Christopher Young v. Joanna Mare Paynter

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

Christopher Young and Biotech Restorations, LLC,
Appellants/Respondents,

v.

Joanna Marie Paynter, a/k/a Joey Painter, Samantha P.
Nelson, and Paynter Consulting, LLC,
Respondents/Appellants.

Appellate Case No. 2022-001777

Appeal From Pickens County
Letitia H. Verdin, Circuit Court Judge

Unpublished Opinion No. 2024-UP-369
Submitted September 11, 2024 – Filed October 30, 2024

AFFIRMED

Wesley D. Few, of Wesley D. Few, LLC, of Greenville,
for Appellants-Respondents.

Steven R. LeBlanc, of Steve LeBlanc, LLC, of
Greenville, for Respondents-Appellants.

PER CURIAM: This appeal and cross-appeal arise out of a business relationship
and involve a dispute over the circuit court's order interpreting a General
Partnership Agreement (GPA) executed by Appellant-Respondent Christopher
Young and Dr. Valerie Paynter on May 30, 2006. Appellants-Respondents 1 argue
the circuit court erred by: (1) finding Respondents-Appellants 2 were the owners of
Factor Technology; (2) construing the GPA provisions "in the event of a death of a
partner"; (3) construing the GPA to provide Respondents-Appellants exclusive use
and control of Factor Technology; and (4) failing to find a partnership breach and
intentional interference by Respondents-Appellants. Respondents-Appellants
cross-appeal the circuit court's denial of their motion for a directed verdict, and the
admission of the May 30, 2006 GPA into evidence. We affirm.

FACTS

Dr. Paynter developed and owned a proprietary biochemical formula used to
remediate soil pollution known as "The Factor." Appellants-Respondents began
doing business with Dr. Paynter in 2004, as evidenced by a handwritten agreement
executed by Dr. Paynter and Young on November 19, 2004. On January 1, 2006,
Dr. Paynter and her company, Paynter Consulting, and Appellants-Respondents
prepared and executed the first partnership agreement. On May 30, 2006, the
parties prepared and executed a second partnership agreement, the GPA 3. Both
agreements were signed and notarized.

Paragraph 3 of the GPA defines the purpose of the Partnership as follows:

3. Purpose – The business of the partnership is set forth
below and relates to the treatment of contaminated soil,
marine sediments and other media as applicable to the
Factor [B]iotechnology. To the extent necessary for the
remediation of soil and marine sediments, the Partnership
will utilize proprietary products and services under an
exclusive use permit which restricts the use of the Factor

1
Appellants-Respondents consist of Biotech Restorations, LLC (Biotech) and its
owner, Christopher Young (Young).
2
Respondents-Appellants are Joanna Paynter and Samantha Nelson. They are the
daughters of the late Dr. Valerie Paynter, the sole owner of Paynter Consulting,
LLC (Paynter Consulting). Paynter Consulting was held in default and is not a
party to this action.
3
The term "GPA" will hereafter refer exclusively to the May 30, 2006 second
partnership agreement signed by the parties.
Biotechnology to this Partnership for all environmental
business applications.
3a. Christopher W. Young (representing Biotech
Restorations, LLC) and Valerie A. Paynter
(representing Paynter Consulting) jointly agree to
work exclusively in support of the Partnership in
matters relating to the development of and
commercial use of Factor based products in the
environmental remediation marketplace.
3b. Paynter Consulting, having sole knowledge of
the proprietary Factor formulation, agrees to
provide the Partnership with exclusive use of
Factor formulated products during the term of the
Partnership, ongoing technical and scientific
assistance in support of the Partnership and the
first option to incorporate new technologies into
the Partnership.
3c. Biotech Restorations, LLC, having developed
existing markets and business opportunities, agrees
to provide ongoing business development and
management of remediation projects in which
Factor Products are in use and exclusive ongoing
support of the Partnership.

Paragraph 4 of the GPA defines the term of the Partnership as follows:

4. Term – The Partnership shall commence on and
continue until dissolved by mutual agreement of the
partners. The Partnership will terminate upon the death
or incapacity of a partner . . . . In the event of a death of
a partner, the remaining partner has the right to continue
the business of the Partnership by themselves or in
conjunction with any other persons they may select. The
continuing partner will pay 10% of net profits annually to
the heirs/estate of the deceased partner on any contract
involving the use of [T]he Factor, and 10% gross from
the sale of the Factor Technology.

