to divest myself of those interests.
Q. You also mentioned Professional Properties, Incorporated which writes title insurance and it looks like you and Mr. Stoudemire are the stockholders --
A. Owners.
Q. -- in that and you indicate that you would cease any activity relating to the writing of insurance?
A. Yes, I get --
Q. What do you mean by that?
A. I wouldn't have anything to do with that. I'd get out of that entirely. Divest myself of any interest in it.
Q. You'd no longer be an officer in that?
A. Well, that title -- the corporation owns other property, but we would take -- I would get -- I would have no interest in the title business. I'd get

Printed Page 1603 . . . . . Thursday, February 10, 1994
it out of that corporation and anything that I had anything to do with it. I wouldn't have any interest in that.
Q. I guess I'm interested a little bit in how you would build that Chinese wall between you, if you're an officer in that corporation --
A. I just wouldn't write any more, but -- between the corporation -- now the corporation owns the property, real estate in addition to doing this title business. We just operate the title business through the corporation. The corporation would just cease to be involved in the title business completely.
Q. All right.
A. I'd still have an interest in the real estate that it owned, but it wouldn't be involved in the title business. Somebody else would do that. It wouldn't -- that would cease to be a part of this business activity.
Q. What do you consider to be good judicial temperament?
A. Well, you know, I was thinking about it on the way down here. Like Senator McConnell said, you know, I've been a number of times where the case was tried before I got there and I've also been to a few judges -- not recently, but I've been to judges who were discourteous and I can recite to you every single incident when that happened and tell you all the facts because it stuck in my mind very vividly and, you know, I'd never be a party to those kind of experiences that I've been subjected to.

I believe the only thing I've ever asked from any judge that I've ever appeared before, and there have been many across the state, is that they give me a fair hearing and listen to what I've got to say and they exercise their best judgement, the only thing I ask. And I guarantee you, I would listen to everybody and give everybody a fair hearing and I would be available and open and I can't say I'd make the practice of law fun, but I sure wouldn't punish people. I'd make it as pleasant as I possibly could for the litigant and the people in the court.

I think we've gotten away from that and for a trial lawyer -- anybody who tries cases knows that to be a fact. We've lost a lot in the last several years in the way lawyers are treated and litigants are treated. Not necessarily from anybody's fault, but that's just kind of been the way it was written and that's very painful for the people who are out there, as I say, the people trying cases and I'd have no part of it and people would be treated courteously and fair and impartial in any court that I had anything to do with, like I've always wanted to be treated.
Q. Now you've also, on the PDQ, indicated you've served as an arbitrator on a panel of arbitrators, so you've had a chance also to demonstrate that. Did you meet your own definition of judicial temperament?

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A. I did. I think I did. As a matter of fact, I've been selected now to be an arbitrator in a case. It hadn't been decided yet, but the people picked me out and called me up. There's all kind of conflict of interest and they disregarded that and waived all that if I'd agree to hear it. It involved a construction case. I'm not perfect now. I don't mean to tell you I'm perfect. I'm not perfect.

The other thing I have is nobody who knows me will tell you that they don't know where I stand. Everybody knows where I stand. I've -- and sometimes to a fault, but, anyway, I'm just what I am.
Q. Briefly, I feel like I need to give you the same opportunity. The Bar made similar findings about that. Some people question your judicial temperament. How do you respond to that?
A. Well, I just -- I think that is not true. My experience with the Bar was they called me, when, last Monday and said they wanted to interview me on Tuesday and I went down and met with the panel for 30 minutes or something.

I don't have any idea who they called or whatever, but I have confidence in the -- if that is a legitimate charge against me, people in this Legislature know it because a lot of people in the legislature know me. On other hand, if it's not a fair charge against me, they also know it because I work with people in the Legislature, in this Legislature and prior Legislatures, on a great many issues and with a great many number of people -- problems, and I think that my general reputation be it good or bad, there is nothing I can do about that, notwithstanding what the Bar said.

You know, I didn't pay much attention to what the Bar said because I feel like the people who know me -- if that's true, I can't do anything about it and I don't think it is and people who know me know that that's not a fair charge.
Q. Have you sought directly or indirectly the pledge of a legislator's vote for you for circuit judge?
A. No, I haven't done anything. I haven't approached anybody.
Q. Are you aware of any solicitation on your behalf which you did not authorize or request?
A. No.
Q. And we don't have any -- no indication that you've had any campaign expenditures. Is that accurate?
A. That is accurate except coming down here today.
Q. Thank you. That's all.
A. And coming to Columbia the other day for the meeting with the Bar is the only other thing I've done.

