Marshall v. Pence

• Decision Date: 07 June 2005
• Docket Number: 2005-UP-370
• Parties: Kenneth A. Marshall, Vol-World, LLC, and Springerland, Inc., Respondents, v. John W. Pence, Jerry B. Massey, Planets Edge, Inc., Joseph Hickman and Annie Hickman, Defendants, Of whom John W. Pence, Jerry B. Massey, and Planets Edge, Inc. are the, Appellants.
• Court: South Carolina Court of Appeals

Kenneth A. Marshall, Vol-World, LLC, and Springerland, Inc., Respondents, v. John W. Pence, Jerry B. Massey, Planets Edge, Inc., Joseph Hickman and Annie Hickman, Defendants, Of whom John W. Pence, Jerry B. Massey, and Planets Edge, Inc. are the, Appellants.

No. 2005-UP-370

Court of Appeals of South Carolina

June 7, 2005

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.

Heard April 5, 2005

Appeal From Charleston County Thomas L. Hughston, Jr., Circuit Court Judge

William B. Jung, of Mt. Pleasant, for Appellants.

Saul Gliserman and O. Grady Query, of Charleston, for Respondents.

SHORT J.

This is an appeal from a trial court's grant of a preliminary injunction. We reverse.

FACTS

Joseph and Annie Hickman own 32A Centre Street in Folly Beach, South Carolina. From 1997 until 2003, the Hickmans leased the property to Ken (Marshall”) and Mary Marshall through the Marshalls' corporation, Springerland, Inc., for use as a restaurant and bar named Planet Follywood. Upon the Marshall's petition for divorce, the family court issued a temporary order, awarding Mary Marshall sole control over the operations of Planet Follywood.

In October 2003, John Pence, a Planet Follywood patron, and Marshall discussed the potential of forming a partnership or association to run Planet Follywood. Pence introduced Marshall to Rick Neighbors as a potential third partner because Neighbors had started, managed and sold a number of successful businesses.” Marshall's primary concern was having a name other than his listed as the owner of the business because he had unpaid tax liens owed to the IRS. However, the discussions ended because Marshall did not want Neighbors as a partner. After Marshall approached Pence a second time in November 2003 about forming a business relationship, Pence suggested his son-in-law Jerry Massey manager of a local restaurant franchise, as the third partner. Marshall, Pence, and Massey met at Pence's home later that month to discuss the organization of the business and inspect Springerland's financial books. Because of Marshall's IRS difficulties, Massey agreed to put all necessary permits and licenses in his name, including the lease on the 32A Centre Street property. Massey also agreed to handle the day-to-day operations of the restaurant and bar because Marshall expressed a desire to continue his job in construction; however, Marshall wanted a portion of the monthly proceeds from the operation of the new business.

At trial, Marshall testified he simply asked Pence to help him meet the past due rental amounts so he could take over the restaurant once his divorce proceedings were final. He stated he never intended to form a partnership with Pence or Massey but he admits he discussed a business association with them at some point.

The Hickmans notified Marshall in early December that Mary Marshall was behind on her rent payments. ^[1] They began formal eviction proceedings against Springerland on December 22, 2003, though the proceedings [were] never concluded and... therefore [eventually] deemed by [the] court to be null and void.” In addition, the IRS ordered Planet Follywood to close at the end of December 2003 because of Springerland's unpaid tax liens. Subsequently, Mary Marshall threw a going out of business and customer appreciation party on December 25, 2003.

On December 16, 2003, Massey, Pence, and Marshall met with the Hickmans to discuss the new lease on the property. At that meeting, Massey paid $3, 200 to the Hickmans for December 2003 and January 2004 rent on the property. Also during the meeting, Joseph Hickman signed a document, witnessed by Annie Hickman and Massey and in the presence of Marshall and Pence attesting to his receipt of rent for the months of Dec. 03 and January 04 from the new tenants of Planet Follywood 32 Center St Folly Beach S.C. 29439. The new lease will be prepared in ap[p]rox two weeks by atty Ben Peeples. New tenants are [sic] Jerry Massey.” Massey testified that Marshall was present for the meeting, the payment of the rent, and the signing of the temporary lease agreement from the Hickmans to Massey; however, Marshall testified that he was not at the meeting. Shortly thereafter, Massey formed a corporation named Planets Edge, Inc. for purpose of operating the new business. Planets Edge signed a one-year lease with the Hickman's for 32A Centre Street that contained an option to renew until December 2009.

