North American Rescue Prods., Inc. v. Richardson

• Decision Date: 27 January 2012
• Docket Number: No. 4909.,4909.
• Citation: 396 S.C. 124,720 S.E.2d 53
• Court: South Carolina Court of Appeals
• Parties: NORTH AMERICAN RESCUE PRODUCTS, INC., Appellant/Respondent, v. P.J. RICHARDSON, Respondent/Appellant.

396 S.C. 124

720 S.E.2d 53

NORTH AMERICAN RESCUE PRODUCTS, INC., Appellant/Respondent,

v.P.J. RICHARDSON, Respondent/Appellant.

No. 4909.

Court of Appeals of South Carolina.

Heard Sept. 12, 2011.Decided Nov. 9, 2011.Rehearing Denied Jan. 27, 2012.

Bernie Wellington Ellis, of Greenville and Robert L. Widener, of Columbia, for Appellant–Respondent.

C. Mitchell Brown, William C. Wood, Jr., and A. Mattison Bogan, all of Columbia and Rivers S. Stilwell, of Greenville, for Respondent–Appellant.

WILLIAMS, J.

In this cross-appeal, North American Rescue Products, Inc. (NARP) argues the circuit court erred in denying its motion for a directed verdict because no evidence existed that P.J. Richardson (Richardson) had an ownership interest in NARP or had a contractual right to purchase an ownership interest in NARP. Richardson cross-appeals, contending the circuit court erred in upholding the jury verdict ordering specific performance of the contract with a fair market valuation of the stock. We affirm.

FACTS/PROCEDURAL HISTORY

On January 1, 2000, Bob Castellani (Castellani), on behalf of NARP, and Richardson, on behalf of Reeves Manufacturing, Inc. (Reeves), entered into an agreement (the 2000 Agreement), in which the parties agreed to pay each other commissions equal to twenty-five percent of the taxable income of their companies for cross-selling each other's respective products. Moreover, the parties agreed to issue twenty-five percent of their companies' respective capital stock to each other. After several years of each company operating under this agreement, it is undisputed the parties orally modified the 2000 Agreement by reducing the percentages of stock from twenty-five percent to seven and one-half percent at a meeting in Charleston, South Carolina (the Charleston Agreement). At trial, the parties testified the percentages were reduced, in part, because Richardson began negotiating with a third party for the sale of Reeves. Although the parties agree that the Charleston Agreement modified the percentages of stock from twenty-five percent to seven and one-half percent, the parties dispute the method of payment. Richardson contends the parties agreed that Richardson could acquire seven and one-half percent ownership interest in NARP in exchange for the monetary value of seven and one-half percent of the proceeds from the pending sale of Reeves. NARP argues there was never an agreement where it would accept a cash payment from Richardson in exchange for seven and one-half percent of NARP's stock, but insisted instead that the Charleston Agreement was a “like for like” exchange in each other's companies. In short, there is conflicting testimony as to the method of payment, and the Charleston Agreement is silent on this term.

Several months after the Charleston Agreement, Richardson's attorney drafted an “Agreement of Termination, Settlement, and Release” (the Termination Agreement). Richardson signed the Termination Agreement on behalf of Reeves on November 4, 2004, and Castellani signed the same agreement on behalf of NARP several days later. The Termination Agreement provided, in pertinent part:

1. Termination of the 2000 Outline. The parties agree that the 2000 Outline and any and all agreements, understandings, undertakings, or arrangements that in any way arose or may have arisen out of or relate in any manner to the 2000 Outline, are terminated.

2. Settlement. All claims and potential claims of any nature whatsoever that have been, could have been, or in the future could be asserted by the parties arising out of or relating in any manner to the 2000 Outline are hereby settled, compromised and released for and in consideration of the payment by [Reeves/Richardson] of the sum of $100.00 in lawful money of the United States of America to NARP and [Castellani].

