Decision Date31 January 2000
Docket NumberNo. 3107.,3107.
Citation338 S.C. 572,527 S.E.2d 371
CourtSouth Carolina Court of Appeals
PartiesJohn A. KIRIAKIDES and Louise Kiriakides, Respondents, v. ATLAS FOOD SYSTEMS & SERVICES, INC., Marica Enterprises, Ltd., Marica, Inc., and Alex Kiriakides, Jr., Appellants.

F. Barron Grier, III, and Deborah H. Sheffield, both of Grier Law Firm, of Columbia; and Ellis M. Johnston, II, Haynsworth, Marion, McKay & Guerard, of Greenville, for appellants.

Wilburn Brewer, Thomas L. Stephenson and Charles W. Emory, Jr., all of Nexsen, Pruet, Jacobs & Pollard, of Columbia; George J. Conits, of Greenville, for respondents.


Atlas Corporation and Alex Kiriakides appeal a circuit court order finding Alex defrauded his brother and sister, John and Louise Kiriakides, and Atlas must provide an accounting and buy out John and Louise's minority Atlas shares. We affirm and remand.


Alex Sr. and Marica Kiriakides immigrated to this country from Turkey in the early twentieth century. They had five children: Alex, Louise, John, Libby, and George. Alex is the oldest. George passed away in 1968.

At the time of trial, John was approximately 69 years old, while Alex was 85 or 86. Both John and Alex have worked all of their lives in Atlas and the other various family businesses. In many ways Atlas is the family, and the family is Atlas. Alex and his father started a wine business in the thirties. John helped by sealing the bottles and washing returned bottles. The wine company eventually went bankrupt and Alex entered the service.

While Alex was gone, John and his father sold fireworks and maintained the few cigarette vending machines they could supply. When Alex returned, John and his father had managed to save $20,000 from their various business ventures. All three brothers and their father went into business together.

In 1949, Alex Sr. passed away. Alex was 35 or 36 years old. John was 21 years old. Alex assumed the role of the head of the family. All five children were still living at home with their mother at that time. The family expanded its fireworks business and operated cigarette and candy vending machines. In 1953, John was drafted to serve in the Korean War. Alex got married in 1955.

Alex handled the business' financial matters. Louise counted money collected from the machines. John handled the routes. This division of labor continued throughout most of their working lives. Eventually, the siblings decided to incorporate the business in 1957, and it became known as Atlas Vending Co. Incorporated. Alex, George, and John were elected as directors. Atlas is a contract food service that provides refreshments to factories and other businesses.

After incorporation, Alex kept the checkbook and dealt with the banks, lawyers, and accountants. The vending machine business later expanded into food, pastries, coffee, and cold drinks. Alex continued to be responsible for all financial matters while John handled operations.

The family's business and personal lives were completely interwoven. For example, at tax time, under Alex's directions, corporate employees would prepare personal tax returns for Alex, John, and Louise. Corporation money was liberally loaned to family members for personal items without provisions for repayment.

Over the years, Atlas spun off various other business entities. Atlas Corporation funded Marica, Inc. (Marica) to hold real estate and to invest in real estate. This corporation was viewed as a way to overcome retained earnings. K Enterprises, a partnership, was formed to handle investments. Marica Enterprises, Ltd. (MEL) is also a partnership. MEL is Atlas' landlord. Alex decided when and how each new business entity such as Marica would be created.

In 1986, John became president of Atlas and continued to primarily handle the company's day to day operations. John married again shortly before trial and has had no children. Alex has four children: Alex III, Mary Ann, Michael, and Cathryn. Alex III, Michael, and Mary Ann began working for Atlas.1 After George passed away, John and Louise provided a home for George's three children.

In 1995, a rift developed between John and Alex over a real estate transaction unrelated to Atlas. John discovered Alex had caused him to convey his entire interest in property in Greenville to Alex III, and for a price less than the value of the property. The brothers' relationship became very strained and the environment at Atlas was tense.

Several events involving Atlas occurred to add to the problems between Alex and John. The Board of Atlas decided to change the company's status to an S Corporation from an C Corporation. John was in favor of this change. However, Alex, as majority shareholder, overruled the decision and Atlas remained a C Corporation. The next incident took place in 1996, when John learned Alex had made decisions contrary to the majority and without informing John. Atlas agreed to purchase a piece of property in Columbia. However, John, Alex III, and Bill Freitag determined it would not be in Atlas's best interest to purchase the property. Alex told Alex III to continue with the purchase. John found out the following day while riding with Alex III to Columbia on unrelated business.

