UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

HIT PRODUCTS CORPORATION,
Plaintiff-Appellant,

v.

ANCHOR FINANCIAL CORPORATION,
d/b/a Anchor Bank,
Defendant-Appellee,

and
                                                               No. 99-2456
JOHN C. NELSON; GARY JEWEL;
CATHY PAYNE; JACK TILGHAM; SISCO
USA; SISCO USA, INCORPORATED,
Defendants,

and

PAUL CORDUA; BILL VOGT; GEORGE
COOK,
Third-Party Defendants.

Appeal from the United States District Court
for the District of South Carolina, at Florence.
Cameron McGowan Currie, District Judge.
(CA-97-3799-4-22)

Argued: May 1, 2000

Decided: May 31, 2000

Before MURNAGHAN, WILLIAMS, and MICHAEL,
Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.
COUNSEL

ARGUED: Gray Thomas Culbreath, COLLINS & LACY, P.C.,
Columbia, South Carolina, for Appellant. Howell V. Bellamy, Jr.,
BELLAMY, RUTENBERG, COPELAND, EPPS, GRAVELY &
BOWERS, P.A., Myrtle Beach, South Carolina, for Appellee. ON
BRIEF: Joseph S. McCue, COLLINS & LACY, P.C., Columbia,
South Carolina, for Appellant. Douglas M. Zayicek, BELLAMY,
RUTENBERG, COPELAND, EPPS, GRAVELY & BOWERS, P.A.,
Myrtle Beach, South Carolina, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Hit Products Corporation filed a diversity suit in the United States
District Court for the District of South Carolina against Anchor
Financial Corporation, d/b/a Anchor Bank, claiming negligent mis-
representation with regard to a letter of reference authored by Anchor
Bank's Executive Vice President. The district court granted Anchor
Bank's motion for summary judgment, reasoning that Hit Products
failed to establish a genuine issue of material fact as to its justifiable
reliance on any alleged misrepresentation by Anchor Bank. Hit Prod-
ucts noted a timely appeal of this ruling. Finding no error, we affirm.

I.

In 1992, Hit Products entered into an agreement with John C. Nel-
son, Gary Jewel, Cathy Payne, SISCO USA, and SISCO USA, Inc.
(the SISCO Defendants) to manufacture PVC fittings for sale in the
Middle East. Upon receipt of an order from the SISCO Defendants,
Hit Products would turn the products over to SISCO USA's agents for
shipment overseas and then bill SISCO USA. SISCO USA in turn

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paid Hit Products on an account basis. SISCO USA allowed its
account to grow to a large amount, totaling $1,123,771.25 on March
25, 1994. As a result, both Hit Products and its bank, the Bank of
Sierra, expressed concern about SISCO USA's ability to pay the out-
standing debt.

The Bank of Sierra requested that Hit Products obtain a letter of
reference concerning Nelson, SISCO USA, and other related busi-
nesses from their local bank. Paul Cordua, the president of Hit Prod-
ucts, prepared a form letter of reference and provided it to Nelson to
give to his bank. The form letter was addressed"To Whom It May
Concern" and sought information on SISCO USA, SISCO Middle
East Ltd., BIN Mahfooz Trading Co., Jewel, and Nelson. Nelson
asked Robert R. Durant, III, Executive Vice President and Chief
Credit Officer of Anchor Bank, to fill out the form letter of reference.
On January 11, 1996, Anchor Bank issued the letter of reference (the
Anchor Bank letter). The Anchor Bank letter was faxed to Hit Prod-
ucts on January 19, 1996.

The Anchor Bank letter contained the following statements about
SISCO USA, SISCO Middle East Ltd., BIN Mahfooz Trading Co.,
Jewel, and Nelson:

          1. The above listed companies and people have been in an
          excellent working relationship with our company for ten
          (10) years. Length of personal relationship with the princi-
          pals of company ten (10). They are well respected in the
          industry and have combined eighteen (18) years of experi-
          ence and background to utilize.

          2. They have maintained balances ranging from $25,000 to
          $350,000, always paying prompt and as agreed.

          3. Standing in the community is excellent.

          4. Business ethics are considered good.

          5. They are economically stable having no adverse credit
          history. Cash flow is sufficient for operation of all business
          entities.

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          6. We feel valued to have them as customers.

(J.A. at 83.) It is undisputed that at the time the letter was written, Hit
Products had done business with Nelson, Jewel, and SISCO USA for
ten years and that Hit Products looked exclusively to these entities for
payment. Cordua acknowledged that he did not inform Anchor Bank
or any credit reporting service of the debt owed by SISCO. Moreover,
upon receiving the Anchor Bank letter, Hit Products did not contact
anyone at Anchor Bank to verify or explain the letter or have anybody
at the Bank of Sierra contact Anchor Bank.

