SSI Medical Services, Inc. v. Cox, No. 23229

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: HARWELL; GREGORY
• Citation: 301 S.C. 493,392 S.E.2d 789
• Parties: SSI MEDICAL SERVICES, INC., Respondent, v. Donald L. COX; Heritage Trust Federal Credit Union; North Charleston National Bank of South Carolina; Port City Leasing, Inc., A South Carolina Corporation; and Southland Trucking Company, A South Carolina Corporation, Defendants, of whom Donald L. Cox is Appellant.
• Decision Date: 18 June 1990
• Docket Number: No. 23229

Page 789

392 S.E.2d 789 301 S.C. 493 SSI MEDICAL SERVICES, INC., Respondent,
v.
Donald L. COX; Heritage Trust Federal Credit Union; North
Charleston National Bank of South Carolina; Port City
Leasing, Inc., A South Carolina Corporation; and Southland
Trucking Company, A South Carolina Corporation, Defendants,
of whom
Donald L. Cox is Appellant. No. 23229. Supreme Court of South Carolina. Submitted March 20, 1990.
Decided June 18, 1990.

Page 791

[301 S.C. 495] Don C. Gibson, North Charleston, for appellant.

Stephen P. Groves, of Young Clement, Rivers & Tisdale, Charleston, for respondent.

HARWELL, Justice:

This case involves the issue of whether the trial judge properly entered summary judgment in favor of respondent.

I. FACTS

Respondent SSI Medical Services, Inc. (SSI) is a corporation headquartered in Charleston engaged in the manufacture and distribution of medical equipment. Its principle product is hospital beds. At one time, SSI provided automobiles and trucks for the business use of some of its employees. These vehicles were leased and the total fleet was comprised of approximately 850 vehicles. During appellant Donald L. Cox's (Cox) tenure with SSI, he was employed as the manager of [301 S.C. 496] the automobile and truck fleet. This action stems primarily from Cox's handling of the automobile fleet.

The normal lease term for automobiles was the first of either two years or 50,000 miles. When an automobile lease expired, the automobile was returned to the leasing company for disposal. SSI and the individual leasing company would then agree on the residual value of the automobile. If the leasing company was able to sell the automobile at either the residual value or more, SSI would pay nothing extra or receive the excess. If the leasing company received less than the residual value of the automobile, SSI would pay the leasing company the difference.

This situation provided no incentive to the leasing companies to obtain a sale of the automobiles at a price at or above the residual values as SSI more often had to pay the leasing company an additional amount. Cox believed that he could save SSI money by disposing of the automobiles himself thereby eliminating the leasing companies' participation. SSI agreed and Cox began selling the leased automobiles through wholesalers and occasionally made retail sales. When Cox sold an automobile, he would obtain the purchaser's personal check in the amount of the purchase price which was payable to either him or cash. More often than not, he would obtain a purchase price in excess of the residual value. Cox would then deposit the check into his personal checking account at North Carolina National Bank. Once the check cleared, Cox would obtain a cashier's check payable to the leasing company for the residual value or an amount slightly higher.

Cox was able to process a substantial number of automobiles through his personal disposal system. It is undisputed that Cox kept funds placed in his personal NCNB account for his personal use which constituted the difference between the residual value or slightly higher and the actual price he received from the sales. SSI was not aware that Cox was retaining funds from the automobile sales. Cox did not report or provide a reconciliation statement to SSI detailing the automobile sales, funds obtained, or funds he retained.

After SSI discovered what Cox was doing, Cox resigned from SSI. SSI initiated this action against Cox and other defendants including institutions where Cox maintained banking accounts and two companies owned by Cox. [301 S.C. 497] Although a complete procedural history is not necessary,

Page 792

SSI's complaint alleged causes of action for conversion, constructive trust, and claim and delivery against all defendants. SSI also sought an order of attachment on Cox's bank accounts and actual and punitive damages from Cox. SSI also sought a court order requiring that Cox hold funds in a constructive trust for the benefit of SSI, that Cox account to SSI, that Cox's bank accounts be frozen, and that the bank accounts of Cox's two companies be frozen. An order of attachment was issued. Cox's companies denied liability as did Cox. Cox however, counterclaimed for abuse of process and conversion.

SSI filed motions for summary judgment as to Cox's counterclaims and as to liability on SSI's claims against Cox. The trial judge issued an order granting SSI's motion for summary judgment as to the liability of Cox for the causes of action for conversion and constructive trust. SSI received summary judgment in its favor as to Cox's counterclaim for abuse of process, but the trial judge permitted Cox's conversion action against SSI to continue. Cox appeals from this order.

II. DISCUSSION

Summary judgment is appropriate when it is clear that there is no genuine issue of material fact and the conclusions and inferences to be drawn from the facts are undisputed. U.S. Leasing Corp. v. Janicare, Inc., 294 S.C. 312, 364 S.E.2d 202 (Ct.App.1988); South Carolina National Bank v. Joyner, 289 S.C. 382, 346 S.E.2d 329 (Ct.App.1986). In ruling on a motion for summary judgment, the evidence and the inferences which can be drawn therefrom should be viewed in the light most favorable to the nonmoving party. Davis v. Piedmont Engineers, Architects & Planners, P.A., 284 S.C. 20, 324 S.E.2d 325 (Ct.App.1984).

Further, Rule 56(e), SCRCP requires that when a motion for summary judgment is made and supported as provided by the rule, an adverse party may not rest upon the mere allegations or denials of his pleadings. The adverse party's response, including affidavits or as otherwise provided by the rule, must set forth specific facts showing there is a genuine issue for...