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Johnson v. Little

Court of Appeals of South Carolina

April 10, 2019

Robin Johnson and CQI Pharmacy Services, LLC, Respondents,
v.
Robert Little and CQI Oncology/Infusion Services, LLC, Appellants. Appellate Case No. 2016-001689

          Heard December 6, 2018

          Appeal From Anderson County Ellis B. Drew, Jr., Master-in-Equity Steven C. Kirven, Master-in-Equity

          James McKinley Robinson, of Robinson Law Firm, of Easley, for Appellants.

          Timothy G. Quinn, and Natalie Joan Quinn, both of Quinn & Hardy, of Columbia, for Respondents.

          KONDUROS, J.

         In this breach of contract action for the sale of a business, Robert Little and his company, CQI Oncology/Infusion Services, LLC, appeal the findings of the Master-in-Equity arguing the master erred (1) by finding Little breached the contract with Robin Johnson and her company, CQI Pharmacy Services, LLC; (2) by requiring he indemnify Johnson against claims arising from the sale of business assets; (3) in granting damages in the amount of $50, 000; (4) in granting judgment on a theory of successor liability; and (5) in granting judgment against Little individually. We affirm as modified.

         FACTS/PROCEDURAL HISTORY

         The two companies in this case were intertwined. Johnson and Little both worked as an employee at each other's company, but they were the sole owners of their respective companies. Both Johnson and Little were authorized signatories for the other's business checking account. In late March and early April 2013, Johnson paid invoices from vendors in the amount of $25, 568.59 out of the CQI Oncology account, Little's company. Shortly after, on April 15, 2013, Johnson removed Little as an authorized signatory on CQI Pharmacy's-her company's-checking account. Johnson immediately informed Little of this through a letter. Little subsequently removed Johnson as an authorized signatory on CQI Oncology's-his company's-checking account, which caused the checks used to pay the vendor invoices to fail.

         On May 9, 2013, Little entered into a Purchase and Sale Agreement with Johnson in which Little agreed to sell certain assets of his company to Johnson for the purchase price of $30, 000. The contract provided the sale would include "all contracts, files, clients lists, contacts, and vendor lists." The contract noted "[t]he seller represents and warrants that the Property is free and clear of any liens or encumbrances and that the [s]eller has rightful title to the Property." The contract also contained an indemnity clause that stated "[s]eller agrees that he will defend, indemnify and hold purchaser harmless from any and all actions, causes of action, claims and or demands which arise or are asserted as arising from [s]eller's conduct prior to closing."

         Johnson filed suit against Little on October 2, 2013, alleging breach of contract, breach of contract accompanied by a fraudulent act, negligent misrepresentation, fraud, and violation of the South Carolina Unfair Trade Practices Act. Little moved to dismiss, and the master denied the motion. The matter was tried without a jury by the master. The master found for Johnson and awarded damages in the amount of $50, 000. Little filed a motion for reconsideration, which the master denied following a hearing.[1] This appeal followed.

         STANDARD OF REVIEW

         "Our scope of review for a case heard by a [m]aster-in-[e]quity who enters a final judgment is the same as that for review of a case heard by a circuit court without a jury." Tiger, Inc. v. Fisher Agro, Inc., 301 S.C. 229, 237, 391 S.E.2d 538, 543 (1989). "An action for breach of contract seeking money damages is an action at law." Branche Builders, Inc. v. Coggins, 386 S.C. 43, 47, 686 S.E.2d 200, 202 (Ct. App. 2009) (quoting McCall v. IKON, 380 S.C. 649, 658, 670 S.E.2d 695, 700 (Ct. App. 2008)). "In an action at law, 'we will affirm the master's factual findings if there is any evidence in the record which reasonably supports them.'" Query v. Burgess, 371 S.C. 407, 410, 639 S.E.2d 455, 456 (Ct. App. 2006) (quoting Lowcountry Open Land Tr. v. State, 347 S.C. 96, 101-02, 552 S.E.2d 778, 781 (Ct. App. 2001)). "In an action at law, tried without a jury, the appellate court standard of review extends only to the correction of errors of law." Pope v. Gordon, 369 S.C. 469, 474, 633 S.E.2d 148, 151 (2006).

         LAW/ANALYSIS

         I. Breach of Contract

         Little argues the master erred in finding he breached the contract. He contends because the invoices were issued to Johnson and the contract contained no provision requiring him to pay the invoices, he was not liable for them ...


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