United States District Court, D. South Carolina, Charleston Division
ORDER AND OPINION
RICHARD MARK GERGEL, UNITED STATES DISTRICT COURT JUDGE
matter is before the Court on Defendants Richard DeVito and
Samuel Mullinax's motion for summary judgment (Dkt. No.
28). For the reasons set forth below, the Court grants in
part and denies without prejudice in part Defendants'
Johnny Thomerson alleges that the Defendants, the former
owners of Lenco Marine ("Lenco"), failed to provide
Plaintiff a three percent ownership interest in Lenco. Lenco
manufactured and sold trim tabs and other products to boat
manufacturers, and Defendant Samuel Mullinax served as the
CEO and Defendant Richard DeVito was the president. (Dkt. No.
28-9 at ¶ 3 - 4.) Lenco was sold to Power Products, LLC
in December 2016. (Id. at ¶ 13.)
was hired by Lenco no later than May 2007. (Plaintiffs
Deposition, Dkt. No. 28-1 at 35.) Plaintiff testified that
during discussions regarding his compensation with Defendant
DeVito prior to starting at Lenco, they had a
"discussion that we [Plaintiff and Brian Robinson,
another employee of Lenco] both wanted to have equity
ownership at some point in time in the future."
(Id. at 29.) Plaintiff acknowledges that at the time
he began at Lenco, he did not yet have an agreement regarding
an equity interest in the company, and instead Defendant
DeVito stated that they would "work on that as we go on
down the road." (Id. at 33 - 34; Plaintiffs
Deposition, Dkt. No. 28-2 at 23.) Though Defendants dispute
the nature of the conversation, Plaintiff testified that
Defendant DeVito ultimately provided some detail on the
equity plan in early 2009,  informing Plaintiff and Robinson
that Lenco was going to buy back a 15 percent interest from a
minority shareholder, Matthew Muer, and distribute it as a
three percent share to five employees, including Plaintiff
and Robinson. (Dkt. No. 28-2 at 26 - 27; 30 - 31; 35.)
Plaintiff at the time believed that the five sets of three
percent ownership share would be issued contemporaneously
with the stock buyback. (Id. at 30.)
2011, Plaintiff and Robinson had two conversations with
Defendant DeVito regarding the ownership share. When Plaintiff
and Robinson were in Florida with DeVito, they approached
DeVito asking, "where were we with our deal,"
meaning the "stock transfer." (Plaintiffs
Deposition, Dkt. No. 28-3 at 5 - 6.) Defendant DeVito, as
they approached, "pretty much blew [them] off."
(Id.) On another evening during a cookout at
Defendant DeVito's house, Plaintiff testified that he and
Robinson again asked about the stock transfer, and Defendant
DeVito "abruptly left our presence and went into his
house." (Id. at 7.) Robinson resigned shortly
thereafter without any ownership share of Lenco.
(Id.; 29-2 at ¶ 14.)
DeVito also told Plaintiff that he did not want to distribute
ownership shares in the company while there was a pending
lawsuit against Lenco, filed by Bennett Marine. (Dkt. No.
28-2 at 32.) Plaintiff testified that this was because
Defendant DeVito wanted to protect them from potential
liability in the lawsuit. (Id.; 29-1 at ¶ 6.)
The Bennett Marine litigation concluded in September 2013 in
favor of Lenco. (Dkt. No. 28-3 at 3.) However, when the
allegedly impeding Bennett Marine lawsuit ended, Plaintiff
did not receive the promised three percent interest. (Dkt.
No. 29-1 at ¶ 10.) When Plaintiff asked about the three
percent of equity, Defendant DeVito refused to speak about
the shares, telling Plaintiff he "didn't want to
talk about it or we'd [DeVito and Plaintiff] talk about
it later." (Id.) Finally, near the end of 2016,
Plaintiff asked Defendant DeVito whether he "still
intend[ed] to fulfill [his] promise to me of my 3%," and
DeVito stated "No, I am not." (Id. at
¶ 11; Dkt. No. 28-3 at 12.)
filed this action on April 9, 2018, in the Charleston County
Court of Common Pleas. (Dkt. No. 1) The action was removed to
this Court on June 8, 2018, based on diversity jurisdiction.
