Moser v. Gosnell, No. 2951.

CourtCourt of Appeals of South Carolina
Writing for the CourtSTILWELL.
Citation334 S.C. 425,513 S.E.2d 123
PartiesJack L. MOSER, Barbara J. Moser and JLM Enterprises, Inc., Appellants, v. James W. GOSNELL and Vivian A. Gosnell, Respondents.
Decision Date01 March 1999
Docket NumberNo. 2951.

334 S.C. 425
513 S.E.2d 123

Jack L. MOSER, Barbara J. Moser and JLM Enterprises, Inc., Appellants,
v.
James W. GOSNELL and Vivian A. Gosnell, Respondents

No. 2951.

Court of Appeals of South Carolina.

Heard January 14, 1999.

Decided March 1, 1999.


334 S.C. 427
Ronald G. Tate, Jr., of Gibbes, Gallivan, White & Boyd; and Robert E. Hoskins, of Foster & Foster, both of Greenville, for appellants

Michael J. Giese, of Leatherwood, Walker, Todd & Mann, of Greenville, for respondents.

STILWELL, Judge:

This breach of contract action involves a dispute over the terms of a covenant not to compete. Jack L. Moser, Barbara J. Moser and JLM Enterprises sued James W. and Vivian A. Gosnell and alleged that the Gosnells breached the covenant.

334 S.C. 428
Both parties moved for summary judgment. The trial court denied the Mosers' motion and granted the Gosnells' in part. The Mosers appeal. We affirm

FACTS

The Gosnells owned Certified Cleaning and Contractors until 1994 when they sold the business to the Mosers. Certified was a full-service construction and carpet cleaning company that performed a variety of services including remodeling, renovation, restoration, and painting. Prior to purchasing Certified, the Mosers received a business brochure outlining Certified's wide variety of services. They also received a prospectus which revealed that up to 80% of Certified's revenue came from insurance funded restoration work and the remaining revenue came from carpet cleaning and other non-insurance funded services.

The Gosnells entered into an Asset Purchase and Sale Agreement for the sale of substantially all of the assets of Certified to the Mosers for $585,000. The preamble to the Agreement stated that the "Seller is in the business of insurance funded restoration work for fire and water damage as well as commercial and residential carpet cleaning and the like."

The Agreement required the Gosnells to enter into a covenant not to compete, a copy of which was incorporated by reference into and supported the Agreement. The covenant stated "Seller has been engaged in the business of insurance funded restoration work for fire and water damage as well as commercial carpet cleaning throughout upstate South Carolina." One hundred forty-five thousand dollars of the total purchase price was attributed to the covenant. The Gosnells agreed that for three years, and within the geographical limits of Greenville, Spartanburg, and Laurens counties, they would not:

own, manage, operate, control, represent, be employed by, participate in, or be connected in any manner, directly or indirectly as consultant, shareholder, employee, partner or in any fashion whatsoever, with the ownership, management, operation or control of any person or other entity that
334 S.C. 429
is engaged in the same business as Seller was in prior to this sale.

The covenant also provided that in the event of a "breach or threatened breach," the Mosers would be entitled to both injunctive relief and damages "in an amount equal to the purchase price of the business." Certified eventually went out of business, and the Mosers sued, seeking liquidated damages of $585,000.

The trial court held that the Mosers' claims against the Gosnells were limited to only insurance funded services and commercial carpet cleaning. The court concluded that the covenant unambiguously defined Certified's business as "insurance-funded restoration work for fire and water damage as well as commercial carpet cleaning throughout upstate South Carolina." Thus, any non-insurance funded restoration, remodeling, repair services, and residential carpet cleaning performed by the Gosnells was allowed under the covenant.

The court also found that the Gosnells breached the covenant by engaging in insurance related projects within the designated areas of the covenant and reserved the issue of damages for a jury.1 The court found that any breach by the Gosnells of the covenant "may total no more than a few thousand dollars." Thus, it determined that the liquidated damages provision constituted a penalty because the amount of damages stipulated to in the covenant was disproportionate to any probable damage resulting from a breach.

