UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

CHARLES R. GRAY,

Plaintiff-Appellant,

v.

No. 95-1741

RISO KAGAKU CORPORATION, RISO,

INCORPORATED,

Defendants-Appellees.

Appeal from the United States District Court

for the District of South Carolina, at Columbia.

Dennis W. Shedd, District Judge.

(CA-92-1190)

Argued: January 31, 1996

Decided: April 17, 1996

Before RUSSELL and HAMILTON, Circuit Judges, and BLAKE,

United States District Judge for the District of Maryland,

sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: T. English McCutchen, III, MCCUTCHEN, BLANTON,

RHODES & JOHNSON, Columbia, South Carolina, for Appellant.

Milton D. Andrews, THOMPSON & MITCHELL, Washington, D.C.,

for Appellees. ON BRIEF: William E. Hopkins, Jr., MCCUTCHEN,

BLANTON, RHODES & JOHNSON, Columbia, South Carolina, for
Appellant. Halpin J. Burke, THOMPSON & MITCHELL, Washington, D.C., for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Charles R. Gray (Gray) brought this action against Riso Kagaku

Corporation (Riso Kagaku) and Riso, Inc. (Riso-USA), alleging

causes of action for breach of contract, breach of the South Carolina

Unfair Trade Practices Act, conversion, and fraud. The district court

dismissed all causes of action against Riso Kagaku for lack of personal jurisdiction and granted summary judgment as to all causes of

action in favor of Riso-USA. Gray appeals both the dismissal in favor

of Riso Kagaku and the grant of summary judgment in favor of RisoUSA. We affirm.

I.

Riso Kagaku, a Japanese corporation, makes office machines.

Riso-USA, a Massachusetts corporation wholly owned by Riso

Kagaku, markets Riso Kagaku's office machines in the United States.

On June 26, 1987, Riso-USA entered into a written dealer agreement

(the Dealer Agreement) with RGI, Inc.,1 a South Carolina corporation.

RGI, Inc. was owned by three individuals. Gray owned 47.5%,

Michael Randall owned 47.5%, and Danny Allen owned 5%. Pursuant to the Dealer Agreement, RGI, Inc. became an authorized dealer

of certain Riso products.2

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1 RGI, Inc.'s name was later changed to "Riso Products of South Carolina, Inc."

2 Later, Riso-USA also entered into a written dealer agreement with

RGI South, Inc. (later known as "Riso Products of Florida, Inc."), a

wholly owned subsidiary of RGI, Inc. Hereafter, RGI, Inc. and RGI

South, Inc. will be referred to collectively a "RGI."

 2
By November 1988, as a result of purchasing inventory from RisoUSA on credit, RGI owed Riso-USA approximately $600,000. In

December 1988, Riso-USA sent a memorandum to all dealers stating

that finance charges would accrue on delinquent account balances and

that Riso-USA would not deliver supplies, parts, and machines to

dealers with delinquent account balances until the delinquent account

balances were paid off. Accordingly, because RGI's account with

Riso-USA was delinquent, Riso-USA refused to deliver supplies,

parts, and machines to RGI. The Dealer Agreement authorized RisoUSA to take these actions.

On February 28, 1989, Riso-USA made a proposal to purchase the

stock of RGI. On March 1, 1989, Gray responded to the proposal by

stating that he would like to make a counter-proposal. The following

day, RGI received a fax from Riso-USA, terminating the Dealer

Agreement as of March 13, 1989. The Dealer Agreement authorized

termination because RGI had a seriously delinquent account with

Riso-USA. Riso-USA also informed RGI that Riso-USA would pursue legal action to collect RGI's delinquent account balance. Gray,

Randall, and Riso-USA then began negotiating an agreement under

which Gray and Randall would sell their stock in RGI to Riso-USA.

Both Gray and Randall were represented by counsel during the negotiations.

Gray, Randall, and Riso-USA executed an agreement (the Sale

Agreement), dated April 25, 1989, under which Gray and Randall

would sell their stock in RGI to Riso-USA for a total of $1.00 each.

