Plantation A.D. v. Gerald Builders, 4632.

• Decision Date: 10 November 2009
• Docket Number: No. 4632.,4632.
• Citation: 687 S.E.2d 714
• Parties: PLANTATION A.D., LLC, Appellant, v. GERALD BUILDERS OF CONWAY, INC., and Jimmy Gerald, Individually, and as President of Gerald Builders of Conway, Inc., Respondents, of whom Gerald Builders of Conway, Inc., is, Third-Party Plaintiff, v. Scott Pyle, ABD Development Inc. and Wachovia Securities, Inc., Third-Party Defendants.
• Court: South Carolina Court of Appeals

687 S.E.2d 714

PLANTATION A.D., LLC, Appellant, v. GERALD BUILDERS OF CONWAY, INC., and Jimmy Gerald, Individually, and as President of Gerald Builders of Conway, Inc., Respondents, of whom Gerald Builders of Conway, Inc., is, Third-Party Plaintiff, v. Scott Pyle, ABD Development Inc. and Wachovia Securities, Inc., Third-Party Defendants.

No. 4632.

Court of Appeals of South Carolina.

Heard September 1, 2009.

Decided November 10, 2009.

Withdrawn, Substituted and Refiled December 18, 2009.

Natale Fata, of Surfside Beach, for Appellant.

Desa Ballard and Stephanie Weissenstein, of West Columbia, J. Jackson Thomas, of Myrtle Beach, for Respondents.

HUFF, J.

Plantation A.D., LLC appeals the trial court's grant of summary judgment in favor of Gerald Builders and Jimmy Gerald (collectively Respondents). We reverse and remand.

FACTS/PROCEDURAL HISTORY

In October of 2003, Jimmy Gerald, as President of Gerald Builders, entered into a Purchase Agreement to purchase 45 acres in the International Club PUD from Plantation A.D. (the Property). At the time the Purchase Agreement was executed, SouthTrust Bank had foreclosed on the Property. Gerald claimed he did not know about the foreclosure proceedings at the time he executed the Purchase Agreement. Soon after entering into the Purchase Agreement, Gerald Builders' attorney discovered the foreclosure action. However, Gerald continued negotiating with Scott Pyle of Plantation A.D. concerning a development deal for the Property.

Gerald Builders' attorney drafted a Memorandum of Understanding, which provided for a 50/50 profit participation between Gerald Builders and Plantation A.D. The Memorandum required Gerald Builders to fully satisfy the SouthTrust Bank first mortgage and repay a $950,000.00 loan to Ralph Jones and Charlie Floyd as the lots in the development were sold with the interest deducted from Plantation A.D.'s share of the profits. The Memorandum also provided: "Plantation A.D., LLC will cooperate fully with Jimmy Gerald in the closing of [the Property] on or before December 31, 2003 upon this signed understanding." Although the parties were listed as Jimmy Gerald of Gerald Builders as the Buyer and Scott Pyle of Plantation A.D. as the Seller, the Memorandum stated, "This memorandum shall not be deemed as a contract for the sale of Real Estate."

Gerald signed the Memorandum on November 3, 2003. According to Gerald, Pyle refused to accept the Memorandum and threatened to file for bankruptcy. Gerald authorized his attorney to offer the Memorandum to Pyle again two days later at the upset bid sale. Gerald claimed Pyle again rejected the Memorandum. Pyle, however, claimed that Plantation A.D. accepted the terms of the Memorandum and he signed the Memorandum when it was faxed to him on November 3.

Gerald Builders purchased the Property at the upset bid sale for $2,327,500.00. It borrowed $2,517,500.00 from Wachovia Bank to pay for the purchase. Gerald Builders began developing the property for a single family subdivision. In March of 2005, Pyle contacted Gerald and informed him that he knew of potential purchasers for the property. Gerald Builders agreed to the sale. On September 26, 2005, Gerald Builders sold the property to Signature Homes for $6,870,000.00. Gerald Builders' distribution from the sale was $1,510,222.23. It did not share the profit with Plantation A.D.

Plantation A.D. brought this action against Respondents asserting claims for breach of contract, breach of contract with fraudulent intent, fraud, unfair trade practices, unjust enrichment, constructive trust, and conversion. Respondents asseverated in their answer that Gerald's signature had been forged on the draft of the Memorandum and also asserted counterclaims and third party claims against Pyle and ADB Development due to the sale of the Property to Signature Homes. Plantation A.D., ADB Development, and Pyle denied Respondents' claims and asserted defenses including statute of limitations and unclean hands. In addition, Pyle asserted a claim for defamation.

