September 27, 2017
From Greenville County Edward W. Miller, Circuit Court Judge
Day Hurley, of Turner Padget Graham & Laney, PA, of
Greenville, for Appellant.
Crittenden Bach and Robert Hudson Smith, both of Eller
Tonnsen Bach, of Greenville, for Respondent.
awarded Brian Morin damages on his breach of contract and
Wage Payment Act claims against Innegrity, LLC. Pursuant to
section 41-10-80(C) of the South Carolina Code (Supp. 2017),
the trial court trebled the Wage Payment Act damages, and
awarded Morin prejudgment interest, costs, and attorney's
fees. Innegrity appeals, arguing the trial court erred by (1)
denying its judgment notwithstanding the verdict (JNOV)
motion as to Morin's breach of contract claim because it
had proven the defense of impossibility, and some of the
damages were speculative; (2) denying its JNOV motion on
Morin's Wage Payment Act claim because the damages were
unsupported by the evidence, and Innegrity established the
defense of equitable estoppel; (3) trebling the Wage Payment
Act award; (4) excluding Morin's deposition testimony
from evidence; and (5) denying its motion for a new trial
based on after-discovered evidence. We affirm all of the
trial court's rulings except the trebling of part of
Morin's Wage Payment Act damages.
out of his home, Brian Morin developed a patented process for
manufacturing a lightweight, high-strength synthetic fiber.
In 2004, he founded Innegrity, LLC to bring the product to
market. He financed Innegrity's early growth with his own
funds and investments from family and friends. In 2008, Dr.
Robert Schwartz invested three million dollars in Innegrity.
In exchange, Morin transferred ownership of the intellectual
property to the company and signed an Employment Agreement
(Agreement) governing his rights and responsibilities as
President and CEO. The Agreement included the company's
promise to remove Morin as guarantor on any of
Innegrity's loans if he were fired "without
the influx of funds, the company suffered from the severe
recession that began in 2008. As money woes persisted,
Innegrity's Board instructed Morin to "stretch"
the company's cash. To avoid layoffs, in April 2009 Morin
and other key employees signed letters agreeing to reduce
their salaries by certain percentages, which they would
recoup as a bonus once the company raised another one million
dollars. Upon reaching the goal in September 2010, Morin and
the others signed a second agreement delaying the bonus
payout until collection of another two million dollars.
lingering recession, chronic undercapitalization, and Board
turnover increased pressure on Innegrity. To finance
equipment Morin valued at 2.5 million dollars, in 2008,
Innegrity borrowed 1.4 million dollars from BB&T in
exchange for a first lien on equipment and a personal
guarantee by Morin. Morin also guaranteed a loan to Innegrity
from Appalachian Development Company (ADC) and engaged the
investment firm McGladrey Capital to search for other
funding. In addition, Morin was instrumental in securing
substantial grants from the National Science Foundation (NSF)
and South Carolina Launch.
2009, an ex-Innegrity employee approached a Board member and
accused Morin of falsifying time records related to the NSF
grant. The Board members, including Morin, voted to hire
outside counsel to investigate the allegation and later
self-reported to the NSF, which suspended and ultimately
terminated the grant.
2010, several companies became interested in purchasing
Innegrity. After conducting due diligence, however, the
companies withdrew. As Innegrity's cash began
evaporating, its Board members began resigning, and those
left were less than cohesive. At an early November 2010 Board
meeting, a motion to terminate Morin for cause failed. A few
days later, the Board terminated Morin without cause. At the
time, he owned approximately 23 percent of the company.
Innegrity defaulted on the BB&T and ADC loans, and never
removed Morin as guarantor. BB&T later auctioned the
equipment for $700, 000, and sued Morin on his guaranty.
Innegrity refused to pay his severance, back pay, and other
monies, Morin brought this lawsuit. At the jury trial, he
sought damages for Innegrity's alleged breach of contract
and violation of the Wage Payment Act. Innegrity
counterclaimed for breach of fiduciary duty, breach of duty
of loyalty, and equitable estoppel. The jury awarded Morin
$308, 456 for breach of contract (including $150, 000 for the
BB&T loan) and $73, 230 on his Wage Payment Act claim.
After a post-trial hearing, the trial court trebled the Wage
Payment Act damages and awarded prejudgment interest,
attorney's fees, and costs.
challenges the denial of its JNOV motion on Morin's claim
for breach of the contract provision requiring Innegrity to
remove Morin as guarantor on the BB&T and ADC loans,
contending performance was impossible.
review a JNOV ruling in an action at law using the same
yardstick as the trial court: presuming credibility of the
evidence, we measure it in the light most favorable to Morin
and gauge whether there is enough evidence as to each element
of the claim to allow a rational jury to find in Morin's
favor. If there is, the motion must be denied, for when
reviewing a JNOV ruling, neither trial nor appellate courts
may second-guess jury verdicts supported by reasonable
evidence. S.C. Const. art. V, § 5; Welch v.
Epstein, 342 S.C. 279, 300, 536 S.E.2d 408, 419 (2000).
asserts it conclusively established its affirmative defense
of impossibility of performance at trial by showing the
company was insolvent at the time of Morin's termination,
and BB&T and ADC had rejected their request to remove
Morin from his guarantees.
doctrine of impossibility excuses performance when "the
thing to be done cannot by any means be accomplished, for if
it is only improbable or out of the power of the obligor, it
is not deemed in law impossible." Hawkins v.
Greenwood Dev. Corp., 328 S.C. 585, 593, 493 S.E.2d 875,
879 (Ct. App. 1997) (citation omitted). Innegrity bore the
burden of proving impossibility by the greater weight of the
cases were uniform that once a party contracted to perform an
act, their later failure to perform the act promised breached
the contract, unless it expressly excused performance or
allocated the risk of nonperformance elsewhere. This rule is
traced to Paradine v. Jane, 62 Eng. Rep. 897 (K.B.
1647), and its limited exceptions, as ...