DISCUSSION

Summary judgment is appropriate where it is clear that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Tupper v. Dorchester County, 326 S.C. 318, 487 S.E.2d 187 (1997). In determining whether any triable issues of fact exist, the evidence and all reasonable...

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23 practice notes
  • Ward v. West Oil Co., Inc., No. 4389.
    • United States
    • Court of Appeals of South Carolina
    • May 12, 2008
    ...according to its plain, ordinary, and popular meaning. Conner v. Alvarez, 285 S.C. 97, 101, 328 S.E.2d 334, 336 (1985); Moser v. Gosnell, 334 S.C. 425, 430, 513 S.E.2d 123, 125 Contrary to R&B's contention, the language of the Addition expressly and unambiguously sets forth what will occur ......
  • Cedar Cove Homeowners Ass'n v. DiPietro, No. 4092.
    • United States
    • Court of Appeals of South Carolina
    • March 13, 2006
    ...on a credibility assessment, but on the application of largely undisputed facts to unambiguous restrictive covenants. Moser v. Gosnell, 334 S.C. 425, 430, 513 S.E.2d 123, 125 (Ct.App.1999) (holding that when a covenant or contract is clear and unambiguous, matters of construction are questi......
  • In re Builders Transport, Inc., No. 05-15900.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • December 5, 2006
    ...of the lease, if construed as a liquidated damages provision, would be unenforceable under South Carolina law. See Moser v. Gosnell, 334 S.C. 425, 513 S.E.2d 123, 126-27 (1999) ("The test for determining whether a stipulation constitutes a penalty is whether the sum stipulated is so large t......
  • Baugh v. Columbia Heart Clinic, P.A., No. 5074.
    • United States
    • Court of Appeals of South Carolina
    • March 13, 2013
    ...upon contemplated actual damages but is intended to provide punishment for breach of the contract, it is a penalty.” Moser v. Gosnell, 334 S.C. 425, 432, 513 S.E.2d 123, 126 (Ct.App.1999). The stipulation will be deemed a penalty if it “is so large that it is plainly disproportionate to any......
  • Request a trial to view additional results
23 cases
  • Ward v. West Oil Co., Inc., No. 4389.
    • United States
    • Court of Appeals of South Carolina
    • May 12, 2008
    ...according to its plain, ordinary, and popular meaning. Conner v. Alvarez, 285 S.C. 97, 101, 328 S.E.2d 334, 336 (1985); Moser v. Gosnell, 334 S.C. 425, 430, 513 S.E.2d 123, 125 Contrary to R&B's contention, the language of the Addition expressly and unambiguously sets forth what will occur ......
  • Cedar Cove Homeowners Ass'n v. DiPietro, No. 4092.
    • United States
    • Court of Appeals of South Carolina
    • March 13, 2006
    ...on a credibility assessment, but on the application of largely undisputed facts to unambiguous restrictive covenants. Moser v. Gosnell, 334 S.C. 425, 430, 513 S.E.2d 123, 125 (Ct.App.1999) (holding that when a covenant or contract is clear and unambiguous, matters of construction are questi......
  • In re Builders Transport, Inc., No. 05-15900.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • December 5, 2006
    ...of the lease, if construed as a liquidated damages provision, would be unenforceable under South Carolina law. See Moser v. Gosnell, 334 S.C. 425, 513 S.E.2d 123, 126-27 (1999) ("The test for determining whether a stipulation constitutes a penalty is whether the sum stipulated is so large t......
  • Baugh v. Columbia Heart Clinic, P.A., No. 5074.
    • United States
    • Court of Appeals of South Carolina
    • March 13, 2013
    ...upon contemplated actual damages but is intended to provide punishment for breach of the contract, it is a penalty.” Moser v. Gosnell, 334 S.C. 425, 432, 513 S.E.2d 123, 126 (Ct.App.1999). The stipulation will be deemed a penalty if it “is so large that it is plainly disproportionate to any......
  • Request a trial to view additional results

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