Buck Investments, LLC v. ROA, LLC

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Buck Investments, LLC, Respondent,

v.

ROA, LLC; Deborah Rice-Marko; and PNC Bank, N.A.,
Successor to RBC Bank, Defendants,

Of whom ROA, LLC is the Appellant.

Appellate Case No. 2018-001729

Appeal From Charleston County
D. Craig Brown, Circuit Court Judge

Unpublished Opinion No. 2023-UP-249
Heard March 2, 2021 – Filed June 21, 2023

AFFIRMED

Louis H. Lang and Demetri K. Koutrakos, both of
Callison Tighe & Robinson, LLC, of Columbia, for
Appellant.

Morgan S. Templeton, of Wall Templeton & Haldrup,
PA, of Charleston, and Thomas B Boger, of The Pflug
Law Firm, LLC, of Mount Pleasant, both for Respondent.
MCDONALD, J.: ROA, LLC (ROA) appeals the jury's award of $900,000 to
Buck Investments, LLC (Buck) for breach of contract, arguing the circuit court
erred by (1) granting Buck's motion for a directed verdict on ROA's impossibility
defense and (2) denying ROA's motion for judgment notwithstanding the verdict
(JNOV) as to its waiver and estoppel defenses. We affirm.

Facts and Procedural History

On March 20, 2013, ROA entered a real estate sales agreement (the Contract) to
sell a King Street commercial property in Charleston (the Property) to Buck for
$3.5 million. Deborah Rice-Marko was the sole owner and managing member of
ROA; Edgar Alton Buck, Jr. (Edgar) was the managing member of Buck.

The Contract required Buck to pay $50,000 in earnest money and provided Buck
"shall conduct an examination of title to the Property" during a specified inspection
period. The Contract further stated, "If an exception to title not acceptable to
Purchaser [Buck] appears on the Title Report or the new survey, Purchaser shall
give Seller [ROA] notice of the exception within ten (10) business days after
receipt . . . ." of the title reports and related documents. ROA would then have
fifteen days to "remove any such exception, as long as Purchaser provide[d]
written notice of such exception." The Contract included options addressing how
the parties would proceed if an exception were stated.

The Contract required ROA "to remove at closing those exceptions which can be
removed by paying an ascertainable sum of money such as mortgages" and noted
"[t]he failure of either Party to exercise any power given any Party hereunder or to
insist upon strict compliance by either Party of its obligations hereunder, shall not
constitute a waiver of either Party's right to demand exact compliance with the
terms hereof." The Contract anticipated closing to occur by April 3, 2013, and
provided time was of the essence; however, the Contract gave ROA thirty calendar
days to cure should it default "by failing to close for reasons within [ROA's]
control."

On April 2—the day before the sale was to close—ROA communicated it would
likely need an extension to obtain documents needed from tenants. On April 3,
Rice-Marko did not appear for the closing. On April 4, the escrow attorney
advised "Seller is in default and Purchaser reserves all rights as provided in the
Agreement if Seller fails to cure the default within thirty (30) days." On April 5,
Rice-Marko confirmed ROA needed the thirty-day extension. In forwarding the
email chain in which Rice-Marko requested the extension, Edgar remarked to the
escrow attorney that there "must be a lender issue." Rice-Marko and Edgar
exchanged several additional emails about closing the sale, and Rice-Marko
continued to express her wish to sell the Property.

On May 3, 2013, PNC Bank (PNC) filed a foreclosure action as to certain
properties ROA, Rice-Marko, her family members, and other entities owned. Prior
to entering the Contract, Rice-Marko had experienced financial difficulties and
executed a forbearance agreement and cross-collateralization of several properties
through a 2012 restructuring. As of April 2013, the total amount PNC alleged it
was owed exceeded $20 million. Pursuant to the terms of the restructuring, ROA
was not permitted to transfer any rights in the Property without "[PNC's] prior
written consent, which may be withheld in [PNC's] sole discretion." Neither Rice-
Marko nor any other representative of ROA ever notified Buck of this issue prior
to entering the Contract to sell the King Street property.

On May 14, the escrow attorney again wrote to advise that ROA was in default and
Buck reserved "all rights" under the Contract arising from ROA's failure to cure
the default. On July 10, Edgar again emailed Rice-Marko, stating he had not heard
from her, noting he would still like to close on the Property, and inquiring as to
whether she had spoken with her lender. Rice-Marko refused to further discuss the
matter due to the pending litigation with PNC.