Paragraph 5 of the GPA defines the distribution of profits for the Partnership as
follows:
5. Distribution of Profits – The partners agree that net
profits (after disbursement of expenses) arising from the
Partnership will be distributed equally (50/50). A
division of profits shall be made at such time as may be
agreed upon by the partners and at the close of each fiscal
year.

Paragraph 6 of the GPA defines control within the Partnership as follows:

6. Control – The partners shall have exclusive control
over the Factor Based Environmental Remediation
Business and each partner shall have equal rights in the
management and conduct of the Partnership business.
Any difference arising as to the ordinary matters
connected with the Partnership business shall be decided
by a third[-]party arbitrator chosen and agreed upon by
the partners. Any act beyond the scope of this
Partnership agreement or any contract that may subject
this Partnership to liability shall be subject to the prior
written consent of the partners.

Disputes arose between Young and Dr. Paynter in the years leading up to 2015. In
August of that year, Paynter Consulting filed a complaint against
Appellants-Respondents for eleven causes of action including, inter alia, breach of
contract, breach of contract accompanied by a fraudulent act, breach of duty of
loyalty, breach of fiduciary duty, and fraud. Dr. Paynter moved to dismiss without
prejudice and the motion was granted.

Dr. Paynter passed away on September 4, 2017. At the time of her death, Dr.
Paynter had only shared the formula for The Factor with her husband (deceased)
and Respondents-Appellants. Her estate was probated by the Pickens County
Probate Court. Appellants-Respondents filed a Creditor's Claim during the probate
of Dr. Paynter's estate claiming ownership of The Factor. Additionally, they
claimed Respondents-Appellants had: (1) possession of trade secrets; (2) refused to
return the trade secrets; and (3) attempted to sell trade secrets in breach of the
GPA. The claim was disallowed, and the probate of Dr. Paynter's estate was
closed on March 25, 2019. The findings of the probate court were never appealed
by Appellants-Respondents.
Appellants-Respondents filed the present lawsuit, again claiming that they owned
Dr. Paynter’s bioremediation technology and that Respondents-Appellants had
possession of Dr. Paynter's records, had refused to return the records, and had
attempted to sell the trade secrets in breach of the GPA. Respondents-Appellants
filed an Answer, generally denying the allegations in the Complaint and asserting
affirmative defenses for, inter alia, res judicata and the statute of limitations.

A jury trial commenced on April 20, 2022. Pretrial, the court heard arguments
from both parties as to the admission of the GPA. Ultimately, the court admitted
the GPA because both agreements were signed and notarized. Nevertheless, the
court gave a limiting instruction regarding testimony about the GPA. After the
close of Appellants-Respondents' case and directed verdict rulings, the parties
agreed to dismiss the jury and conduct the remainder of the trial as a bench trial.
During the trial, the court overruled Respondents-Appellants' objections and
allowed Appellants-Respondents to authenticate and admit into evidence two
versions of a partnership agreement. The court granted Respondents-Appellants a
directed verdict on Appellants-Respondents' first cause of action for Declaratory
Judgment, Breach of Agreement; fifth cause of action for Aiding and Abetting
Breach of Fiduciary Duty; and sixth cause of action for Breach of Fiduciary Duty.
Respondents-Appellants also moved for a directed verdict on all claims based on
res judicata and the statute of limitations, which the circuit court denied.

At the close of the April trial, the parties volunteered to conduct settlement
discussions outside of court to hopefully reach a resolution. They agreed to
reconvene in front of the circuit court at a later date and continue the non-jury trial
only if they could not reach an agreement. An agreement was never reached, and
on August 11, 2022, the court conducted a hearing at which time
Respondents-Appellants renewed their prior motions and, "in the context of
resuming the trial," rested without providing further evidence or testimony.
Appellants-Respondents offered to provide the court with deposition testimony of
Joanna Paynter in lieu of her in-court testimony that never occurred because
Respondents-Appellants rested. The remainder of the hearing laid out the parties'
plans to submit proposed contract constructions to the court prior to the execution
of a final order.

