Neeltec Enterprises, Inc. v. Long

741 S.E.2d 767, 402 S.C. 524, 2013 WL 694637, 2013 S.C. App. LEXIS 64
CourtCourt of Appeals of South Carolina
DecidedFebruary 27, 2013
DocketAppellate Case No. 2008-101646; No. 5094
StatusPublished

This text of 741 S.E.2d 767 (Neeltec Enterprises, Inc. v. Long) is published on Counsel Stack Legal Research, covering Court of Appeals of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Neeltec Enterprises, Inc. v. Long, 741 S.E.2d 767, 402 S.C. 524, 2013 WL 694637, 2013 S.C. App. LEXIS 64 (S.C. Ct. App. 2013).

Opinion

KONDUROS, J.

Neeltec Enterprises, Inc., d/b/a Fireworks Supermarket, filed a complaint alleging violation of the South Carolina Unfair Trade Practices Act (SCUTPA) against Willard Long, d/b/a Foxy’s Fireworks and d/b/a Fireworks Superstore. After hearing Long’s motion for summary judgment or, in the alternative, a substitution of parties, the special referee filed an order directing two corporations be substituted as defendants instead of Long. Neeltec appeals arguing the special referee erred in substituting the corporations because Long was responsible for his employees’ actions. We reverse and remand.

FACTS/PROCEDURAL BACKGROUND

Neeltec owns and operates a fireworks store called Fireworks Supermarket off of 1-95 in Walterboro. According to Neeltec, it advertises heavily with billboards along northbound 1-95. Neeltec asserted Long opened and operated a competing fireworks store next to Fireworks Supermarket and closer to the interstate exit. Neeltec averred Long changed his store’s sign to read “Fireworks Superstore” in early 2006 to capitalize on Neeltec’s advertising. After Neeltec repainted its outside wall facing 1-95 with an advertising display, Neeltec contended Long placed a forty-five-feet-long, nine-feet-tall storage container on the front of Long’s property, substantially blocking the view of Neeltec’s store.

In June of 2006, Neeltec filed a complaint against “Willard Long, d/b/a Foxy’s Fireworks, and d/b/a Fireworks Superstore,” alleging Long violated the SCUTPA by employing unfair and deceptive acts or practices and unfair methods of competition. Neeltec claimed Long’s acts “have damaged, threaten to- damage, and continue to damage” Neeltec’s business by reducing sales. Neeltec requested actual, punitive, and statutory treble damages as well as attorney’s fees and costs.

Long’s answer stated a South Carolina corporation named Hobo Joe’s, Inc. originally opened a store, named it “Foxy’s Fireworks,” and later changed the sign on the store to “Fireworks Super Store.” Long admitted Hobo Joe’s, Inc. placed a [527]*527storage container in front of its store. Long stated Neeltec had sued the wrong party, and he consented to the substitution of the proper defendant. By way of a counterclaim, Long argued Neeltec’s actions constituted a public nuisance.

Neeltec served and filed a motion to amend the complaint and motion for a temporary injunction. The motion to amend was granted. In June of 2007, the case was referred to a special referee, who declined to ■ issue the injunction. In. August of 2007, Long served and filed a motion for summary judgment or, in the alternative, a substitution of- parties.

Long’s motion asserted (1) Long did not individually own the Fireworks Superstore; (2) Hobo Joe’s, Inc., owned the store when the action began; (3) Fox’s Fireworks Superstore, Inc. now owned the store; (4) Neeltec did not assert a claim for piercing the corporate veil nor was such- a claim supported by the facts; and (5) Neeltec sued the wrong party. Long requested he be dropped as a defendant and Hobo Joe’s, Inc. and Fox’s Fireworks Superstore, Inc. be added.

In June of 2008, the special referee met with the parties to hear Long’s motion.1 At the hearing, Long admitted the store was always owned by his corporations and, while he is the sole' shareholder, he has never operated the store as a sole proprietorship.