Printed Page 1605 . . . . . Thursday, February 10, 1994
Q. Thank you.
THE CHAIRMAN: Mr. Ross, what's your Martindale-Hubbell rating?
A. AV.
THE CHAIRMAN: Any other questions? If not, thank you, and again, if you would just please be seated. You'll have a chance to respond to the testimony which we will now hear. Mr. Frank Kennard. Am I pronouncing that correctly.
MR. KENNARD: You are. Thank you.
THE CHAIRMAN: Thank you. Mr. Kennard, please raise your right hand.
FRANK L. KENNARD, having been duly sworn, testified as follows:
THE CHAIRMAN: Thank you very much. I'm going to turn you over to Mr. Elliott, our staff counsel.
MR. KENNARD - EXAMINATION BY MR. ELLIOTT:
Q. Good morning, Mr. Kennard.
A. Good morning.
MR. ELLIOTT: Mr. Chairman, Mr. Kennard a large part of his complaint relates to an order of the Public Service Commission and I have obtained a certified copy of that.
THE CHAIRMAN: All right.
Q. If we could, we need to establish -- since a lot of your complaint relates to that order, establish some of the facts in that order. Mr. Kennard, you're a resident of the Keowee Key subdivision?
A. I am.
Q. In Salem, South Carolina, is that where it's located?
A. Yes.
Q. If you would, if you would review for us for a minute those portions of the PSC order that relate to your complaint against Mr. Ross.
A. Well, I would say first that my complaint against Mr. Ross it solely relates to actions involved in the Public Service Commission matter and the nature of my testimony is to reflect the report on his conduct at least as I observed it as adversely effecting his qualification to be a judge.

I have particular reference to the application of the South Carolina Public Service Commission, which you have a copy I believe for approval of the transfer of the Keowee Key subdivision water and sewer facilities from Realtec. Mr. Ross was representing the Keowee Key utilities, the supposed purchaser.

Having received a notice of this hearing and so forth, quite by acci--- I had learned independently that title to the real -- the sewer property -- water and sewer property had already been transferred and filed at the court house prior to the hearing.

Printed Page 1606 . . . . . Thursday, February 10, 1994
Furthermore very accidently, I had never met Mr. Ross before in my life. I was at a function in South Carolina at which Mr. Ross came in the door and I introduced myself to him. I inquired was he the Ross of Ross, Stoudemire and he was and knowing that Ross, Stoudemire handled the legal work for Realtec who was the seller of the utility, I questioned him about the transfer that he was aware of it and I expressed my surprise that the transfer had been carried out before approval of the South Carolina Public Service Commission.

His response to me was, and I'm quoting as substantially accurately as I can remember it, one, he had handled the legal work personally and, two, it was a routine matter.

When the hearing finally took place and subsequent order of the Public Service Commission, the Commission stated in part in the hearing which you have a copy, it appears that everything associated with this transfer has been completed and all that was left for the Commission to do was quote rubber stamp the transfer and also the violation of the Commission's regulations are so egregious that the Commission must deny the transfer request.

There was an attempt to rectify the situation and application for a rehearing and a subsequent order issued by the Commission of which you have a copy states in part, quote, the attempt after the fact to rectify the violation is not sufficient. The Commission cannot tolerate the practice engaged in this by the Petitioners. While it may not have been the Petitioner's intention to avoid or to violate its rules and regulations such did happen and such should not be standard industry practice. And that's a quotation.

It is my view that Mr. Ross -- the candidate Ross by assisting his client in the egregious violation of the rules and regulations has demonstrated he's not qualified to be judge of the Circuit Court. I think you have copies of the various documents including the deed which he has initialed, the agreement, bill of sale, which he witnessed and the Public Service Commission orders. I have copies here if you need them.

I would also like to state that in response to the South Carolina Public Service Commission and in exercise of my right as a citizen, I was an intervener in the hearings before the Public Service Commission. Although I was only an intervener, Candidate Ross filed a petition in the Court of Common Pleas. That's case number 93, Common Pleas, 1980 seeking relief from the Public Service Commission order and naming me individually as a defendant, even though I was not a proper party for court review and the petition did not state a cause of action.

