Vacation Time of Hilton Head Island, Inc. v. Lighthouse Realty, Inc.

• Court: South Carolina Court of Appeals
• Writing for the Court: GOOLSBY; CURETON, J., concurs, and GARDNER; GARDNER
• Citation: Vacation Time of Hilton Head Island, Inc. v. Lighthouse Realty, Inc., 286 S.C. 261, 332 S.E.2d 781 (S.C. App. 1985)
• Decision Date: 25 March 1985
• Docket Number: No. 0518,0518
• Parties: VACATION TIME OF HILTON HEAD ISLAND, INC., Respondent, v. LIGHTHOUSE REALTY, INC., Appellant. . Heard

Page 781

332 S.E.2d 781

286 S.C. 261

VACATION TIME OF HILTON HEAD ISLAND, INC., Respondent, v. LIGHTHOUSE REALTY, INC., Appellant.

No. 0518.

Court of Appeals of South Carolina.

Heard March 25, 1985.

Decided July 2, 1985.

Kermit S. King, of King & Cobb, Columbia, for appellant.

William M. Bowen and Drew A. Laughlin, both of Bowen, Smoot & Laughlin, Hilton Head Island, and John S. Taylor, Jr., of Robinson, McFadden, Moore, Pope, Williams, Taylor & Brailsford, P.A., Columbia, for respondent.

GOOLSBY, Judge:

In this action for breach of fiduciary duties, Lighthouse Realty, Inc., appeals from a jury verdict in favor of the respondent Vacation Time of Hilton Head Island, Inc., in the amount of $50,000. The issues on appeal relate to the cross-examination of a witness as to his interest in certain prior litigation, the sufficiency of the evidence concerning breach of fiduciary duties, the trial judge's jury instructions concerning punitive damages and nondisclosure of material facts, a motion to strike punitive damages from the complaint, and the absence of the trial judge during jury deliberations. We affirm.

Vacation Time entered into a listing agreement with Lighthouse, a real estate agency, on July 3, 1980. Under the terms of the agreement, Lighthouse agreed to act as Vacation Time's broker for the sale of approximately five acres of land owned by Vacation Time on Hilton Head Island. Vacation Time agreed to pay Lighthouse a ten per cent sales commission if the property were sold.

On Thursday, July 31, 1980, Jeff Wilson of Lighthouse communicated two offers to Dennis Lowes, the President of Vacation Time. One offer was submitted by Westwood Developers, Inc., and the other by John Reed. Both offers were for $335,000 and contained contingencies. Unknown to Lowes, Reed was an officer of Lighthouse.

Lowes rejected both offers because of the contingencies.

Both Westwood and Reed resubmitted new offers the following day. Westwood's offer was for $335,000 from which a real estate commission of $35,000 would be deleted. Reed's offer was for "$306,000 net" to Vacation Time, meaning Reed would be responsible for the sales commission Vacation Time had agreed to pay Lighthouse upon the sale of the property. Neither offer contained a contingency.

On Saturday, August 2, 1980, Westwood's President, Richard E. Greider, and its financial backer for the Vacation Time venture, Frank O'Donnell, discussed increasing Westwood's offer. They agreed that Greider, who was negotiating for Westwood, could increase the offer from $50,000 to $60,000 "if necessary" to acquire the property.

Wilson, who had been advised by Lowes he would make no decision regarding the two offers prior to Monday, August 4, 1980, telephoned Lowes on Saturday, August 2, 1980, and pressed him for a decision. Lowes told Wilson that if he had "to make a decision, naturally [he was] going to make the decision to favor the $6,000 higher price."

Greider called Wilson on Sunday. Although Greider submitted no new offer, Greider informed Wilson that Westwood would be willing to increase its offer if that was what it would take to buy the property. Wilson, however, indicated to Greider he did not think Vacation Time wanted more money.

Wilson telephoned Lowes "two, possibly three" times on Sunday to inquire if Lowes had made any decision. Lowes repeated his preference for the offer that would net him the greater amount and finally told Wilson he accepted Reed's offer. Lowes then signed the Reed contract.

At this time, Lowes still did not know Reed was an officer of Lighthouse. He also did not know Westwood was willing to increase its offer.

Shortly after Lowes accepted the Reed offer, Wilson called a sales agent for Lighthouse, Richard F. Turner, to tell him of Lowes's decision. Wilson also contacted Reed to tell him Lowes "had agreed to his deal."

Turner then telephoned Greider and said to him, "[W]e got beat, you know, we lost the deal." Greider immediately questioned Turner about the fairness of the transaction, referring to the fact that Lighthouse had failed to inform him Reed was an officer of Lighthouse and that Westwood was prepared to increase its offer.

Turner later telephoned Wilson to give him Westwood's reaction.

Wilson in turn called Lowes and advised him that Reed "agreed to the deal" but because Westwood was upset about its offer not being accepted, they needed to confer.