While Massey, Pence, their respective spouses, and occasionally Marshall prepared the restaurant for opening, Marshall's divorce became final. As a result of the settlement, on January 15, 2004, Mary Marshall paid Marshall $50, 000, satisfied the IRS tax lien against Springerland, and surrendered her interest in Springerland to Marshall. ^[2] Massey testified that Marshall contacted Pence on January 17, 2004 and scheduled a meeting at the property for the following day, where he informed Massey that he did not think this partnership [was] going to work” because Massey was too corporate” for a family business like Planet Follywood. Marshall stated to both Massey and Pence that he would not do business with either of them in the future. Unbeknownst to Pence and Massey until that day, Marshall had applied for liquor licenses and other permits on January 15 and 16, 2004 in his name and the name of his new corporation, Vol-World, LLC, thereby preventing Appellants from obtaining permits for the same address in their corporate name.

To protect their investment, Massey and Pence contacted legal counsel, and after notifying the Hickmans, changed the locks on the 32A Centre Street building. Respondents ^[3] instituted a breach of contract action against the Hickmans. Respondents also brought an action for intentional interference with contractual relations, conversion, trespass, and forcible entry and detainer against Appellants. In their amended complaint, Respondents withdrew the breach of contract claim against the Hickmans and added a request for specific performance of the 1997 lease between Springerland and Hickman. They also requested injunctive relief awarding them possession of 32A Centre Street and the return of any personal property belonging to Springerland left inside the premises.

From January 2003 until the trial court ordered the preliminary injunction on February 27, 2004, Appellants remained in possession of the 32A Centre Street premises and were current on all rent due for the premises. Marshall also was current on all rent due for the premises. Following the hearing on February 27, 2004, the trial court ordered Appellants to vacate the premises and immediately grant access to the said premises to” Respondents, once Respondents posted a $3, 200 attachment bond. The trial court held the following:

[T]here was [sic] discussions to lead up to the formation of a partnership, but a partnership was never formed. Secondly, as far as the competing leases are concerned, I think that the first lease is still valid and it is enforced [sic] and therefore I'll grant the injunction, the temporary injunction, turning the property over to the plaintiff.

This appeal followed.

LAW/ANALYSIS

Appellants claim the trial court erred in awarding a preliminary injunction to Respondents because Appellants were in actual possession under color of right.” We agree.

Actions for injunctive relief are equitable. Doe v. South Carolina Med. Malpractice Liab. Joint Underwriting Ass'n, 347 S.C. 642, 645, 557 S.E.2d 670, 672 (2001). In equitable actions, we may review the record and make findings of fact in accordance with our own view of the preponderance of the evidence. Id. Pursuant to the ‘main purpose rule,' in actions praying for both money damages and equitable relief, ‘characterization of the action as equitable or legal depends on the plaintiff's ‘main purpose' in bringing the action.'” Id. (quoting Floyd v Floyd, 306 S.C. 376, 380, 412 S.E.2d 397, 399 (1991)). Marshall's main purpose in instituting this action was to restore the status quo. Thus, the main purpose” of Marshall's action was equitable in nature. However, [t]he granting of temporary injunctive relief is within the sound discretion of the trial court and will not be overturned absent an abuse of that discretion.” City of Columbia v. Pic-A-Flick Video, Inc., 340 S.C. 278, 282, 531 S.E.2d 518, 520 (2000). An abuse of discretion occurs when a trial court's decision is unsupported by the evidence or controlled by an error of law. Id. at 282, 531 S.E.2d at 521.

Ordinarily the purpose of a temporary injunction is merely to preserve the existing status during the litigation, and as a general rule, subject to some exceptions, it will not be allowed to have the effect of transferring the possession of property from a litigant in possession to another who claims the right to possession. Atlantic Coast Lumber Corp. v. E.P. Burton Lumber Co., 89 S.C. 143, 145, 71 S.E. 820, 820 (1911). In case of property rights the purpose is to preserve the status quo pending litigation.” County Council of Charleston v. Felkel, 244 S.C. 480, 484, 137 S.E.2d 577, 578 (1964). If the right of possession is in dispute between two parties, one of whom is in actual possession under a claim or color of right, injunction will not, as a rule, lie to transfer possession to the other party.” 43A C.J.S. Injunctions § 127 (2004) (emphasis added).

Appellants were in actual possession of the property prior to February 27, 2004 when the temporary injunction was issued. Although there was some debate as to Marshall's intent to enter into a partnership and which of the parties' leases was primary, there was some evidence that Appellants were in possession...