Printed Page 1607 . . . . . Thursday, February 10, 1994
This case was dismissed in November 30, 1993 with prejudice. I do not take it lightly being named a defendant without proper cause. In my opinion, Candidate Ross' action in this case further demonstrates he's not qualified to be a judge of the Circuit Court.
Q. Is that your --
A. That's my testimony.
Q. Well, Mr. Kennard, of your own personal knowledge, the only information you have about Mr. Ross' involvement relating to the transfer of the realty was based on your experience at that public meeting or at the public gathering where you ran into him; is that correct?
A. I believe he was the -- represented his client in the Public Service Commission in 1987. He may have been there. I was at that hearing. He didn't know me. I didn't know him.
Q. I mean with regard to --
A. I've had no other contact whatsoever with him except in his -- the meeting directly that I speak of where I personally talked to him and where he may have appeared in the actual proceedings before the Public Service Commission.
Q. And he mentioned the legal work was a routine matter. Did you have any idea -- was there any further discussion what that meant? What routine work was? What that legal work was?
A. No, I did not. I would offer parenthetically that this whole proceeding which lasted almost two years and which ultimately resolved in the citizens of Keowee Key being able to buy the utility on the same terms as was originally proposed to sell, it took two years and a lot of effort before the Public Service Commission and the -- the deed and the transfer of the deed before the fact made me feel that it was, quote, a done deal, close quotes, and it's only because the Public Service Commission denied the situation in the first place that we were able then to do our homework and find out what was really involved here.
Q. Since we don't know of our personal -- of your own personal knowledge, other than your conversation at that gathering; assuming Mr. Ross advised his client or advised Realtec -- Realtec was his client -- and he advised them about this transfer, do you have any information that would suggest whether this was an error in judgment or an intentional violation of the rules and regulations of the PSC, the Public Service Commission?
A. I'm not a lawyer. I have no -- no knowledge. I could parenthetically add that in the reference to the filing by his -- as an attorney for his client and the appeal before the Common Pleas court, I received a copy of the complaint because I was named.
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The complaint was incomplete. There was missing language from the complaint which I discovered, so I called his law office and said, "I need to understand why I'm being named a defendant in. You cannot read this complaint because there is language missing from it."

Following that, there was an amended complaint filed which was complete. At that time I said, "I don't understand why I'm being named as a defendant," but nonetheless, I was. I subsequently got a notice from the court making my attendance at the court for a roster meeting mandatory.

I called his office again and wanted to know what's going on here. I thought this case was being dismissed. Well, ultimately, it was. But I just think that -- I guess I would say it was sloppy legal work, certainly, and whether he -- how he advised his client in this whole proceeding, I don't know.
Q. Or if that was his responsibility? I mean you don't really know if that's the case or not?
A. I can only quote the language of the Public Service Commission order.
Q. Does that order reference Mr. Ross at all?
A. No, it refers to the egregious violation of the -- I don't know how -- he's acting as an attorney for his client, so his client -- the applicants were the ones who violated. That is to say, Realtec was his client and I assume Utilities, Inc., who was also a client -- not his client, but also an applicant, and -- but I believe technically it is his client who was applying to the Public Service Commission for the approval of the transfer.
Q. And in a minute we'll ask Mr. Ross about his involvement and what his relationship was to Realtec. Thank you.
MR. ELLIOTT: That's all I have.
REPRESENTATIVE ALEXANDER: Let me have --
THE CHAIRMAN: Yes. Mr. Alexander.
EXAMINATION BY REPRESENTATIVE ALEXANDER:
Q. Did Realtec furnish the residents of Keowee Key's water and waste treatment?
A. Yes. Well --
Q. Prior to the actual transfer of --
A. The water and sewer service -- water and sanitary sewer service is part of the development and it was provided by the developer who since 1976 has been Realtec, so I believe the answer to your question is yes. At no time did they ever offer to sell the utility to us, the property owners.

Printed Page 1609 . . . . . Thursday, February 10, 1994
Q. None of your people had any representation with Realtec as -- did you know who owned it really at that time?
A. Know who owns the --
Q. Realtec, who owns it?
A. Well, Realtec is a private corporation of which there is one shareholder and Lake Keowee Utilities, the corporate entity was originally a subsidiary of Realtec, but in 1986 there was a corporate reorganization and all the subsidiaries of Realtec were merged into one known as --
Q. No one in your area had any financial interest in Realtec?
A. To my knowledge, no. There is only one shareholder, that's Richard Ford.
Q. Do you know who he is?
A. Of course.
Q. And where does he live?
A. Well, he used to have a residence at Keowee Key. He's had a residence in Atlanta, but the scope of his activity and -- Mr. Ross can tell you, but I think he lives in Virginia. I'm not sure, but he sold his residence in Keowee Key within the past 12 months, but up until that time frame, he had a residence in Keowee Key. And as of the latest date that I know of he still is the sole shareholder of Realtec.

The utility actually finally was transferred by Realtec to the Keowee Key Property Owners Association, October 30th, 1993.
Q. So you have a board of directors to operate it now?
A. We are -- have commenced to operate it, yes, sir.
Q. Okay.
REPRESENTATIVE ALEXANDER: That's all.
THE CHAIRMAN: Mr. Beatty.
EXAMINATION BY REPRESENTATIVE BEATTY:
Q. Mr. Kennard, is it your contention or allegation that Mr. Ross knowingly assisted his client in violation of the rules of the Public Service Commission?
A. I don't know. You know you asked me knowingly, it seems to me that this modus operandi, or whatever you call it, routine may have been the basis of operation in the past. I don't know that.

All I know is that -- the scenario events, first, there was a purchase contract signed dated in December of 1991. This purchase contract had onerous conditions in it, which among other things provided for a bonus payment to the seller if an increase in rates of no less than one hundred percent were obtained by the seller.
Q. I understand that, Mr. Kennard.
A. Now --

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