The special referee filed an order in August of 2008, denying summary judgment. The order found (1) Neeltec’s claims were against the business Fireworks Superstore, which is a corporation; (2) the complaint did not allege conspiracy be- ■ tween Long and the corporation; (3) the complaint did not allege failure to follow corporate formalities or any other basis for piercing the corporate veil; and (4) Long was not the proper defendant for the claims presented. The special referee held the action should proceed against the two corporations that have owned and operated Fireworks Superstore, Hobo Joe’s, Inc. and Fox’s Fireworks Superstore, Inc.2 The order concluded:

[528]*528[ T]o the extent [Neeltec] wishes to articulate a conspiracy claim against ... Long, individually, along with the subject corporations, [Neeltec] shall submit ... no later than thirty (30) days from the date of this Order, a proposed Amended Complaint setting forth any such claims as well as a short Memorandum of Law....

The Record does not indicate ah amended complaint was ever filed. Neeltec appealed to this court, which dismissed the appeal because it was not immediately appealable. See Neeltec Enterps., Inc. v. Long, 391 S.C. 177, 705 S.E.2d 57 (Ct.App.2011). Neeltec petitioned the South Carolina Supreme Court for certiorari, which the supreme court granted. On appeal, the supreme court reversed this court and found: “The order requiring petitioner to discontinue its SCUTPA suit against respondent Long affects petitioner’s substantial right to name its defendant. This interlocutory order is immediately appeal-able under § 14 — 3—330(2)(a)[of the South Carolina Code].” Neeltec Enterps., Inc. v. Long, 397 S.C. 563, 567, 725 S.E.2d 926, 929 (2012) (citing Watts v. Copeland, 170 S.C. 449, 456-57, 170 S.E. 780, 783 (1933)). The supreme court also noted the special referee’s contention that Neeltec could amend its complaint to assert a conspiracy theory was irrelevant to the appealability of the order. Id. at 567 & n. 3, 725 S.E.2d at 929 & n. 3 (citing McMillan v. Oconee Mem’l Hosp., Inc., 367 S.C. 559, 565, 626 S.E.2d 884, 887 (2006) (“[A] corporation cannot conspire with itself.”)). The supreme court remanded the appeal to this court to consider the merits. Id. at 567-68, 725 S.E.2d at 929.

LAW/ANALYSIS

Neeltec argues the special referee erred in substituting the corporations for Long. Neeltec argues Long should be personally liable for commanding or inducing the corporation to commit a harmful act.3 We agree.

“[I]n private actions under the [SC]UTPA, directors and officers are not liable for the corporation’s unfair trade practices unless they personally commit, participate in, direct, or authorize the commission of a violation of the [SC]UTPA.” [529]*529Plowman v. Bagnal, 316 S.C. 283, 286, 450 S.E.2d 36, 38 (1994) (citing Donsco, Inc. v. Casper Corp., 587 F.2d 602 (3rd Cir.1978) (holding corporate officer is individually liable for unfair competition in which he participates); E. Star, Inc. v. Union Bldg. Materials Corp., 6 Haw.App. 125, 712 P.2d 1148 (1985) (finding corporate officer or director who participates in unfair or deceptive acts is jointly and severally liable with corporation); Moy v. Schreiber Deed Sec. Co., 370 Pa.Super. 97, 535 A.2d 1168

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705 S.E.2d 57 (Court of Appeals of South Carolina, 2011)
Moy v. Schreiber Deed Security Co.
535 A.2d 1168 (Supreme Court of Pennsylvania, 1988)
Watts v. Copeland
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Bluebook (online)
741 S.E.2d 767, 402 S.C. 524, 2013 WL 694637, 2013 S.C. App. LEXIS 64, Counsel Stack Legal Research, https://law.counselstack.com/opinion/neeltec-enterprises-inc-v-long-scctapp-2013.