Hansen v. DHL Laboratories, Inc., No. 2251

CourtCourt of Appeals of South Carolina
Writing for the CourtHOWELL; SHAW, J., and HOWARD
Citation450 S.E.2d 624,316 S.C. 505
PartiesFloyd HANSEN, Appellant, v. DHL LABORATORIES, INC., John F. Ladley and R.S. Dickson & Co., d/b/a Ruddick Investment Co., and R. Stuart Dickson, Defendants, Of Whom DHL Laboratories, Inc., is Respondent. . Heard
Docket NumberNo. 2251
Decision Date04 October 1994

Page 624

450 S.E.2d 624
316 S.C. 505
Floyd HANSEN, Appellant,
v.
DHL LABORATORIES, INC., John F. Ladley and R.S. Dickson &
Co., d/b/a Ruddick Investment Co., and R. Stuart
Dickson, Defendants,
Of Whom DHL Laboratories, Inc., is Respondent.
No. 2251.
Court of Appeals of South Carolina.
Heard Oct. 4, 1994.
Decided Oct. 31, 1994.
Rehearing Denied Dec. 6, 1994.

Page 625

[316 S.C. 506] G. Randall Taylor, of Butler, Means, Evins & Browne, Spartanburg, for appellant.

William U. Gunn, of Holcombe, Bomar, Cothran & Gunn, Spartanburg, for respondent.

HOWELL, Chief Judge:

[316 S.C. 507] Floyd Hansen appeals from an order granting partial summary judgment in favor of DHL Laboratories, Inc. (DHL) on DHL's action to collect certain promissory notes signed by Hansen. We affirm.

I.

Hansen was a shareholder and President of DHL. After DHL removed Hansen as President and Chairman of the Board in 1991, Hansen brought suit against DHL, alleging, inter alia, breach of contract and tortious interference with a contractual relationship. In its answer, DHL raised counterclaims seeking judgment on four promissory notes given by Hansen to DHL. In his reply and during discovery, Hansen admitted signing the notes, but claimed that the loan proceeds were really additional compensation structured as loans to avoid tax liability. Hansen claimed that there was never any intention that he repay the notes.

DHL moved for summary judgment as to its counterclaims, supporting its motion with Hansen's deposition and his responses to DHL's Requests to Admit. DHL argued that any evidence Hansen may have to show that the loans were disguised compensation was inadmissible under the parol evidence rule. Hansen contended that his evidence was admissible as evidence of fraudulent inducement, an exception to the parol evidence rule.

By order dated October 15, 1993, the court granted partial summary judgment in favor of DHL. The court held that Hansen did not properly plead the required elements of fraud in his original reply or in his amended reply. In addition, the court characterized Hansen's claims as alleging a promise by DHL not to collect the notes in the future. Because fraud cannot be predicated on unfulfilled promises, the court held that Hansen's allegations did not amount to fraud as a

Page 626

matter of law. Hansen's evidence that the loans were disguised compensation and that he had no obligation to repay the loans was therefore inadmissible under the parol evidence rule. The court granted DHL summary judgment on three of the four notes. 1

[316 S.C. 508] II.

On appeal, Hansen argues that his pleadings and deposition, as well as his affidavit submitted to the court at the summary judgment hearing, show that DHL fraudulently induced him to sign the promissory notes, thus creating an exception to the parol evidence rule. Hansen argues that because DHL did not submit any affidavits contradicting Hansen's claims, summary judgment was inappropriate. The lower court held, however, that Hansen's allegations did not amount to fraud as a matter of law, and that the parol evidence rule barred any evidence contradicting the terms of the promissory notes. We agree.

Generally, the parol evidence rule prohibits the admission of evidence to contradict or add to the terms of a clear and unambiguous contract. Allen-Parker Co. v. Lollis, 257 S.C. 266, 185 S.E.2d 739 (1971); Ray v. South Carolina Nat. Bank, 281 S.C. 170, 314 S.E.2d 359 (Ct.App.1984); However, "if the writing was procured by words and with a fraudulent intent of the party claiming under it, then parol evidence is competent to prove the facts which constitute the fraud." Lollis, 257 S.C. at 272, 185 S.E.2d at 742. Therefore, if Hansen's pleadings raise an issue of fraudulent inducement, parol evidence would be admissible to show that he was not liable on the notes.

We agree with the trial court that Hansen's allegations do not amount to fraud as a matter of law. To be actionable, a fraudulent misrepresentation must relate to a pre-existing fact. Unfulfilled promises or statements as to future events do not amount to fraud. Moye v. Wilson Motors, Inc., 254 S.C. 471, 176 S.E.2d 147 (1970); Davis v. Upton, 250 S.C. 288, 157 S.E.2d 567 (1967). However, if at the time the promise is made, the party making the promise has no intention of keeping it, the promise then amounts to an actionable fraudulent misrepresentation of fact. Moye, 254 S.C. at 480-81, 176 S.E.2d at 152; Davis, 250 S.C. at 292, 157 S.E.2d at 568.

In his first reply to DHL's counterclaims, Hansen stated that, as to each note:

Plaintiff [Hansen] would further show that DHL intended Plaintiff to have the funds represented by the [316 S.C. 509] said note as additional compensation and that the transaction was structured as a loan so as to minimize or eliminate income tax liability for Plaintiff. Plaintiff would further show that it was the intention of the parties that Plaintiff would not be required to repay the purported indebtedness evidenced by the said note.

