THIS
OPINION HAS NO PRECEDENTIAL VALUE.
IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT
AS PROVIDED BY RULE 239(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Alvin Herbert Shuman,
Respondent/Appellant,
v.
Charleston Lincoln Mercury, Inc. & Haywood B. Hyman, Sr.,
Appellants/Respondents.
Appeal From Charleston County
Thomas L. Hughston, Jr., Circuit Court
Judge
Unpublished Opinion No. 2004-UP-001
Heard December 10, 2003 Filed January
6, 2004
Withdrawn, Substituted and Re-Filed
February 19, 2004
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED
G. Dana Sinkler, of Charleston, and W. Reilly Marchant,
of Richmond, for Appellants-Respondents.
Helen Tyler McFadden and W.E. Jenkinson, III, both of Kingstree,
for Respondent-Appellant.
PER CURIAM: This cross-appeal involves
a contract dispute and a claim for unpaid wages arising out of Alvin Shumans
(Shuman) employment with a car dealership. A jury returned a verdict in favor
of Shuman against Charleston Lincoln Mercury (CLM) and Heyward B. Hyman, Sr.
[1] for $175,000 for breach of contract and $65,000 for unpaid wages.
The trial court reduced the breach of contract verdict by $65,000, doubled the
amount of unpaid wages pursuant to the South Carolina Payment of Wages Act,
and awarded Shuman $75,000 in attorneys fees. CLM and Shuman appeal. We affirm
in part, reverse in part, and remand.
FACTS
Shuman was employed as general manager of CLM.
In addition to a set salary, Shuman received incentives or bonuses based on
the dealerships net profit. In 1998, CLM began attempts to sell the dealership.
On July 30, 1998, Shuman received an employment agreement from CLM which provided
that, in exchange for Shuman using his best efforts to aid in the sale of the
dealership and continuing to serve as general manager, he would receive a $240,000
lump sum severance payment at the time of the closing of the sale of the dealership.
The agreement stated the purpose of the payment was to secure Shumans cooperation
in selling the dealership despite the fact that the sale could result in his
loss of employment. The agreement was signed by John Conway, CLMs vice-president.
In January 1999, CLM began negotiations with Sonic
Automotive, Inc. for the sale of the CLM dealership. Because of the pending
sale of CLM, Shuman sought employment with a car dealership in Pennsylvania.
On January 9, 1999, Shuman entered into a second employment agreement with
CLM providing Shuman with a six-month term of employment, renewable unless written
notice of termination was given by either party sixty days prior to the expiration
of a term. The 1999 agreement referenced the terms of the prior agreements
between the parties. The 1999 agreement further provided that Shuman would
make himself available on CLMs premises a minimum of seven days per month and
would be available for telephone consultations with the owner and managers of
CLM as necessary. Shuman continued working at CLM as well as with the dealership
in Pennsylvania.
By letter of July 2, 1999, CLM terminated Shumans
employment. On August 17, 1999 an agreement to sell the CLM dealership to Sonic
was finalized. CLM did not provide Shuman with sixty days written notice of
its intent to terminate his employment and did not provide him with a severance
payment.
Shuman filed this action against CLM alleging damages
for breach of contract and failure to pay wages. In separate verdict forms,
the jury returned a verdict in favor of Shuman against CLM in the amount of
$175,000 for the breach of contract claim and $65,000 for the failure to pay
wages claim. The trial court determined that the $65,000 the jury awarded for
unpaid wages was included in the breach of contract award and reduced the verdict
by $65,000. The trial court doubled the award for unpaid wages pursuant to
S.C. Code Ann. § 41-10-80(C) (Supp. 2002) and awarded $75,000 in attorneys
fees and costs.
LAW/ANALYSIS
1. CLM argues the trial court erred in submitting
Shumans $240,000 severance pay claim to the jury because the severance pay
agreement was contingent on Shumans inability to obtain a comparable position
with the buyer of the CLM dealership. Specifically, CLM asserts that because
Shuman accepted employment elsewhere prior to the closing of the sale of the
CLM dealership he was not entitled to the severance payment. We find no error.
A condition precedent is any fact . .
. which, unless excused, must exist or occur before a duty of immediate performance
by the promisor can arise. Ballenger Corp. v. City of Columbia, 286
S.C. 1, 5, 331 S.E.2d 365, 368 (Ct. App. 1985). Whether a stipulation in a
contract constitutes a condition precedent is a question of construction dependent
on the intent of the parties to be gathered from the language they employ.
