Hill v. Harbert
| Decision Date | 20 April 2005 |
| Docket Number | 2005-UP-283 |
| Parties | Robert E. Hill, Appellant, v. Virginia C. Harbert, Respondent. |
| Court | South Carolina Court of Appeals |
THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.
Appeal From Greenville County John W. Kittredge, Circuit Court Judge
Submitted March 1, 2005
Michael Stephen Chambers, of Greenville, for Appellant.
Lynn Reames Hudson and Melvin R. Hutson, both of Greenville, for Respondent.
Robert E. Hill appeals the trial court's dissolution of his partnership with Virginia C. Harbert and the apportionment of partnership proceeds. We affirm. [1]
In 1998, Hill and Harbert formed a partnership to purchase residential homes at foreclosure sales, renovate them, and sell them for profit. Under their oral partnership agreement Hill was to locate the houses and oversee their remodeling and renovation. Harbert was to arrange for or provide the financing.
In practice, however, the partnership quickly developed into a one-person operation with Harbert handling many of Hill's assigned responsibilities. Harbert incurred the expense of hiring an employee to supervise renovations. Additionally Harbert became concerned Hill was using partnership assets for his personal business.
Due to Hill's actions, Harbert fired” him in August 2000. Hill retained tools and a pick-up truck purchased for use in partnership ventures. Harbert continued to make payments on the truck, but Hill abandoned it in Tennessee with extensive damage to the exterior and electrical system.
In an effort to wind up the partnership, Harbert incurred additional expenses to repair the vehicle so it could be sold. Harbert also completed renovations and sold three homes owned by the partnership.
Hill sued Harbert in 2001 seeking judicial dissolution of the partnership and an accounting of partnership assets. Hill also alleged breach of fiduciary duty and unjust enrichment.
The trial court held a bifurcated trial, found a partnership existed, ordered the partnership dissolved, and granted judgment for Harbert in the amount of $10, 255.
A case with legal and equitable issues presents a divided scope of review. Kuznik v. Bees Ferry Assocs., 342 S.C. 579 589, 538 S.E.2d 15, 20 (Ct. App. 2000). 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, 485 S.E.2d 97, 99 (1997).
An action for damages arising from breach of fiduciary duty is at law, but the suit must sound in equity if equitable relief is sought. Bivens v. Watkins, 313 S.C. 228, 230, 437 S.E.2d 132, 133 (Ct. App. 1993). In an action at law, the trial judge's findings of fact will be upheld unless without evidentiary support. Corley, 326 S.C. at 92, 485 S.E.2d at 99.
An action for an accounting of a partnership is equitable. Townes Assocs. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976). On appeal, the appellate court may find facts in accordance with its own view of the preponderance of the evidence. Id.
Hill asserts the trial court erred in finding Harbert did not breach her fiduciary duties. Hill specifically complains that Harbert's management of the partnership assets and bookkeeping constituted a breach. We disagree.
A partnership imposes a fiduciary relationship upon individuals who are obligated to refrain from taking advantage of one another by even the slightest misrepresentation or concealment. Lawson v. Rogers, 312 S.C. 492, 498-99, 435 S.E.2d 853, 857 (1993). A fiduciary relationship imposes mutual duties of loyalty, good faith, and fair dealing. Id.
Parties in a fiduciary relationship must fully disclose to each other all known information that is significant and material, and when this duty to disclose is triggered, silence may constitute fraud.” Ellie v. Miccichi, 358 S.C. 78, 100, 594 S.E.2d 485, 497 (Ct. App. 2004) (quoting Anthony v. Padmar, Inc., 320 S.C. 436, 449, 465 S.E.2d 745, 752 (Ct. App. 1995)).
The behavior of a partner is not governed by marketplace principles or with an eye to personal advantage, but to universally recognized obligations of loyalty, good faith, and fair dealing between partners. See Few v. Few, 239 S.C. 321, 336, 122 S.E.2d 829, 836 (1961); Moore v. Moore, 360 S.C. 241, 251, 599 S.E.2d 467, 472 (Ct. App. 2004); see also 59A Am. Jur. 2d Partnership § 420 (1987).
A partnership may be dissolved, but those fiduciary duties continue to exist during the winding up period when the partnership affairs are completed. S.C. Code Ann. § 33-41-920 (Supp. 2004). If a partnership agreement does not stipulate an ending date, then the partnership is an agreement at will, subject to dissolution by the act of one or more partners. McPherson v. J.E. Sirrine & Co., 206 S.C. 183, 208, 33 S.E.2d 501, 511 (1945); see also 59A Am. Jur. 2d Partnership § 819 (1987).
Hill offered no evidence to demonstrate Harbert denied him access to partnership accounts or records or prohibited him from participating in the management of the business. To the contrary, Hill admitted on cross-examination that he had access to the partnership books. The record reveals the partnership began with the parties collaborating to share responsibilities and declined to the point that Hill became an inactive member who caused conflict with members of the work crew when he did choose to participate.
Harbert acted within her rights as a partner to terminate the partnership. Harbert also acted properly to begin the process of winding up the partnership affairs by renovating and selling the partnership's remaining assets.
Hill argues the trial court erred by finding he failed to establish the amount of partnership funds Harbert allegedly spent without authority. We disagree.
Hill alleges Harbert spent partnership funds on renovating two properties that were not owned by the partnership. Hill acknowledged Harbert maintained meticulous accounting records. Hill was unable to demonstrate that either of the two properties was renovated with partnership funds. A plaintiff has the burden of proof on allegations raised in his pleadings. See Smith v. Smith, 50 S.C. 54, 65 ...
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