The Sale Agreement provided, among other things, that: (1) RGI's

debt to Riso-USA would be converted to a long-term note; (2) RisoUSA would provide RGI with a general business manager; (3) Gray

and Randall would continue as RGI employees, receiving annual salaries of $75,000 plus a percentage of profits; (4) Gray and Randall

could be terminated only for cause; and (5) Gray and Randall would

have access to all the books and records of RGI. Finally, the Sale

Agreement contained a Repurchase Option giving Gray and Randall

the option to repurchase all the stock of RGI for $1.00 by May 1,

1992, provided: (1) Gray and Randall repaid their loans from RGI; (2)

RGI paid its debts to Riso-USA; (3) RGI had a positive net worth and

a positive current assets to current liabilities ratio; (4) the purchaser

was employed by RGI at the time of exercising the Repurchase

 3
Option; and (5) RGI paid a buy-back premium of approximately

$400,000 to Riso-USA. Allen then transferred his 5% of stock in RGI

to Riso-USA without consideration. Randall subsequently entered

into an agreement with Riso-USA terminating his employment with

RGI.

On October 18, 1990, Gray and Riso-USA executed an agreement

amending the Sale Agreement (the Amendment). The Amendment

extended the period in which Gray could exercise the Repurchase

Option to May 1, 1994, and waived the condition that RGI pay the

buy-back premium of approximately $400,000 to Riso-USA. On the

same day, in consideration for the Amendment, Gray executed a

"General Release" releasing "any and all legal and equitable claims

he may have against [Riso-USA], or Riso Kagaku Corporation, separately or jointly, arising from any acts or omissions which occurred

on or before the date of this General Release." (J.A. 761).

Thereafter, relations soured between Gray and Riso-USA and the

protracted litigation culminating in this appeal began. On May 6,

1991, Gray and RGI brought a declaratory judgment action against

Riso-USA and Riso Kagaku. And on April 24, 1992, Gray filed his

original complaint in this action. He subsequently amended the complaint three times, filing the present version of the complaint on June

28, 1994. The present version of the complaint alleges causes of

action against Riso-USA and Riso Kagaku for: (1) breach of contract,

(2) breach of contract accompanied by a fraudulent act, (3) breach of

the implied covenant of good faith and fair dealing, (4) breach of

fiduciary duty, (5) conversion, (6) breach of the South Carolina

Unfair Trade Practices Act, (7) fraud, (8) constructive fraud, (9) tortious interference with a business relationship, and (10) intentional

interference with a contract. Gray later withdrew with prejudice his

declaratory judgment action and his causes of action for tortious interference with a business relationship and intentional interference with

a contract. The district court then dismissed Gray's causes of action

against Riso Kagaku for lack of personal jurisdiction and granted

summary judgment in favor of Riso-USA on Gray's remaining causes

of action. This appeal followed.

II.

Gray first argues that the district court erred in dismissing his

causes of action against Riso Kagaku for lack of personal jurisdiction.

 4
Gray, the party asserting that personal jurisdiction exists, bears the

burden of establishing that personal jurisdiction exists. See Mylan

Labs., Inc. v. Azko, N.V., 2 F.3d 56, 60 (4th Cir. 1993). To establish

personal jurisdiction over Riso Kagaku, Gray must show: (1) that a

statute authorizes service of process on Riso Kagaku, and (2) that

exercising personal jurisdiction over Riso Kagaku would comport

with due process. See id.; see also Fed. R. Civ. P. 4(e).

To make the first showing, Gray relies on the South Carolina longarm statute, S.C. Code Ann. § 36-2-803. Riso Kagaku concedes that

the South Carolina long-arm statute extends to the limits of due process. See Southern Plastics Co. v. Southern Commerce Bank, 423

S.E.2d 128, 130 (S.C. 1992).

Because Riso Kagaku concedes that the South Carolina long-arm

statute extends to the limits of due process, Gray must only show that

exercising jurisdiction over Riso Kagaku comports with due process.

