Title: Viking Broadcasting v. SNELL PUB. CO.
Citation: 243 Neb. 92, 497 N.W.2d 383
Docket Number: 1193, 1194
State: Nebraska
Issuer: Nebraska Supreme Court
Date: March 26, 1993

497 N.W.2d 383 (1993) 243 Neb. 92 VIKING BROADCASTING CORPORATION, a Utah Corporation, Appellant, v. SNELL PUBLISHING CO., INC., a Nebraska Corporation, Appellee. No. S-90-1193. Supreme Court of Nebraska. March 26, 1993. Jerry J. Grossart and Larry W. Beucke, of Parker, Grossart, Bahensky &amp; Beucke, Kearney, for appellant. Douglas Pauley, of Conway, Connolly &amp; Pauley, P.C., Hastings, for appellee. HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, FAHRNBRUCH, and LANPHIER, JJ. CAPORALE, Justice. The plaintiff-appellant, Viking Broadcasting Corporation, a Utah corporation, seeks to force the defendant-appellee, Snell Publishing Co., Inc., a Nebraska corporation, to merge itself into Viking. The district court sustained Snell's motion for summary judgment, and Viking here asserts that the court erred in so doing. We affirm. Viking's suit rests on a typed 1¾-page "Letter of Intent" it prepared and the parties signed on or about April 27, 1988. The document, on Viking letterhead and addressed to Snell, reads: Viking contends that summary judgment was inappropriate because there are genuine issues of material fact concerning whether there was a meeting of the minds as to the parties' intent to enter into a merger contract as reflected in the April 27 letter. Viking is, of course, correct in asserting that summary judgment is to be granted only when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law. McCurry v. School Dist. of Valley, 242 Neb. 504, 496 N.W.2d 433 (1993). The controlling question is whether there exist in this case genuine issues as to material facts or as to the ultimate inferences *385 which may be drawn from them, as Viking contends, or whether, as Snell contends and the district court impliedly found, there are no factual issues and Snell is entitled to judgment as a matter of law. The nature of the controversy before us has been aptly described by the U.S. Court of Appeals for the Seventh Circuit as follows: Empro Mfg. Co., Inc. v. Ball-Co Mfg., Inc., 870 F.2d 423, 424 (7th Cir.1989). Having thus defined the nature of the controversy, the threshold task is to determine if the issue as to whether the April 27 document constitutes an enforceable contract is one of law or one of fact. As might be expected, the decisions on this point are by no means harmonious. In Opdyke Investment v. Norris Grain, 413 Mich. 354, 320 N.W.2d 836 (1982), litigation arose over the effect of a letter of intent to build a sports arena. The Supreme Court of Michigan reversed the trial court's grant of the defendants' motion for accelerated judgment. The court noted that "[w]hether the parties intend to be bound only by a formally written and executed final document is a question of fact, not a question of law; in most cases the question is properly left to the jury." Opdyke Investment, 413 Mich. at 360, 320 N.W.2d at 838. The court further wrote: Opdyke Investment, 413 Mich. at 362, 320 N.W.2d at 839. A similar result was reached in Arnold Palmer Golf Co. v. Fuqua Industries, Inc., 541 F.2d 584 (6th Cir.1976). In that case, several months of negotiations seeking to establish a business relationship between the parties culminated in the drafting of a detailed six-page memorandum of intent, which included a paragraph contemplating the subsequent preparation of a definitive agreement. The district court granted Fuqua's motion for summary judgment. The court of appeals reversed, holding that "the question whether the parties intended a contract is a factual one, not a legal one, and, except in the clearest cases, the question is for the finder of fact to resolve." Arnold Palmer Golf Co., 541 F.2d at 588. For other cases holding that the determination of whether a contract exists is a question of fact, see, e.g., American Cyanamid Co. v. Elizabeth Arden Sales Corp., 331 F. Supp. 597 (S.D.N.Y.1971); Mid-Continent Telephone Corp. v. Home Telephone Co., 319 F. Supp. 1176 (N.D.Miss. 1970); and Itek Corporation v. Chicago Aerial Industries, Inc., 248 A.2d 625 (Del. 1968). Although one can point to factual distinctions between at least some of the aforecited cases and the one before use.g., in Opdyke Investment, the letter was lengthy and detailed, and in Arnold Palmer Golf Co., not only was the memorandum detailed, but the party claiming it to be nonbinding had issued a prior contrary press releasethe fact is that Empro Mfg. Co., Inc. v. Ball-Co Mfg., Inc., supra, provides the better analysis. Therein, Empro showed interest in purchasing the assets of Ball-Co. After preliminary negotiations, Empro sent Ball-Co a three-page letter of intent to purchase the latter's assets. The letter stated "`[t]he general terms and conditions of such proposal (which will be subject to and incorporated in a formal, definitive Asset Purchase Agreement signed by *386 both parties).'" Empro Mfg. Co., Inc., 870 F.2d at 424. Moreover, the letter stated that "`Empro's purchase shall be subject to the satisfaction of certain conditions precedent to closing including, but not limited to'" the definitive Asset Purchase Agreement and, inter alia, "`[t]he approval of the shareholders and board of directors of Empro.' " Id. The parties signed the letter of intent, and negotiations continued until the contentious issue of a security interest in Empro's land caused Ball-Co to abandon the deal. Empro's suit was dismissed by the district court for the failure to state a claim. The U.S. Court of Appeals for the Seventh Circuit affirmed the district court's dismissal. On the issue of whether the determination of the legal force of the letter was an issue of law or fact, the Empro Mfg. Co., Inc. court wrote: Empro Mfg. Co., Inc., 870 F.2d at 424-25. See, also, Knight v. Sharif, 875 F.2d 516 (5th Cir.1989); Hill v. McGregor Mfg. Corp., 23 Mich.App. 342, 178 N.W.2d 553 (1970). In keeping with our rules that intent in the realm of contract law is to be viewed objectively, not subjectively, see Professional Serv. Indus. v. J.P. Construction, 241 Neb. 862, 491 N.W.2d 351 (1992), and Kracl v. Aetna Cas. &amp; Surety Co., 220 Neb. 869, 374 N.W.2d 40 (1985), and that in order to establish an express contract there must be a definite proposal and an unconditional and absolute acceptance thereof, Logan Ranch v. Farm Credit Bank, 238 Neb. 814, 472 N.W.2d 704 (1991), we conclude that here the April 27 letter of intent was so cursory, indefinite, and conditional as to fail as a matter of law to establish an objective intent on the part of the parties to be bound thereby. Not only is the document, which involves a $14-million transaction, sketchy, it recites in numbered paragraph 1 that it is with Snell's consent that an agreement and plan of merger would be entered into; it declares in the same paragraph that certain Snell assets, only some of which are specified, would not be included in the transaction; and further, it acknowledges in numbered paragraph 6 that the merger might not be consummated. Under those circumstances, there can be no factual issues, and Snell is indeed entitled to judgment as a matter of law. Thus, the judgment of the district court is affirmed. AFFIRMED. SHANAHAN, J., not participating.