Save Charleston Foundation v. Murray, 0502
| Decision Date | 28 January 1985 |
| Docket Number | No. 0502,0502 |
| Citation | 333 S.E.2d 60,286 S.C. 170 |
| Court | South Carolina Court of Appeals |
| Parties | SAVE CHARLESTON FOUNDATION, Appellant-Respondent, v. William E. MURRAY, individually and William E. Murray and Harold Adler, now or formerly acting as and under the name Save Charleston Partnership, Defendants- Respondents, of whom William E. Murray is Respondent-Appellant. Appeal of William E. MURRAY. . Heard |
Charles S. Bernstein, of Bernstein & Manos, P.A., and Ray P. McClain, Charleston, for appellant-respondent.
George J. Morris, of Morris, Duffy & Boone, Charleston, for respondent-appellant.
Morris D. Rosen, of Rosen, Oberman & Rosen, Charleston, for defendant-respondent, Adler.
Save Charleston Foundation (Foundation) appeals from the circuit court's order granting summary judgment in favor of William E. Murray, individually, and Murray and Harold Adler doing business as Save Charleston Partnership (Partnership) and overruling its demurrer to identical counterclaims for conversion asserted by Murray and Adler. Murray cross-appeals from the circuit court's order striking his claim for attorney fees and costs from his counterclaim for conversion and from the circuit court's order sustaining the Foundation's demurrers to his counterclaims alleging causes of action for outrage, breach of contract accompanied by fraudulent acts, and prima facie tort. Adler does not appeal. We affirm.
These appeals present issues involving election of remedies, punitive damages, sufficiency of pleadings, and attorney fees and costs.
As the record discloses, the Foundation and Murray entered into negotiations in 1976 for the sale of certain real property owned by the Foundation. Their negotiations resulted in an agreement between the Foundation and Murray. The Foundation agreed to transfer the property to Murray or his designee for the sum of $375,000.00.
Pursuant to the agreement, the Partnership, Murray's designee, executed a promissory note on April 7, 1976, obligating itself to pay to the Foundation the sum of $375,000.00 "without interest, payments of said sum to be in annual installments equal to forty (40%) per cent of the 'net profits' " either derived from the sale of the subject property or otherwise produced by it.
Thereafter, the Foundation, believing "that the development and operation of the subject real property ha[d] been extremely profitable" and that the Partnership intended "to dispose of the ... property ... without making any payment whatsoever to the [Foundation] on the [note]," filed suit alleging three causes of action against the Partnership and Murray.
Each of the first two causes of action sought the recovery of actual damages in the amount of $375,000.00, the face amount of the note. The first cause of action alleged an action for anticipatory breach of contract. The second cause of action realleged the allegations of the first cause of action and further alleged an action for breach of contract. The third cause of action realleged the allegations of the first and second causes of action, sought $375,000.00 in actual damages and an equal amount in punitive damages and further alleged an action for fraud. The Foundation demanded judgment against Murray and the Partnership jointly and severally for actual damages in the amount of $375,000.00 and punitive damages in the amount of $375,000.00.
Shortly after the Foundation brought suit against Murray and the Partnership, the parties mutually agreed to submit the dispute to arbitration. Under the terms of the arbitration agreement, the Foundation agreed to dismiss its first two causes of action "with prejudice" and its third cause of action "without prejudice." Another term of the agreement expressed the intention of the parties that the agreement was "to forever resolve the issues disputed."
Pursuant to the terms of the settlement agreement, the circuit court ordered the dismissal of the Foundation's first two causes of action with prejudice and its third cause of action without prejudice.
An arbitration panel later determined the Foundation was entitled to the net sum of $109,378.40, which the Partnership subsequently paid.
Afterward, the Partnership demanded the return of the promissory note. The Foundation refused to surrender it and brought the present suit.
The Foundation's present complaint alleges two causes of action: the first, against Murray, alleging fraud in the inducement of the contract for which the promissory note was given and the second, against Murray and Adler as partners in the Partnership, alleging fraudulent breaches of fiduciary duties owed to the Foundation by the Partnership under the promissory note. The complaint seeks actual damages in the amount of $240,621.60 and punitive damages in the amount of $2,406,216.00.
The answers to the complaint assert a general denial and an affirmative defense alleging that the Foundation's actions against them are barred because all matters concerning the funds due under the promissory note were finally determined in the former arbitration proceeding.