The due process standard has two prongs: (1) the minimum contacts

prong and (2) the fairness prong. To satisfy the minimum contacts

prong, the defendant must have certain minimum contacts or ties with

the forum state. To satisfy the fairness prong, the exercise of personal

jurisdiction over the defendant must not "offend traditional notions of

fair play and substantial justice." Lesnick v. Hollingsworth & Vose

Co., 35 F.3d 939, 942 (4th Cir. 1994), cert. denied, 115 S. Ct. 1103

(1995).

The minimum contacts prong focuses on whether the defendant

"has created a substantial connection to the forum state by action purposefully directed toward the forum state or otherwise invoking the

benefits and protections of the laws of the state." Id. at 945-46. Gray

argues that Riso Kagaku had the requisite minimum contacts with

South Carolina because Riso Kagaku's wholly owned subsidiaries

marketed Riso Kagaku's products in South Carolina. But the mere

fact that Riso Kagaku's subsidiaries do business in South Carolina

does not confer personal jurisdiction over Riso Kagaku. See Cannon

Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 335-38 (1925);

Transure, Inc. v. Marsh & McLennan, Inc., 766 F.2d 1297, 1299 (9th

Cir. 1985); Yarborough & Co. v. Schoolfield Furniture Indus., Inc.,

268 S.E.2d 42, 44 (S.C. 1980); see also Donatelli v. National Hockey

League, 893 F.2d 459, 466 (1st Cir. 1990) (requiring more than the

 5
sharing of directors or other forms of control inherent in the parent/subsidiary relationship to exercise personal jurisdiction over a parent corporation based on its subsidiary's contacts with the forum

state). And the marketing of Riso Kagaku's products in South Carolina does not provide a basis for exercising personal jurisdiction over

Riso Kagaku. See Lesnick, 35 F.3d at 944 (rejecting the proposition

that personal jurisdiction may be exercised over a manufacturer who

merely delivers its products into the stream of commerce with the

expectation that the products will be purchased by consumers in the

forum state).

Additionally, Gray argues that the district court should have exercised personal jurisdiction over Riso Kagaku by piercing Riso-USA's

corporate veil. He points to the following evidence in the record to

support this argument: (1) Riso Kagaku funded Riso-USA and gave

it infusions of cash and at least part of the purpose of the cash infusions was to gain favorable tax treatment for Riso Kagaku in Japan;

(2) at least one board of directors meeting was held in Tokyo; (3)

notices of board of directors meetings may have originated in Japan;

(4) Riso-USA did not regularly hold formal board of directors meetings, relying instead on informal consultation; (5) a majority of the

members of Riso-USA's board of directors were also associated with

Riso Kagaku; (6) Riso Kagaku forced Riso-USA to terminate a

financing program on which Riso Kagaku acted as guarantor; (7) the

president of Riso-USA sought approval from Riso Kagaku officials

before hiring a financial controller, although the president believed he

had the authority to hire the financial controller without Riso

Kagaku's consent; and (8) Riso-USA forwarded certain complaints

made by Gray to officials in Japan and received a response on Riso

Kagaku letterhead indicating that Riso Kagaku's approval was

required for resolving the complaints.

Although these facts demonstrate that Riso-USA failed to observe

some corporate formalities, Gray has not sustained his burden of

proving that Riso Kagaku has minimum contacts with South Carolina.

For example, he has not proved that Riso-USA was an agent of Riso

Kagaku, that Riso Kagaku exerts a degree of control greater that what

is normally associated with common ownership and directorship, or

that Riso-USA is a separate entity in name alone. Donatelli, 893 F.2d

at 466. We thus conclude that Gray has not established that Riso

 6
Kagaku had sufficient minimum contacts with South Carolina to satisfy the due process standard for the exercise of personal jurisdiction.

We also conclude that Gray cannot satisfy the fairness prong of the

due process standard. Under the fairness prong, a court must consider

several factors, including the interests of the plaintiff and of the forum

state and the burden on the defendant of having to defend the case in

the forum state. Id. at 946. When personal jurisdiction over an alien

defendant is at issue, a court must also consider the procedural and

substantive policies of other nations whose interests are affected by

the assertion of jurisdiction by a court in the United States. Asahi

Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 115

(1987).

