Mac Papers, Inc. v. Genesis Press, Inc.

• Decision Date: 03 April 2019
• Docket Number: Appellate Case No. 2016-001296,Opinion No. 5634
• Citation: 426 S.C. 393,826 S.E.2d 874
• Court: South Carolina Court of Appeals
• Parties: MAC PAPERS, INC., Appellant/Respondent, v. GENESIS PRESS, INC., Lawrence I. Kudeviz, Barry Zissok, and Lewis Levin, Defendants, Of whom Lawrence I. Kudeviz is the Respondent/Appellant.

426 S.C. 393

826 S.E.2d 874

MAC PAPERS, INC., Appellant/Respondent,

v. GENESIS PRESS, INC., Lawrence I. Kudeviz, Barry Zissok, and Lewis Levin, Defendants,Of whom Lawrence I. Kudeviz is the Respondent/Appellant.

Appellate Case No. 2016-001296

Opinion No. 5634

Court of Appeals of South Carolina.

Heard November 13, 2018

Filed April 3, 2019

Townes Boyd Johnson, III, of Townes B. Johnson III, LLC, of Greenville, for Appellant/Respondent.

Bernie W. Ellis, of McNair Law Firm, PA, of Greenville; and Robert L. Widener, of McNair Law Firm, PA, of Columbia, both for Respondent/Appellant.

SHORT, J.:

In this breach of contract action between Mac Papers, Inc. (Mac), Genesis Press, Inc. (Genesis), and one of Genesis's founders, Lawrence I. Kudeviz, Mac and Kudeviz filed cross-appeals. Mac, as Appellant/Respondent, argues the trial court erred in (1) finding Kudeviz's 1991 guaranty agreement was limited by Genesis's credit application, (2) finding Mac failed to prove that Kudeviz intended to be liable for more than $ 70,000, and (3) not addressing Kudeviz's liability under a 2008 guaranty agreement. Kudeviz, as Respondent/Appellant, argues the trial court erred in finding (1) he failed to terminate his personal guaranty, (2) he was not shielded from liability by equitable estoppel, and (3) he was not shielded from liability by the equitable doctrine of waiver. We affirm.

FACTS

On October 17, 1991, Genesis sought a $ 70,000 line of credit with Mac to purchase office supplies for its printing business in Miami, Florida. On December 2, 1991, Genesis's three principals, Kudeviz, Barry Zissok, and Lewis Levin, signed a personal guaranty agreement, which stated in part:

For and in consideration of credit extended or to be extended by [Mac], its successors or assigns, to and at the request of [Genesis,] the undersigned, jointly and severally, do hereby unconditionally guarantee the payment at respective maturity dates of any and all indebtedness of any kind whatsoever, whether now due or which may hereafter become due .... This guaranty contains no limitations or conditions except as written herein, may be modified only in writing signed by the parties hereto, and is to remain in full force and effect until written notice of its termination is received by registered mail by [Mac], its successors or assigns, at its office in Jacksonville, Florida, except the written termination of this guaranty by the undersigned shall be effective only as to future credit from and after the date [Mac], its successors or assigns, receives the aforesaid notice, i.e., any termination hereof as aforesaid shall not affect credits extended prior to its effective termination.

In 2007, Genesis moved its operation from Miami to Greenville. Between 1991 and 2008, Mac and Genesis conducted business without incident; however, on March 28, 2008, Genesis's Greenville operation suffered a devastating fire that disrupted their business. While Genesis litigated with its insurance carrier over coverage, Mac extended Genesis significant credit and flexibility so it could maintain its operation by restructuring some of its debt. As part of the restructuring, on December 9, 2008, Kudeviz, on behalf of Genesis, endorsed a note for $ 303,836.32 and signed a separate personal guaranty containing the same language as the 1991 guaranty. On February 2, 2009, Kudeviz endorsed another note for the sum of the first note, plus additional debt accrued during the interim time frame for a total of $ 401,852.51. In 2010, Genesis settled with its insurance company and paid Mac in full.

Between 2010 and 2012, Genesis accrued additional financial obligations to Mac, and by September 4, 2012, Genesis owed Mac $ 432,185.60. Mac filed a complaint for breach of contract against Genesis and breach of guaranty against Genesis's three principals, Kudeviz, Zissok, and Levin, for the unpaid balance of $ 432,185.60. Genesis filed bankruptcy, Zissok settled separately for $ 32,500, and Levin is now deceased. Accordingly, Mac sought $ 399,685.60 from Kudeviz, which was the difference between the outstanding debt and Zissok's settlement.

During trial, Mac called two witnesses, Tonja Van Zandt, its vice president and finance manager, and Craig Boortz, the general manager of its Greenville office and primary salesperson for Genesis's account. Kudeviz testified on his own behalf. Kudeviz claimed he terminated his personal guaranty by an email exchange with Boortz on July 12, 2010. As part of an email to Boortz regarding a sale, Kudeviz asked, "On a separate subject[,] is [Van Zandt] working on releasing my personal note?" Boortz replied, "Yes she is and feel free to call her on anything related to the note."

