Passailaigue v. Kuznik
| Decision Date | 22 June 2016 |
| Docket Number | 2016-UP-311 |
| Court | South Carolina Court of Appeals |
| Parties | Virgil v.= henry= alfred= l.= paul= d.= and= thornwell= respondents.= appellate= case= no.= |
UNPUBLISHED OPINION
Heard May 11, 2016
Appeal From Charleston County R. Markley Dennis, Jr., Circuit Court Judge
Lawrence E. Richter, Jr. and Aaron Eric Edwards, both of The Richter Firm, LLC, of Mount Pleasant, for Appellant.
John M. Bleecker, Jr., of Law Office of John M. Bleecker, Jr. Lindsey W. Cooper, Jr. and Margarete Linsay Allio, of The Law Offices of L.W. Cooper Jr., LLC, all of Charleston, and Shaun C. Blake, of Rogers Lewis Jackson Mann & Quinn, LLC, of Columbia, for Respondents.
Appellant Virgil "Ray" Passailaigue, instituted this action against Respondents, Henry Kuznik, Alfred Saad, III, Paul D Hollen, III, and Thornwell Partners, LLC, (the LLC), alleging failure to pay a promissory note in the principal sum of $130, 000, executed by the LLC and unconditionally guaranteed by Kuznik, Saad, and Hollen. The trial court granted summary judgment to Respondents. Passailaigue appeals, asserting (1) the trial court erred in failing to provide detailed relevant findings of fact and conclusions of law in its order granting summary judgment, (2) the trial court erred in granting summary judgment because there are genuine issues of material fact making summary judgment improper, and (3) he is a third-party beneficiary of the promissory note and attendant unconditional guarantees, and thus is in a position to enforce the same. We affirm.
1. Passailaigue first contends the trial court erred in failing to provide an order which detailed the court's relevant findings of fact and conclusions of law. We disagree.
Our supreme court has specifically determined "findings [of fact] and conclusions [of law] are not required for appellate review" of orders granting summary judgment and has overruled prior case law to the extent such is relied upon to vacate and remand orders granting summary judgment. Woodson v. DLI Props., LLC, 406 S.C. 517, 527, 753 S.E.2d 428, 433 (2014). Further, the trial court's orders here are sufficient because this court is able to ascertain the basis for the trial court's ruling from the record on appeal. See id. (). In particular, while there were various grounds asserted by Respondents in support of granting summary judgment to them, their answers, summary judgment motions, and memorandum in support of summary judgement all argued that there were no "net proceeds" from the sale of the property, such that the condition for repayment required within the terms of the promissory note failed to occur. Further, a review of the transcript from the summary judgment proceeding reveals this was the only basis argued in that hearing before the trial court, and the trial court clearly granted summary judgment on that basis in its oral ruling. Accordingly, we find the trial court did not err in failing to provide orders which detailed the court's relevant findings of fact and conclusions of law.
2. Passailaigue next contends the trial court mistakenly held there was no genuine issue of material fact and improperly granted summary judgment. In making this argument, he asserts there are genuine issues of material fact as to (a) the definition of the term "net proceeds, " (b) which promissory note controls, and (c) whether Respondents met their obligations under the promissory note and unconditional guarantees. Viewing the evidence and all reasonable inferences in the light most favorable to Passailaigue as we must, Turner v. Milliman, 392 S.C.116, 122, 708 S.E.2d 766, 769 (2011), we find no error.
a Passailaigue argues there is a genuine issue of material fact as to the meaning of the term "net proceeds" contained in the promissory note, arguing the term is ambiguous. We disagree.
"Where an agreement is clear on its face and unambiguous, the court's only function is to interpret its lawful meaning and the intent of the parties as found within the agreement." Stevens & Wilkinson of S.C., Inc. v. City of Columbia, 409 S.C. 568, 577, 762 S.E.2d 696, 700 (2014) (quoting Miles v. Miles, 393 S.C. 111, 117, 711 S.E.2d 880, 883 (2011)). "Where the contract language is plain and capable of legal construction, that language alone determines the instrument's force and effect." Id. We find the term "net proceeds" is clear on its face.
