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Mac Papers, Inc. v. Genesis Press, Inc.

Court of Appeals of South Carolina

April 3, 2019

Mac Papers, Inc., Appellant/Respondent,
v.
Genesis Press, Inc., Lawrence I. Kudeviz, Barry Zissok, and Lewis Levin, Defendants, Of whom Lawrence I. Kudeviz is the Respondent/Appellant. Appellate Case No. 2016-001296

          Heard November 13, 2018

          Appeal From Greenville County Letitia H. Verdin, Circuit Court Judge

          Townes Boyd Johnson, III, of Townes B. Johnson III, LLC, of Greenville, for Appellant/Respondent.

          Bernie W. Ellis, of McNair Law Firm, PA, of Greenville; and Robert L. Widener, of McNair Law Firm, PA, of Columbia, both for Respondent/Appellant.

          SHORT, J.

         In this breach of contract action between Mac Papers, Inc. (Mac), Genesis Press, Inc. (Genesis), and one of Genesis's founders, Lawrence I. Kudeviz, Mac and Kudeviz filed cross-appeals. Mac, as Appellant/Respondent, argues the trial court erred in (1) finding Kudeviz's 1991 guaranty agreement was limited by Genesis's credit application, (2) finding Mac failed to prove that Kudeviz intended to be liable for more than $70, 000, and (3) not addressing Kudeviz's liability under a 2008 guaranty agreement. Kudeviz, as Respondent/Appellant, argues the trial court erred in finding (1) he failed to terminate his personal guaranty, (2) he was not shielded from liability by equitable estoppel, and (3) he was not shielded from liability by the equitable doctrine of waiver. We affirm.

         FACTS

         On October 17, 1991, Genesis sought a $70, 000 line of credit with Mac to purchase office supplies for its printing business in Miami, Florida. On December 2, 1991, Genesis's three principals, Kudeviz, Barry Zissok, and Lewis Levin, signed a personal guaranty agreement, which stated in part:

For and in consideration of credit extended or to be extended by [Mac], its successors or assigns, to and at the request of [Genesis, ] the undersigned, jointly and severally, do hereby unconditionally guarantee the payment at respective maturity dates of any and all indebtedness of any kind whatsoever, whether now due or which may hereafter become due . . . . This guaranty contains no limitations or conditions except as written herein, may be modified only in writing signed by the parties hereto, and is to remain in full force and effect until written notice of its termination is received by registered mail by [Mac], its successors or assigns, at its office in Jacksonville, Florida, except the written termination of this guaranty by the undersigned shall be effective only as to future credit from and after the date [Mac], its successors or assigns, receives the aforesaid notice, i.e., any termination hereof as aforesaid shall not affect credits extended prior to its effective termination.

         In 2007, Genesis moved its operation from Miami to Greenville. Between 1991 and 2008, Mac and Genesis conducted business without incident; however, on March 28, 2008, Genesis's Greenville operation suffered a devastating fire that disrupted their business. While Genesis litigated with its insurance carrier over coverage, Mac extended Genesis significant credit and flexibility so it could maintain its operation by restructuring some of its debt. As part of the restructuring, on December 9, 2008, Kudeviz, on behalf of Genesis, endorsed a note for $303, 836.32 and signed a separate personal guaranty containing the same language as the 1991 guaranty. On February 2, 2009, Kudeviz endorsed another note for the sum of the first note, plus additional debt accrued during the interim time frame for a total of $401, 852.51. In 2010, Genesis settled with its insurance company and paid Mac in full.

         Between 2010 and 2012, Genesis accrued additional financial obligations to Mac, and by September 4, 2012, Genesis owed Mac $432, 185.60. Mac filed a complaint for breach of contract against Genesis and breach of guaranty against Genesis's three principals, Kudeviz, Zissok, and Levin, for the unpaid balance of $432, 185.60. Genesis filed bankruptcy, Zissok settled separately for $32, 500, and Levin is now deceased. Accordingly, Mac sought $399, 685.60 from Kudeviz, which was the difference between the outstanding debt and Zissok's settlement.

         During trial, Mac called two witnesses, Tonja Van Zandt, its vice president and finance manager, and Craig Boortz, the general manager of its Greenville office and primary salesperson for Genesis's account. Kudeviz testified on his own behalf. Kudeviz claimed he terminated his personal guaranty by an email exchange with Boortz on July 12, 2010. As part of an email to Boortz regarding a sale, Kudeviz asked, "On a separate subject[, ] is [Van Zandt] working on releasing my personal note?" Boortz replied, "Yes she is and feel free to call her on anything related to the note."

         The trial court found Kudeviz liable for Genesis's debt pursuant to the 1991 guaranty, but held Kudeviz's liability was capped at $70, 000 by the terms of the credit application contemporaneously executed. This appeal followed.

         STANDARD ...


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