Buck filed suit against ROA and Rice-Marko, pleading causes of action for
specific performance, breach of contract, negligent misrepresentation, fraudulent
misrepresentation, constructive fraud, and breach of contract accompanied by a
fraudulent act. In its amended answer, ROA raised defenses of waiver, estoppel,
and impossibility of performance due to PNC's refusal to consent to the sale of the
Property under the cross-collateralization agreement. ROA argued the Contract
was "expressly conditioned on [ROA's] ability to release the lien held by PNC
from the [P]roperty for an 'ascertainable sum of money.'" In 2017, Rice-Marko,
her family members, ROA, and other entities settled the PNC case involving the
foreclosure and cross-collateralization agreement.

Buck's case against ROA and Rice-Marko was tried in July 2018. 1 At the close of
Buck's case in chief, ROA moved for a directed verdict on Buck's causes of action
for specific performance and negligent misrepresentation, and as to punitive
damages. ROA argued specific performance of the Contract was not

1
In 2017, the circuit court granted PNC's motion for summary judgment as to
Buck's specific performance claim and Buck's effort to compel PNC to consent to
the sale of the Property.
"available . . .given the position of a third-party lienholder." ROA also moved for
a directed verdict on Buck's breach of contract claim and moved to preclude Buck
from arguing appreciation value or the loss of a 1031 exchange as appropriate
measures of damages. The circuit court denied ROA's motions.

At the close of ROA's case, Buck moved for a directed verdict on ROA's defenses
of impossibility, waiver, and estoppel, arguing Morin v. Innegrity, LLC 2 barred the
defense of impossibility. ROA attempted to distinguish Morin, but the circuit
court noted Rice-Marko presented "absolutely no testimony" that there "was not an
ascertainable sum of money" PNC would accept to consent to the sale of the
Property. The circuit court noted Rice-Marko's testimony that she was negotiating
with PNC differed from evidence that there was no ascertainable sum PNC would
take to release the Property for sale. ROA did not seek a directed verdict on
impossibility, arguing there was sufficient evidence in the record for the jury to
consider whether or not Buck waived or should be estopped as to any argument
regarding PNC's mortgage and the requirement that PNC consent to the sale. ROA
noted the mortgage was a matter of public record, Buck completed a title search,
and Buck stated no exceptions as referenced in the Contract. "So, we believe that
issue should go to the jury." ROA also renewed the "motions for a directed verdict
that we argued after the close of [Buck's] case. The ones that were denied we
would renew at this time just to preserve the record." Relying upon Morin and
Hawkins v. Greenwood Development Corp., 3 the circuit court granted Buck's
motion for a directed verdict as to ROA's impossibility defense but denied the
motion as to waiver and estoppel. However, the court later recognized the question
of estoppel was not a jury question and directed a verdict for Buck on ROA's
estoppel defense as well. See Gaymon v. Richland Mem'l Hosp., 327 S.C. 66, 68,

2
424 S.C. 559, 570, 819 S.E.2d 131, 137 (Ct. App. 2018) (holding Innegrity's
"claimed financial inability to perform cannot constitute impossibility" and
Innegrity "assumed the risk it would be able to [perform its obligation under the
contract], whether by making alternative arrangements with the lender or paying
off the loan").
3
328 S.C. 585, 593, 493 S.E.2d 875, 879 (Ct. App. 1997) ("A party to a contract
cannot be excused from performance on the theory of impossibility of performance
unless it is made to appear that the thing to be done cannot by any means be
accomplished, for if it is only improbable or out of the power of the obligor, it is
not deemed in law impossible." (quoting 17A Am.Jur.2d Contracts § 674)).
488 S.E.2d 332, 333 (1997) ("[A] defense of equitable estoppel interposed in a law
case should be tried by the court as an equitable issue.").

The case went to the jury only on the breach of contract claim. The jury returned a
verdict for Buck, finding it had "proven damages by a preponderance of the
evidence in the amount of $900.000." ROA filed a Rule 59(e), SCRCP motion to
alter or amend, arguing impossibility excused ROA's failure to perform and the
defenses of waiver and estoppel barred Buck's recovery. ROA also moved for
JNOV and requested "an order finding, as a matter of law, ROA's failure to
perform under the subject contract was excused pursuant to the doctrine of
impossibility of performance." ROA further requested entry of judgment on the
doctrines of waiver and estoppel. The circuit court denied the post-trial motions. 4

