Hayne D. McCondichie learned that Jerrell Groover, an acquaintance who worked for Krispy Kreme Doughnuts, Inc., could buy shares of stock in the company during the initial public offering at a discounted employee price. McCondichie gave $20,000 to Groover to take advantage of this situation, but ultimately Groover was not able to purchase shares with McCondichie’s money. McCondichie brought suit against Groover seeking the profits that he would have received if the deal had gone through. The trial court granted summary judgment to Groover, and McCondichie appeals. Construed in favor of McCondichie, the evidence shows that in early 2000, Groover, who was the husband of one of McCondichie’s employees, told him that during Krispy Kreme’s initial public offering in April, due to his status as an employee, he could get some of the stock for McCondichie at an attractive price and that he would purchase it for McCondichie if McCondichie furnished the money for him to do so. McCondichie averred, “Because his wife had been an employee of mine for two or three years, I trusted Groover to do what he promised.” He agreed to give $20,000 to Groover so that Groover could buy the stock for him “as soon as it became available.” Groover placed McCondichie’s money in an account that he also used for personal business, including for matters related to gambling in Biloxi, Mississippi. McCondichie knew that in order for the transaction to proceed, Groover would have to purchase the stock in his own name.
Around the middle of April, Groover told McCondichie that he had only been able to buy $14,700 worth of the stock and that he would not be able to transfer the stock to McCondichie for several months. He returned the balance of $5,300 to McCondichie in May. In May, McCondichie received what appeared to be a memorandum from Groover that stated that Groover owed McCondichie 700 shares of Krispy Kreme stock. Groover denies that he wrote or signed the memorandum, although he admitted that his wife may have written it. Groover never transferred any shares to McCondichie, and he now asserts that he never purchased any shares with McCondichie’s money, although he did purchase some shares for himself.