On November 10, 2022, the court issued an order containing the court's findings,
specifically as to construction of the GPA. On November 17, 2022, the court
issued an order amending a portion of the order issued on November 10, 2022.
The circuit court's order found the language of the GPA was unambiguous, and the
Partnership no longer existed. "Since there was no mutual agreement of the
partners to dissolve the Partnership prior to Dr. Paynter's death, her death as a
partner is what ultimately terminated the Agreement." As to who owned The
Factor, the court further found:

The introductory sentence of the Agreement states that
Paynter Consulting is "owned and operated solely by"
Dr. Paynter. Paragraph 3 of the Agreement states that the
"business of the partnership is set forth below and relates
to the treatment of contaminated soil, marine sediments
and other media as applicable to the Factor
[B]iotechnology" and "the Partnership will utilize
propriety products and services under an exclusive use
permit which restricts the use of the Factor
Biotechnology to this Partnership for all environmental
business applications." Paragraph 3.b further states that
Paynter Consulting "having sole knowledge of the
proprietary Factor formulation, agrees to provide the
Partnership with exclusive use of Factor formulated
products during the term of the Partnership." (emphasis
in original).

The circuit court construed these clauses together to find, based on the GPA,
Paynter Consulting had sole knowledge of The Factor formulation, and Paynter
Consulting was owned and operated solely by Dr. Paynter. There was nothing in
the remainder of the GPA that required Dr. Paynter or Paynter Consulting to share,
transfer, or otherwise disclose the formula of The Factor. Further, there was
nothing in the GPA that restricted Paynter Consulting or Dr. Paynter from sharing
The Factor formulation with her children. As the sole owner and operator of
Paynter Consulting, Dr. Paynter was the only person with sole knowledge of the
proprietary Factor formulation; thus, she was the sole owner of The Factor prior to
her death, according to the GPA.

As to the split of the sale, the circuit court found:

If [Respondents-Appellants] should choose to sell the
Factor Biotechnology, the contract for sale must include
a provision allowing [Appellants-Respondents] to use the
Factor Biotechnology after the sale. In addition, in
compliance with the terms set forth in the Agreement, if
[Respondents-Appellants] choose to sell the Factor
Biotechnology, they would be required to pay
[Appellants-Respondents] 10% gross from the sale.

As to the rights to The Factor, the circuit court's order found the GPA:

[C]ontemplates that a partner may continue the business
of the Partnership after the death of a partner.
Continuation of the business of the Partnership would be
impossible for [Appellants-Respondents] without use of
the Factor Biotechnology. Therefore,
[Appellants-Respondents] have the right to use the Factor
Technology and enter into contracts for use of the Factor
Technology. However, [Respondents-Appellants] own
the Factor Biotechnology and are not required to share
the Factor Biotechnology formulation with
[Appellants-Respondents].

The court continued, "While the partners enjoyed exclusive use of the Factor
Biotechnology 'during the term of the Partnership,' Paragraph 4 states 'the
remaining partner has the right to continue the business of the Partnership by
themselves or in conjunction with any other person they may select.'" Further, the
order found, "If the partners intended for the remaining partner to have the
'exclusive' right to continue business with the Factor Biotechnology following the
death of the other, language indicating that would be included in the contract."

This appeal and cross-appeal followed.

STANDARD OF REVIEW

"It is a question of law for the court whether the language of a contract is
ambiguous." S.C. Dep't. of Nat. Res. v. Town of McClellanville, 345 S.C. 617, 623,
550 S.E.2d 299, 302–03 (2001). "The construction of a clear and unambiguous
contract is a question of law for the court." Hawkins v. Greenwood Dev. Corp.,
328 S.C. 585, 592, 493 S.E.2d 875, 878 (Ct. App. 1997). "In an action at law, tried
without a jury, the appellate court's standard of review extends only to the
correction of errors of law." Smith v. Auto-Owners Ins. Co., 377 S.C. 512, 515,
660 S.E.2d 271, 272 (Ct. App. 2008). "We will not disturb the trial court's findings
of fact unless those findings are wholly unsupported by the evidence or controlled
by an erroneous conception or application of the law." Id. "However, an appellate
court may make its own determination on questions of law and need not defer to
the trial court's rulings in this regard." Auto-Owners Ins. Co. v. Rhodes, 405 S.C.
584, 593, 748 S.E.2d 781, 785 (2013).

