Jones v. Builders Inv. Grp., LLC, Appellate Case No. 2013–002673.

CourtCourt of Appeals of South Carolina
Writing for the CourtWILLIAMS, J.
Citation415 S.C. 321,781 S.E.2d 737
Parties Robert S. JONES, Appellant, v. BUILDERS INVESTMENT GROUP, LLC, Brian D. Boone, and Arden Homebuilders, LLC, Defendants, Of whom Builders Investment Group, LLC and Brian D. Boone are Respondents.
Docket NumberNo. 5373.,Appellate Case No. 2013–002673.
Decision Date30 December 2015

415 S.C. 321
781 S.E.2d 737

Robert S. JONES, Appellant,
v.
BUILDERS INVESTMENT GROUP, LLC, Brian D. Boone, and Arden Homebuilders, LLC, Defendants,

Of whom Builders Investment Group, LLC and Brian D. Boone are Respondents.

Appellate Case No. 2013–002673.
No. 5373.

Court of Appeals of South Carolina.

Heard Sept. 10, 2015.
Decided Dec. 30, 2015.

Rehearing Denied Feb. 19, 2016.


781 S.E.2d 739

D. Reece Williams, III and Kathleen McColl McDaniel, both of Callison Tighe & Robinson, LLC, of Columbia, for appellant.

Thornwell F. Sowell, III, of Sowell Gray Stepp & Laffitte, LLC, of Columbia, and David Cochran Dick, Jr., of the Law Office of David C. Dick, of Charleston, for respondents.

WILLIAMS, J.

415 S.C. 324

In this civil appeal, Robert Jones contends the circuit court erred in granting Builders Investment Group, LLC (BIG) and Brian D. Boone's (collectively "Respondents") motion for judgment notwithstanding the verdict (JNOV). Jones claims the circuit court (1) erroneously held his personal payment of the parties' business loan discharged Respondents from their legal responsibility to contribute toward the payoff of the business loan and (2) misconstrued the terms of the parties' operating agreement regarding personal guaranties. We affirm.

FACTS/PROCEDURAL HISTORY

This appeal stems from a dispute between Jones and Respondents over whether Jones is entitled to contribution from Respondents for debts arising out of a joint business venture. In 2005, Holt Family Homes, LLC was formed to develop, build, and sell residential homes. At its inception, the company had four Class A members, one of whom was Jones.1 BIG was a Class B member, and Boone had no ownership interest in Holt Family Homes.

In January 2007, Holt Family Homes obtained a loan from Southern First Bank2 (SFB) for $300,500. Three of the Class A members—Jones, Keisler, and Buck—signed and personally guaranteed the loan. In April 2007, Holt Family Homes obtained a second loan from SFB for $199,250. The same Class A members signed and guaranteed this second loan.

415 S.C. 325

In the summer of 2007, Boone and BIG agreed to make capital contributions and investments in Holt Family Homes.3 BIG contributed additional capital of $625,000,4 and Boone contributed capital of $125,000. In exchange for these investments, Boone and BIG became Class A members. To reflect these investments and changes in membership status, the company amended its operating agreement (Arden Operating Agreement) on July 31, 2007. As part of these amendments,

781 S.E.2d 740

the company's name was also changed from Holt Family Homes to Arden Homebuilders, LLC (Arden).

On September 25, 2007, Jones, Keisler, and Buck—the guarantors on the initial two loans with SFB—consolidated these two loans into one new loan for $498,000 in Arden's name (Arden Loan). Similar to the initial two loans, only these three individuals signed and personally guaranteed the newly consolidated Arden Loan.

Almost one year later, on September 24, 2008, Buck was removed as a personal guarantor on the Arden loan. Only Jones and Keisler signed the renewed note. Jones confirmed that neither Boone nor BIG was asked about removing Buck as a personal guarantor, and neither Boone nor BIG personally guaranteed the amended Arden loan. On December 8, 2009, Jones obtained a personal loan with SFB in the amount of $449,326.33 to satisfy the Arden loan.5 SFB marked the Arden loan as satisfied and transferred the balance to Jones's personal loan.

415 S.C. 326

Jones was unable to repay the personal loan and subsequently executed a confession of judgment to SFB regarding his personal loan on November 8, 2012. Jones testified at trial that he had not made any payments on his personal loan or on the confession of judgment. The president of SFB, Justin Strickland, also affirmed Jones's testimony. Strickland acknowledged that Jones's personal loan was charged off in varying increments between December 29, 2009, and December 20, 2010. Despite writing off Jones's personal loan, Strickland testified SFB eventually sued Jones on the promissory note, which resulted in the confession of judgment against him.

