Nasco, Inc. v. Calcasieu Television and Radio, Inc.

• Decision Date: 08 November 1985
• Docket Number: Civ. A. No. 83-2564.
• Parties: NASCO, INC. v. CALCASIEU TELEVISION AND RADIO, INC.; G. Russell Chambers and Mabel Christine Baker.
• Court: U.S. District Court — Western District of Louisiana

623 F. Supp. 1372

NASCO, INC. v. CALCASIEU TELEVISION AND RADIO, INC.; G. Russell Chambers and Mabel Christine Baker.

Civ. A. No. 83-2564.

United States District Court, W.D. Louisiana, Lake Charles Division.

November 8, 1985.

Neal & Harwell (Aubrey B. Harwell, Jr., and Jon D. Ross), Nashville, Tenn., Scofield, Bergstedt, Gerard, Mount & Veron (John B. Scofield and David L. Hoskins), Lake Charles, La., for plaintiff.

Arnall, Golden & Gregory (Jonathan Golden), Atlanta, Ga., Camp, Carmouche, Barsh, Hunter, Gray, Hoffman & Gill (A.J. Gray, III, Gary L. Boland), Lake Charles, La., Baton Rouge, La., Rubin, Curry, Colvin & Joseph (Michael H. Rubin and Richard A. Curry), Baton Rouge, La., for defendants.

OPINION

NAUMAN S. SCOTT, District Judge.

This is an action for specific performance of a Buy and Sell Agreement (Agreement) executed on August 9, 1983, providing for the sale and purchase of television station KPLC-TV in Lake Charles, Louisiana.

Jurisdiction is found under the provisions of 28 U.S.C. § 1332.

The plaintiff is Nasco, Inc. (Nasco), the prospective purchaser of the station. The defendants are Calcasieu Television and Radio, Inc. (CTR), the owner and prospective seller of the station; G. Russell Chambers (Chambers), the sole shareholder and sole director of CTR, who signed the Agreement on behalf of CTR and in his individual capacity; and Mable Christine Baker (Baker), in her capacity as the Trustee of a Facility Trust which is the alleged record owner of certain immovable properties previously owned by CTR and covered by the Agreement. Chambers is Baker's brother, and is the settlor of the Trust of which Baker is Trustee. His three adult children are the beneficiaries.

This matter was tried to the Court without a jury as a suit in equity on April 17, 1985. Prior to trial, Nasco dismissed without prejudice certain claims in contract and in tort, reducing its case in chief to a purely equitable claim for specific performance of the August 9th Agreement and the defenses applicable thereto. By order of the Court, trial was limited solely to those claims, severing all other issues (including damages) for trial at a later date.

Chambers and CTR contend that the remedy of specific performance is no longer available to Nasco because the title of Baker is protected by the Louisiana Public Records doctrine thereby reducing Nasco's remedies to a claim for damages.

FINDINGS OF FACT

1. On August 9, 1983, Nasco, as buyer, and CTR and Chambers, as sellers, entered into the Agreement to convey the television facilities and the broadcast license of KPLC-TV in Lake Charles, Louisiana for the purchase price of $18 million dollars. The Agreement has never been recorded in Calcasieu and Jefferson Davis Parishes where the properties are located.

2. It is expressly recognized in the Agreement that the Agreement could not be consummated unless and until Federal Communication Commission (FCC) approved the transfer of the KPLC license to Nasco.

Paragraph 6 of the Agreement provides as follows:

"It is specifically understood and agreed that the consummation of this Agreement shall be in all respects subject to the approval of the Commission (Federal Communications Commission — FCC).

Upon execution of the Agreement, Buyer and Seller shall proceed as expeditiously as practicable to file all requisite applications and other necessary instruments, and agree thereafter to prosecute said application or applications with all reasonable diligence and otherwise to cooperate with each other and to use their best efforts to obtain the requisite consent and approval promptly and to carry out the provisions of this Agreement. In no event shall the Application be filed later than forty five (45) days from the date of the Agreement." (Emphasis ours).

Thus the joint application for transfer of the license was to be filed no later than September 23, 1983.

3. On August 22, 1983 Brian Burns and Jim Smith who had signed the Agreement on behalf of Nasco visited KPLC-TV. This was the only instance on which any representative of Nasco was present at the TV station prior to September 23, 1983. It was during this visit that Rita Guillory, president of CTR, learned for the first time that KPLC-TV was to be sold, and that Chambers had signed the Nasco Agreement of August 9, 1983. The president of CTR had no part in the negotiations leading to the execution of the Agreement; nor was she consulted regarding the Agreement. In fact no officers or employees of the station except Chambers and his lawyers were aware that the Agreement existed.

