Court Opinion

ID: 9587673
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:25:03.969836+00
Date Added: 2024-06-11T12:48:23.755362
License: Public Domain

Gardner, Judge
(dissenting):
I respectfully dissent.
The Howells present the following argument on appeal.
The trial court erred in not directing a verdict in favor of the Howells when the overwhelming weight of the evidence proved that Mervyn Epstein did not have a right to rely upon any representations made by Orris Howell because he testified that prior to the alleged representation he did not trust him and thought him to be unethical.
It is my opinion that at the time Orris Howell affirmed that the payroll taxes and FICA taxes had been paid, no fiduciary *533relationship existed between the Epsteins and Orris Howell. At the time the alleged statement was made, the Epsteins and Howells were both represented by attorneys and were dealing at arm’s length about the sale of the corporation. Mervyn Epstein testified he did not trust the Howells.
Confidential or fiduciary relations are deemed to arise whenever two persons have come into such a relation that confidence or trust is necessarily reposed by one in the other. Chapman v. Citizens and Southern National Bank, 302 S.C. 469, 395 S.E. (2d) 446 (Ct. App. 1990). Also see Black’s Law Dictionary, p. 564 (5th Ed. 1979). It therefore is self-evident that if the Epsteins professed to have no confidence and trust in the Howells, then they cannot claim to be the beneficiary of a fiduciary relationship.
Admittedly, the Epsteins, at the time of the alleged misrepresentation, reposed no confidence or trust in the Howells. Mervyn Epstein testified that at that time he though the Howells were unethical and he did not trust them. And so without question, if there were a confidential relationship between the parties prior to the day in question, it had been extinguished by the disclaimer of trust and the declaration by the Epsteins that the relationship between the Epsteins and Howells was at an end. See Pate v. Ford, 297 S.C. 294, 376 S.E. (2d) 775 (1989). Pate relates to an express trust but the principles of failure, lapse, or extinguishment of a trust apply to fiduciary relationships just as they do to an express trust.
In my opinion, this case is controlled by Florentine Corp., Inc. v. PEDA I, Inc., 287 S.C. 382, 339 S.E. (2d) 112 (1985). There the Supreme Court held that where there is no confidential or fiduciary relationship and an arm’s-length transactions between mature, educated people is involved, there is no right to rely. This is especially true in circumstances where one should have utilized precaution and protection to safeguard his interest. The Court went on to hold that the right to rely is a necessary element that must be proved in fraud and deceit actions.
I would hold that under the circumstances of this case, the trial judge erred in failing to direct a verdict or in the alternative granting a post-verdict judgment n.o.v. on the basis that the Epsteins had no right to rely on the alleged misrepresen*534tation and therefore failed to prove an essential element of a fraud and deceit action.
I would also hold, assuming arguendo that the Howells are liable under a fraud and deceit action, that actual damages should be limited to one-half of the unpaid taxes. The Epsteins owed one-half of these taxes and if the parties, prior to the sale to the Epsteins, had each put in their half in order to cover the check that had been written for the taxes, the Ep-steins would have no complaint. Accordingly, since the parties did not cover the outstanding check, the Epsteins were only damaged by what the Howells owed the corporation to pay their half of the taxes.
I would reverse and remand for entry of judgment in accordance with this dissent.