The trial court found Kudeviz liable for Genesis's debt pursuant to the 1991 guaranty, but held Kudeviz's liability was capped at $ 70,000 by the terms of the credit application contemporaneously executed. This appeal followed.

STANDARD OF REVIEW

"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." Consignment Sales, LLC v. Tucker Oil Co. , 391 S.C. 266, 270, 705 S.E.2d 73, 75 (Ct. App. 2010) (quoting Corley v. Ott , 326 S.C. 89, 92 n.1, 485 S.E.2d 97, 99 n.1 (1997) ). "An action for breach of contract is an action at law." Electro-Lab of Aiken, Inc. v. Sharp Constr. Co. of Sumter, Inc. , 357 S.C. 363, 367, 593 S.E.2d 170, 172 (Ct. App. 2004).

"In an action at law, on appeal of a case tried without a jury, the appellate court's standard of review extends only to the correction of errors of law." Id. "The trial [court's] findings of fact will not be disturbed upon appeal unless found to be without evidence which reasonably supports the judge's findings." Id. "The trial court's findings are equivalent to a jury's findings in a law action." Branche Builders, Inc. v. Coggins , 386 S.C. 43, 47, 686 S.E.2d 200, 202 (Ct. App. 2009). "Questions regarding credibility and the weight of the evidence are exclusively for the trial court." Id.

"In an action at equity, tried by a judge alone, an appellate court may find facts in accordance with its own view of the preponderance of the evidence." Inlet Harbour v. S.C. Dep't of Parks, Recreation & Tourism , 377 S.C. 86, 91, 659 S.E.2d 151, 154 (2008). "However, we are not required to disregard the findings of the trial [court] who saw and heard the witnesses and was in a better position to judge their credibility." Straight v. Goss , 383 S.C. 180, 192, 678 S.E.2d 443, 449 (Ct. App. 2009). "Moreover, the appellant is not relieved of his burden of convincing the appellate court the trial judge committed error in his findings." Pinckney v. Warren , 344 S.C. 382, 387-88, 544 S.E.2d 620, 623 (2001).

LAW/ANALYSIS

I. Kudeviz's Appeal¹

Kudeviz argues he terminated his continuing guaranty as evidenced by the July 12, 2010 email exchange with Boortz; therefore, he was not liable for any of Genesis's unpaid debt. We disagree.

The contract between Kudeviz and Mac was created in Florida, and the parties agree Florida law controls its interpretation.

"The cardinal rule of contract interpretation is that when the language of a contract is clear and unambiguous, the contract must be interpreted and enforced in accordance with the plain meaning." R.J. Reynolds Tobacco Co. v. Webb , 187 So.3d 388, 392 (Fla. Dist. Ct. App. 2016). "This is because the contractual language reveals the intent of the parties, and therefore, the plain language controls." Razin v. A Milestone, LLC , 67 So.3d 391, 396 (Fla. Dist. Ct. App. 2011).

"A guaranty is a promise to pay some debt (or to perform some obligation) of another on the default of the person primarily liable for payment or performance." New Holland, Inc. v. Trunk , 579 So.2d 215, 216-17 (Fla. Dist. Ct. App. 1991). "The law of Florida has recognized that a contract of guaranty [m]ay be continuing in nature." Fid. Nat'l Bank of S. Miami v. Melo , 366 So.2d 1218, 1221 (Fla. Dist. Ct. App. 1979). A guaranty

is said to be continuing in nature if it contemplates a future course of dealing during an indefinite period, or if it is intended to cover a series of transactions or succession of credits, or if its purpose is to give to the principal-debtor a standing credit to be used by it from time to time.

Id. "Thus, a continuing guaranty covers all transactions, including those arising in the future, which are within the description of contemplation of the agreement." Id. "A guaranty which provides it will run until further notice remains in force until revoked by the guarantor."

Brann v. Flagship Bank of Pinellas, N.A. , 450 So.2d 237, 239 (Fla. Dist. Ct. App. 1984).

Although the guaranty was continuing, and Kudeviz could unilaterally terminate it, the signed agreement contained explicit instructions for termination. See Webb , 187 So.3d at 392 ("The cardinal rule of contract interpretation is that when the language of a contract is clear and unambiguous, the contract must be interpreted and enforced in accordance with the plain meaning."). In relevant part, the guaranty stated it was "to remain in full force and effect until written notice of its termination [was] received by registered mail by [Mac], its successors or assigns, at its office in Jacksonville, Florida." At trial, Kudeviz testified he signed the agreement, but admitted he did not comply with the termination requirements outlined in the contract. Accordingly, he failed to terminate the agreement and remained liable for Genesis's debt pursuant to the guaranty. See Razin , 67 So.3d at 396 (noting "the plain language controls" contractual interpretation "because the contractual language reveals the intent of the parties").

Kudeviz also argues he was shielded from liability based on the equitable doctrines of estoppel and waiver. He contends Mac's conduct precluded it from enforcing the guaranty. We disagree.

"In its broadest sense, equitable estoppel is a means of preventing a party from...