Atlantic States Const. Co. v. Robert E. Lee & Co., Inc. of SC, 12441.

• Decision Date: 05 February 1969
• Docket Number: No. 12441.,12441.
• Citation: 406 F.2d 827
• Parties: ATLANTIC STATES CONSTRUCTION COMPANY, Appellee, v. ROBERT E. LEE & CO., INC. OF SOUTH CAROLINA, and Robert M. Lee, Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

406 F.2d 827 (1969)

ATLANTIC STATES CONSTRUCTION COMPANY, Appellee, v. ROBERT E. LEE & CO., INC. OF SOUTH CAROLINA, and Robert M. Lee, Appellants.

No. 12441.

United States Court of Appeals Fourth Circuit.

Argued October 29, 1968.

Decided February 5, 1969.

Joseph O. Rogers, Jr., Manning, S. C., (Rogers & Riggs, Manning, S. C., on brief) for appellants.

Irvine F. Belser, Jr., Columbia, S. C., (Charles E. Baker, and Belser, Belser & Baker, Columbia, S. C., on brief) for appellee.

Before HAYNSWORTH, Chief Judge, CRAVEN, Circuit Judge, and HUTCHESON, District Judge.

CRAVEN, Circuit Judge:

We affirm the entry below of summary judgment under Rule 56 of the Federal Rules of Civil Procedure against Robert E. Lee & Company, Inc. and Robert M. Lee.

Atlantic States brought this diversity action in the district court on an admittedly valid promissory note dated April 4, 1963, for $58,040.37 bearing six percent interest from December 31, 1964, made by the Lee Company and endorsed individually by Robert M. Lee. Although the company and Lee were unquestionably bound on the note, there was an ancillary agreement, typical of construction industry complexity, whereby any profits earned by an associated company, Carolina Dredging, on the "Flintkote Job" were to be applied against the note. The amount of these profits is the subject of the litigation. The only question on appeal is whether there was an issue of fact as to the amount of profits to be applied to reduce the note so as to prevent Rule 56 summary judgment.¹

Defendants maintain that such a factual issue is raised (1) by an alleged statement made by Charles Girardeau, III, vice president of Atlantic States, after going through the accounts at the Flintkote job site with the owner of Carolina Dredging during the latter stages of the construction project to the effect that it looked as if the job had made about $25,000, and (2) by a letter from W. C. Lea, chairman of the board of Atlantic States, on December 7, 1964, to defendant Robert M. Lee. That letter read in part:

"1. Tommy John T. Parker, owner of Carolina Dredging has evidently `earned\' approximately $25,000.00 against the note for $58,040.37 dated April 4, 1963, which you endorsed. * * *

"2. You paid us $5,000.00 and with the credits referred to above, assuming they are true, and adding in the interest of $1,379.90 to date, this leaves a present deficiency of $29,420.27.

"3. * * *. We\'ll send you an accurate accounting in the next few weeks and will expect your check for the balance due at that time."

When the "accurate accounting" was sent to defendants on February 17, 1965, it showed a profit or credit to Carolina Dredging of $7,919.11, $17,080.89 less than the estimated earnings. Defendants would have us hold that because the only records and accounts of the job were kept by Atlantic States and because its officers made statements estimating a $25,000 profit that there is a triable issue of fact. With the district court we think not.

Rule 56(c), Federal Rules of Civil Procedure, provides:

"* * * The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. * * *"

Rule 56(e), Federal Rules of Civil Procedure, provides:

"* * * When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him."

Atlantic States offered in evidence in support of its Rule 56 motion the records and accounts of the "Flintkote Job" which show that the project earned a profit of $7,919.11. The burden was then upon defendants to set forth specific facts showing that there was a genuine issue of fact for trial. The statement of plaintiff's vice president and the letter written by plaintiff's board chairman are, of course, inconsistent with the final audit of the job, but it cannot be said that they created an issue of fact as to the accuracy of the audit. This is not a case...