3. [Reeves and Richardson] Release. NARP and [Castellani] hereby remise, release and forever discharge each [other], along with their respective directors, officers, stockholders, controlling persons, employees, agents, predecessors, successors and assigns, and agents, of and from all, and all manner of, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, executions, claims and demands whatsoever, whether in law or equity, which NARP and/or [Castellani] had, now have or which any personal representative, heir, predecessor, successor or assign of NARP and/or [Castellani] can, shall or may have against [Reeves or Richardson] or their respective directors, officers, stockholders, controlling persons, employees, agents, predecessors, successors and assigns, arising out of or relating to the 2000 Outline from and beginning of time to the date of this Settlement Agreement. It is specifically agreed and understood by the parties that the foregoing release is not intended to, and shall not, release any of the parties from that certain, separate Option Agreement dated [15 Dec], 2004 pursuant to which NARP and [Castellani] have granted [Richardson] an option to purchase 7.5% of the capital stock of NARP.

4. NARP and [Castellani] Release. [Reeves] and [Richardson] hereby remise, release and forever discharge each [other], along with their respective directors, officers, stockholders, controlling persons, employees, agents, predecessors, successors and assigns, and agents, of and from all, and all manner of, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, executions, claims and demands whatsoever, whether in law or equity, which [Reeves] and/or [Richardson] had, now have or which any personal representative, heir, predecessor, successor or assign of [Reeves] and/or [Richardson] can, shall or may have against [NARP or Castellani] or their respective directors, officers, stockholders, controlling persons, employees, agents, predecessors, successors and assigns, arising out of or relating to the 2000 Outline from and beginning of time to the date of this Settlement Agreement. It is specifically agreed and understood by the parties that the foregoing release is not intended to, and shall not, release any of the parties from that certain, separate Option Agreement dated [15 Dec], 2004 pursuant to which NARP and [Castellani] have granted [Richardson] an option to purchase 7.5% of the capital stock of NARP.

5. Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter contained herein, and merges all prior discussions and agreements, both oral and written, between the parties.

(emphasis added). To complicate matters further, the parties concede that no written option agreement dated December 15, 2004 existed at the time of the Termination Agreement. Moreover, the parties never entered into an option agreement dated December 15, 2004.

In January 2005, Richardson sold one-hundred percent of Reeves to a third party. The parties continued to discuss the terms of a potential agreement, including the exchange of several proposals, but NARP and Richardson never reached an agreement. On April 17, 2007, Richardson sent NARP a demand letter, advising NARP that Richardson “now desires to exercise his option to purchase” seven and one-half percent of NARP's stock “under the terms of the October 4, 2004 Option Agreement.” ¹ NARP responded to the demand letter by instituting this suit seeking a declaratory judgment on the matter. Richardson filed an answer and counterclaim, alleging breach of contract and demanded specific performance. Richardson also asserted relief under the doctrine of promissory estoppel. During the course of the litigation, Richardson filed multiple amended answers and counterclaims. In addition, the circuit court granted Richardson's motion to amend the pleadings to conform to the evidence presented at trial under Rule 15(b), SCRCP.

As a result of the conflicting testimony throughout the trial, the circuit court refused NARP's multiple requests for a directed verdict. Without objection, the circuit court submitted the case to the jury under a special verdict form to answer the fundamental question of whether Richardson had the right to acquire seven and one-half percent of NARP's stock and, if so, at what price. The jury returned a verdict finding Richardson was entitled to receive seven and one-half percent of NARP's stock, but Richardson should pay $2,936,300 for the stock. Following the verdict, the circuit court denied NARP's post-trial motions for directed verdict, new trial absolute, judgment notwithstanding the verdict, and for a new trial under the thirteenth juror doctrine. In addition, Richardson unsuccessfully moved for the circuit court to “reform the verdict” on the basis that the “number is something that [Richardson] can't see already in evidence.” The circuit court confirmed the jury verdict in favor of Richardson and granted specific performance as found by the jury.

NARP appeals, contending the circuit court erred in denying its directed verdict motion on all contract claims and on promissory estoppel. Richardson cross-appeals, arguing the judgment amount for specific performance should be $415,988, not $2,936,300 as provided in the jury verdict.

STANDARD OF REVIEW

When considering a directed verdict motion, the circuit court should view the evidence and all reasonable inferences in the light most favorable to the non-moving party. Sabb v. S.C. State Univ., 350 S.C. 416, 427, 567 S.E.2d 231, 236 (2002) (citing Steinke v. S.C. Dep't of Labor, Licensing & Regulation, 336 S.C. 373, 386, 520 S.E.2d 142, 148 (1999)). “If more than one reasonable inference can be drawn ... the case should be submitted to the jury.” Chaney v. Burgess, 246 S.C. 261, 266, 143 S.E.2d...