(Id.) Plaintiff brought six counts against
Defendants: Breach of Contract and Covenant of Good Faith and
Fair Dealing (Count 1); Promissory Estoppel (Count 2);
Quantum Meruit and Unjust Enrichment (Count 3); Negligent
Misrepresentation (Count 4); Constructive Fraud (Count 5),
and; the South Carolina Payment of Wages Act
("SCPWA") (Count 6). (Id.) Each claim
relates to the alleged failure to provide Plaintiff with a
three percent ownership share of Lenco. Defendants moved for
summary judgment on February 15, 2019. (Dkt. No. 28.)
Defendants argue that Plaintiffs claims are barred by the
statute of limitations and, in the alternative, that
Plaintiffs claims fail on the merits. (Id.)
Plaintiff opposed the motion, and the Parties submitted
additional briefs in support of their positions. (Dkt. Nos.
29, 32, 37, 40.)
prevail on a motion for summary judgment, the movant must
demonstrate that there is no genuine issue of any material
fact and that the movant is entitled to judgment as a matter
of law. Fed.R.Civ.P. 56(a). The party seeking summary
judgment has the burden of identifying the portions of the
"pleadings, depositions, answers to interrogatories, any
admissions on file, together with the affidavits, if any,
which show there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter
of law." Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). The Court will construe all inferences and
ambiguities against the movant and in favor of the non-moving
party. U.S. v. Diebold, Inc., 369 U.S. 654, 655
(1962). The existence of a mere scintilla of evidence in
support of the non-moving party's position is
insufficient to withstand a motion for summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
(1986). However, an issue of material fact is genuine if the
evidence is such that a reasonable jury could return a
verdict in favor of the non-movant. Id. at 257.
the moving party has carried its burden under Rule 56(c), its
opponent must do more than simply show that there is some
metaphysical doubt as to the material facts."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). "In the language of the Rule,
the nonmoving party must come forward with 'specific
facts showing that there is a genuine issue for
trial."' Id. at 587. "Where the record
taken as a whole could not lead a rational trier of fact to
find for the non-moving party, there is no 'genuine issue
for trial.'" Id. (quoting First
Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S.
253, 289 (1968)).
argue that Plaintiffs claims are barred by the applicable
statute of limitations. South Carolina applies the
"discovery rule" to determine when the statute of
limitations begins to run. Under "the discovery rule,
the statute of limitations begins to run from the date the
injured party either knows or should know, by the exercise of
reasonable diligence, that a cause of action exists for the
wrongful conduct." True v. Monteith, 327 S.C.
116, 489 S.E.2d 615, 616 (1997) (emphasis added). The
"exercise of reasonable diligence" requires that
the injured party "act with some promptness where the
facts and circumstances of an injury place a reasonable
person of common knowledge and experience on notice that a
claim against another party might exist." Dean v.
Ruscon Corp., 321 S.C. 360, 468 S.E.2d 645, 647 (1996).
The date on which the discovery of a cause of action should
have been made is an objective question. Bayle v. S.
Carolina Dep't of Tramp., 344 S.C. 115, 542 S.E.2d
736, 740 (S.C. Ct. App. 2001). Therefore, to the extent that
there is no conflicting evidence regarding whether a claimant
should have known that a cause of action existed, resolution
of the question is appropriate at summary judgment. See
Moriarty v. Garden Sanctuary Church of God, 341 S.C.
320, 534 S.E.2d 672, 681 (2000).
drawing all inferences in favor of Plaintiff, the undisputed
evidence demonstrates that Plaintiff knew or should have
known no later than September 2013 that Defendants had
refused to provide him an ownership share of Lenco. To begin
with, the undisputed evidence demonstrates that Brian
Robinson, who had also been promised a three percent share of
Lenco, departed the company in 2011 without any ownership
share. However, regardless of Robinson's departure in
2011, Plaintiff testified extensively that he believed he
would receive a three percent share of the company when the
Bennett Marine litigation ended. (Dkt. Nos. 28-2 at 32; 29 at
4.) The Bennett Marine litigation ended in September 2013
and, at that point, Plaintiff knew or should have known that
a cause of action existed for the failure to provide the
allegedly promised three percent ownership share. ...