First we note the term "net proceeds" is defined by Black's Law Dictionary as "[t]he amount received in a transaction minus the costs of the transaction (such as expenses and commissions)." Net Proceeds, Black's Law Dictionary (10th ed. 2014). Black's Law Dictionary also defines "net" as "[a]n amount of money remaining after a sale, minus any deductions for expenses, commissions, and taxes." Net, Black's Law Dictionary (10th ed. 2014). There is nothing in the plain language of the promissory note to indicate that "net proceeds" refers to only certain costs being deducted to give "above the line" gross profits, as Passailaigue contends. Further, as Passailaigue conceded in his deposition testimony, the term "net" was included before the word "proceeds" in the promissory note; the word carried some meaning and was not intended to be superfluous; by including the word "net, " the word "proceeds" alone was deemed insufficient to convey the meaning the parties to the note intended; and Passailaigue had agreed to the inclusion of the word "net." Had the promissory note simply stated the $130, 000 sum was to be repaid from the "proceeds" from the future sales of the Dasinger tract-and not included the word "net"-then the note may have been ambiguous as to what was meant by the term "proceeds, " as the parties then could have intended Passailaigue be paid the sum from gross proceeds or net profits from the sale of the tract. Here, however, the promissory note specifically provided the $130, 000 was to be repaid "in its entirety from the net proceeds from the future sales" of the Dasinger tract. Passailaigue's interpretation of the agreement-as requiring unconditional payment of the note once the property was sold-would render the word "net" in the promissory note superfluous. See Stevens Aviation, Inc. v. DynCorp Int'l LLC, 407 S.C. 407, 417, 756 S.E.2d 148, 153 (2014) () (quoting Crown Laundry & Dry Cleaning Inc. v. United States, 29 Fed.Cl. 506, 515 (1993)). Thus, Respondents demonstrated an absence of a genuine issue of material fact, as the plain, ordinary meaning of the contract shows no sums were due to Passailaigue under the promissory note absent the realization of net proceeds from the sale of the Dasinger tract, and there were no such net proceeds from the sale of the property. We further note, although it was not necessary for Respondents, as moving parties, to support their motion with affidavits or other similar materials negating Passailaigue's claim, Lord v. D & J Enters., Inc., 407 S.C. 544, 553, 757 S.E.2d 695, 699 (2014), Respondents also presented the affidavit of the LLC's Certified Public Accountant (CPA) attesting that the phrase "net proceeds, " as commonly used in accounting terms, "is the amount of proceeds received from a sale after subtracting the costs necessary to accomplish and complete the transaction, " and "no net proceeds" were realized from the sale of the Dasinger tract. Passailaigue, however, presented nothing to show the term "net proceeds" in the promissory note had some other meaning than the plain, ordinary meaning attached to such term or one different from that set forth by the CPA, or that net proceeds were, in fact, realized from the sale of the Dasinger tract. See Russell v. Wachovia Bank, N.A., 353 S.C. 208, 220, 578 S.E.2d 329, 335 (2003) . Once Respondents pointed out the absence of evidence to support Passailaigue's assertion that Respondents were in default under the terms of the promissory note, Passailaigue failed to show, by affidavit or otherwise, that there were facts to show a genuine issue for trial. See Lord, 407 S.C. at 553, 757 S.E.2d at 699 ( once the moving party carries its initial burden of pointing out to the trial court that there is an absence of evidence to support the non-moving party's case, the opposing party must do more than rest upon the mere allegations or denials of his pleadings, but must, by affidavit or otherwise, set forth specific facts to show that there is a genuine issue for trial). At best, Passailaigue's attorney simply argued there could be a different meaning; however, "argument of counsel is not a substitute for evidence." Brown v. Johnson, 276 S.C. 68, 71-72, 275 S.E.2d 876, 878 (1981). Here, the contractual language of the promissory note indicates the parties' unambiguous, mutual intent to pay Passailaigue the $130, 000 sum only if proceeds remained after subtracting the expenses associated with the transaction. Because it is undisputed that Respondents...
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