This is an appeal from a trial court's order awarding damages under claims for breach of contract and violation of the Payment of Wages Act. Appellant Brown & Brown of South Carolina (Appellant) contends the trial court erred (1) in finding it breached its contract with Respondent Blair Mathis (Mathis); (2) in finding it violated the Payment of Wages Act; (3) in applying the Payment of Wages Act to prospective wages; (4) in failing to comply with Rule 52, SCRCP; and (5) in denying Appellant's motion for change of venue. We affirm on all issues with the exception of the trial court's holding that the Payment of Wages Act applies to prospective wages.
Mathis was employed as an account executive and producer for Reidman Insurance in Spartanburg, which was acquired by Appellant during Mathis's employment. In 2003, Mathis left employment with Appellant and went to work with a company that would later become Carolina First.
In 2004, Mathis received a call from an acquaintance, Herb McBride, the Profit Center Manager for Appellant's Greenville office. The two had lunch a number of times and began to discuss Mathis returning to work for Appellant. In August 2004, McBride verbally offered Mathis a salary of $90,000 per year for the first year of employment with Appellant, as well as a 20% commission on new business generated by Mathis. Additionally, Mathis would be assigned the $300,000 book of business of a departing producer and, in six months, would be named the Sales Manager. Mathis declined the offer.
McBride later laid out a new offer, which he then communicated in an e-mail (the McBride e-mail) which provided in part:
Hyatt Brown was the CEO of Appellant's corporate office. Mathis testified that McBride explained that Hyatt Brown was involved through "corporate assistance," which meant that corporate headquarters was willing to pay part of Mathis's salary. After further negotiations, on September 17, 2004, Mathis accepted the offer and sent his resignation letter to Carolina First. Mathis began work on September 27, 2004. Two days later, he signed an Employment Agreement.
Mathis testified that he arrived for work one morning and found a blank copy of a corporate assistance form on his chair with a note from McBride saying that they needed to discuss the document. Mathis reviewed the document and noticed that it contained language providing for certain production goals and consequences for failing to meet the goals. According to Mathis, he objected to McBride that such contingencies were not part of his contract deal to which McBride responded that Mathis's salary would be unaffected by any failure to meet the goals.
In February 2005, McBride was replaced as Profit Center Manager by Clay Collins. Mathis testified that he met with Collins and brought his correspondence and employee records. Collins explained that he would not need a sales manager as he would be handling those duties himself. Mathis testified that he told Collins that he expected to have his job offer honored, to which Collins responded that he needed time to get acclimated to the new job and they would discuss the matter later.
In an e-mail in May 2005, Collins placed limits on expense accounts which were inconsistent with Mathis's agreement with McBride. In July 2005, Collins asked to meet with Mathis and informed him that, due to his failure to meet corporate assistance goals, he would reduce Mathis's salary to $90,000. According to Mathis, he told Collins that "it was
In January 2006, Collins set new goals for Mathis for the coming year and warned that "[a]ny future short falls in new business and growth to your book will certainly have an impact on your compensation." Mathis responded with a letter in which he detailed his negotiations with McBride and the terms set forth in the e-mails from McBride. In a memo dated March 10, 2006, Collins again outlined payment reductions and extended a termination offer to Mathis. The memo provided, in part:
Mathis did not respond to the offer and was terminated. Mathis then instituted this action.
The trial court found a two-year contract of employment existed between the parties and that Appellant breached the terms of the contract by reducing Mathis's pay. The court further found that there was no bona fide dispute regarding the wages due Mathis and that Appellant violated the Payment of Wages Act by failing to pay Mathis the contract amount. Pursuant to the Payment of Wages Act, the trial court awarded Mathis three times the unpaid wages of his
Actions seeking damages for breach of contract and actions for violation of the Payment of Wages Act are actions at law. See McCall v. IKON, 380 S.C. 649, 657, 670 S.E.2d 695, 700 (2008); Ross v. Ligand Pharmaceuticals, Inc., 371 S.C. 464, 468, 639 S.E.2d 460, 462 (Ct.App.2006). In an action at law tried without a jury, the trial judge's findings have the force and effect of a jury verdict upon the issues and are conclusive on appeal when supported by competent evidence. See Beheler v. Nat'l Grange Mut. Ins. Co., 252 S.C. 530, 535, 167 S.E.2d 436, 438 (1969). Accordingly, this Court's scope of review is limited to determining whether the findings are supported by competent evidence and correcting errors of law. See Temple v. Tec-Fab, Inc., 381 S.C. 597, 600, 675 S.E.2d 414, 415 (2009).