LAW/ANALYSIS

A. Appellants-Respondents' Appeal

1. General Partnership Agreement Interpretation

Appellants-Respondents argue the circuit court committed reversible error by: (1)
finding Respondents-Appellants were the owners of The Factor, (2) construing the
GPA to provide for a 90/10 split on the sale of The Factor in favor of
Respondents-Appellants, who are "heirs/estate of the deceased partner" not the
"remaining partner," and (3) construing the GPA without recognizing the partners'
intent that profits related to The Factor be split on a 50/50 basis during their
lifetimes, and 90/10 thereafter in favor of the "remaining partner," who has rights
of use and sale of The Factor "in the event of a death of a partner." We affirm.

"The cardinal rule of contract interpretation is to ascertain and give legal effect to
the parties' intentions as determined by the contract language." McGill v. Moore,
381 S.C. 179, 185, 672 S.E.2d 571, 574 (2009). The language alone will
determine the contract's force where such language is unambiguous; however,
where the language is subject to multiple interpretations, the fact finder must
determine the parties' intentions from the evidence presented. Compare
Schulmeyer v. State Farm Fire & Cas. Co., 353 S.C. 491, 495, 579 S.E.2d 132,
134 (2003) (stating that where the language is clear and unambiguous the intent of
the parties is to be derived from the language of the contract) with Charles v. B &
B Theatres, Inc., 234 S.C. 15, 18, 106 S.E.2d 455, 456 (1959) (finding that when
the contract is ambiguous in its terms other evidence must be considered to
ascertain the intent of the parties). A party may not create an ambiguity by reading
a single sentence or clause, but rather the contract and the language used must be
considered as a whole. Schulmeyer, 353 S.C. at 495, 579 S.E.2d at 134.

Ownership of The Factor Technology

Appellants-Respondents argue the circuit court committed reversible error by
finding Respondents-Appellants were the owners of The Factor technology.
Dr. Paynter was able to share The Factor formulation with Respondents-Appellants
prior to her death; thus, after her death, Respondents-Appellants became the only
persons with sole knowledge of the proprietary Factor formulation. Daughter
Samantha Nelson testified in her deposition that she believed she and Daughter
Joanna Paynter became owners of The Factor in the spring of 2016 when Dr.
Paynter provided Respondents-Appellants with her lab notebooks detailing her
bench studies for The Factor. In the Declaration of Joanna Paynter, she testified
that Dr. Paynter met with Respondents-Appellants in August 2009, and intimated
that she wanted to transfer the formulation for The Factor to
Respondents-Appellants before her death. It was at that time
Respondents-Appellants were given the formula to The Factor. The GPA only
addressed the exclusive use of The Factor while the partnership was ongoing, and
it provided no language preventing Dr. Paynter from sharing the formula prior to,
or at the time of, her passing. The circuit court properly interpreted the language
of the GPA when it found:

[A]llowing for the right to continued use of the Factor
Biotechnology upon the death of one, unspecified partner
demonstrates to this Court there was no intent on behalf
of either party for the information concerning the Factor
formulation to die with Dr. Paynter. Dr. Paynter did not
choose to share this information with
[Appellants-Respondents], but there is nothing within the
GPA requiring or limiting her to do [so].

We agree with the circuit court's interpretation of the plain language of the GPA
finding Respondents-Appellants were the sole owners of The Factor upon the death
of Dr. Paynter.

Rights, Use, and the Sale of The Factor

Appellants-Respondents argue the circuit court committed reversible error by
construing the GPA to grant exclusive use and control of The Factor to
Respondents-Appellants after Dr. Paynter's death. Further,
Appellants-Respondents argue the circuit court committed reversible error by
construing the GPA to provide for a 90/10 split on the sale of The Factor in favor
of Respondents-Appellants, who are "heirs/estate of the deceased partner" not the
"remaining partner." We disagree.

