Rotureau v. Chaplin

Filing 38

ORDER denying 23 Motion for Summary Judgment Signed by Honorable David C Norton on 1/23/2014.(cahe, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
BRENDA ROTUREAU,

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Plaintiff,
v.
ROBERT P. CHAPLIN, III,

Defendant.

No. 2:13-cv-00849-DCN

ORDER

This matter is before the court on plaintiff Brenda Rotureau’s renewed motion for
summary judgment. For the reasons set forth below, the court denies plaintiff’s motion.
I. BACKGROUND
Robert Chaplin, IV (“Preston”), the son of the defendant, acquired land from
Mary Martin, a friend of his father’s. Pl.’s First Mot. for Summ. J. 1-2. The property
was deeded to Preston instead of defendant Robert Chaplin because Chaplin was subject
to judgments and wanted to avoid a judgment lien attaching to the property. Chaplin
Dep. 18:6-13. At closing, Preston gave Martin a note for $500,000 and a mortgage on the
property. Def.’s Resp. to Pl.’s First Mot. for Summ. J. (“Def.’s First Resp.”) 6. In her
will, Martin forgave Preston’s mortgage indebtedness and the debt was therefore
extinguished. Def.’s First Resp. 6. On June 27, 2008, Chaplin executed a promissory
note (“the note” 1) in which he agreed to pay Rotureau $400,000, the amount remaining
on Preston’s debt when it was forgiven. Def.’s First Resp. 7-9.
The payment term of the note reads:

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The court refers to the alleged promissory note as “the note” for ease of
reference and without attaching legal significance to the label.
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FOR VALUE RECEIVED, [Chaplin] will pay to the order of
Brenda Rotureau . . . the principal sum of Four Hundred Thousand No /
100 ($400,000.00) Dollars without interest, payable as follows:
On or before December 27, 2010. The undersigned will pay this
amount when Two (2) of the remaining Three Lots located on Riggs Lane
are sold if this occurs before December 27, 2010.
Compl. Ex. A (emphasis in original). It is undisputed that Chaplin has not paid any part
of the $400,000. Answer ¶ 10. Additionally, Chaplin did not sell any of the lots on
Riggs Lane prior to December 27, 2010. Def.’s First Resp. 9.
On March 29, 2013, Rotureau filed a complaint in this court, alleging that Chaplin
was liable to her on the note in the amount of $400,000, plus interest and cost of
collection. Previously, Chaplin moved to dismiss the claim and Rotureau moved for
summary judgment. The court denied both motions.
On October 23, 2013, Rotureau filed a renewed motion for summary judgment.
Chaplin responded on December 16, 2013, and Rotureau replied on December 30, 2013.
The matter is ripe for the court’s review.
II. STANDARD
Summary judgment is proper “if the movant shows that there is no genuine
dispute as to any material fact and that the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). “By its very terms, this standard provides that the mere
existence of some alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment; the requirement is that there be no
genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48
(1986). “Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment.” Id. at 248.
“[S]ummary judgment will not lie if the dispute about a material fact is ‘genuine,’ that is,
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if the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Id.
“[A]t the summary judgment stage the judge’s function is not himself to weigh
the evidence and determine the truth of the matter but to determine whether there is a
genuine issue for trial.” Id. at 249. The court should view the evidence in the light most
favorable to the non-moving party and draw all inferences in its favor. Id. at 255.
III. DISCUSSION
Rotureau argues that she is entitled to summary judgment because the note is
absolute on its face, became due on December 27, 2010, and has not been paid. Pl.’s
First. Mot. 3. Chaplin advances two arguments for denying summary judgment: (1)
there are genuine disputes of material fact, and (2) the note is not supported by
consideration.2
1.

Disputed Facts

Chaplin asserts that there are several factual disputes that should preclude
summary judgment. These disputes essentially involve Chaplin’s relationship with
Martin, specifics concerning how the property was transferred to Preston, and the
circumstances surrounding the creation of the note. Def.’s First Resp. 4-7. Chaplin also
argues that there is a factual dispute as to which version of the note submitted to the court
by Rotureau is the correct version of the note and whether the punctuation following the
phrase “On or before December 27, 2010” is a comma or a period. Def.’s Resp. to Pl.’s
Renewed Mot. for Summ. J. (“Def.’s Second Resp.”) 2.

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Chaplin also argues that Rotureau’s motion should be denied because the note is
conditional and the condition for payment never occurred. Because the court denies
summary judgment on other grounds, it is not necessary to determine on this motion
whether the note is conditional or not.
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“Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment.” Anderson, 477
U.S. at 248. The factual details regarding Chaplin’s relationship with Martin, including
her age when he met her and when she died, are immaterial to the present case because
they would not affect the outcome of the suit. Likewise, the disputed details concerning
how Martin transferred the property to Preston are immaterial. The parties agree on the
material facts of transfer: Preston received property from Martin and in exchange gave
her a mortgage on part of the property, the balance of which was forgiven when Martin
died. Additionally, the disputes that Chaplin cites regarding the creation of the note are
not so much factual disputes as they are legal ones. For example, whether the note is
conditional and whether it represents Preston’s forgiven debt are disputed legal issues,
and therefore do not preclude summary judgment. Finally, the issue of whether the
punctuation mark at issue is a comma or a period is immaterial because, as explained
below, its resolution does not impact the court’s determination whether the note is
enforceable.
The court will consider whether the note is an enforceable contract.
2.