While discovery motions and Plantation A.D.'s motions to amend its complaint and answer to Respondents' counterclaim and third-party claim were pending, the trial court granted summary judgment in favor of Respondents on Plantation A.D.'s claims in an order filed July 5, 2007. The trial court found the Memorandum was a complete, unambiguous agreement and therefore parol evidence was not admissible. It held the Memorandum lacked consideration and was unenforceable. The court also found the Memorandum contained two conditions precedent: 1) Gerald Builders had to purchase the property from Plantation A.D. (and not from the master-in-equity or some other party); and 2) Gerald Builders had to develop the property and not simply resell it. The court held as these conditions precedent did not occur, the Memorandum was void. In addition, the court ruled there was no evidence of individual liability of Gerald. Plantation A.D. filed a Rule 59, SCRCP, motion asking the court to alter or amend the judgment. It subsequently amended its motion and included excerpts from depositions taken after the order granting summary judgment.

While the Rule 59 motion was pending, the court ruled on other pending motions. The court denied Plantation A.D.'s motion to amend the complaint as summary judgment had already been granted, but allowed Plantation A.D. leave to amend its answer to the third-party complaint and counterclaim. It also ruled on discovery motions. On November 7, 2007, Plantation A.D. filed a motion pursuant to Rule 60, SCRCP, asserting in their Second Amended Answer and Counterclaim, Respondents made allegations contrary to the arguments they had made previously to the court.

The trial court denied the Rule 59 motion in an order filed December 10, 2007. The court provided all other pending motions would be heard before a judge with proper jurisdiction. It did not address Plantation A.D.'s Rule 60, SCRCP, motion. This appeal followed.

STANDARD OF REVIEW

In reviewing the grant of summary judgment, the appellate court applies the same standard that governs the trial court under Rule 56(c), SCRCP Nexsen v. Haddock, 353 S.C. 74, 77, 576 S.E.2d 183, 185 (Ct.App. 2002). Summary judgment should be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c). "In determining whether any triable issues of fact exist, the court must view the evidence and all reasonable inferences that may be drawn from the evidence in the light most favorable to the non-moving party." Brockbank v. Best Capital Corp., 341 S.C. 372, 378-79, 534 S.E.2d 688, 692 (2000). "[I]n cases applying the preponderance of the evidence burden of proof, the non-moving party is only required to submit a mere scintilla of evidence in order to withstand a motion for summary judgment." Hancock v. Mid-South Management Co., 381 S.C. 326, 330, 673 S.E.2d 801, 803 (2009). "However, in cases requiring a heightened burden of proof or in cases applying federal law, we hold that the non-moving party must submit more than a mere scintilla of evidence to withstand a motion for summary judgment." Id. at 330-31, 673 S.E.2d at 803.

LAW/ANALYSIS

I. Consideration

Plantation A.D. argues the trial court erred in holding as a matter of law the Memorandum was void for lack of consideration. We agree.

"It is a question of law for the court whether the language of a contract is ambiguous." S.C. Dep't of Natural Res. v. Town of McClellanville, 345 S.C. 617, 623, 550 S.E.2d 299, 302-03 (2001). "Whether a contract is ambiguous is to be determined from the entire contract and not from isolated portions of the contract." Farr v. Duke Power Co., 265 S.C. 356, 362, 218 S.E.2d 431, 433 (1975). An ambiguous contract is one that can be understood in more ways than just one or is unclear because it expresses its purpose in an indefinite manner. Klutts Resort Realty, Inc. v. Down'Round Dev. Corp., 268 S.C. 80, 89, 232 S.E.2d 20, 25 (1977); see Hawkins v. Greenwood Dev. Corp., 328 S.C. 585, 592, 493 S.E.2d 875, 878 (Ct.App.1997) ("A contract is ambiguous when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages, and terminology as generally understood in the particular trade or business.") (internal citation and quotation omitted).

Construction of an ambiguous contract is a question of fact. Skull Creek Club Ltd. P'ship v. Cook & Book, Inc., 313 S.C. 283, 286, 437 S.E.2d 163, 165 (Ct.App.1993). When an agreement is ambiguous, the court should seek to determine the parties' intent. Ebert v. Ebert, 320 S.C. 331, 338, 465 S.E.2d 121, 125 (Ct.App.1995). Any ambiguity in a contract, doubt, or uncertainty as to its meaning should be resolved against the party who prepared the contract or is responsible for the ambiguous language. Myrtle Beach Lumber Co. v. Willoughby, 276 S.C. 3, 8, 274 S.E.2d 423, 426 (1981). "The parol evidence rule prevents the introduction of extrinsic evidence of agreements or understandings contemporaneous with or prior to execution of a written instrument when the extrinsic evidence is to be used to contradict, vary, or explain the written instrument." Redwend Ltd. P'ship v. Edwards, 354 S.C. 459, 471, 581 S.E.2d 496, 502 (Ct.App.2003). However, if a contract is ambiguous, parol evidence is admissible to ascertain the true meaning of the contract and the intent of the parties. Klutts Resort Realty, 268 S.C. at 89, 232 S.E.2d at 25.

"The necessary elements of a contract are an offer, acceptance, and valuable consideration." Roberts v. Gaskins, 327 S.C. 478, 483, 486 S.E.2d 771, 773 (Ct.App.1997). "Valuable consideration to...