Opinion ID: 1797359
Heading Depth: 1
Heading Rank: 1

Heading: the february 18, 1976, phone conference

Text: Before commencing the action, Lewis phoned McDonnell on February 18, 1976, and advised that his company was prepared to immediately file suit in California on the Phase I Weight Issue. McDonnell indicated surprise and a lack of knowledge of the issue so Lewis reviewed the history of the matter, stating he was reluctant to file this suit and asked McDonnell if he would consider sitting down and negotiating a settlement on a timely basis in a manner similar to the way we had settled the DC-10 contractual change matter in August of 1974. McDonnell stated he needed time to familiarize himself with the problem and inquired, how much time General Dynamics Corporation could allow him before it required an answer and asked that he be given a few days time. Lewis explained he was to be out of the country during the week of February 23 and suggested March 1, 1976, for a further telephone conference on the subject. This was agreed upon, but Lewis concludes: However, I very carefully conditioned my agreement for any delay upon Mr. McDonnell's personal assurance that McDonnell Douglas Corporation would not file action against General Dynamics Corporation on the Phase I Weight Claim because General Dynamics Corporation wanted to preserve its option to file suit on this issue in San Diego County. Responding to the Lewis affidavit, McDonnell in his affidavit of April 15, 1976, admitted having received the February 18 call from Lewis, and gave this version of the conversation: Mr. Lewis stated that General Dynamics Corporation had prepared a lawsuit claiming that it was entitled to a $16,000,000 price increase on the `weight' issue which they intended to file unless we settled that issue. I was disturbed that General Dynamics' only response to my letter was threatened litigation on a single issue and no response to my proposals for an overall settlement of our disputes. I asked Mr. Lewis if he wouldn't give me a little time to look into the matter since I was not familiar in detail with the `weight' issue. He asked that I agree that McDonnell Douglas Corporation would not file suit first on the `weight' issue. I agreed to this, and we agreed to talk further on March 1, 1976.. . . From these statements we conclude that General Dynamics stood ready in February, 1976, to file suit in San Diego County, Superior Court, California, but in an effort to settle or amicably dispose of the weight/price issue, if not all others, its Chief Executive Officer advised McDonnell Douglas of the intention to proceed and readiness to file. If General Dynamics, instead of calling, had simply filed suit such action would have provided relator the first filed position McDonnell Douglas now claims for its Missouri action. We are not persuaded by respondent's convoluted argument that only because of General Dynamics'threatened litigation did McDonnell Douglas agree to further conference on March 1, 1976, and that this somehow balances the equities. General Dynamics was free to have filed immediately without notification or discussion of its intentions and had it sued first and talked later its suit would have been first in time. If McDonnell Douglas had refused to agree not to file on the weight issue or any other, General Dynamics could have proceeded forthwith and preempted the first position for its suit. From this a clear picture emerges of General Dynamics withholding filing suit pursuant to the parties' agreement of February 18, and this forebearance is critical to the issues here.