Kagan v. Simchon
| Decision Date | 12 February 2020 |
| Docket Number | Appellate Case No. 2017-000810,Opinion No. 5713 |
| Citation | 429 S.C. 516,839 S.E.2d 106 |
| Parties | Jeffrey S. KAGAN, Appellant, v. D. Renee SIMCHON, Respondent. |
| Court | South Carolina Court of Appeals |
Clarence Rauch Wise, of Greenwood, for Appellant.
J. Walker Coleman, IV, Meg Elizabeth Sawyer, and Jennifer Hess Thiem, all of K&L Gates LLP, of Charleston; and Edward S. McCallum, III, of Law Offices of Edward S. McCallum, III, of Greenwood, all for Respondent.
In this civil matter, Jeffrey S. Kagan appeals the circuit court's order granting summary judgment to D. Renee Simchon on Kagan's breach of contract and promissory estoppel claims for repayment of a loan in the amount of $210,000. On appeal, Kagan argues the circuit court erred in finding the statute of frauds and statute of limitations barred his claims. We affirm.
The facts in the light most favorable to Kagan are as follows.1 From 1993 to 2013, Kagan periodically worked as an independent contractor for Bay Island Sportswear, Inc. (Bay Island Sportswear), a company owned by Simchon's husband, Sam Simchon (Husband). Simchon owned a realty company, Greenwood Realty, next door to Husband's business. Over the years, Kagan maintained a close relationship with the Simchons and lent them money on occasion, including a loan to Bay Island Sportswear for $129,000 in June 2009 (First Loan).
On October 26, 2010, Kagan loaned Simchon $210,000 (Second Loan), which Simchon used to pay off a balloon payment on a mortgage that she held for her clients—the Wagners—on a property in Waterloo, South Carolina. Pursuant to an oral agreement between Kagan and Simchon, Kagan would collect six and a half percent annual interest on the Second Loan from the Wagners, and Simchon would repay the principal amount upon the sale and closing of the Waterloo property.
On March 11, 2011, Simchon closed on the sale of the Waterloo property. Upon receiving the proceeds of the sale, Simchon wrote Kagan a check for $31,616.46 on March 21, 2011, and transferred the remainder of the principal—$180,000—to Husband to invest in cotton futures on Kagan's behalf. In his deposition, Kagan testified he went to see Simchon after the closing on the Waterloo property. When asked about repayment of the remainder of the Second Loan, Simchon informed him that she transferred the remaining $180,000 to Husband to invest. Kagan averred he did not authorize Simchon's transfer of the funds to Husband. In response, Kagan contacted Husband about the repayment of the remainder on the Second Loan. By Kagan's own account, he thereafter looked to Husband for repayment of the Second Loan.2 Over the next couple of years, Husband made periodic payments on the loans. Kagan did not receive any further payments from Simchon.
In November 2013, Kagan made another loan to Husband and Bay Island Sportswear for $52,000 (Third Loan), which Kagan believed to be consolidated with the remaining principal on the prior loans. The last payment Kagan received from Husband was on November 6, 2013. In April 2014, Husband terminated Kagan's employment with Bay Island Sportswear.
On August 31, 2015, Kagan filed a summons and complaint against Simchon, Husband, Bay Island Sportswear, and Bay Island, LLC (collectively, Defendants), seeking repayment of all three loans and alleging breach of contract, breach of contract accompanied by a fraudulent act, promissory estoppel, and intentional infliction of emotional distress. In his complaint, Kagan admitted the parties never reduced the First Loan to a writing but alleged Simchon drafted a written agreement regarding the terms of the Second Loan.3 As to the Third Loan, Kagan alleged the parties agreed to modify the terms of the prior consolidated loans to include the principal of the Third Loan plus interest, but he did not assert the parties reduced this agreement to a writing. On November 15, 2015, Defendants filed a motion to dismiss Kagan's claims, and the circuit court held a hearing on the matter on February 8, 2016. At the hearing, Kagan alleged a writing evidencing the terms of the Second Loan existed, and he believed discovery was necessary to locate the document.
Via a Form 4 order dated February 8, 2016, the circuit court granted Defendants' motion to dismiss in part pursuant to Rule 12(b)(6), SCRCP. Specifically, the court granted Defendants' motion to dismiss with respect to the First Loan and the Third Loan, finding both loans clearly violated section 37-10-107 of the South Carolina Code (2015).4 The court additionally dismissed Kagan's claim for intentional infliction of emotional distress as to all three loans.
