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2011-UP-044 - Hadwin v. Ocean Air Repair & Construction, Inc.

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Mary K. Hadwin Respondent,

v

Ocean Air Repair & Construction, Inc. and David Warren Linker Appellant.


Appeal From Charleston County
 Thomas L. Hughston, Jr., Circuit Court Judge


Unpublished Opinion No.  2011-UP-044
Submitted October 1, 2010 – Filed February 2, 2011


REVERSED


D. Mark Stokes, of North Charleston, for Appellant.

Paul E. Tinkler, and Joshua P. Stokes, of Charleston, for Respondent.

PER CURIAM:  Mary Hadwin brought suit against Ocean Air Repair and Construction, Inc., (Ocean) and David W. Linker, for breach of contract, and a violation of section 33-14-101(4) of the South Carolina Code (2006), as well as an attempt to pierce Ocean's corporate veil.  The trial court granted partial summary judgment in Hadwin's favor for $455,559.00.  We reverse.[1]  

FACTS

Linker incorporated Ocean in 1999.  He employed Hadwin, his mother-in-law, as a bookkeeper.  Between April 2001 and March 2004, Hadwin wrote approximately forty checks to Ocean, in various amounts, totaling $358,450.  From June 2001 to May 2006, Ocean wrote a series of checks to Hadwin for a total amount of $119,150. 

In 2008, Hadwin brought this action, alleging her payments to Ocean were loans, and demanding repayment.  Ocean denied the allegations, asserting as defenses: (1) the payments were investments, (2) the statute of limitations, and (3) the statute of frauds. 

The trial court granted partial summary judgment for Hadwin, finding: (1) the payments made by Hadwin to Ocean were loans, not investments; and therefore, Hadwin was entitled to repayment; (2) Ocean's affirmative defense of the statute of frauds failed as a matter of law, and (3) Ocean's affirmative defense of the statute of limitations failed as a matter of law.  Ocean appeals. 

STANDARD OF REVIEW

When reviewing a grant of summary judgment, this court applies the same standard as the trial court, and summary judgment shall be proper when there exists no issue of material fact and the moving party is entitled to judgment as a matter of law.  Rule 56(c), SCRCP.  In making this determination the evidence and all reasonable inferences therefrom must be viewed in the light most favorable to the non-moving party.  Law v. S.C. Dep't of Corrs., 368 S.C. 424, 434, 629 S.E.2d 642, 648 (2006).  Summary judgment is a drastic remedy, "[t]he purpose of [which] is to expedite the disposition of cases which do not require the services of a fact finder." Singleton v. Sherer, 377 S.C. 185, 198, 659 S.E.2d 196, 203 (Ct. App. 2008) (internal quotations omitted).  To overcome summary judgment in cases applying the preponderance of the evidence burden of proof, the non-moving party need only present a scintilla of evidence creating a genuine issue of material fact.  Zurich Am. Ins. Co. v. Tolbert, 387 S.C. 280, 283, 692 S.E.2d 523, 524 (2010); Hancock v. Mid-South Mgmt. Co., 381 S.C. 326, 330, 673 S.E.2d 801, 803 (2009). 

LAW/ANALYSIS

Ocean argues the trial court erred, as a matter of law, in granting summary judgment.[2]  We agree.

In this case, the trial court ruled:

Defendants allege that the payments into the account were not loans, but instead were investments by Plaintiff [(Hadwin)] in the company.  However, the affidavit for Defendant David Warren Linker . . . in opposition to the motion indicated that these deposits were "advances."  An advance is a loan.  See RIM Assocs. v. Blackwell, 359 S.C. 170, 182, 597 S.E.2d 152, 159 (Ct. App. 2004).  Moreover, Defendant Linker reveals in his affidavit that he intended to reorganize the corporation to grant stock to Plaintiff.  There is no indication in the affidavit, however, that stock was ever issued.  Accordingly, a finder of fact could come to no other conclusion than the deposits Plaintiff made into the corporate account were loans and not investments of equity.  It thus appears that Plaintiff is entitled to summary judgment on the issue.  

In his affidavit, Linker stated; "at times the company needed infusions of cash which the Plaintiff advanced to the company strictly as an investment in the business." (emphasis added)  Ocean maintains the trial court looked at this term in isolation rather than in context, asserting that the evidence shows a disputed issue of material fact as to whether the payments to Ocean were intended as a loan or investments. 

Generally, courts are bound by a duty to interpret words and terms in context, rather than in isolation.  See, e.g., Jackson v. Charleston School Board, 316 S.C. 177, 181, 447 S.E.2d 859, 861 (1994) (recognizing that when interpreting a statute, a court should view the language in context, not in isolation); Shultz v. Barr, 186 S.C. 498, 502, 196 S.E. 177, 179 (1938) (pointing out that when interpreting terms in a will, words must be construed in the context of how they are used rather than in isolation); State Accident Fund v. S.C. Second Injury Fund, 388 S.C. 67, 75, 639 S.E.2d 441, 445 (Ct. App. 2010) (indicating that when interpreting the terms of a contract the "court must examine the entire contract" not merely certain phrases in isolation).  Thus, to the extent a trial court relies on a term in isolation, it fails to view the evidence in the light most favorable to the non-moving party.

Further, when a motion for summary judgment is made and properly supported, the non-moving party "may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits . . . must set forth specific facts showing that there is a genuine issue for trial."  Rule 56(e), SCRCP (emphasis added). 

Hadwin asserts that Linker's affidavit provided no more evidence than that supplied in Ocean's answer; thus, Ocean failed to meet its burden.  While we must agree that the burden is on Ocean to rebut Hadwin's evidence, Ocean's position is premised upon an oral agreement.  Evidence of this oral agreement was presented by way of an affidavit.   

In the case at bar, Ocean presented evidence by way of Linker's affidavit, creating a dispute as to the parties' intentions and understanding.  Based on our standard of review, when the evidence is viewed in the light most favorable to Ocean, it raises an issue of fact sufficient to overcome summary judgment. 

CONCLUSION

For the foregoing reasons, the trial court's grant of partial summary judgment is

REVERSED.

SHORT, THOMAS, and LOCKEMY, JJ., concur.


[1]  We decide this case without oral argument pursuant to Rule 215, SCACR. 

[2] Ocean does not challenge the trial court's ruling on the defenses of statute of frauds and statute of limitations; therefore, the only issue on appeal is whether the trial court erred in finding the payments were loans as a matter of law and in granting summary judgment.