On March 23, 2011, Jones filed suit against Respondents for breach of contract and breach of fiduciary duty. Jones alleged in his complaint that Respondents were required to personally guarantee the Arden loan based on their status as Class A members under the Arden Operating Agreement. In support of his position, Jones cited to section 2.3 of the Arden Operating Agreement, which states as follows:

2.3 Guaranty of Loans to Company. Each of the Class A Members (but none of the Class B Members) shall, in its individual capacity, jointly and severally guaranty any loan to the Company ("Guaranteed Loan") for so long as any guaranty of such loan is required by the lender. Notwithstanding any other provision of this Agreement or any provision of the Guaranteed Loan documents, as between the Members, each Class A Member shall be responsible for paying such Class A Member's proportionate share of any Guaranteed Loan ("Guaranty Percentage").... Any Class A Member who pays more than such Class A Member's Guaranty Percentage of the Guaranteed Loan to the Lender shall be entitled to contribution from the other Class A Members.

Jones contended the Arden Operating Agreement—by the plain terms of section 2.3—required Respondents to pay their proportionate share of the loan, and Respondents' failure to do so entitled Jones to contribution for the full amount of the loan, plus interest, costs, and reasonable attorney's fees.

Prior to trial, Respondents moved for summary judgment on both causes of action. As to the breach of contract cause of

415 S.C. 327

action, Respondents acknowledged section 2.3 and its requirement for all Class A Members to pay their proportionate share of any guaranteed loans. However, Respondents claimed Jones had never paid his proportionate share of the loan and, thus, could not seek contribution pursuant to the Arden Operating Agreement until he had done so. In addition, Respondents claimed the plain language of section 6.6(a)6 of the Arden Operating Agreement requires a Class A member to personally guarantee a loan before liability can attach, noting the Arden loan was entered

781 S.E.2d 741

into before BIG and Boone became Class A members. Because SFB never required Respondents to guarantee the Arden loan, Respondents contended they could not be liable for any portion of the loan as a matter of law.

Prior to trial, the circuit court granted Respondents' summary judgment motion on Jones's breach of fiduciary duty claim. On December 10–11, 2012, the case proceeded to trial on Jones's breach of contract claim against Respondents. Respondents moved for a directed verdict at the close of evidence, which the circuit court denied. The jury returned a verdict in Jones's favor. Respondents then filed a motion for JNOV or, in the alternative, a new trial, reiterating the grounds they raised in support of their directed verdict...

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3 practice notes
  • Mangal v. Warden, Perry Corr. Inst., Civil Action No. 6:18-106-RBH-KFM
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • December 18, 2019
    ...findings was based on her opinion that the victim was truthful, making her testimony particularly prejudicial. See Mangal I, 781 S.E.2d at 737 ("Given a lack of physical evidence, we believe Dr. Henderson's testimony was critical because she explained how Victim—who claimed full penetration......
  • Mangal v. State, Opinion No. 27726.
    • United States
    • United States State Supreme Court of South Carolina
    • July 19, 2017
    ...at 319-20, 781 S.E.2d at 736-37. The court of appeals remanded to the court of general sessions for a new trial. 415 S.C. at 319-20, 781 S.E.2d at 737. The State filed a petition for a writ of certiorari for review of the court of appeals' decision, which we granted.II. Standard of Review O......
  • Mangal v. State, Appellate Case No. 2012–212701.
    • United States
    • Court of Appeals of South Carolina
    • December 30, 2015
    ...were truthful); Dawkins, 297 S.C. at 393–94, 377 S.E.2d at 302 (holding a psychologist's testimony indicating he believed a victim's781 S.E.2d 737allegations were genuine was improper). Accordingly, Dr. Henderson's 415 S.C. 320testimony was improper bolstering, and trial counsel was deficie......
3 cases
  • Mangal v. Warden, Perry Corr. Inst., Civil Action No. 6:18-106-RBH-KFM
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • December 18, 2019
    ...findings was based on her opinion that the victim was truthful, making her testimony particularly prejudicial. See Mangal I, 781 S.E.2d at 737 ("Given a lack of physical evidence, we believe Dr. Henderson's testimony was critical because she explained how Victim—who claimed full penetration......
  • Mangal v. State, Opinion No. 27726.
    • United States
    • United States State Supreme Court of South Carolina
    • July 19, 2017
    ...at 319-20, 781 S.E.2d at 736-37. The court of appeals remanded to the court of general sessions for a new trial. 415 S.C. at 319-20, 781 S.E.2d at 737. The State filed a petition for a writ of certiorari for review of the court of appeals' decision, which we granted.II. Standard of Review O......
  • Mangal v. State, Appellate Case No. 2012–212701.
    • United States
    • Court of Appeals of South Carolina
    • December 30, 2015
    ...were truthful); Dawkins, 297 S.C. at 393–94, 377 S.E.2d at 302 (holding a psychologist's testimony indicating he believed a victim's781 S.E.2d 737allegations were genuine was improper). Accordingly, Dr. Henderson's 415 S.C. 320testimony was improper bolstering, and trial counsel was deficie......

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