Law and Analysis

"When reviewing the trial court's ruling on a motion for a directed verdict or
JNOV, this [c]ourt applies the same standard as the trial court by viewing the
evidence and all reasonable inferences in the light most favorable to the
nonmoving party." Maybank v. BB&T Corp., 416 S.C. 541, 568, 787 S.E.2d 498,
512 (2016). "The trial court must deny a motion for a directed verdict or JNOV if
the evidence yields more than one reasonable inference or its inference is in
doubt." Id. "Moreover, '[a] motion for JNOV may be granted only if no
reasonable jury could have reached the challenged verdict.'" Id. at 568–69, 787

4
ROA does not seek a new trial in this appeal; instead, ROA seeks entry of
judgment in its favor on the defenses of impossibility, waiver, and estoppel. This
request is complicated by the fact that ROA did not request a directed verdict
before the circuit court on the question of impossibility, instead stating "we believe
that issue should go to the jury." ROA now argues a directed verdict motion would
have been futile in light of the circuit court's ruling in Buck's favor as to
impossibility. We disagree. For the reasons discussed below, we find ROA's
claim fails both procedurally and on the merits. See e.g., RFT Management Co.,
LLC v. Tinsley & Adams LLP, 399 S.C. 322, 332, 732 S.E.2d 166, 171 (2012)
(reiterating that "[a] motion for judgment notwithstanding the verdict is a renewal
of the directed verdict motion and cannot raise grounds beyond those raised in the
directed verdict" motion (quoting Roland v. Palmetto Hills, 308 S.C. 283, 286, 417
S.E.2d 626, 628 (Ct. App. 1992))).
S.E.2d at 512 (alteration in original) (quoting Gastineau v. Murphy, 331 S.C. 565,
568, 503 S.E.2d 712, 713 (1998)).

I. Impossibility

ROA argues the circuit court erred by directing a verdict for Buck on impossibility
of performance. ROA contends Morin is distinguishable because (1) the trial court
in Morin submitted the impossibility defense to the jury; (2) the contract in Morin
"contained an unconditional promise" to remove an employee as the guarantor,
whereas here the clause only required a mortgage be removed "by paying an
ascertainable sum of money"; and (3) PNC had absolute discretion to reject the
sale. ROA cites cases from other jurisdictions, Serio v. Copeland Holdings, LLC 5
and Olbum v. Old Home Manor, Inc., 6 to support its impracticability argument.
We find the circuit court properly directed a verdict on impossibility.

"A party to a contract must perform its obligations under the contract unless its
performance is rendered impossible by an act of God, the law, or by a third party."
Hawkins, 328 S.C. at 593, 493 S.E.2d at 879. "Impossibility must be real and not a
mere inconvenience." Id.

A party to a contract cannot be excused from
performance on the theory of impossibility of
performance unless it is made to appear that the thing to
be done cannot by any means be accomplished, for if it is
only improbable or out of the power of the obligor, it is
not deemed in law impossible.

Id. (quoting 17A Am. Jur. 2 Contracts § 673, at 682 (1991)). "Subjective
impossibility, possibility which is personal to the promisor and does not inhere in
the nature of the act to be performed, does not excuse nonperformance of a
contractual obligation." Moon v. Jordan, 301 S.C. 161, 164, 390 S.E.2d 488, 490
(Ct. App. 1990); see also id. ("[T]he fact that one is unable to perform a contract

5
521 S.W.3d 131, 138 (Ark. Ct. App. 2017) (recognizing "[t]he law of
impossibility has evolved into a broader and more equitable rule of
impracticability" in Arkansas).
6
459 A.2d 757, 762–63 (Pa. Super. Ct. 1983) (referencing the Restatement 2nd's
language addressing supervening impracticability in a case involving payment of
mineral rights and unmineable coal).
because of his inability to obtain money, whether due to his poverty, a financial
panic, or failure of a third party on whom he relies for furnishing the money, will
not ordinarily excuse nonperformance in the absence of a contract provision in that
regard.").

ROA bases its impossibility argument on the Contract's provision providing ROA
was only required to remove an exception that "can be removed by paying an
ascertainable sum of money such as mortgages" and on PNC's refusal to consent to
the sale of the Property. But ROA's argument ignores Rice-Marko's own trial
testimony supporting Buck's claim that she "and ROA knowingly and intentionally
omitted and/or misrepresented facts concerning the status of the Property" when
contracting for its sale.

Rice-Marko testified she was the owner, managing member, and sole member of
ROA, LLC. When asked on direct examination whether she advised Buck of any
financial impediment that might hinder closing, she responded, "I did not
personally tell Mr. Buck, but it was recorded and it was also known to his
attorney." However, upon further inquiry, Rice-Marko admitted that while the
mortgage and forbearance agreement with PNC were recorded, she never disclosed
to Buck that the note and mortgage were in default nor advised Buck of other
financial difficulties that might hinder ROA's ability to sell the Property.