Murray on behalf of himself and as a partner in the Partnership and Adler as a partner in the Partnership also assert an action for conversion based on the Foundation's failure to deliver the promissory note after the Partnership satisfied the note and demanded its return.
Additionally, Murray's answer asserts counterclaims for outrage based on the Foundation's conversion of the promissory note and its bringing of the instant action, for breach of contract accompanied by fraudulent acts consisting of the Foundation's failure to deliver the promissory note and its bringing of the instant action, and for prima facie tort based on the Foundation's filing of the instant action allegedly without justification.
The Foundation demurred to all counterclaims upon the ground that each fails to state a cause of action. The circuit court overruled the Foundation's demurrers to the counterclaims alleging a cause of action for conversion and, on its own motion, struck from these counterclaims the requests for attorney fees and costs. The circuit court, however, sustained the demurrers to the other counterclaims.
Prior to the hearing on the demurrers, Murray and Adler both moved for summary judgment. They asserted that the Foundation could not bring the instant action since it had previously elected its remedy by participating in the arbitration proceedings. The circuit court agreed and granted Murray and Adler summary judgment as to both causes of action. It also held that the "arbitration eliminated the question of actual damages [and left] no basis for punitive damages."
The Foundation maintains the circuit court erred in holding that the Foundation may not pursue the instant action because it had elected its remedy against Murray and the Partnership when it agreed to arbitrate its causes of action for anticipatory breach and breach of contract and thereafter obtained a final and conclusive award through arbitration.
The doctrine of election of remedies involves a choice between two or more different and coexisting modes of procedure and relief afforded by law for the same injury. Tzouvelekas v. Tzouvelekas, 206 S.C. 90, 33 S.E.2d 73 (1945); Walker v. McDonald, 136 S.C. 231, 134 S.E. 222 (1926); Boardman v. Lovett Enterprises, Inc., 283 S.C. 425, 323 S.E.2d 784 (Ct.App.1984). Its purpose is to prevent double redress for a single wrong. 25 Am.Jur.2d Election of Remedies Section 1 at 646 (1966). Application of the doctrine should be confined to cases where double compensation of the plaintiff is threatened. Id. Section 3 at 650. When an identical set of facts entitle the plaintiff to alternative remedies, he may plead and prove his entitlement to either or both; however, the plaintiff may not recover both. Baeza v. Robert E. Lee Chrysler, Plymouth, Dodge, Inc., 279 S.C. 468, 309 S.E.2d 763 (Ct.App.1983). "This rule rests on the principle that the plaintiff should have a full opportunity to prove his claim to some form of relief, but he should not receive a double recovery." Id. at 473, 309 S.E.2d at 766. The invocation of one remedy constitutes an election of remedies that will bar another remedy consistent therewith where the suit upon the remedy first invoked reached the stage of final adjudication. McMahan v. McMahon, 122 S.C. 336, 342, 115 S.E. 293, 295 (1922). Arbitration is a mode of procedure and relief afforded by law. See S.C. Code of Laws Sections 15-48-10 to -240 (1976) (Cum.Supp.1984).
Even though the Foundation's three causes of action in the former suit were based on different theories of recovery, they nonetheless were consistent. The Foundation, therefore, would not have been required to make an election had the suit proceeded to trial. It could have pleaded and proved all three causes of action but would have been limited to one recovery. Robert Harmon and Bore, Inc. v. Jenkins, 282 S.C. 189, 318 S.E.2d 371 (Ct.App.1984); see Carrigg v. Blue, 283 S.C. 494, 323 S.E.2d 787 (1984).
The controlling question, then, is not whether the Foundation would have been required to elect among its causes of action had the matter been tried rather than arbitrated but whether the Foundation has obtained a recovery arising out of its dispute with Murray and the Partnership. The Foundation clearly did so as a result of the arbitration proceeding.
Where the parties agree to submit a claim to arbitration and the claim is properly adjudicated by the arbitrators, the prosecution of the same claim on a different theory is barred. See 6 C.J.S. Arbitration Section 128 at 376 (1975). To conclude otherwise would be to sanction a double recovery and "would defeat the object of arbitration, which is to avoid litigation." 5 Am.Jur.2d Arbitration and Award Section 147 at 628 (1962).
We therefore hold that the Foundation, having obtained through arbitration a recovery on its claim...
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