There is a dispute over whether John said he quit when he found out about Alex overturning the purchase decision, or whether he just got out of the car upset. The next morning, John went to work as usual. He met with Freitag, then left to meet with Atlas offices in Columbia, Orangeburg, and Charleston. On Monday, John had breakfast with Alex III and Michael, and they discussed work related matters. John found out through Michael that Alex no longer intended John to be president of Atlas. John circulated a memo stating he intended to remain at Atlas and to continue as president. Alex III responded by memo, explaining John would no longer serve as president of the company. John was subsequently offered a position as a consultant, but refused.

John filed the original complaint in order to obtain records from Atlas and for an accounting of partnership affairs. The complaint was amended seeking a judicial dissolution, an accounting, and damages for fraud. By agreement of the parties, the trial was bifurcated pursuant to Rule 42(b). The bipartite trial activity resulted in a liability proceeding with the damages aspect saved for later consideration. The liability hearing took place on August 24-27 and September 1, 1998. After the initial order on October 12, Atlas and Alex moved for reconsideration under Rules 52(b) and 59(e), SCRCP on October 22, 1998. The Special Referee2, Frank S. Holleman III issued a second order on November 6, 1998.

I. Did the Special Referee err in finding Alex committed fraud in the transfer of 21 percent of Marica, Inc.?
II. Did the Special Referee err in finding Alex committed fraud in regards to the distribution of profits and the number of shares owned by Louise?
III. Did the Special Referee err in ordering a forced buyout of John and Louise?
IV. Did the Special Referee err in denying Atlas's counterclaim for the negative balance in John's capital account in Marica Enterprises, Ltd?

This case consists of actions in law and equity. "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, 485 S.E.2d 97, n. 1 (1997) (citing Future Group v. Nationsbank, 324 S.C. 89, 478 S.E.2d 45 (1996)).

I. Fraud

"Actionable fraud is an action at law unless an equitable remedy is sought." Perry v. Heirs at Law and Distributees of Charles Gadsden, 313 S.C. 296, 301, 437 S.E.2d 174, 178 (Ct.App.1993). John and Louise seek actual and punitive damages for fraud. Actual and punitive damages are not an equitable remedy. Id. Hence, the trial judge's findings regarding fraud will not be disturbed on appeal if there is any evidence in the record supporting it. Townes Associates, Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976).

In an action at law, on appeal of a case tried without a jury, the findings of fact of the judge will not be disturbed upon appeal unless found to be without evidence which reasonably supports the judge's findings. The rule is the same whether the judge's findings are made with or without a reference. The judge's findings are equivalent to a jury's findings in a law action.

Townes Associates, Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976) (citing Chapman v. Allstate Ins. Co., 263 S.C. 565, 211 S.E.2d 876 (1975)).

II. Corporate Buyout

A corporate dissolution, under S.C.Code Ann. § 33-14-300 et seq., is an equitable relief. Ward v. Ward Farms, Inc., 283 S.C. 568, 324 S.E.2d 63 (1984). The provisions of S.C.Code Ann. § 33-14-310(d), allowing for appropriate alternative relief including a buyout of shareholders by other shareholders or the corporation, are also equitable. McDuffie v. O'Neal, 324 S.C. 297, 476 S.E.2d 702 (Ct.App.1996); See Hite v. Thomas & Howard Co. of Florence, 305 S.C. 358, 409 S.E.2d 340 (1991), overruled on other grounds by Huntley v. Young, 319 S.C. 559, 462 S.E.2d 860 (1995) (characterizing as equitable the relief provided by S.C.Code Ann. § 33-14-310(d)).

In an action in equity, tried by the judge alone, without a reference, on appeal the Supreme Court has jurisdiction to find facts in accordance with its views of the preponderance of the evidence.

Townes, 266 S.C. at 86, 221 S.E.2d at 775 (citing Crowder v. Crowder, 246 S.C. 299, 143 S.E.2d 580 (1965)). Accord Segall v. Shore, 269 S.C. 31, 236 S.E.2d 316 (1977).


On appeal Alex and Atlas contend the trial court erred in: 1) finding Alex liable for fraud in connection with the 21 percent interest in Marica; 2) finding Alex liable for fraud in...

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