Conway v. Charleston Lincoln Mercury Inc.

• Decision Date: 14 February 2005
• Docket Number: No. 3946.,3946.
• Citation: 609 S.E.2d 838,363 S.C. 301
• Parties: John C. CONWAY, Jr., Appellant, v. CHARLESTON LINCOLN MERCURY INC. and Haywood B. Hyman, Sr., Respondents.
• Court: South Carolina Court of Appeals

363 S.C. 301

609 S.E.2d 838

John C. CONWAY, Jr., Appellant, v. CHARLESTON LINCOLN MERCURY INC. and Haywood B. Hyman, Sr., Respondents.

No. 3946.

Court of Appeals of South Carolina.

Heard December 8, 2004.

Decided February 14, 2005.

Rehearing Denied May 19, 2005.

George Hunter McMaster and Nelda T. Smyrl, both of Columbia, for Appellant.

G. Dana Sinkler, of Charleston, for Respondents.

STILWELL, J.:

John Conway sued Charleston Lincoln Mercury (CLM) and Haywood Hyman, its sole shareholder and president, alleging breach of contract, unpaid wages, fraud, and constructive fraud arising from an alleged oral agreement between Hyman and Conway to pay Conway a severance allowance. After a bench trial, the trial court issued an order finding for CLM and Hyman on all claims. We affirm.

BACKGROUND

CLM initially hired Conway as an independent contractor when Hyman was negotiating to sell the company. After one negotiation fell through, Conway and another employee, Al Shuman, discussed purchasing CLM. However, on a trip to Hyman's home in Richmond, Virginia, Hyman informed Conway he did not intend to sell the company to Conway and Shuman and was in talks with another party. Conway alleges Hyman asked him to work to get the company ready for sale and to keep Shuman from leaving the company. Conway contends Hyman promised him $120,000 in severance in exchange for his efforts should he not be offered employment comparable to his then employment following a sale. Conway testified he prepared a memorandum memorializing the agreement he made with Hyman. Conway asserts he presented a copy of this memorandum to Hyman, but Hyman did not sign it. Later, Conway drafted another memorandum, entitled "Memorandum to File," setting forth his version of the events surrounding the agreement and reciting the terms of the agreement as presented to Hyman. Conway placed a copy of this memorandum in his personnel file where a CLM accounts payable clerk found it approximately a year later.

Eventually, another buyer was identified and a contract was executed for the sale of CLM's assets. After the sale closed, Conway continued his employment with the dealership for a short time as an independent contractor, but never became a full-time employee of the new owner.

Conway then filed this action, alleging CLM and Hyman failed to pay him the $120,000 severance as promised in the oral agreement. Following a non-jury trial, the court ruled in favor of CLM and Hyman on all of Conway's claims. Among other things, the trial court ruled no valid contract between the parties for severance ever existed because the written agreement was never executed as Conway anticipated. The court also denied Conway's post-trial motions.

DISCUSSION

I. Existence of an Oral Contract

Conway contends the trial court erred in not finding an oral contract existed between he and CLM. We disagree.

An action for breach of contract seeking damages is an action at law. Sterling Dev. Co. v. Collins, 309 S.C. 237, 240, 421 S.E.2d 402, 404 (1992). In an action at law tried without a jury, the trial courts factual findings will not be disturbed on appeal unless those findings are wholly unsupported by the evidence or controlled by error of law. Gordon v. Colonial Ins. Co. of California, 342 S.C. 152, 155, 536 S.E.2d 376, 378 (Ct.App.2000).

Because Conway alleges he and Hyman formed the contract in Virginia, Virginia law must be applied to determine whether a valid contract was formed. Unisun Ins. Co. v. Hertz Rental Corp., 312 S.C. 549, 551-52, 436 S.E.2d 182, 184 (Ct.App.1993) ("Unless the parties agree to a different rule, the validity and interpretation of a contract is ordinarily to be determined by the law of the state in which the contract was made."). Under Virginia law, a writing is not always necessary to form a valid contract. Harris v. Citizens Bank & Trust Co., 172 Va. 111, 200 S.E. 652, 665 (1939). However, "[i]f it be understood that its terms are to be reduced to writing as an ultimate expression of conclusions reached ... then a writing is necessary." Id. at 665.

The trial court's conclusion that no valid agreement existed is supported by the evidence. The record indicates the parties meant for the agreement to be reduced to writing as a prerequisite to the formation of a contract. Conway testified that after his conversation with Hyman regarding the payment of severance, Conway reduced the terms of that agreement to writing and gave Hyman a copy the next morning. Conway admitted Hyman told him he was not feeling well and could not read it at that time.

Conway's memo to file also contains evidence of the parties' intentions. The memo's subject line states: "Employment Agreements & Severance Pay." Conway testified he created the document after his trip to Richmond and it "memorialized the agreement Mr. Hyman and I came to [during his trip]." The memo states:

Mr. Conway presented Mr. Hyman a new written Employment Agreement for himself as well as a Memorandum outlining the Estate and Business Planning that had been discussed previously with Mr. Douglas. Mr. Hyman started to look the documents over and then said that he wasn't feeling well and that he couldn't go through them right then because he wasn't feeling well and was tired. He said he would look them over later and get back to Mr. Conway, since he (Mr. Conway) was preparing to leave to return to Charleston.

(Emphasis added.) The memorandum then recites the "text of the written text of the Employment Agreement." The terms of this Employment Agreement included Conway's right to receive a $120,000 severance at the closing of the sale of CLM if CLM were unable to offer him continued employment.

Additionally, Conway's wife, Carol Conway, testified she was present when the alleged oral agreement was formed. She confirmed Conway produced a written memo the next day that included the points he and Hyman discussed. She stated Conway gave a copy of the memo along with other documents to Hyman in her presence and said Mr. Hyman remarked "he didn't feel well. That he didn't want to read over anything like that because he was feeling bad and I assume that he really was and that he would sign it, just to leave the papers and he would sign them and send them to John. And that was it."

The trial court could infer from this evidence that the parties presumed their oral negotiations were to be reduced to writing before a contract was formed. Additionally, according to the memo Conway placed in the file, the terms of the agreement were in fact reduced to writing in the form of an employment agreement. Therefore, Conway's testimony, his wife's testimony, and the file memo contemplating a written agreement, sufficiently support the trial court's finding that the parties intended for the agreement to be reduced to writing. Because the trial court found the prerequisite of a written agreement was not satisfied, it properly determined a valid agreement did not exist.¹

II. Hyman's Deposition

As part of his argument that an oral agreement existed, Conway contends the trial court erred in allowing the defense to admit Hyman's deposition in lieu of testimony. The trial court allowed the deposition after the defense submitted a physician's letter documenting Hyman's Alzheimer's disease and significant deterioration of his memory. Conway complains the deposition was the sole evidence in support of the position of CLM and Hyman that no valid agreement existed and should not have been admitted. We disagree.

The decision to admit or exclude evidence is within the trial court's sound discretion and will not be disturbed on appeal absent an abuse of discretion. Gamble...