In December 1997, Hit Products filed suit against the SISCO
Defendants and Jack Tilgham, treasurer of SISCO USA. In June
1998, Hit Products joined Anchor Bank in an amended complaint, and
in August 1998, Hit Products filed a second amended complaint in
response to Anchor Bank's motion for a more definite statement.*
The second amended complaint alleged against Anchor Bank a single
cause of action for negligent misrepresentation with regard to the
Anchor Bank letter. Specifically, Hit Products claimed that it justifi-
ably relied upon the false representations that (1) SISCO Middle East
Ltd. and BIN Mahfooz Trading Co. were customers of Anchor Bank,
(2) Anchor Bank had a relationship with Nelson and SISCO USA in
excess of ten years, and (3) all entities had sufficient cash flow. Hit
Products further alleged that it suffered a pecuniary loss as a proxi-
mate result of this reliance because it continued to ship fittings and
other products to SISCO, Nelson, and Jewel based upon the represen-
tation that they had sufficient money to pay for such product. As a
result, Hit Products asserted, it diverted capital in the form of labor,
materials, and monies to the production of fittings for which it was
not paid and did not move into other markets that it could have had
it not committed its resources to producing products for SISCO, Nel-
son, and Jewel.
_________________________________________________________________

*The district court granted summary judgment to Tilgham on March
17, 1999. Hit Products subsequently settled with the SISCO Defendants
and the district court has dismissed Hit Products's claims against these
settling defendants. Neither Tilgham nor the SISCO Defendants, there-
fore, are parties to this appeal.

                     4
In response to Hit Products's complaint, Anchor Bank filed a
motion for summary judgment. The district court granted Anchor
Bank's motion for summary judgment on the ground that Hit Products
failed to establish a genuine issue of material fact as to its justifiable
reliance upon any alleged misrepresentation by Anchor Bank. Specifi-
cally, the court found that Hit Products could not establish that reli-
ance was justified because Hit Products occupied a superior position
as to the allegedly misrepresented information, Hit Products knew of
the discrepancies in the Anchor Bank letter but still relied upon the
letter without further investigation, and the alleged representations
regarding BIN Mahfooz and SISCO Middle East were immaterial
because Hit Products never looked to these entities for payment.

Hit Products noted a timely appeal of this ruling. Before us, Hit
Products argues that its subjective intent and state of mind upon
receipt of the Anchor Bank letter are genuine issues of material fact.
Hit Products also asserts that whether it had a duty to investigate the
representations in the Anchor Bank letter also presents a genuine
issue of material fact. Hit Products further contends that the basis of
the district court's grant of summary judgment to Anchor Bank was
erroneous, because whether Anchor Bank occupied a superior posi-
tion as to knowledge of the truth of the statements in the Anchor Bank
letter and whether Hit Products knew that Anchor Bank was unaware
of the debt owed by the SISCO Defendants to Hit Products are also
issues of fact. Finally, Hit Products claims that the record contains a
genuine issue of material fact as to whether Hit Products relied upon
statements in the Anchor Bank letter regarding BIN Mahfooz and
SISCO Middle East.

II.

Summary judgment is appropriate if "`the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any mate-
rial fact and that the moving party is entitled to a judgment as a matter
of law.'" Celotex Corp v. Catrett, 477 U.S. 317, 322 (1986) (quoting
Fed. R. Civ. P. 56(c)). Although "[t]he evidence of the non-movant
is to be believed, and all justifiable inferences are to be drawn in his
favor," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986), in
order to survive summary judgment, "[t]he mere existence of a scin-

                     5
tilla of evidence in support of the [non-movant's] position will be
insufficient; there must be evidence on which the jury could reason-
ably find for the [non-movant]," id. at 252. We review a grant of sum-
mary judgment de novo. See Higgins v. E.I. DuPont de Nemours &
Co., 863 F.2d 1162, 1167 (4th Cir. 1988).

We have reviewed the record, briefs, and pertinent case law on this
matter, and we have had the benefit of oral argument. Our careful de
novo review persuades us that the ruling of the district court was cor-
rect. Accordingly, we affirm on the reasoning set forth in the district
court's opinion. See Hit Products Corp. v. Anchor Fin. Corp., No.
CA-97-3799-4-22 (D.S.C. Oct. 8, 1999).

AFFIRMED

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