Here, consideration of these factors leads to the conclusion that

exercising personal jurisdiction over Riso Kagaku would "offend traditional notions of fair play and substantial justice." See Lesnick, 35

F.3d at 942. Although Gray has an interest in adjudicating this action

in his home state, South Carolina, and South Carolina has an interest

in providing a forum for one of its citizens, these interests are outweighed by the burden on Riso Kagaku in having to defend this

action in South Carolina. The distance between Japan and South Carolina makes travel here expensive. Additionally, Riso Kagaku would

be at a disadvantage in South Carolina because of language and cultural barriers. See Asahi, 480 U.S. at 115 ("The unique burdens placed

upon one who must defend oneself in a foreign legal system should

have significant weight in assessing the reasonableness of stretching

the long arm of personal jurisdiction over national borders."). The

Supreme Court has admonished courts to demonstrate"an unwillingness to find the serious burdens on an alien defendant outweighed by

minimal interests on the part of the plaintiff or the forum State." Id.

Accordingly, we hold that exercising personal jurisdiction over Riso

Kagaku would violate the fairness prong of the due process standard.

III.

Having determined that the district court properly dismissed the

causes of action against Riso Kagaku, we now consider the propriety

of the district court's grant of summary judgment in favor of RisoUSA. We review the grant of summary judgment de novo. See Cooke

 7
v. Manufactured Homes, Inc., 998 F.2d 1256, 1260 (4th Cir. 1993).

Summary judgment must be entered against a party who, "after adequate time for discovery . . . fails to make a showing sufficient to

establish the existence of an element essential to that party's case, and

on which that party will bear the burden of proof at trial." Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986); see Fed. R. Civ. P. 56(c).

The nonmoving party must demonstrate that specific, material facts

exist that give rise to a genuine issue. See Celotex Corp., 477 U.S. at

324. "The nonmoving party, however, cannot create a genuine issue

of material fact through mere speculation or the building of one inference upon another." Beale v. Hardy, 769 F.2d 213, 214 (4th Cir.

1985). Furthermore, the existence of a scintilla of evidence in support

of the nonmoving party's position is insufficient. There must be evidence on which the jury could reasonably find for the nonmoving

party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).

A.

Before we address each of Gray's causes of action against RisoUSA, we note at the outset that some of Gray's claims are barred by

the General Release. The General Release executed by Gray on October 18, 1990, states, "Charles Gray hereby releases any and all legal

and equitable claims he may have against [Riso-USA], or Riso

Kagaku Corporation, separately or jointly, arising from any acts or

omissions which occurred on or before the date of this General

Release." (J.A. 761). The plain language of the General Release precludes Gray from recovering from Riso-USA for any wrong committed by Riso-USA on or before October 18, 1990. See Jordan v.

Security Group, Inc., 428 S.E.2d 705, 707 (S.C. 1993) ("Where the

language of a contract is plain and capable of legal construction, that

language alone determines the instrument's force and effect.").3

Although Gray contends that the General Release was only intended

to release certain specific claims, the language of the General Release

does not admit of such limitation.4 It is therefore our duty to "enforce

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3 There is no dispute that South Carolina law applies to this case.

4 Gray also argues that the General Release was not fairly obtained. He

relies on a memorandum written by the president of Riso-USA three

months before the General Release was executed, stating that Gray was

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the contract made by the parties regardless of its wisdom or folly,

apparent unreasonableness, or the parties' failure to guard their rights

carefully." Id. Thus, to the extent that Gray's claims against RisoUSA are based on conduct that occurred on or before October 18,

1990, summary judgment was properly granted on those claims.

B.

Gray asserts that Riso-USA breached the Sale Agreement and the

Amendment in the following particulars: (1) failing to provide RGI

with a general business manager; (2) failing to allow Gray to repurchase the stock in RGI; (3) failing to make available to RGI a special

type of financing that was available to all other dealers; and (4) failing

to give RGI the special pricing reserved for Riso-only dealers. We

shall address these arguments in turn.

1.