Buck's counsel introduced PNC's November 26, 2012 Notice of Default as well as
a February 15, 2013 letter PNC's counsel sent to Rice-Marko just one month prior
to ROA's entering the Contract, and Rice-Marko eventually admitted she did not
notify Buck of this correspondence. Rice-Marko further admitted she knew Buck
was attempting a 1031 exchange and even inquired through email as to the latest
date Buck could close and satisfy any 1031 deadline. Still, even after the April 3
closing date had come and gone, Rice-Marko did not inform Buck of her financial
difficulties with PNC because she "was continuing to negotiate. In fact, [she] had
a counteroffer out to [PNC] at this time." Rice-Marko testified she did not appear
at the closing "because the bank would not release the mortgage and note"—a fact
she chose not to disclose to Buck. And, when Buck emailed Rice-Marko on April
5 to ask why the closing had not occurred as per the Contract, she admitted she was
nonresponsive to his inquiry but continued to assert she was not having any
difficulty with PNC because "we were getting along. We were negotiating."

Finally, Buck's counsel highlighted the "Representations and Warranties" section
of the Contract, specifically provision 6(a)(ii), in which Rice-Marko and ROA
represented, "To the best knowledge of the Seller[,] there is no actual or threatened
action, litigation, or proceeding (including, but not limited to, condemnation) by
any organization, person, individual, or governmental authority against the
Property, or with respect thereto." These representations were made despite the
litigation threatened by PNC in the November 26, 2012 Notice of Default and the
February 15 follow-up letter threatening to pursue "litigation to collect on the
Notes, foreclosure of the Mortgages[,] and enforcement of the Guarantys [sic]."

Like the circuit court, we disagree with ROA's contention that PNC's unwillingness
to consent to the sale of the Property presented a legal impossibility. As in Morin,
ROA undertook the risk that it would be able to clear any encumbrances to the sale
by paying an ascertainable sum of money, thus enabling it to sell the Property to
Buck. See Morin, 424 S.C. at 570, 819 S.E.2d at 137 ("Even the most generous
interpretation of impossibility will not save a contracting party who bargains for
his own folly by guaranteeing performance despite impracticability."). Although
Rice-Marko properly references Serio and Olbum in her argument, these cases
from other jurisdictions are unpersuasive here. Arkansas and Pennsylvania have
recognized an impracticability defense whereas South Carolina has not. Compare
Serio, 521 S.W.3d. at 138 ("Impracticability of performance may excuse a party
from performing contractual obligations." (emphasis added)), and Olbum, 459
A.2d 757 at 763 (utilizing an impracticability defense to support the court's
decision), with Morin, 424 S.C. at 569–70, 819 S.E.2d at 137 (noting South
Carolina has not expanded its impossibility defense to impracticability, other than
as specified in the commercial code). Accordingly, the circuit court did not err in
directing a verdict for Buck on ROA's impossibility defense. 7

II. Waiver & Estoppel

ROA next asserts the trial court erred by denying its motion for JNOV based on

7
Although pursuant to its global restructuring contract with PNC, the sum of
money ROA may have had to pay to release the Property could have been in
excess of $20 million, that option was still legally possible. See Moon, 301 S.C. at
164, 390 S.E.2d at 490 ("Subjective impossibility, possibility which is personal to
the promisor and does not inhere in the nature of the act to be performed, does not
excuse nonperformance of a contractual obligation."); Morin, 424 S.C. at 570, 819
S.E.2d at 137 (emphasizing an individual's financial difficulties do not constitute
legal impossibility). As the circuit court recognized, Rice-Marko presented no
evidence of her financial condition, choosing merely to reiterate she and PNC
"were negotiating."
waiver and estoppel. Specifically, ROA contends the Contract required Buck to
inspect the title and identify any exceptions. ROA further contends Buck should
be precluded by the doctrines of waiver and estoppel from recovering for ROA's
breach because Buck failed to demand evidence of PNC's consent to the sale. We
disagree.
A waiver is a voluntary and intentional abandonment or
relinquishment of a known right. Generally, the party
claiming waiver must show that the party against whom
waiver is asserted possessed, at the time, actual or
constructive knowledge of his rights or of all the material
facts upon which they depended.