Id. In the current appeal, there was conflicting testimony from the
parties as to whether Shuman was entitled to a severance payment. The employment
agreement regarding the $240,000 severance payment made no reference to the
payment being conditioned on Shumans failure to obtain employment with the
purchaser of the dealership. Accordingly, the evidence created a jury question
as to whether Shuman was entitled to severance pay and whether the pay was contingent
on his inability to obtain comparable employment with the purchaser of the CLM
dealership. See Fleming v. Borden, Inc., 316 S.C. 452, 457, 450
S.E.2d 589, 592 (1994) (In passing on motions for directed verdict, the trial
court must view the evidence and all inferences which may reasonably be drawn
therefrom in the light most favorable to the non-moving party. If more than
one reasonable inference can be drawn from the evidence, the case must be submitted
to the jury.).
2. CLM asserts the trial court erred in allowing
Shuman to testify about the meaning of the term net profit because such testimony
violated the parol evidence rule. We disagree.
Shumans original employment agreement
with CLM in 1997 provided that he would receive a certain percentage of the
dealerships net profits. Shuman also alleged that under the terms of the payroll
agreement he was entitled to a percentage of the net profit on the sale of
the CLM dealership to Sonic Automotive, Inc. At trial the court allowed Shuman
to testify as to the construction of the term net profit in relation to the
dealership.
The parol evidence rule generally prohibits
the admission of extrinsic evidence to vary or contradict the terms of a contract.
Penton v. J.F. Cleckley & Co., 326 S.C. 275, 486 S.E.2d 742 (1997).
Parol evidence, however, may be admissible to ascertain the true meaning and
intent of the parties when the contract is ambiguous. Id.; see also
Klutts Resort Realty, Inc. v. Down Round Dev. Corp., 268 S.C. 80, 232
S.E.2d 20 (1977). An ambiguous contract is one capable of being understood
in more ways than just one or one unclear in meaning because it expresses its
purpose in an indefinite manner. Penton, 326 S.C. at 280, 486 S.E.2d
at 745. The subject-matter of the contract and the purpose of its execution
are material to the ascertainment of the intention of the parties and the meaning
of the terms they use, and when these are ascertained they must prevail over
the dry words of an agreement. Chatfield-Woods Co. v. Harley, 124 S.C.
280, 286, 117 S.E. 539, 541 (1923) (citation omitted).
Here, the term net profit was ambiguous
and the trial court allowed Shuman to explain the term within the context of
car dealerships. We find this testimony did not violate the parol evidence
rule and did not vary or contradict the terms of the parties written agreements.
3. The jury awarded Shuman $65,000 for his unpaid
wages claim. The trial court doubled the award pursuant to the South Carolina
Payment of Wages Act. CLM argues the trial court abused its discretion in doubling
the award. Conversely, Shuman asserts that he was entitled to treble damages.
Section 41-10-80(C) of the Payment of
Wages Act provides that [i]n case of any failure to pay wages . . . the employee
may recover in a civil action an amount equal to three times the full amount
of the unpaid wages, plus costs and reasonable attorneys fees as the court
may allow. S.C. Code Ann. § 41-10-80(C) (Supp. 2002).
Our supreme court has held that a trial
court has the discretion to decide whether or not to award treble damages:
If there is a dispute over unpaid wages the employer acts at his peril and
the court in its discretion may award treble damages when the withholding was
unreasonable and there was no good faith wage dispute. Rice v. Multimedia
Inc., 318 S.C. 95, 99, 456 S.E.2d 381, 383 (1995) (citation omitted). Citing
Rice, this Court recently reiterated that the statutes explicit statement
that the employee may recover treble damages indicates the matter is committed
to the trial courts discretion. ONeal v. Intermedical Hosp., 355 S.C.
499, 585 S.E.2d 526 (Ct. App. 2003).
We find the statute specifically provides the court
with discretion to award an amount equal to three times the amount of
the unpaid wages, rather than an amount up to three times the unpaid
wages, so the doubling of an unpaid wages award is not an option. Consequently,
we reverse the trial courts doubling of the unpaid wages award and remand for
the court to decide, in its discretion, whether or not to award treble damages
on the unpaid wages claim. The court should base its determination on the current
record and explain the grounds for its ruling.
4. CLM argues the trial courts award to Shuman
of $75,000 for attorneys fees was excessive and improper. We find the award
of attorneys fees was not excessive under the circumstances of this case.