Gray argues that Riso-USA breached Paragraph 5(b) of the Sale

Agreement, which states that Riso-USA "will provide RGI with a

general business manager who will act as chief executive officer and

chief financial officer regardless of whether such person carries either

or both of those titles." (J.A. 724). Although the Sale Agreement was

executed on May 11, 1989, Riso-USA did not appoint a general business manager for RGI until June 1991.

In South Carolina, no cause of action for breach of contract arises

unless the breach caused damage to the plaintiff. Baughman v. Southern Ry., 121 S.E. 356, 356 (S.C. 1924). Here, Gray has failed to demonstrate that Riso-USA's delay in appointing a general business

manager caused him any injury. See Celotex Corp. , 477 U.S. at 324

(holding that summary judgment is appropriate against a party who,

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concerned that he would be unable to exercise the Repurchase Option

within the time provided for its exercise in the Sale Agreement. At most,

this memorandum provides evidence of Gray's motivation for executing

the General Release, i.e., to obtain an extension of time to exercise the

Repurchase Option. By no means does it show that the General Release

was not fairly obtained.

 9
"after adequate time for discovery . . . fails to make a showing sufficient to establish the existence of an element essential to that party's

case, and on which that party will bear the burden of proof at trial").

Indeed, the record demonstrates that Gray was not injured by RisoUSA's delay in appointing a general business manager. Before the

appointment of the general business manager, Riso-USA officials performed the functions that a general business manager would perform.

The president of Riso-USA told Gray that Riso-USA was having difficulty hiring a general business manager, that the salary for a general

business manager was an expense that RGI could ill afford, and that,

therefore, the president of Riso-USA would act as"de facto" general

business manager. Gray admits that this arrangement"was fine with"

him. (J.A. 1105). Summary judgment in favor of Riso-USA was

appropriate on this breach of contract claim because Gray failed to

establish the existence of injury resulting from the breach.

2.

Gray also argues that Riso-USA breached Paragraph 6 of the Sale

Agreement (the Repurchase Option), which gives Gray an option to

repurchase RGI if, among other things, "[a]ll RGI debts, long term or

current, to Riso[-USA] shall have been paid in full" and "RGI shall

have a positive net worth and a positive current assets to current liabilities ratio." (J.A. 726). Gray argues that Riso-USA prevented him

from exercising this Repurchase Option.

To support his argument that Riso-USA prevented him from exercising the Repurchase Option, Gray relies on a series of letters

between his attorney and Riso-USA's attorney. Examination of these

letters does not show that Riso-USA prevented Gray's exercise of the

Repurchase Option. Rather, the letters show that the parties were

attempting to settle the ongoing litigation between the parties and to

determine the amount due under the Repurchase Option. In determining the amount due under the Repurchase Option, each party sought

offsets and credits for various expenses for which they claimed the

other party was responsible. The offsets and credits sought by each

party were not specifically authorized in the Sale Agreement or in the

Amendment, and neither party would agree to the offsets and credits

sought by the other party. Consequently, the parties failed to reach an

 10
agreement. Because an examination of these letters reveals no genuine issue regarding Gray's allegation that Riso-USA prevented his

exercise of the Repurchase Option, summary judgment in favor of

Riso-USA was appropriate on this breach of contract claim.

3.

Gray argues that Riso-USA breached Paragraph 5(a) of the Sale

Agreement, which states that RGI's debts to Riso-USA will be "on

standard terms as stated by Riso[-USA] for all dealers." (J.A. 724).

Gray claims that Riso-USA refused to allow RGI to purchase its

inventory under a particular financing plan, the"ORIX" plan. However, Riso-USA terminated the ORIX plan as to all dealers, including

RGI, in the summer of 1990. Gray does not claim that Riso-USA

refused to allow RGI to purchase its inventory under the ORIX plan

before it terminated the plan as to all dealers. Because no dealer could

use the ORIX plan, Riso-USA's failure to allow RGI to use the ORIX

plan did not breach the Sale Agreement's requirement that RGI's

debts to Riso-USA would be on standard terms applicable to all dealers. Therefore, summary judgment in favor of Riso-USA was appropriate regarding this breach of contract claim.

