Consignment Sales LLC v. Tucker Oil Co.
| Decision Date | 22 December 2010 |
| Docket Number | Opinion No. 4773 |
| Parties | Consignment Sales, LLC, Respondent, v. Tucker Oil Company, Appellant. |
| Court | South Carolina Court of Appeals |
Appeal From Richland County
AFFIRMED
Wesley D. Few, of Columbia, for Appellant.
George R. McElveen, III, of Columbia, for Respondent.
In this breach of contract action, Tucker Oil Company (Tucker Oil) argues the trial court erred in finding the existence and breach of a contract with Consignment Sales, LLC. Tucker Oil also maintains the trial court erred in ordering an accounting and declaring it was obligated to continue paying Consignment Sales. We affirm.
Tucker Oil owns several convenience stores and supplies gasoline to numerous gas stations throughout South Carolina. Consignment Sales owns several gas stations and also services gasoline supply contracts. Pursuant to a gasoline supply contract, a gas station operator agrees to purchase gasoline exclusively from a supplier at an agreed upon price for a fixed period of time. These contracts are also assignable from supplier to supplier.
By contract dated June 27, 2005, Consignment Sales assigned twelve gasoline supply contracts to Tucker Oil for $20,000 and 50% of the "net profits" generated by each contract. Net profits were to be calculated pursuant to a formula set forth in an exhibit to be attached to the contract. No exhibit was ever attached.
The contract also required Consignment Sales to market Tucker Oil's products and give Tucker Oil the right of first refusal to any new gasoline supply contracts procured by Consignment Sales. The contract included a termination clause that stated:
This agreement is terminable by either party upon 60 days written notice to the other, after which [Consignment Sales'] duty to market [Tucker Oil's] products and secure accounts for [Tucker Oil's] approval shall expire. All contracts subject to this agreement, however, shall remain subject to this agreement in spite of such termination for the life of said contracts.
In March 2006, Tucker Oil informed Consignment Sales it intended to terminate the parties' agreement because it "decided this is not the type of business that [it] want[ed] to deal with." Tucker Oil informed Consignment Sales it would continue paying on the accounts sold by Consignment Sales "based on the terms of [the] agreement." However, in July, Tucker Oil informed Consignment Sales it would stop paying on the existing supply contracts in December. Subsequently, Tucker Oil stopped payment, and Consignment Sales initiated an action for breach of contract, accounting, and a declaratory judgment.
After a bench trial, the trial court found a valid and enforceable contract existed between the parties, and Tucker Oil breached its obligation to continue paying Consignment Sales for the life of the supply contracts. The trial court ordered an accounting because Tucker Oil was in exclusive control of the "information necessary to determine the amounts due" Consignment Sales. The trial court also declared Tucker Oil was obligated to pay Consignment Sales 50% of the net profits on the supply contracts "previously assigned or procured" by Consignment Sales for the life of the contracts. This appeal followed.
Issues on appeal
| 1. | Did the trial court err in finding a valid and enforceable contract existed without finding an agreed upon definition of net profits? |
| 2. | Did the trial court err in finding Consignment Sales sufficiently established damages to recover for breach of contract? |
| 3. | Did the trial court err in ordering Tucker Oil to render an equitable accounting to establish Consignment Sales' damages? |
| 4. | Did the trial court err in ordering a declaratory judgment where Consignment Sales failed to establish rights that could be declared going forward? |
"When legal and equitable actions are maintained in one suit, each retains its own identity as legal or equitable for purposes of the applicable standard of review on appeal." Corley v. Ott, 326 S.C. 89, 92 n.1, 485 S.E.2d 97, 99 n.1 (1997).
"An action for breach of contract is an action at law." Electro Lab of Aiken, Inc. v. Sharp Constr. Co. of Sumter, Inc., 357 S.C. 363, 367, 593 S.E.2d 170, 172 (Ct. App. 2004). "In an action at law, on appeal of a case tried without a jury, the appellate court's standard of review extends only to the correction of errors of law." Id. "The trial judge's findings of fact will not be disturbed upon appeal unless found to be without evidence which reasonably supports the judge's findings." Id.