Appellant does not dispute that a contract was created by the McBride e-mail, but instead contends that it did not
Appellant contends that the McBride e-mail did not create a contract of definite term. Appellant therefore argues that it was free to reduce Mathis's pay without violating the contract. We find there is competent evidence to support the trial court's finding that the e-mail created a contract of definite term.
Appellant correctly notes that "`[i]n order for a contract to be valid and enforceable, the parties must have a meeting of the minds as to all essential and material terms of the agreement.'" Davis v. Greenwood Sch. Dist. 50, 365 S.C. 629, 634, 620 S.E.2d 65, 67 (2005). Appellant argues that, "[a]t a minimum, there was no meeting of the minds regarding [Appellant's] right to terminate the employment relationship at-will":
We find that the plain language of the e-mail refutes Appellant's contention that "the employment period was intended by both parties to be indefinite" and that Appellant could terminate the relationship at-will. The e-mail specifically refers to two years of employment. The document guarantees Mathis one-year of employment at a salary of $110,000. It then provides that McBride will "insure that the second year will be $120,000 in earnings." These statements provide competent evidence to support the trial court's finding that the contract was a two-year contract. That the parties may or may not have chosen to continue their relationship beyond the two-year term does not render the contract one of indefinite duration. The vague language cited by Appellant that "if you are meeting your goals and achievements, doing your part, we will make sure we do our part and you are taken care of going forward" does not refute the language providing for, at minimum, two years of guaranteed employment. See Moody v. McLellan, 295 S.C. 157, 367 S.E.2d 449, 451 (Ct.App.1988) (courts must interpret contracts based on their plain language). Moreover, even if the language creates an ambiguity, a court will construe any doubts and ambiguities in an agreement against the drafter of the agreement. See Duncan v. Little, 384 S.C. 420, 425, 682 S.E.2d 788, 790 (2009).
Appellant contends that overwhelming evidence demonstrates that Mathis was employed "at-will" and, consequently, the trial court erred in finding that the contract between Mathis and Appellant was a term contract. We disagree.
In South Carolina, employment at-will is presumed absent the creation of a specific contract of employment. See Prescott v. Farmers Tel. Coop., 335 S.C. 330, 334-36, 516 S.E.2d 923,
Appellant argues that while Mathis may have initially been party to a term contract, by signing the Employment Agreement, he became an at-will employee. Appellant cites to the case of Cape v. Greenville County Sch. Dist., 365 S.C. 316, 618 S.E.2d 881 (2005), for the proposition that a term contract may be altered to at-will. 365 S.C. at 319, 618 S.E.2d at 883. We find that Cape is not applicable here.
In Cape, a teacher signed a contract for a specific school year which contained a provision specifying that the contract was for at-will employment. Id. at 317, 618 S.E.2d at 882. This Court noted that a contract for a definite term "is presumptively terminable only upon just cause" but found that the parties had "by express contract provision, altered the presumption that employment for a definite term is terminable only upon just cause, and replaced that presumption with an at-will termination clause." Id. (emphasis added). The instant case is markedly different than Cape as the e-mail which formed the basis for the contract did not contain an at-will clause, and instead only referenced the definite term.
