819 S.E.2d 131
S.C. Ct. App.2018Background
- Brian Morin developed proprietary fiber technology, founded Innegrity, LLC, and transferred IP to the company in exchange for an Employment Agreement that, among other things, required the company to remove Morin as guarantor on company loans if he was fired without cause.
- Innegrity experienced prolonged financial distress after 2008; Morin personally guaranteed loans (BB&T and ADC) and the company defaulted; BB&T later auctioned equipment and sued Morin on his guaranty.
- Morin and key employees executed temporary salary-reduction/bonus agreements (2009–2010) conditioned on future fundraising; some bonus payments were delayed and disputed after Morin’s termination without cause in November 2010.
- Morin sued for breach of contract and violations of the South Carolina Wage Payment Act; Innegrity counterclaimed for fiduciary breaches and equitable estoppel. A jury awarded Morin breach-of-contract damages ($308,456, including $150,000 for the BB&T guaranty) and Wage Payment Act damages ($73,230).
- The trial court trebled part of the Wage Payment Act award and awarded prejudgment interest, costs, and attorney’s fees. Innegrity appealed several rulings (JNOV denials, trebling, deposition exclusion, and denial of new trial based on later conviction).
Issues
| Issue | Plaintiff's Argument (Morin) | Defendant's Argument (Innegrity) | Held |
|---|---|---|---|
| Whether impossibility excused Innegrity's failure to remove Morin as guarantor (JNOV) | Agreement entitled Morin to removal; jury found breach | Performance was impossible due to insolvency and lenders' refusal to remove guaranty | Rejected: financial inability and lender refusal do not constitute legal impossibility; sufficient evidence supported jury verdict |
| Whether BB&T-guaranty damages were speculative | Settlement offer and BB&T suit show concrete liability | Damages were speculative future liability | Affirmed: $150,000 settlement evidence was reasonably certain proof of damages |
| Whether equitable estoppel barred Morin's Wage Payment Act claim (JNOV) | Board knew or should have known about payroll liabilities and bonus arrangements | Morin misled Board about finances and caused nonpayment; estops recovery | Rejected: evidence showed Board was aware of liabilities; no prejudicial reliance shown |
| Whether the $47,888 bonus-related back pay was correctly awarded under Wage Payment Act | Bonus letters did not override Agreement; wages owed | Bonus letters conditioned pay on fundraising, creating a bona fide dispute | Split: award sustained, but trebling reversed for $47,888 as a bona fide dispute existed; trebling upheld for vacation and October–November salary portions |
| Whether trial court erred excluding deposition excerpts where Morin invoked Fifth (adverse inference) | Deposition admissible under Rule 32 for any purpose; exclusion prejudiced defendant | Court could elicit questions at trial and admit excerpts only if Morin again invoked Fifth; exclusion prevented unfair prejudice to Morin | Affirmed: court did not abuse discretion under Rules 32/403/611; no prejudice shown because Innegrity could have asked questions at trial |
| Whether Morin's post-trial guilty plea warranted a new trial (Rule 60) | Conviction is newly discovered evidence that would change outcome | Board already knew allegations; plea is cumulative/impeaching only | Denied: plea was largely cumulative of facts known pretrial and would not probably change result |
Key Cases Cited
- Dermott v. Jones, 69 U.S. 1 (1849) (classic statement that performance is excused only for act of God, law, or other party)
- Pearce-Young-Angel Co. v. Charles R. Allen, Inc., 213 S.C. 578 (1948) (South Carolina recognition of act-of-God impossibility excuse)
- Moon v. Jordan, 301 S.C. 161 (1990) (financial inability ordinarily does not excuse contractual performance)
- Welch v. Epstein, 342 S.C. 279 (2000) (standard of review for JNOV: view evidence in light most favorable to verdict)
- Rice v. Multimedia, Inc., 318 S.C. 95 (1994) (treble damages under Wage Payment Act require no bona fide dispute and bad faith withholding)
- Baxter v. Palmigiano, 425 U.S. 308 (1976) (adverse inference from invocation of Fifth Amendment in certain civil contexts)