Tucker Oil argues the trial court erred in finding a valid and enforceable contract existed between the parties because there was no agreed upon definition of net profits. We disagree.
In general, a binding contract requires a manifestation of mutual assent to its terms. Edens v. Laurel Hill, Inc., 271 S.C. 360, 364, 247 S.E.2d 434, 436 (1978). Terms such as price, time, and place are indispensable to a binding contract and must be set out with reasonable certainty. Id. Where a contract fails to fix a price, there must be a definite method for ascertaining it. Id. Here, the parties agreed on a price term: $20,000 and 50% of the "net profits" generated by each supply contract. Although the exhibit outlining the formula used to calculate net profits was never attached to the contract, Tucker Oil calculated net profit and paid Consignment Sales for eighteen months without objection. In fact, even in terminating the contract, Tucker Oil never expressed any difficulty in determining net profits. Tucker Oil's assertion that its contract with Consignment Sales is invalid because it lacked an agreed upon price term is inconsistent with its actions. Accordingly, we find the parties set forth the price term with reasonable certainty, and the trial court properly determined the contract was valid and enforceable.
Tucker Oil argues the trial court erred in finding Consignment Sales sufficiently established damages for recovery under a breach of contract claim. We disagree.
In order to recover for breach of contract, a plaintiff must allege and prove (1) the existence of a contract, (2) breach of the contract, and (3) damages caused by the breach. Fuller v. E. Fire & Cas. Ins. Co., 240 S.C. 75, 89, 124 S.E.2d 602, 610 (1962). Tucker Oil misconstrues the trial court's order. The trial court never found Consignment Sales sufficiently established damages as Tucker Oil suggests. Rather, the trial court found a valid and enforceable contract existed, and Tucker Oil breached the contract by ceasing payment of 50% of the net profits from the existing supply contracts. The trial court never ruled Consignment Sales established damages. Instead, the trial court ordered an accounting because Tucker Oil was in "exclusive control of the information necessary to determine the amounts due" Consignment Sales. See Rogers v. Salisbury Brick Corp., 299 S.C. 141, 144-45, 382 S.E.2d 915, 917-18 (1989) (). In fact, the trial court's order specifically retained jurisdiction to render a final judgment in accordance with the accounting. Accordingly, Tucker Oil's argument that the trial court erred in finding Consignment Sales sufficiently established damages is without merit.
Tucker Oil maintains that because Consignment Sales sought a remedy for breach of contract, it was error for the trial court to order an equitable accounting. We disagree.
An action for an accounting is an action in equity. Historic Charleston Holdings, LLC v. Mallon, 381 S.C. 417, 427, 673 S.E.2d 448, 453 (2009). Accordingly, this court "may review the record and make findings in accordance with [our] own view of the preponderance of the evidence." Id.
We find Tucker Oil's argument that Consignment Sales' "sole remedy is at law under the alleged contract" because it relied upon the existence of a binding contract is without merit. An accounting implies the defendant is responsible to the plaintiff for money or property as the result of a contract or some other fiduciary relationship. 1A C.J.S. Accounting § 6 (2010). Additionally, Tucker Oil's reliance on Charleston County Sch. Dist. v. Laidlaw Transit, Inc., is misplaced. 348 S.C. 420, 559 S.E.2d 362 (Ct. App. 2001). The issue in Laidlaw was whether Laidlaw could assert equitable counterclaims for quantum meruit, contract implied in law, and promissory estoppel for additional work it performed outside the parties' contract. Id. at 424, 559 S.E.2d at 364. This court affirmed the trial court's dismissal of the equitable counterclaims, noting the parties' agreement specifically covered the expansion of work. Id. at 425, 559 S.E.2d at 364. This court concluded Laidlaw's entitlement to payment was determined by its performance under the terms of the contract and held "[b]y admitting the contract and its terms... the parties have defined their...
To continue reading
Request your trial