Moreover, the document which Appellant contends converted the contract from a term contract to an at-will contract was signed after the contract was created. Any subsequent agreement must be supported by consideration and Appellant has shown no separate consideration to support the Employment Agreement. See Poole v. Incentives Unlimited, Inc., 345 S.C. 378, 548 S.E.2d 207 (2001) (holding that when a covenant is entered into after the inception of employment, separate consideration, in addition to continued employment, is necessary in order for the covenant to be enforceable).
Appellant further contends that "Mathis was aware from the outset of his discussions about the possibility of working for [Appellant] ... that his employment would be at-will and governed by [Appellant's] Employment Agreement." However, the portions of the record cited by Appellant do not support this contention. Mathis admits that, based on his past employment with Appellant, he expected that he would have to
Given the above, we find competent evidence supports the trial court's finding that the contract between Appellant and Mathis was a term contract rather than an at-will contract.
Appellant argues that even if its contract with Mathis was a term contract and, consequently, could only be terminated "for cause," Appellant had a reasonable good faith belief that it had "cause" to terminate Mathis. Consequently, in Appellant's view, it did not breach the contract by reducing Mathis's salary or discharging him and the trial court erred in finding to the contrary. We find that this issue is not properly preserved for our review.
In order for an issue to be properly preserved for appeal, it must have been both raised to and ruled on by the trial court. See I'On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 422, 526 S.E.2d 716, 724 (2000). The trial court's order did not address Appellant's argument that it had "cause" to terminate Mathis's contract. Appellant's Motion to Alter or Amend did not bring the absence of this issue to the trial court's attention. Accordingly, this issue is not preserved.
Appellant argues that even if the McBride e-mail established a term contract, the trial court erred in finding that it breached the contract as Mathis was estopped from
As noted above, Collins informed Mathis of the compensation change in writing in a letter dated August 1, 2005. According to Mathis, Collins verbally notified him of the change during a meeting on July 18, 2005. Mathis testified that he objected to the change and asked that they discuss the matter with McBride, which Collins declined to do. Mathis then claimed that he raised the issue with McBride and presented Collins with McBride's initial offer, explaining that he had declined the offer and instead accepted a two-year guarantee. Months later, in response to a letter from Collins referencing Mathis's agreement with McBride, Mathis sent a letter to Collins detailing his negotiations with McBride and the e-mail offers.
Appellant claims that because Mathis continued to work for Appellant in the months following the change in compensation, he is estopped from raising contract and wage claims. In support of its argument, Appellant cites Facelli v. Southeast Mktg. Co., 284 S.C. 449, 327 S.E.2d 338 (1985). In Facelli, this Court found that an employee who continued to work for his employer for six months without complaint following a change to his commission rate impliedly consented to the change. Id. at 452, 327 S.E.2d at 339. Consequently, the employee was estopped from seeking damages for the change. Id.
Mathis argues that Facelli is distinguishable from the instant case because, unlike the employee in Facelli, Mathis objected to the compensation change. Two cases from the Court of Appeals are instructive on this point and reach different conclusions on the issue. In Matthews v. City of Greenwood, 305 S.C. 267, 407 S.E.2d 668 (Ct.App.1991), the Court of Appeals relied on Facelli in upholding a circuit court's ruling granting summary judgment on an employee's claim based on a unilateral change in his original employment
The Court of Appeals reached a different conclusion in Estes v. Roper Temp. Servs., 304 S.C. 120, 403 S.E.2d 157 (Ct.App.1991). Estes involved an employee whose written employment contract was unilaterally altered by her employer. Id. at 121, 403 S.E.2d at 158. The Court of Appeals noted that the employee "did not agree to these changes and, indeed, objected to them while continuing to work" and it found that the trial court erred in finding the employee estopped from asserting the breach of contract action. Id. at 122, 403 S.E.2d at 158.
The Estes court noted that the employer, as the party seeking estoppel, was required to prove the elements of estoppel, including that the employee "engaged in conduct that amounted to a false misrepresentation or concealment." Id., citing Frady v. Smith, 247 S.C. 353, 359, 147 S.E.2d 412, 415 (1966) (the party estopped must have made a false misrepresentation or concealment or made some representation calculated to convey an incorrect impression of the facts), overruled on other grounds by Tolemac, Inc. v. United Trading, Inc., 326 S.C. 103, 484 S.E.2d 593 (1997). The court continued:
Estes, 304 S.C. at 122, 403 S.E.2d at 158.