Consideration

Chaplin argues that Rotureau’s motion summary judgment should be denied
because the note is not supported by consideration and, therefore, unenforceable. Def.’s
First Resp. 10.
“Some good or valuable consideration is essential to support all contracts.”
Ferrell v. Scott, 29 S.C.L. (2 Speers) 344, 347 (S.C. Ct. App. 1844). An “age-old
definition” of consideration is “a benefit to the party promising, or a loss or detriment to

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the party to whom the promise is made.” Shayne of Miami, Inc. v. Townes, 101 S.E.2d
486, 489 (S.C. 1957) (internal citations omitted); see also Prestwick Golf Club, Inc. v.
Prestwick L.P., 503 S.E.2d 184, 186 (S.C. Ct. App. 1998) (“Valuable consideration to
support a contract may consist of some right, interest, profit or benefit accruing to one
party or some forbearance, detriment, loss or responsibility given, suffered or undertaken
by the other.”).
Rotureau claims that “consideration for this note was the amount due Ms.
Rotureau for the remaining balance of the purchase price for [the land] which was sold to
Preston by Mary Martin and Joseph Rotureau.” Pl.’s Br. 3. Rotureau advances two
theories on which the court should find consideration. First, she argues that since
Chaplin used his son as a “strawman” to purchase the property, it is “clear that the legal
obligation was owed by the Defendant and not by his son.” Id. at 4. Even assuming that
Chaplin owed an obligation to Rotureau, plaintiff cites no legal authority for the
proposition that Chaplin’s obligation to pay Rotureau survived after the original debt was
extinguished in Martin’s will. After it was extinguished, the debt owed Martin was at
best past consideration, which is inadequate to make a promise enforceable as a contract.
See Future Grp., II v. Nationsbank, 478 S.E.2d 45, 49 (S.C. 1996). Therefore, Rotureau’s
theory of consideration based on Chaplin owing her a legal obligation is unavailing.
Rotureau’s argument that consideration exists because Chaplin was answering for
the debt of another likewise misses the mark. “[A]n undertaking to pay the debt of
another, on condition that that other shall be entirely discharged from liability, is founded
on a sufficient consideration, upon the ground that the promisor, in such case, has
become an original debtor, on the discharge of the former debt, which is supposed to

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deprive the promisee of some previous advantage, or to subject him to some prejudice
and delay in realizing it.” Ferrell, 29 S.C.L. at 348; see Gen. Elec. Co. v. Gate, 254
S.E.2d 305, 307 (S.C. 1979) (holding that a promise to pay the debt of another “must be
supported by an independent consideration in the form of an advantage to the promisor or
a detriment to the promise”). In this case, by signing the note in question Chaplin did not
undertake to pay the debt of another. Preston’s debt had been forgiven in Martin’s will.
Therefore Chaplin’s note did not “deprive” Rotureau “of some previous advantage”
because she was owed nothing prior to Chaplin executing the note. Moreover, Preston’s
debt was not “discharged” because he owed nothing prior to execution of the note.
In sum, the note is not supported by consideration.3 There is no benefit to
Chaplin, the promisor, nor detriment to Rotureau, the promisee. Plaintiff’s reliance on
cases in which there was a benefit or a detriment is therefore unfounded. See Jackson v.
Carter, 121 S.E. 559 (S.C. 1924) (holding that, even though consideration given for a
note had no monetary value in hindsight, because it had the potential to be valuable, “the
maker . . . will not be relieved of liability); Shayne of Miami, 232 S.C. 161 (holding that
there was consideration because a transfer of stock was a detriment to promisee, even if
that stock later became worthless).

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Because the note is not supported by consideration, the note may be seen as an
incomplete gift. See McLeod v. Sandy Island Corp., 216 S.E.2d 746, 749 (S.C. 1975)
(“A gift has been judicially defined as a voluntary transfer of property by one to another
without any consideration or compensation therefor.” (citations omitted)). “The mere
intention to give [a gift] without delivery is unavailing, the intention must be executed by
a complete and unconditional delivery.” Baptist Found. for Christian Educ. v. Baptist
Coll. at Charleston, 317 S.E.2d 453, 457 (S.C. Ct. App. 1984). “To constitute a valid
gift, the done must have an immediate right to the property; in other words, the donee
must be vested with immediate dominion and control.” Id. (citations omitted). It is
undisputed that Chaplin never delivered the $400,000 to Rotureau. Because there was no
delivery, the note is at most an incomplete gift.
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Because the note is unenforceable, Rotureau is not entitled to judgment as a
matter of law. Therefore, the court denies her motion for summary judgment.
IV. CONCLUSION
Based on the foregoing, the court DENIES plaintiff’s motion for summary
judgment.
AND IT IS SO ORDERED.

DAVID C. NORTON
UNITED STATES DISTRICT JUDGE
January 23, 2014
Charleston, South Carolina

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