See Evans v. Taylor Made Sandwich Co., 337 S.C. 95, 100, 522 S.E.2d
350, 352 (Ct. App. 1999) (The amount of unpaid wages may be trebled and costs
and attorneys fees may be added pursuant to the Act.).
5. CLM asserts the trial court lacked jurisdiction
to enter an order prohibiting CLM from seeking disbursement of the escrowed
accounts. We disagree.
Prior to the sale of the dealership to
Sonic, CLM entered into two escrow agreements covering a portion of the proceeds
of the sale of assets. One of the escrow agreements is held with the Chicago
Title Insurance Company in Illinois and the other agreement is with the First
Union National Bank in North Carolina. The North Carolina escrow agreement
was entered into to cover claims Shuman and Conway had brought against CLM.
The Chicago agreement contained funds set aside for contingent environmental
liabilities associated with the dealership property and contained the following
provisions: (1) the agreement would be governed by the applicable laws of South
Carolina, (2) the parties submitted to personal jurisdiction in South Carolina,
and (3) the parties waive[d] any and all rights under the laws of any other
state to object to jurisdiction within the State of South Carolina. Because
of the impending appeal and the concern that funds would not be available to
pay the final judgment, the trial court ordered CLM not to distribute the balance
of the funds without the courts approval, although certain designated expenditures
were exempted.
We find the trial courts order merely prohibited
CLM from making a request to disburse the funds for any purpose other than those
specifically authorized by the escrow agreements. Contrary to CLMs assertion,
the trial court did not merge the funds or make any orders directly affecting
the balance in the funds. Moreover, as Shuman points out, one of the agreements
expressly consented to jurisdiction in South Carolina and the court had jurisdiction
over the parties in this action. We therefore find no error in the trial courts
order regarding the escrow agreements.
6. Shuman argues the trial court erred in failing
to provide him with prejudgment interest on the $175,000 judgment because it
was a sum certain. We find no error.
The law allows prejudgment interest on
obligations to pay money from the time when, either by agreement of the parties
or operation of law, the payment is demandable, if the sum is certain or capable
of being reduced to certainty. Babb v. Rothrock, 310 S.C. 350, 353,
426 S.E.2d 789, 791 (1993). Here, the issue of whether Shuman was entitled
to any damages was heavily disputed between the parties and was not clear from
the parties agreements. CLM disputed the existence of the agreements on which
Shuman based his claims for breach of contract and failure to pay wages, alleging
Conway lacked the authority to enter into the agreements on its behalf. CLM
also disputed the amount of any severance pay due to Shuman and the parties
disagreed on whether any net profit was due on the sale of the business as well
as its method of calculation. Under the circumstances, the amount of severance
and unpaid wages that Shuman may have been entitled to was not readily ascertainable,
as was evidenced by the jury award, which was somewhere in between the amounts
argued to the jury; therefore, he was not entitled to prejudgment interest.
7. Shuman asserts the trial court erred in finding
the amount the jury awarded him for unpaid wages was included in the amount
the jury awarded for his contract claim. We disagree.
In charging the jury, the trial court
explained that Shumans claims for breach of contract and failure to pay wages
overlapped because both included Shumans claim of $65,000 in unpaid salary
and the possible $325,350 he claimed was owed to him as incentive pay. The
trial court further stated to the jury: If you find that he is entitled to
any of that money on both of the claims, he wont be paid twice. The jury
returned two verdict forms. The first form stated: We find [CLM] knowingly
failed to pay [Shuman] wages due him as required by law in the amount of $65,000.00
Dollars. The second form stated: We find [CLM] broke the contract of employment
and must pay [Shuman] $175,000 Dollars actual damages.
We find that, in light of the trial courts
instructions to the jury and the language of the two verdict forms, the trial
court correctly found that the amount the jury awarded Shuman for his wage claim
was included in the amount awarded for the breach of contract claim.
CONCLUSION
We affirm all of the trial courts rulings
with the exception of its doubling of the jurys award for unpaid wages, which
we reverse and remand upon our finding that the Payment of Wages Act only provides
a trial court with the discretion to award either treble damages or no additional
damages. Upon remand, the trial court shall use the existing record in making
its determination and should give the basis for its ruling.
AFFIRMED IN PART, REVERSED IN PART, and REMANDED.
GOOLSBY and ANDERSON, JJ., and CURETON, A.J., concur.
[1] CLM also includes Haywood B. Hyman, Sr. where appropriate as both
are parties to this appeal.