We are most persuaded by Estes, as we find it to be more relevant factually and that it best comports with the doctrine of estoppel. See Black's Law Dictionary 589 (8th ed.2004) (defining estoppel, in part, as: "A bar that prevents one from asserting a claim or right that contradicts what one has said or done before or what has been legally established as true."). We therefore hold that, on these facts, there was a genuine issue of material fact whether Mathis consented to the compensation reduction by continuing employment with Appellant. We find competent evidence to support the trial court's finding that Mathis did not impliedly consent by continuing to work following the reduction in pay.
Appellant contends the trial court erred in finding it breached its contract with Mathis because the contract was induced by Mathis's misrepresentations regarding his book of business at Carolina First and is therefore voidable. We disagree.
A contract may be rescinded for mistake, if justice so requires, where the mistake is unilateral and has been induced by the fraud, deceit, misrepresentation, concealment, or imposition of the party opposed to the rescission, without negligence on the part of the party claiming rescission. See King v. Oxford, 282 S.C. 307, 313, 318 S.E.2d 125, 128 (Ct.App.1984), citing Jumper v. Queen Mab Lumber Co., 115 S.C. 452, 106 S.E. 473 (1921). We find there is conflicting evidence whether Mathis made misrepresentations to Appellant. Clearly, the trial judge made a credibility determination in favor of Mathis. We find that the trial court's determination is supported by competent evidence and he did not err in failing to find the contract voidable based on misrepresentation. See Pinckney v. Warren, 344 S.C. 382, 387, 544 S.E.2d 620, 623 (2001) (scope of review does not require appellate court to disregard findings
As noted, the trial court found that Appellant withheld wages from Mathis though there was no bona fide dispute as to wages due. The court therefore found that Appellant violated the Payment of Wages Act and awarded Mathis an amount equal to three times the unpaid wages, plus costs and attorney's fees. Appellant contends that the trial court erred in finding that it violated the Payment of Wages Act because (1) there was a bona fide dispute as to wages due Mathis, and (2) Appellant provided seven days notice prior to the compensation change as required under the Payment of Wages Act.
Appellant argues that the trial court erred in ruling that Appellant did not have any bona fide dispute to Respondent's contract and Payment of Wages Act claims. We disagree.
S.C.Code Ann. § 41-10-40 generally requires an employer to timely pay all wages due and § 41-10-50 provides that when an employer discharges an employee, it must timely pay him all wages due. S.C.Code Ann. §§ 41-10-40, 50 (Supp. 2005). S.C.Code Ann. § 41-10-80(C) provides that when an employer violates the provisions of §§ 41-10-40 or 41-10-50 "the employee may recover in a civil action an amount equal to three times the full amount of the unpaid wages, plus costs and reasonable attorney's fees as the court may allow." S.C.Code Ann. § 41-10-80(C) (Supp.2005). However, this Court held in Rice v. Multimedia, Inc., 318 S.C. 95, 456 S.E.2d 381 (1995), that the penalty set forth in § 41-10-80(C) is discretionary with the trial judge. 318 S.C. at 98, 456 S.E.2d at 383. The Court reasoned that "[t]he imposition of treble damages in those cases where there is a bona fide dispute would be unjust and harsh." Id.
Appellant contends that "[t]o warrant reversal, [Brown & Brown] need only establish that one of the following defenses constitutes a bona fide defense or good faith dispute" and then lists each of the arguments set forth in its brief.
We have addressed Appellant's remaining arguments above and we find competent evidence supports the trial court's finding that no bona fide dispute existed to support Appellant's decision.