On Monday afternoon, August 4, 1980, Wilson and Lighthouse's attorney, James M. Herring, met with Lowes in Lowes's office. Lowes learned for the first time Reed was an officer of Lighthouse when Herring explained to Lowes that Greider "was upset" over the rejection of Westwood's offer and that Greider felt Reed's connection with Lighthouse was influencing either Lowes or Lighthouse.

Herring recommended to Wilson and Lowes that Westwood and Reed be requested to resubmit their bids in writing directly to Lowes and Lowes "then [could] decide which [was] the best proposition, if any, and sign the contract [he] wish[ed] to sign." Lowes left the meeting thinking both offerors would be contacted and asked to submit new bids.

The next day, however, Wilson informed Lowes that Reed's bid was a final bid and that Reed "was not going to get involved in any kind of a bidding situation." After seeking legal advice, Lowes delivered the signed contract to Wilson.

At no time did Wilson mention to Lowes that Westwood was prepared to make a higher offer for the property. Moreover, Lighthouse made no effort to contact Westwood after the Monday meeting to inform it of a new opportunity to bid on the property.

Vacation Time initiated this action against Lighthouse in January, 1981. Its complaint alleges, among other things, that Lighthouse, acting as its broker, assumed the duties of a fiduciary to act in good faith and to inform Vacation Time of all material facts concerning the sale of the subject property and that Lighthouse willfully breached its duties to further its own interests. Vacation Time's complaint also alleges it sustained actual and punitive damages in the amount of $150,000.

In its answer, Lighthouse acknowledges its broker-principal relationship with Vacation Time but denies the breach of any duties arising therefrom.

This appeal followed the return of a jury verdict in favor of Vacation Time in the amount of $50,000 actual damages and the denial of Lighthouse's post-trial motions.

I. Cross-examination

Lighthouse contends the trial judge erred in sustaining Vacation Time's objection to Lighthouse's cross-examination of O'Donnell regarding his involvement in litigation earlier brought by Westwood against Lighthouse. As we mentioned, O'Donnell provided Westwood with financial support for the Vacation Time venture.

On cross-examination, Lighthouse asked O'Donnell, "Would it be fair to say that ... you were also more than just a casual bystander in the litigation instituted by Westwood against Lighthouse?" Vacation Time objected to the question on the ground of relevancy and the trial judge sustained the objection.

Considerable latitude is generally allowed in the cross-examination of an adverse witness for possible bias. Martin v. Dunlap, 266 S.C. 230, 222 S.E.2d 8 (1976). North Greenville College v. Sherman Construction Co., Inc., 270 S.C. 553, 243 S.E.2d 441 (1978). "Evidence of past or pending litigation between the witness and the party against whom the witness is testifying is thus commonly admissible to demonstrate bias." Id. at 556, 243 S.E.2d at 442. But to warrant the reversal of a limitation placed on the scope of cross-examination by the trial judge, a manifest abuse of discretion and prejudice must be demonstrated. See Barrineau v. Charleston Consolidated Railway, Gas & Electric Co., 81 S.C. 20, 61 S.E. 1063 (1908); cf. Hall v. Palmetto Enterprises II, Inc., of Clinton, 282 S.C. 87, 317 S.E.2d 140 (Ct.App.1984) (exclusion of evidence forms no basis for reversal absent a clear showing of an abuse of discretion, commission of legal error in its exercise, and prejudice to the appellant's rights).

We hold that the trial judge's refusal to allow cross-examination of O'Donnell concerning his participation in earlier litigation brought by Westwood against Lighthouse, if error, did not prejudice Lighthouse because the proof was not required to show his bias. O'Donnell's bias was obvious.

He testified he was "confused" and "upset" over Lighthouse's handling of the transaction; he told Lighthouse he "was going to go directly to the owner and make it clear to them" what had happened; he also told Lighthouse he "didn't think the whole thing was handled properly"; and he later offered to indemnify Vacation Time for the sales commission Lighthouse may have brought suit to obtain in the event Vacation Time sold the property to Westwood.

The limitation placed by the trial judge on the scope of O'Donnell's cross-examination, therefore, does not warrant a reversal.

II. Sufficiency of Evidence

Lighthouse contends the trial court erred in refusing to grant its motions for involuntary nonsuit, directed verdict, and judgment notwithstanding the verdict. It claims the evidence raises no inference Lighthouse breached any fiduciary duty it owed Vacation Time. We disagree.

In ruling on motions for nonsuit [ Hanselmann v. McCardle, 275 S.C. 46, 267 S.E.2d 531 (1980) ], directed verdict [ Jones v. Broome, 277 S.C. 295, 286 S.E.2d 664 (1982) ], and judgment notwithstanding the verdict [ Allstate Ins. Co. v. State Farm Mutual Automobile Ins. Co., 260 S.C. 350, 195 S.E.2d 711 (1973) ], a trial court is required to view the evidence and the inferences that reasonably can be drawn therefrom in the light most favorable to the party resisting the motions and to deny the motions if either the evidence yields more than one inference or its inferences are in doubt. Holmes v. Black River Electric Co-operative, Inc., 274 S.C. 252, 262 S.E.2d 875 (1980). We are required to affirm if...