Janasik v. Fairway Oaks Villas Horizontal Prop. Regime, 307 S.C. 339, 344, 415
S.E.2d 384, 387–88 (1992). "Waiver is a question of fact for the finder of fact."
Mac Papers, Inc. v. Genesis Press, Inc., 426 S.C. 393, 404, 826 S.E.2d 874, 880
(Ct. App. 2019) (quoting Parker v. Parker, 313 S.C. 482, 487, 443 S.E.2d 388, 391
(1994)). "Waiver is distinct from equitable estoppel in that no detrimental change
of position in reliance on conduct need be shown. In [a] waiver analysis[,] the
focus is upon whether there was an unequivocal intent to relinquish a known
right." 7 S.C. Jur. Estoppel and Waiver § 17 (1993).

"In its broadest sense, equitable estoppel is a means of preventing a party from
asserting a legal claim or defense that is contrary or inconsistent with his or her
prior action or conduct." Rodarte v. Univ. of S.C., 419 S.C. 592, 601, 799 S.E.2d
912, 916 (2017) (quoting 28 Am. Jur. 2d Estoppel and Waiver § 27 (2011)).
"Essential elements of estoppel as related to the party claiming the estoppel are: (1)
lack of knowledge and of means of knowledge of truth as to facts in question; (2)
reliance upon conduct of the party estopped; and (3) prejudicial change in
position." Zabinski v. Bright Acres Assocs., 346 S.C. 580, 589, 553 S.E.2d 110,
114 (2001). "The essence of equitable estoppel is that the party entitled to invoke
the principle was misled to his injury." S.C. Pub. Serv. Auth. v. Ocean Forest, Inc.,
275 S.C. 552, 554, 273 S.E.2d 773, 774 (1981). "Estoppel cannot exist if the
knowledge of both parties is equal and nothing is done by one to mislead the
other." Mac Papers, 426 S.C. at 404, 826 S.E.2d at 880 (quoting Evins v. Richland
Cnty. Hist. Pres. Comm'n, 341 S.C. 15, 20, 532 S.E.2d 876, 878 (2000)).

Here, the circuit court did not err in denying ROA's JNOV motion as to waiver and
estoppel for at least two reasons. First, a reasonable jury could have found (and
did find) that Buck had not waived its rights. Rice-Marko's own testimony and
emails demonstrate ROA was continually attempting to negotiate with PNC to sell
the Property by May 2013, and Buck was actively seeking to purchase it. The
contract provided: "The failure of either Party to exercise any power given any
Party hereunder or to insist upon strict compliance by either Party of its obligations
hereunder, shall not constitute a waiver of either Party's right to demand exact
compliance with the terms hereof." We acknowledge ROA's argument that Buck
waived its rights by not proceeding with the title inspection and exception process
set forth in the contract, but this, at best, presented an issue for the jury in
considering the breach of contract cause of action. See Parker, 313 S.C. at 487,
443 S.E.2d at 391 ("Waiver is a question of fact for the finder of fact."). Notably,
the closing date specified in the contract had passed one month before PNC
initiated the foreclosure action and, even then, Rice-Marko had not disclosed either
the financial difficulties or PNC's refusal to consent to the sale. Buck correctly
notes that while its title examination revealed the PNC mortgage and forbearance
agreement, it did not reveal the default letters that preceded its execution of the
Contract. ROA was the only party with knowledge of the true state of the
mortgage and the foreclosure threat, and Rice-Marko admitted she did not disclose
this to Buck, despite the Contract's obligation that she do so. Thus, the circuit
court did not err in denying ROA's JNOV motion as to waiver.

Nor did the circuit court err in addressing ROA's estoppel defense. ROA's estoppel
defense failed because "[e]stoppel cannot exist if the knowledge of both parties is
equal and nothing is done by one to mislead the other." See Zabinski, 346 S.C. at
589, 553 S.E.2d at 114 (quoting Evins, 341 S.C. at 15, 532, S.E.2d at 878). Here,
ROA was the party holding the knowledge—it knew of PNC's mortgage and
position on the Property, ROA's and Rice-Marko's financial difficulties, and its
own contractual obligation to remove mortgages that could be paid off by an
ascertainable sum of money. Buck consistently set forth its intention to purchase
the Property. Even though Buck speculated there was some lender issue at play,
there was no evidence Buck attempted in any way to mislead ROA; indeed, the
only evidence in the record demonstrates ROA likely violated provision 6(a)(ii) in
failing to disclose its cross-collateralization hurdle.

Accordingly, the circuit court did not err in directing a verdict for Buck on ROA's
equitable estoppel defense or in denying ROA's motion for JNOV.

AFFIRMED.

KONDUROS and GEATHERS, JJ., concur.