Appellant also contends that the trial court erred in finding that it violated the Payment of Wages Act because it complied with the Act by providing Mathis with seven days notice prior to the compensation change, in accordance with S.C.Code Ann. § 41-10-30. We disagree.
S.C.Code Ann. § 41-10-30 requires, in part:
S.C.Code Ann. § 41-10-30(A) (Supp.2005). Appellant notes that, in a letter dated August 1, Clay Collins informed Mathis of the reduction in salary effective August 8. Consequently, in Appellant's view, "[b]y giving Mathis seven-days written notice of the change in his compensation structure, [Brown & Brown] fully complied with the Payment of Wages Act regardless of the Trial Court's ruling regarding Mathis's contract claim."
Even assuming that Appellant has complied with the requirements of § 41-10-30(A), this alone does not show full compliance with the Payment of Wages Act. S.C.Code Ann. § 41-10-40(C) provides: "An employer shall not withhold or divert any portion of an employee's wages unless the employer is required or permitted to do so by state or federal law or the employer has given written notification to the employee of the amount and terms of the deductions as required by subsection (A) of § 41-10-30." Appellant cannot comply with § 41-10-40(C) merely by giving notice, as the latter half of the statute applies only to "deductions." In altering Mathis's salary, Appellant's action constituted a reduction rather than a deduction. A "deduction" within the terms of the statute, is the act of taking away from a salary in order to fund some benefit. This is how the term is used in the context of § 41-10-30(A): "Every employer shall notify each employee in writing at the time of hiring of the normal hours and wages agreed upon, the time and place of payment, and the deductions which will be made from the wages, including payments to insurance programs." S.C.Code Ann. § 41-10-30(A) (Supp.2005) (emphasis added). This reading better comports with the purpose of the Payment of Wages Act, which is "to protect employees from the unjustified and willful retention of wages by the employer." Rice, 318 S.C. at 98, 456 S.E.2d at 383.
Under this interpretation, Appellant cannot comply with the Payment of Wages Act, while breaching the contract, simply by providing seven days notice of the breach. Consequently, even assuming that Appellant gave notice, we find competent evidence to support the trial court's finding that Appellant violated the Act.
Appellant contends that the trial court erred in awarding Mathis damages for prospective wages under the Payment of Wages Act.
As noted above, this Court has held that the purpose of the Payment of Wages Act is "to protect employees from the unjustified and willful retention of wages by the employer." Rice, 318 S.C. at 98, 456 S.E.2d at 383. The Act itself defines the term "wages" as follows:
S.C.Code Ann. § 41-10-10(2) (Supp.2009) (emphasis added). The past tense of the word "rendered" suggests services provided in the past. The word "recompensed" too suggests that payment is for labor already completed. See Webster's Third New Int'l Dictionary 1897 (2002) (defining "recompensed" in part, as "an equivalent or a return for something done, suffered, or given"). Other sections of the Payment of Wages Act speak of acts done in the past. See, e.g., S.C.Code Ann. §§ 41-10-40(D) ("Every employer in the State shall pay all wages due at the time and place designated...."); 41-10-50 ("When an employer separates an employee from the payroll ... the employer shall pay all wages due...."); 41-10-80(C) ("In case of any failure to pay wages due to an employee ...."). The word "due" means "owed or owing as a debt" and, as wages are defined by the Act as amounts paid for labor rendered, no wages can be due for future services. See Webster's Third New Int'l Dictionary 699 (2002). Based on the plain language of the statutes in the Payment of Wages Act, the Act does not apply to prospective wages. See Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000) ("Where
A majority of other jurisdictions addressing this issue have interpreted similar statutes as applying only to services rendered in the past.
In support of his argument that the Payment of Wages Act applies to future wages, Mathis cites to a case from the Louisiana Court of Appeals, Saacks v. Mohawk Carpet Corp., 855 So.2d 359 (La.Ct.App.2003). In Saacks, the Louisiana court found that amounts owed under a fixed-term contract constituted "wages" under a Louisiana statutory scheme similar to the Payment of Wages Act. We do not find Saacks persuasive as the case contains little discussion of the past wages versus future wages issue and espouses a view which it appears has not been adopted by any other jurisdiction. We find persuasive the argument advanced by the amici, that while "prospective" or "post-termination" earnings may be awarded as damages for breach of contract, they do not constitute "wages."