In its order, the circuit court held:
The plain language of the Agreement is consistent
throughout, specifically concerning these portions that
reference rights of the partners at differing periods of
time. Therefore, this Court finds
[Respondents-Appellants] could choose to use the Factor
Biotechnology, sell it, or a combination of both so long
as they abide by the conditions concerning
[Appellants-Respondents'] continued use and
compensation.

Based on the circuit court's interpretation of the GPA, Respondents-Appellants are
not given exclusive use and control of The Factor. As previously addressed,
Respondents-Appellants have the right of ownership to The Factor, and they are
not required to divulge the formula to anyone based upon the GPA. However, the
right to use The Factor to enter into contracts still remains with
Appellants-Respondents.

Here, Paragraph 4 of the GPA governs the term and split of the sale of The Factor.
The plain language of the GPA expressly states, and the circuit court concluded,
the surviving partner has the right to continue the business of the Partnership after
the death of the other partner, however a percentage of profits must be shared with
the heirs of the deceased partner, in this case, Respondents-Appellants. We find
the circuit court properly interpreted this unambiguous clause to contemplate that
the surviving partner may continue the business of the Partnership and enter into
contracts even after the death of the other partner. According to the GPA, the
remaining partner may enter contracts that do or do not include the use of The
Factor. Appellants-Respondents are only required to pay 10% to
Respondents-Appellants on contracts that utilize The Factor. Importantly, Young
testified at trial that he and his company, Biotech, did, in fact, conduct business
and enter into contracts without using The Factor after 2015. Because these
contracts did not involve the use of The Factor, Appellants-Respondents were not
required to pay any portion of the profits to Respondents-Appellants, as the GPA
contemplated.

Based on the foregoing, we affirm the findings of the circuit court's order based on
the construction and interpretation of the plain language of the GPA.

2. Breach of General Partnership
Appellants-Respondents argue the circuit court erred in failing to find Dr. Paynter
breached the GPA by sharing The Factor with Respondents-Appellants before her
death and that Respondents-Appellants therefore interfered with the GPA. We
disagree.

Factual findings of the trial court are reviewed with deference and will not be
reversed unless there is no evidence to support the factual findings. See, e.g., Auto
Owners Ins. Co. v. Newman, 385 S.C. 187, 191, 684 S.E.2d 541, 543 (2009) ("In
an action at law tried without a jury, the appellate court will not disturb the trial
court's findings of fact unless there is no evidence to reasonably support them.").

The circuit court made a factual finding that "Dr. Paynter was able to share The
Factor with [Respondents/Appellants] before her death" without breaching the
GPA. The evidence used to make this determination was the unambiguous
language in the GPA. The court further determined that, according to the
unambiguous language of the GPA, Dr. Paynter was the sole owner of The Factor,
and that the GPA provided no restrictions upon Dr. Paynter as the sole owner to
share the formula with anyone, including Respondents-Appellants. Because there
were no restrictions on the sharing of The Factor, there could be no breach on the
part of Paynter Consulting or Dr. Paynter, thus no interference by
Respondents-Appellants.

We find the circuit court did not err when it found no breach and no interference of
the GPA on the part of Dr. Paynter, Paynter Consulting, and
Respondents-Appellants.

B. Respondents-Appellants' Cross-Appeal

Respondents-Appellants appeal three separate rulings by the circuit court which
they argue, if decided correctly, provide independent bases for affirming the
judgment and rendering moot or vacating the circuit court's construction of the
GPA. Respondents-Appellants argue the circuit court erred in denying their
motion for directed verdict based on res judicata and the statute of limitations.
Respondents-Appellants further argue the circuit court erred in admitting the GPA
into evidence because Appellant-Respondents provided no admissible evidence to
authenticate the GPA. Because we affirm based on the circuit court's proper
contract interpretation, we need not address these arguments. See Futch v.
McAllister Towing of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598
(1999) (stating appellate courts need not address remaining issues when the
disposition of prior issues is dispositive).
CONCLUSION

For the foregoing reasons, the order of the circuit court is

AFFIRMED. 4

THOMAS, HEWITT, and VINSON, JJ., concur.

4
We decide this case without oral argument pursuant to Rule 215, SCACR.