4.

Finally, Gray also argues that for a period of time preceding the

execution of the General Release, Riso-USA breached Paragraph 5(a)

of the Sale Agreement by failing to give RGI special"Riso-only"

pricing that is given to all dealers who sell Riso products exclusively.

Because the acts or omissions from which this claim arises occurred

before October 18, 1990, Gray has completely released Riso-USA for

liability resulting from this breach of the Sale Agreement. Therefore,

summary judgment in favor of Riso-USA was appropriate on this

breach of contract claim.

C.

Gray claims that each of the alleged breaches of contract just discussed were accompanied by fraudulent acts. In South Carolina, the

cause of action for breach of contract accompanied by a fraudulent act

 11
has three elements: (1) a breach of contract, (2) fraudulent intent relating to the breaching of the contract and not merely to its making, and

(3) a fraudulent act accompanying the breach. Floyd v. Country

Squire Mobile Homes, Inc., 336 S.E.2d 502, 503-04 (S.C. Ct. App.

1985).

Gray has waived his argument that Riso-USA's delay in appointing

a general business manager was a breach of contract accompanied by

a fraudulent act. At the summary judgment hearing, Gray's attorney

stated, "As far as fraudulent act accompanying failure to appoint a

business manager, I would not necessarily say that there was one on

that." (J.A. 633). Therefore, we will not consider this argument. See

Muth v. United States, 1 F.3d 246, 250 (4th Cir. 1993) ("[I]ssues

raised for the first time on appeal generally will not be considered.").

As already noted, Riso-USA's alleged prevention of Gray's exercise of the Repurchase Option and Riso-USA's failure to allow RGI

to use the ORIX plan do not constitute breaches of the Sale Agreement or the Amendment. Consequently, as to these claims, Gray cannot establish the first element of the cause of action for breach of

contract accompanied by a fraudulent act. And, as discussed above,

Gray has released Riso-USA from liability for its failure to give RGI

Riso-only pricing. Therefore, summary judgment in favor of RisoUSA was appropriate on Gray's cause of action for breach of contract

accompanied by a fraudulent act.

D.

Gray claims that Riso-USA violated the covenants of good faith

and fair dealing in the contracts at issue in this case. In South Carolina, every contract has an implied covenant of good faith and fair

dealing. Commercial Credit Corp. v. Nelson Motors, Inc., 147 S.E.2d

481, 484 (S.C. 1966). This covenant requires the parties to do those

things that according to reason and justice they should do to carry out

the purpose of the contract. Id.

Gray alleges the following breaches of the implied covenant of

good faith and fair dealing: (1) Riso-USA frustrated and sabotaged

Gray's exercise of the Repurchase Option; (2) Riso-USA refused to

treat RGI on the same credit terms as other dealers; (3) the president

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of Riso-USA told Gray that the Sale Agreement and the Amendment

were void; (4) Riso-USA threatened to pursue legal action to collect

funds owed by RGI; (5) Riso-USA placed RGI on credit hold until

Gray acceded to the Sale Agreement; (6) Riso-USA pressured Gray

into purchasing large amounts of unneeded inventory for RGI; (7)

Riso-USA threatened to terminate RGI as a Riso dealership; and (8)

Riso-USA refused to ship supplies necessary to fill an order that RGI

had from a customer.

The first alleged breach--Riso-USA's frustrating and sabotaging

Gray's exercise of the Repurchase Option--refers to the same conduct that Gray alleges breached the express terms of the Repurchase

Option, as well as to other generalized allegations of Riso-USA's

mismanagement while it controlled RGI. As discussed above, Gray

cannot point to specific facts in the record supporting these allegations. Therefore, the district court properly granted summary judgment on this claim. See Celotex Corp., 477 U.S. at 324.

The second alleged breach--Riso-USA's refusal to treat RGI on

the same credit terms as other dealers--presumably refers to the same

conduct that Gray alleges breached Paragraph 5(a) of the Sale Agreement. As discussed above, Riso-USA did not violate Paragraph 5(a)

by refusing to allow RGI to use ORIX financing because Riso-USA

refused to allow all dealers to use ORIX financing. And Gray released

Riso-USA from liability for its failure to give RGI Riso-only pricing.

