Branco v. Hull Storey Retail Grp.

Decision Date13 January 2021
Docket NumberAppellate Case No. 2017-000998,Unpublished Opinion No. 2021-UP-009
CourtSouth Carolina Court of Appeals
PartiesPaul Branco and Branco Investments, Inc., d/b/a Great American Cookie Co., Respondents, v. Hull Storey Retail Group, LLC and Sumter Mall, LLC, Appellants.

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

Appeal From Sumter County

R. Ferrell Cothran, Jr., Circuit Court Judge

REVERSED

Miles Edward Coleman, of Nelson Mullins Riley & Scarborough, LLP, of Greenville and Matthew W. Matson, of Augusta, GA, for Appellant Hull Storey Retail Group, LLC, and Appellant Sumter Mall, LLC; and John M. Markwalter, of Augusta, GA, for Appellant Hull Storey Retail Group, LLC.

John S. Simmons, of Simmons Law Firm, LLC, of Columbia, and Patrick McFadden Killen, of McGowan

Hood & Felder, LLC, of Sumter, both for Respondents.

PER CURIAM: Appellants, Hull Storey Retail Group, LLC and Sumter Mall, LLC,1 appeal from an order of the trial court finding in favor of Respondents, Paul Branco and Branco Investments, Inc. d/b/a Great American Cookie Co., on Respondents' claim of tortious interference with contract. Appellants contend the trial court erred in (1) ruling there was tortious interference with contract when Respondents failed to demonstrate the existence of a valid and enforceable contract; (2) ruling Hull Storey's actions relating to the contract were unjustified; (3) awarding damages in an amount unsupported by any competent evidence; and (4) awarding damages arising from a purported contract that was entered by a then-dissolved corporation that lacked the capacity to transact, or by awarding damages to Paul Branco individually, when he was not a party to the purported contract. Because we find there was not a valid, enforceable contract with which Appellants could have interfered, we reverse.

This case involves a leased space in Sumter Mall by Paul and Anne Branco for the operation of a Great American Cookie Company (GACC) franchise and the subsequent attempt to sell the assets of the business of Branco Investments, Inc. (Branco Investments), to another GACC franchisee, Brooktenn, LLC (Brooktenn), near the expiration of the lease.2 After the deal with Brooktenn fell through, Respondents brought this action against Appellants asserting causes of action for breach of contract with fraudulent intent, tortious interference with contract, fraud, and constructive fraud. Appellants answered asserting, among other things, that Respondents' claims were barred, in whole or in part, by the Statute of Frauds; that they were barred "because certain conditions precedent were not met in order for its claims to ripen"; and that "no lease was entered between Brooktenn[] and Hull Storey []." Appellants also counterclaimed for breach of contract asserting that Respondents failed to vacate the premises at the end of the lease on April 30, 2013; did not pay rent after the lease ended; and failed to leave the property in "broom clean" condition as required by the lease. Following a February 28, 2017 bench trial, the trial court filed an order on March 23, 2017, in favor of Respondents on their tortious interference with contract claim, awarding them $63,625 after certainset-offs.3 In anticipation of that order, Appellants filed a motion to amend the order under Rule 52(b), SCRCP, on March 21, 2017. Subsequently, Appellants filed a notice of appeal with this court on April 21, 2017. This court thereafter granted Appellants' motion to remand, holding the appeal in abeyance pending the trial court's resolution of Appellants' motion to amend. Following a February 9, 2018 hearing on Appellants' motion to amend, the trial court filed an amended order of judgment on March 2, 2018, reaffirming its award of $63,625 to Respondents on their tortious interference with contract claim.

The record reveals as follows. On March 1, 2013, Respondents and Brooktenn entered into an agreement titled "Proposal for Purchase" (the Agreement), which was divided into two parts, setting forth terms and a purchase price of $70,000 for the GACC store equipment and machinery in Sumter Mall and $30,000 for the same in another GACC store in Magnolia Mall in Florence. The Agreement provided in regard to the Sumter Mall purchase, "This proposal is contingent upon [Brooktenn] getting a satisfactory lease from Hull Storey [] within 90 days of signed proposal." Following various communications regarding Brooktenn possibly becoming tenants of the GACC store in Sumter, Appellants took the position that Respondents were attempting to assign their soon-to-expire lease with them to Brooktenn, which triggered a provision in the lease requiring Respondents to pay all consideration they received in connection with the assignment to the landlord. Respondents maintained that the Agreement they entered with Brooktenn did not involve a lease assignment and, therefore, no consideration was owed under the provision. Appellants continued to attempt to collect a fee—eventually settling on a price of $20,000—from either Respondents or Brooktenn. Negotiations stalled and Brooktenn never entered into a lease agreement nor accepted a lease assignment for lease of the Sumter Mall space, which was a necessary condition to the Agreement between Respondents and Brooktenn. Notably, Respondents presented evidence that, around the time Respondents' lease expired, a Hull Storey representative suggested to Brooktenn that Respondents would not be able to remove the equipment covered by the asset purchase agreement from the leased space and that Brooktenn could take over the store with the equipment still in it, pay Appellants $20,000, not pay Respondents the $70,000 pursuant to the Agreement, and come out of the deal $50,000 better.