Up to the time that he left a meeting with Nasco representative on August 22, 1983, Chambers and CTR had been cooperative in carrying out the Agreement.

4. On August 28, 1983 Chambers' application for a 3½ million dollar bond issue was rescinded or refused. Although the bond issue had no relationship to the performance of the Agreement, Chambers continuously referred to this failed bond issue as a basis for delaying the submission of CTR's portion of the FCC application to transfer the license.

5. Chambers called Bill Cook, chairman of Nasco, on August 29, 1983 and tried to talk him out of going through with the Agreement, offered to reimburse all of Nasco's expenses and pay some additional money. Cook's reply was, "My only interest is in acquiring KPLC-TV." Chambers had demonstrated as early as August 29, 1983 that he desired to avoid performance of the Agreement.

6. On September 2, 1983, Nasco informed CTR and Chambers that Nasco's portion of the Assignment Application was ready and in suitable form for filing with the FCC.

7. On or about September 7, 1983 Chambers had a telephone conversation with Brian Burns in which he referred to the failed bond issue and then asked "What would you say if I didn't file?" Burns replied that Nasco had been ready to file its portion of the FCC application since September 1 or 2, and that he would be very disappointed.

8. Burns and Chambers spoke again on Monday, September 12, 1983. When Chambers asked what Burns thought of Chambers' remark on September 7th, Burns replied that, based on his brief contacts with Chambers, he thought that Chambers would do what the Agreement provided. Chambers answered that he recognized that he (CTR) had a contractual obligation to file CTR's portion of the FCC application.

9. On the next day they spoke again. Chambers, referring again to the lack of any progress in resolving the bond problem, stated that he recognized his obligation but that, if he didn't have an answer to the bond problem by September 23, 1983, he would not file. The bond problem was still entirely unrelated to the Agreement.

10. In a letter (Ex. P2) dated September 16, 1983, Nasco (Brian Burns) refers to the content of the conversations (paragraph 6-9 above) in detail, and again notified CTR and Chambers that the assignee's part of the application had been ready and in suitable form for filing since September 2nd and requested that CTR "immediately prepare, have executed and forwarded the assignor's portion of the assignment application prior to September 23, 1983."

Chambers replied on September 21, 1983 (Ex. P3) that the Agreement speaks for itself and that he understood that his "attorney has contacted your attorney." He did not deny any of the content of the September 16, 1983 letter (Ex. P2).

11. On September 23, 1983, Nasco's FCC counsel, John Stewart, was informed by defendants' FCC counsel, Roy Russo, that the assignor's portion of the Application would not be filed on that date. On that same date Stewart caused a letter to be hand delivered to Russo, stating again that Nasco was ready and willing to file the assignee's portion of the Application and that Russo should notify him if and when the assignor's portion was received.

12. From August 9, 1983, the date that the Agreement was executed by the parties, until September 23, 1983, the date by which CTR was to submit its portion of the FCC application, there was no default or violation of the Agreement on the part of Nasco. In fact all parties, including Chambers, were performing and ready to go forward on August 22, 1983. On that date Burns and Smith, representing Nasco, visited the TV station by arrangement with Chambers. Both Chambers, sole member of the Board of CTR, and Rita Guillory, its president who later married Chambers, were present. Chambers, along with the Nasco representatives chose which of several TV announcements should be used to publicize the intended sale. Although Chambers refused to honor Nasco's request for a list of community leaders to be interviewed by Nasco to prepare its portion of the FCC application, no one contested his right or his reasons for doing so.

13. Chambers, for reasons best known to himself, decided at some time between August 22, 1983 and August 29, 1983 that he did not want to go through with the Agreement. When he called Bill Cook on the latter date (see paragraph 5 above) they talked some forty-five minutes. Chambers did not complain of the violation of any pre-August 9, 1983 understanding, any violation of the Agreement, any harassment of station operations or personnel, any difficulty with ascertainment interviews—all of which have been alleged by defendants following the institution of this suit. He simply tried to generate with Cook some terms on which he could buy out of the Agreement. Cook was adamant.

14. In Chambers' conversations and correspondence with Burns after August 29, 1983 he never once alluded to any such breaches by Nasco, he talked only of an unrelated bond problem as the reason for his admitted reluctance to file CTR's portion of the FCC application. Although he admitted that he and CTR were bound by the Agreement (now a stipulated fact), Chambers suggested on September 7, 1983 for the first time that he (CTR) might refuse to file timely his portion of the FCC application (paragraphs 7-10 above). His (CTR's) acts after August 29,...