The third alleged breach--the president of Riso-USA telling Gray

that the Sale Agreement and the Amendment were void--is immaterial. Riso-USA has not refused to perform under the Sale Agreement

and Amendment. Therefore, even if the president of Riso-USA did

tell Gray that the Sale Agreement and the Amendment were void,

Gray cannot demonstrate that he was injured by this statement. Cf.

Baughman, 121 S.E. at 356 (holding that no cause of action for

breach of contract arises unless the breach causes damage to the

plaintiff).

The remaining alleged breaches refer to the implied covenant of

good faith and fair dealing in the Dealer Agreement between RisoUSA and RGI. An action on a contract must be brought by the parties

to the contract or their assignees. See Professional Bankers Corp. v.

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Floyd, 331 S.E.2d 362, 364-65 (S.C. Ct. App. 1985). Because Gray

was not a party to the Dealer Agreement or an assignee of a party to

the Dealer Agreement, Gray is not the proper party to raise these

claims. Therefore, summary judgment in favor of Riso-USA was

appropriate of these claims.

E.

Gray asserts that by virtue of the Sale Agreement, specifically the

Repurchase Option, a fiduciary relationship existed between RisoUSA and Gray. Gray further asserts that Riso-USA breached its fiduciary duty to him by mismanaging RGI and by preventing him from

exercising the Repurchase Option.

In South Carolina, those who control a corporation owe a fiduciary

duty to the shareholders of the corporation. Jacobson v. Yaschik, 155

S.E.2d 601, 605 (S.C. 1967); see Hite v. Thomas & Howard Co., 409

S.E.2d 340, 342 (S.C. 1991), overruled in part on other grounds,

Huntley v. Young, 462 S.E.2d 860 (S.C. 1995). Although Gray is not

a shareholder of RGI, he attempts to extend the fiduciary duty recognized in Jacobson by noting that Riso-USA, as the sole shareholder

of RGI, controlled RGI and that the Repurchase Option gave him an

option to become a shareholder by repurchasing all the shares in the

corporation. Gray points out that his ability to exercise the Repurchase Option was dependent in part on how Riso-USA managed RGI

because the amount necessary to repurchase the stock was based on

RGI's assets to liabilities ratio.

We agree with Gray that the Sale Agreement implicitly prohibits

Riso-USA from thwarting Gray's exercise of the Repurchase Option

by intentionally inflating the cost to Gray of exercising the Repurchase Option. But we are not convinced this prohibition exists

because the Sale Agreement created a fiduciary relationship. Cf.

Taylor v. First Union Corp., 857 F.2d 240, 246 (4th Cir. 1988) (citing

Jacobson and noting that "[t]he fiduciary obligation established by

South Carolina law is quite specific" and that"the extent of the fiduciary obligation is . . . settled"), cert. denied, 489 U.S. 1080 (1989).

Gray's argument confuses the implied covenant of good faith and fair

dealing with fiduciary duty. See Columbia East Assocs. v. Bi-Lo, Inc.,

386 S.E.2d 259, 262 (S.C. Ct. App. 1989) ("[T]he law will imply an

 14
agreement to do those things that according to reason and justice

should be done to carry out the purpose for which the contract was

made."); Black's Law Dictionary 432 (abridged 6th ed. 1991) (defining "fiduciary duty" as "the highest standard of duty implied by law").

But regardless of whether Riso-USA had a fiduciary duty or simply

a duty to act fairly and in good faith, there is simply no evidence

beyond Gray's bald assertions that Riso-USA managed RGI in such

a way as to inflate the cost of exercising the Repurchase Option.

Therefore, summary judgment was appropriate on Gray's cause of

action for breach of fiduciary duty. See Celotex Corp., 477 U.S. at

324.

F.

Gray asserts that Riso-USA wrongfully refused to allow him to

repurchase the stock in RGI and that Riso-USA's resulting wrongful

detention of the stock constitutes conversion.