After considering all the testimony, the trial court determined Respondents had a valid contract with Brooktenn for the sale of assets; Hull Storey had knowledge ofthis contract; Hull Storey intentionally interfered with the Agreement resulting in the procurement of its breach; the interference was not justified; and as a result, Respondents were damaged by the lost opportunity to sell assets. While we certainly do not condone Appellants' tactics in this matter, we reluctantly agree with their argument that, based upon the contingency in the Agreement, Respondents failed to demonstrate the existence of a valid and enforceable contract that is necessary for a tortious interference with contract claim.

Standard of Review

"A tort action for damages is an action at law." Santoro v. Schulthess, 384 S.C. 250, 259, 681 S.E.2d 897, 901 (Ct. App. 2009). "In an action at law, tried without a jury, the appellate court standard of review extends only to the correction of errors of law." Pope v. Gordon, 369 S.C. 469, 474, 633 S.E.2d 148, 151 (2006). "The trial judge's findings of fact will not be disturbed on appeal unless the findings are wholly unsupported by the evidence or controlled by an erroneous conception of the application of the law." Id.

Preservation of All Issues

As an initial matter, Respondents, citing Wallace v. Milliken & Co., 300 S.C. 553, 389 S.E.2d 448 (Ct. App. 1990), aff'd as modified, 305 S.C. 118, 406 S.E.2d 358 (1991), contend that none of the issues raised by Appellants on appeal are preserved because Appellants failed to renew what amounted to a Rule 41, SCRCP motion after they presented evidence. They argue that at the close of their evidence Appellants made a motion for a directed verdict, which is inapplicable to a matter tried without a jury, and our courts have recognized that the proper motion under such situation is an involuntary non-suit under Rule 41. After Appellants presented a witness in their case-in-chief, counsel failed to renew their motion. Thus, they argue Appellants waived the right for this court to review any and all arguments raised in this appeal.

In Wallace—a retaliatory discharge case in which the trial court found in favor of Wallace after a bench trial—this court stated as follows:

We need not entertain Milliken's contention that the trial judge erred in not granting its motion for involuntary dismissal under Rule 41 of the South Carolina Rules of Civil Procedure and made at the close of Wallace's case. After the trial judge denied its motion, Milliken offeredevidence. In doing so, Milliken waived its right to question on appeal the trial judge's denial of its motion.

300 S.C. at 559, 389 S.E.2d at 451. In so ruling, this court cited Jones v. American Fidelity & Casualty Co., 210 S.C. 470, 43 S.E.2d 355 (1947) for the proposition that "an order erroneously denying a nonsuit will not be set aside where testimony thereafter introduced makes the case sufficient to be considered by the jury." However, this court still addressed Milliken's contention that the evidence was insufficient to support a finding of retaliatory discharge. 300 S.C. at 556, 389 S.E.2d at 450. Thus, this court declined only to address the denial of the involuntary nonsuit on appeal, as such was waived by Milliken's offer of evidence.

Our Rules of Civil Procedure provide:

When findings of fact are made in actions tried by the court without a jury, the question of the sufficiency of the evidence to support the findings may thereafter be raised whether or not the party raising the question has made in the trial court an objection to such findings or has made a motion to amend them or a motion for judgment.

Rule 52(b), SCRCP.

We find no merit to Respondents' argument in this regard. Wallace stands for the proposition that a party waives the right, on appeal, to challenge a trial court's denial of a motion for involuntary dismissal under Rule 41, SCRCP, when the party thereafter introduces evidence. Even assuming Appellants' motion for directed verdict was properly considered by the trial court as a motion for dismissal or involuntary non-suit...

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