On March 28, 2016, Defendants moved to amend the caption to reflect the court's prior dismissal of all claims against Husband, Bay Island Sportswear, and Bay Island, LLC, which the circuit court granted by order dated April 12, 2016. Simchon subsequently filed an answer and counterclaim to Kagan's remaining breach of contract and promissory estoppel claims as to the Second Loan.
Following the completion of discovery, Simchon filed a motion for summary judgment on October 26, 2016, arguing Kagan's remaining claims were barred by the statute of frauds enumerated in section 37-10-107 or, alternatively, by the statute of limitations enumerated in subsection 15-3-530(1) of the South Carolina Code (2005). The circuit court held a hearing on January 24, 2017, and issued an order granting summary judgment to Simchon on February 21, 2017.5 This appeal followed.6
I. Did the circuit court err in finding the statute of frauds enumerated in section 37-10-107 applied to the Second Loan?7
II. Did the circuit court err in finding Kagan's claims regarding the Second Loan were not exempt from the statute of frauds pursuant to subsection 37-10-107(3)(a)?
III. Did the circuit err in finding the statute of limitations enumerated in subsection 15-3-530(1) barred Kagan's claims regarding the Second Loan?
"The purpose of summary judgment is to expedite the disposition of cases not requiring the services of a fact finder." Prince v. Liberty Life Ins. Co. , 390 S.C. 166, 169, 700 S.E.2d 280, 281 (Ct. App. 2010). "We review the granting of summary judgment under the same standard applied by the [circuit] court under Rule 56(c) of the South Carolina Rules of Civil Procedure." Bennett , 421 S.C. at 379, 807 S.E.2d at 200. "Summary judgment is appropriate when there is no genuine issue of material fact such that the moving party must prevail as a matter of law." Carolina Chloride, Inc. v. S.C. Dep't of Transp. , 391 S.C. 429, 434, 706 S.E.2d 501, 504 (2011). "Summary judgment is not appropriate whe[n] further inquiry into the facts of the case is desirable to clarify the application of the law." Id. "However, it is not sufficient for a party to create an inference that is not reasonable or an issue of fact that is not genuine." McMaster v. Dewitt , 411 S.C. 138, 143, 767 S.E.2d 451, 453–54 (Ct. App. 2014) (quoting Town of Hollywood v. Floyd , 403 S.C. 466, 477, 744 S.E.2d 161, 166 (2013) ). "In determining whether any triable issues of fact exist, the court must view the evidence and all reasonable inferences that may be drawn from the evidence in the light most favorable to the non-moving party." Carolina Chloride , 391 S.C. at 434, 706 S.E.2d at 504.
Kagan argues the circuit court erred in granting summary judgment to Simchon because the court improperly found section 37-10-107 barred his claims regarding the Second Loan. Specifically, Kagan argues the circuit court erred in finding section 37-10-107 barred his claims because Simchon used the loaned funds for personal purposes, and therefore, the loan was exempt from the statutory bar pursuant to subsection 37-10-107(3)(a). He asserts, at a minimum, the court erred in finding a question of fact regarding the purpose of the loan did not exist. We disagree.
" Section 37-10-107 precludes certain actions regarding loans for money whe[n] there is no writing evidencing the alleged promise or agreement."
Sea Cove Dev., LLC v. Harbourside Cmty. Bank , 387 S.C. 95, 102, 691 S.E.2d 158, 161 (2010). It provides:
No person may maintain an action for legal or equitable relief or a defense based upon a failure to perform an alleged promise, undertaking, accepted offer, commitment, or agreement ... to lend or borrow money ... or ... to renew, modify, amend, or cancel a loan of money or any provision with respect to a loan of money, involving in any such case a principal amount in excess of fifty thousand dollars, unless the party seeking to maintain the action or defense has received a writing from the party to be charged containing the material terms and conditions of the promise, undertaking, accepted offer, commitment, or agreement and the party to be charged, or its duly authorized agent, has signed the writing.
§ 37-10-107(1) (emphasis added).8 Subsection 37-10-107(2)(b) further provides a party's failure to comply with subsection 37-10-107(1) precludes an action based on the theory of promissory estoppel.
Subsection 37-10-107(3)(a) provides the provisions of subsections (1) and (2) do not apply to loans of money "used primarily for personal, family, or household purposes." Although our jurisprudence has not directly addressed this exemption, we find Kagan has failed to show a genuine issue of material fact existed regarding the Second Loan's underlying purpose or that the circuit court erred in its conclusion that Simchon was entitled to summary judgment as a matter of law.
Simchon is the owner and broker-in-charge of Greenwood Realty; as part of her business, Simchon provides her clients with the option to finance a property directly through her when they are unable to obtain a mortgage through a conventional mortgage lender or bank. In her deposition testimony, Simchon referred to these agreements as "owner financed...
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