We find the trial court erred in finding the Payment of Wages Act applied to future wages. Accordingly, the treble damages award should be reduced from $127,199.94 to $46,073.25.
Appellant argues that the trial court's order lacks findings of fact and does not address Appellant's defenses specifically and is therefore not in compliance with Rule 52, SCRCP. We disagree.
Rule 52, SCRCP provides that "[i]n all actions tried upon the facts without a jury ... the court shall find facts specially and state separately its conclusions of law thereon...." Rule 52, SCRCP. This Court has held that this rule "is directorial in nature so `where a trial court substantially complies with Rule 52(a) and adequately states the basis for the result it reaches, the appellate court should not vacate the trial court's judgment for lack of an explicit or specific factual finding." In re Treatment and Care of Luckabaugh, 351 S.C. 122, 131, 568 S.E.2d 338, 342 (2002), citing Noisette v. Ismail, 304 S.C. 56, 58, 403 S.E.2d 122, 123 (1991). The requirement for appropriately detailed findings "is designed... to dispose of the issues raised by the pleadings and to allow the appellate courts to perform their proper function in the judicial system." Id. at 132, 568 S.E.2d at 343, citing Coble v. Coble, 300 N.C. 708, 712, 268 S.E.2d 185, 189 (N.C. 1980). A lower court is not required to set out findings on all the myriad factual questions arising in a particular case, but the findings must be sufficient to allow this Court, sitting in its appellate capacity, to ensure the law is faithfully executed below. Id.
We find the trial court's four-page order complies with Rule 52(a). The order expressly addressed the existence of a valid employment contract, the terms of the contract, breach of the contract, mitigation, Mathis's damages, and the applicability of the Payment of Wages Act. The trial court also specifically found no bona fide dispute as to the wages owed and that Mathis did not waive his claims. The order is sufficient to allow this Court to perform its role of appellate review.
Appellant argues that the trial court erred in denying its motion to change venue from Spartanburg to Greenville County. We disagree.
A motion to change venue is addressed to the sound discretion of the trial judge and will not be disturbed on appeal absent a manifest abuse of discretion. See McKissick v. J.F. Cleckley & Co., 325 S.C. 327, 335, 479 S.E.2d 67, 71 (Ct.App.1996). South Carolina's venue statute provides that "[a] civil action tried pursuant to this section against a domestic corporation . . . must be brought and tried in the county in which the: (1) corporation . . . has its principal place of business at the time the cause of action arose; or (2) most substantial part of the alleged act or omission giving rise to the cause of action occurred." Appellant is a domestic corporation with offices in Charleston, Greenville, and Spartanburg counties. Appellant does not have a principal place of business in South Carolina
Appellant contends that the most substantial part of the alleged act or omission giving rise to the cause of action occurred in Greenville County, where Mathis maintained his office, and therefore Greenville is the appropriate venue. Mathis counters that venue in Spartanburg is appropriate because Appellant maintains an office in Spartanburg and actively recruited Mathis, a Spartanburg resident, for employment.
In denying Appellant's motion to transfer venue, the trial court noted that "the central issue to the case is going to be the contract or the existence of the contract. . . . Furthermore, from the attachments to the Complaint, it appears that Spartanburg is the primary county for purposes of the contract and, thus, venue can be considered proper . . . ." We do not
For the reasons stated above, we affirm that portion of the trial court's order finding that Appellant breached its contract with Mathis but reverse that portion awarding damages for prospective wages under the Payment of Wages Act. We therefore remand the matter to the circuit court for calculation of damages consistent with this opinion, which should not include damages for prospective wages under the Payment of Wages Act.
TOAL, C.J., BEATTY, KITTREDGE and HEARN, JJ., concur.