In his affidavit submitted in opposition to DHL's summary judgment motion, Hansen stated:

4. Specifically, all sums of money paid to me pursuant to any promissory notes ... were intended as additional compensation to me for services rendered and were in lieu of any salary, salary increases or bonuses.

5. It was the understanding, agreement and intention of all concerned that all monetary payments to me pursuant to any promissory notes were in lieu of salary increases and/or bonuses and were set up as loans simply for tax reasons.

At the summary judgment hearing, DHL argued that Hansen's evidence was inadmissible under the parol evidence rule. It was then that Hansen first raised the fraud exception to the parol evidence rule. After the hearing, and without leave of the court, Hansen submitted a pleading purporting to be an amended reply. In this amended reply, Hansen changed his allegations slightly, stating that:

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14 practice notes
  • In re Ducane Gas Grills, Inc., Bankruptcy No. 03-15219-JW.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • November 24, 2004
    ...the truth; (8) the hearer's right to rely thereon; and (9) the hearer's consequent and proximate injury. Hansen v. DHL Laboratories, Inc., 316 S.C. 505, 511, 450 S.E.2d 624, 627-28 (S.C.Ct.App.1994). Furthermore, under South Carolina law, unfulfilled promises or statements as to future even......
  • Vieira v. Vice (In re Legacy Dev. SC Grp., LLC), C/A No. 12–06435–dd
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • May 13, 2015
    ...253 (S.C.Ct.App.2015). To be actionable, these misrepresentations must reference a pre-existing fact. Hansen v. DHL Laboratories, Inc., 316 S.C. 505, 450 S.E.2d 624, 626 (S.C.Ct.App.1994)aff'd 319 S.C. 79, 459 S.E.2d 850 (1995) (per curiam). Unfulfilled promises and statements about future ......
  • Michelle L. Vieira, for SC Grp., LLC v. Vice (In re, Legacy Dev. SC Grp., LLC), C/A No. 12-06435-dd.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • May 13, 2015
    ...253 (S.C.Ct.App.2015). To be actionable, these misrepresentations must reference a pre-existing fact. Hansen v. DHL Laboratories, Inc., 316 S.C. 505, 450 S.E.2d 624, 626 (S.C.Ct.App.1994)aff'd319 S.C. 79, 459 S.E.2d 850 (1995) (per curiam). Unfulfilled promises and statements about future e......
  • Prescott v. Farmers Telephone Co-op., Inc., No. 2714
    • United States
    • Court of Appeals of South Carolina
    • June 3, 1997
    ...A genuine issue of fact can be created only by evidence which would be admissible at trial. [328 S.C. 395] Hansen v. DHL Labs., Inc., 316 S.C. 505, 450 S.E.2d 624 (Ct.App.1994), aff'd 319 S.C. 79, 459 S.E.2d 850 In the present case, Prescott alleged in his complaint that FTC informed a pote......
  • Request a trial to view additional results
14 cases
  • In re Ducane Gas Grills, Inc., Bankruptcy No. 03-15219-JW.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • November 24, 2004
    ...the truth; (8) the hearer's right to rely thereon; and (9) the hearer's consequent and proximate injury. Hansen v. DHL Laboratories, Inc., 316 S.C. 505, 511, 450 S.E.2d 624, 627-28 (S.C.Ct.App.1994). Furthermore, under South Carolina law, unfulfilled promises or statements as to future even......
  • Vieira v. Vice (In re Legacy Dev. SC Grp., LLC), C/A No. 12–06435–dd
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • May 13, 2015
    ...253 (S.C.Ct.App.2015). To be actionable, these misrepresentations must reference a pre-existing fact. Hansen v. DHL Laboratories, Inc., 316 S.C. 505, 450 S.E.2d 624, 626 (S.C.Ct.App.1994)aff'd 319 S.C. 79, 459 S.E.2d 850 (1995) (per curiam). Unfulfilled promises and statements about future ......
  • Michelle L. Vieira, for SC Grp., LLC v. Vice (In re, Legacy Dev. SC Grp., LLC), C/A No. 12-06435-dd.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • May 13, 2015
    ...253 (S.C.Ct.App.2015). To be actionable, these misrepresentations must reference a pre-existing fact. Hansen v. DHL Laboratories, Inc., 316 S.C. 505, 450 S.E.2d 624, 626 (S.C.Ct.App.1994)aff'd319 S.C. 79, 459 S.E.2d 850 (1995) (per curiam). Unfulfilled promises and statements about future e......
  • Prescott v. Farmers Telephone Co-op., Inc., No. 2714
    • United States
    • Court of Appeals of South Carolina
    • June 3, 1997
    ...A genuine issue of fact can be created only by evidence which would be admissible at trial. [328 S.C. 395] Hansen v. DHL Labs., Inc., 316 S.C. 505, 450 S.E.2d 624 (Ct.App.1994), aff'd 319 S.C. 79, 459 S.E.2d 850 In the present case, Prescott alleged in his complaint that FTC informed a pote......
  • Request a trial to view additional results

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