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Corporate – Shareholder Status – Statute of Frauds – Statute of Limitations – Estoppel

Corporate – Shareholder Status – Statute of Frauds – Statute of Limitations – Estoppel

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Even though the December 10, 1998, minutes for the organizational meeting of defendant Piedmont Glass & Mirror Co., Inc., said that subscriptions for shares in the company were conditioned “upon payment,” since it was clear that defendant David Taylor did not pay for his shares (he admitted that he considered his $42,000 payment to the company to be a loan), defendants’ failure to otherwise enforce the subscription agreement prevents them from enforcing it against plaintiff.

We reverse the circuit court’s dismissal of plaintiff’s claims.

All of the documentary evidence indicates plaintiff was a shareholder. In addition, defendant Julie Taylor referenced plaintiff’s status as an owner and/or partner in her deposition testimony for plaintiff’s prior workers’ compensation action. Even the circuit court found “the evidence more-likely-than-not establishes that all the parties felt that [plaintiff] had a vested interest in the business.” Based on our own view of the preponderance of the evidence, we find plaintiff was a shareholder.

We also find defendants were equitably estopped from asserting the Statute of Frauds as a defense. Plaintiff testified that he and his sister, Julie, agreed that he would leave his higher-paying job to work for reduced pay at Piedmont Glass & Mirror (PGM) in exchange for a one-half ownership interest in PGM. There was expert evidence that a person is unlikely to voluntarily reduce his salary absent a compelling reason. Defendants’ contrary evidence is insufficient to dispute plaintiff’s claim of the existence of the oral contract.

There is evidence Julie offered plaintiff a 50-percent share in PGM if he came to work for it for one year. However, she subsequently contended she merely hired him as an employee.

Julie knew plaintiff was leaving a job for a reduced salary to work for her, which she intended and expected of him. Yet according to her, she never intended to make or consider plaintiff a partner or shareholder. Plaintiff testified he left his job to work for PGM, was required to pledge personal assets, and brought his truck and tools to PGM.

All the elements of equitable estoppel were met.

Finally, the parties agree that plaintiff’s claims were subject to a three-year statute of limitations; however, the discovery rule applies under either S.C. Code Ann. § 15-3-530 or § 33-8-420(e). Plaintiff did not have actual notice of defendants’ position – that he owned no interest in PGM – until he returned to work after his workplace injury in 2007, and he filed this action in 2007. Under our own view of the preponderance of the evidence, we find the statute of limitations did not begin to run until plaintiff was told he could not return to work for PGM for pay.

Reversed and remanded.

O’Shields v. Piedmont Glass & Mirror Co. (Lawyers Weekly No. 012-028-23, 13 pp.) (Per Curiam) Appealed from Cherokee County Circuit Court (Mark Hayes, J.) Chelsea Rikard for appellant; Joseph Johnson for respondents. South Carolina Court of Appeals (unpublished)

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