Court Opinion

ID: 9454087
Source: CourtListenerOpinion
Date Created: 2023-08-04 18:35:42.218557+00
Date Added: 2024-06-11T17:33:57.854179
License: Public Domain

LUMBARD, Chief Judge
(dissenting):
I dissent. Judge MacMahon found that the parties here engaged in nothing more than preliminary negotiations and that they did not intend to be bound until a written agreement had been executed. I do not see how, on this record, we can say that these findings — which are surely as much fact as law — were clearly erroneous. Rule 52(a), Fed.R.Civ. Procedure. On the contrary, I feel that the record amply supports Judge MacMahon’s findings and that the judgment should therefore be affirmed.
Subsequent to December 6, 1963, the date on which the majority say there was a binding agreement, two written con*501tracts were drafted and there were numerous meetings and discussions between the parties and their attorneys regarding the provisions of these contracts. The record shows that several matters of importance had not been resolved as of December 6, many of which were never in fact resolved. These include:
1. Accounting treatment and valuation of certain items in calculating audited net worth.
2. Various tax matters, such as whether the purchase should be a stock or asset acquisition.
3. Treatment of the Lord & Adams exclusive sales contract with V’Soske which involves about one-third of the United States market.
4. The terms of the employment contracts of the five principal executives, and particularly the $30,000 expense account of Thad V’Soske.
5. Whether a mortgage should be given on the V’Soske property to secure the deferred balance in the purchase price.
In my opinion these are precisely the kinds of matters which any prudent purchaser would wish to have resolved before finally committing himself to paying over $1,700,000 for a going business and incurring continuing obligations to the very persons who had sold the business and who were expected to continue in' its management for as long as five years. In these circumstances it is only logical that the parties did not intend to be bound before the execution of a detailed formal contract, and that they would not, under New York law, be so bound. See Schwartz v. Greenberg, 304 N.Y. 250) 107 N.E.2d 65 (1952); Willmott v. Giar-raputo, 5 N.Y.2d 250, 184 N.Y.S.2d 97, 157 N.E.2d 282 (1959); Husky v. Berger, 33 Misc.2d 564, 225 N.Y.S.2d 797 (1962), aff’d, 20 A.D.2d 851, 249 N.Y.S.2d 858 (1964).
I would affirm the judgment of the district court.