The tort of conversion is the illegal use, misuse, or detention of

another's chattel to the exclusion of the owner's rights. Hite, 409

S.E.2d at 342. To establish conversion, including conversion of stock,

the plaintiff must establish title or right to possession of the chattel.

Crane v. Citicorp Nat'l Servs., Inc., 437 S.E.2d 50, 52 (S.C. 1993);

see Daniel v. Post, 187 S.E. 915, 917-18 (S.C. 1936). An action for

conversion of stock has been allowed in cases where either the stock

certificate or payment of the stock's value has been wrongfully

retained by another. Hite, 409 S.E.2d at 342.

Here, however, Riso-USA unquestionably had title and right to

possess the stock by virtue of the Sale Agreement. Riso-USA did not

wrongfully retain the stock, because the parties never reached an

agreement on the amount Gray had to pay to repurchase the stock and

Gray never tendered payment for the stock. Therefore, summary judgment in favor of Riso-USA was appropriate on Gray's conversion

cause of action.

G.

Finally, Gray asserts a cause of action against Riso-USA for breach

of the South Carolina Unfair Trade Practices Act (SCUTPA).

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SCUTPA allows "[a]ny person who suffers any ascertainable loss of

money or property . . . as a result of the use or employment . . . of

an unfair or deceptive method, act or practice" in the conduct of any

trade or commerce to sue for actual damages. S.C. Code Ann. § 39-

5-140(a). A trade practice is "unfair" when it is offensive to public

policy or when it is immoral, unethical, or oppressive. Adams v. G.J.

Creel & Sons, Inc., 465 S.E.2d 84, 86 (S.C. 1995). A trade practice

is "deceptive" when it has a tendency to deceive. Id. To be actionable

under SCUTPA, an unfair or deceptive practice must have an adverse

effect on the public interest. Florence Paper Co. v. Orphan, 379

S.E.2d 289, 291 (S.C. 1989). Such a practice has an effect on the public interest if the practice has the potential for repetition. Noack

Enters. v. Country Corner Interiors, Inc., 351 S.E.2d 347, 350-51

(S.C. Ct. App. 1986).

Gray argues that every alleged instance of misconduct on the part

of Riso-USA constitutes an unfair or deceptive act under SCUTPA.

To the extent the alleged misconduct relates to harm to RGI, Gray

does not have standing to assert that misconduct in his SCUTPA

cause of action. See S.C. Code Ann. § 39-5-140(a) (allowing "[a]ny

person who suffers any ascertainable loss of money or property" to

bring a SCUTPA claim). And, to the extent the misconduct occurred

on or before October 18, 1990, Gray has released Riso-USA from liability for the misconduct.

The remaining allegations of misconduct relate to Riso-USA's preventing Gray from exercising the Repurchase Option. Gray has failed

to demonstrate a potential for repetition of this alleged misconduct.

The only evidence in the record regarding the potential for Riso-USA

to acquire the stock of other dealers and to prevent the dealers from

repurchasing the stock indicates that Riso-USA has never acquired

stock in another Riso dealership, has no plans to acquire all or part

of the stock of another dealership, and has no plans to give any

employee or other person an option to buy any ownership interest in

Riso-USA or any Riso-USA subsidiary. Thus, there is no potential for

repetition of Riso-USA's alleged misconduct of preventing Gray from

exercising the Repurchase Option. Summary judgment in favor of

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Riso-USA was therefore appropriate on Gray's cause of action for

breach of SCUTPA.5

IV.

For the reasons stated herein, we affirm the district court's dismissal of Gray's causes of action against Riso Kagaku and the district

court's entry of summary judgment in favor of Riso-USA.

AFFIRMED

_________________________________________________________________

5 Gray also asserts causes of action for fraud and constructive fraud

against Riso-USA, alleging that Riso-USA misrepresented certain facts

and failed to disclose other facts. Our review of the record and Gray's

arguments discloses that these causes of action are without merit. Therefore, summary judgment in favor of Riso-USA was appropriate on

Gray's causes of action for fraud and constructive fraud.

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