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Keywords

plaintiffdefendantappealtrialverdictfiduciarywillcorporationcircumstantial evidencefiduciary dutygood faithbreach of fiduciary dutypiracy
equityappealtrialverdictfiduciarywillgood faithpiracy

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Island Car Wash, Inc. v. Norris, 292 S.C. 595, 358 S.E.2d 150

Facts

Island Car Wash, Inc. (I.C.W.) alleged that its former manager, George F. Norris, III, conspired with supplier R. William Rhodes to divert corporate funds. Norris, who held a fiduciary relationship with I.C.W., received inflated payments for car wash equipment, with evidence suggesting he pocketed excess funds and failed to return them to the corporation. The trial judge directed a verdict for the defendants, interpreting the complaint as an action for fraud and deceit, but the appellate court found that the complaint clearly stated a cause of action for civil conspiracy.

Island Car Wash, Inc., (I.C.W.) in this action alleged that George F. Norris, III, (Norris), a former manager of I.C.W., stood in a fiduciary relationship with I.C.W. and that Norris conspired with R. William Rhodes (Rhodes) to breach Norris's confidential relationship with I.C.W. and pursuant to said conspiracy diverted funds of I.C.W. to their own pockets.

Issue

Did the trial judge err in directing a verdict in favor of the defendants and in refusing to admit certain evidence for the jury's consideration?

The issues of merit on appeal are whether (1) the trial judge erred in the refusal to admit into evidence for purpose of publication to the jury certain documents which will later be identified and discussed and (2) the trial judge erred in the direction of the verdict.

Rule

A confidential or fiduciary relationship exists when one party places special confidence in another, obligating the latter to act in good faith. Civil conspiracy requires a combination of two or more persons for the purpose of injuring the plaintiff, resulting in special damage.

A confidential or fiduciary relationship exists when one imposes a special confidence in another, so that the latter, in equity and good conscience, is bound to act in good faith and with due regard to the interests of the one imposing the confidence.

Analysis

The appellate court found that Norris occupied a fiduciary relationship with I.C.W. and that the evidence presented, including invoices and testimonies, was sufficient to raise a jury issue regarding the existence of a conspiracy. The court emphasized that the nature of conspiracy allows for circumstantial evidence to establish a prima facie case, and the trial judge's refusal to admit relevant documents was an error.

Taken together, the aforementioned documents do constitute evidence of a conspiracy to breach the confidential relations of Norris to I.C.W. which resulted in the conversion of $17,000 of money belonging to I.C.W., and we so hold.

Conclusion

The Court of Appeals reversed the trial court's decision and remanded the case for a new trial, stating that there was enough evidence for a jury to consider the claims of conspiracy and breach of fiduciary duty.

We therefore hold that the trial judge erred in directing a verdict for Norris and Rhodes.

Who won?

Island Car Wash, Inc. prevailed in the appeal because the appellate court found that the trial court erred in directing a verdict for the defendants and in excluding evidence that could support the claims of conspiracy.

We reverse and remand.

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