Hertzberg & Noveck v. Spoon

Citation681 F.2d 474
Decision Date25 June 1982
Docket NumberNo. 80-1776,80-1776
PartiesHERTZBERG & NOVECK, Plaintiff-Appellee, v. Ira J. SPOON, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Richard E. Zuckerman, Fred A. Foley, Raymond, Rupp & Wienberg, Troy, Mich., for defendant-appellant.

Daniel Noveck, Adelson & Noveck, Southfield, Mich., for plaintiff-appellee.

Before ENGEL and KENNEDY, Circuit Judges, and BALLANTINE, District Judge. *

CORNELIA G. KENNEDY, Circuit Judge.

Defendant-appellant, Ira J. Spoon ("Spoon") appeals the judgment of the District Court ordering him to pay $14,200.00 in legal fees to plaintiff-appellee law firm. He asks us to hold that the agreement on which the District Court predicated liability was so ambiguous as to be unenforceable and that the District Court lacked in personam jurisdiction over him. For the reasons stated herein, we find the agreement enforceable and the assertion of jurisdiction proper, but remand the case to the District Court to determine properly the precise amount of Spoon's liability.

Ira J. Spoon and his brother Lionel engaged the services of the plaintiff in the late 1960's to assist them in a tax matter. At the time, both brothers resided in Michigan where the plaintiff law firm is located. The services were rendered in Michigan as well. The law firm billed the brothers $40,000.00 for their services. The Spoons never contested the quality of the legal work rendered, only the amount of the bill. The bill remained unpaid and the plaintiff permitted Michigan's six-year statute of limitations to expire. M.C.L.A. § 600.5807(8). Plaintiff then negotiated for payment with Lionel and Ira J. Spoon separately.

By this time, however, defendant Spoon had moved to California. The negotiations with him for payment of the indebtedness took place in California when one of plaintiff's attorneys travelled there to effectuate a compromise of plaintiff's claim. It is clear that plaintiff initiated phone calls from its Michigan office to California to discuss the financial arrangements of the settlement with the defendant. The agreement was concluded in California. There is The agreement provided:

some dispute as to whether the first installment was mailed from California to Michigan or whether it was hand-delivered to plaintiff's representative while he was in California. Clearly, though, all subsequent payments were to be made in Michigan.

In accordance with our meeting and telephone conversations concerning your statement for services relating to (tax audits) ... I agree to pay the sum of Fourteen Thousand Five Hundred Dollars for all such services payable at the rate of Three Hundred Dollars per month ....

In the event that my brother, Lionel Spoon, shall pay any lesser sum than $14,500.00 for same services, then the above stipulated sum shall be adjusted downward; proof of same shall be supplied to the undersigned upon request....

When Spoon failed to pay this substituted amount, plaintiff instituted this suit in the United States District Court for the Eastern District of Michigan asserting diversity of citizenship. Three counts were alleged. First, plaintiff asked for $20,000.00, the amount of the original obligation. Since the statute of limitations had clearly expired, the District Court properly awarded summary judgment for defendant on this count. The court disposed of plaintiff's claim for recovery of $20,000.00 under quantum meruit, the second count, on the same grounds. The third count prayed for $14,500.00, the amount called for under the substituted agreement. On this count the District Court awarded summary judgment for plaintiff for $14,200.00, one $300.00 payment having already been made. It is this decision which defendant appeals.

Defendant first argues that the new agreement was indeterminate in amount and therefore unenforceable. Second, defendant asserts that the amount finally due plaintiff cannot be determined from the substituted agreement. The assertion of diversity jurisdiction was therefore improper since the District Court could not determine whether the amount in controversy requirement was satisfied. Third, defendant argues that even if the agreement was enforceable and definite enough as to the amount in controversy, personal jurisdiction was improper because all relevant contacts with respect to the new agreement were in California; hence, jurisdiction would be proper only in California. Plaintiff, on the other hand, asserts that considering just those contacts which defendant had with the forum state in negotiating the substituted agreement, jurisdiction would be properly based in Michigan. Moreover, plaintiff contends that Michigan courts would combine the defendant's contacts with the forum in originally contracting for plaintiff's services and in negotiating the substituted agreement in order to provide a basis for jurisdiction.

ENFORCEABILITY

Defendant's argument that the substituted agreement is so ambiguous that it is unenforceable is meritless. The agreement contains an absolute promise to pay a specified amount ($14,500.00); only upon a certain condition subsequent, namely, Lionel's failure to pay $14,500.00 is Ira's liability reduced. As a federal court sitting in diversity, the District Court was required to apply Michigan law. Under Michigan law, Spoon's promise is definite enough to be enforced as a revival. M.C.L.A. § 600.5866 provides:

Express or implied contracts which have been barred by the running of the period of limitation shall be revived by the acknowledgment or promise of the party to be charged. But no acknowledgment or promise shall be recognized as effective to bar the running of the period of limitations or revive the claim unless the acknowledgment is made by or the promise is contained in some writing signed by the party to be charged by the action.

Defendant argues that Michigan would not enforce such a conditional promise as that contained in Spoon's revival. It is clear to us, however, that Michigan indeed would enforce such an obligation. Equally uncertain arrangements have been enforced before. See, e.g., Lungerhausen v. Crittenden The cases relied upon by defendant are unavailing. In Glass v. Drieborg, 296 Mich. 30, 295 N.W. 547 (1941), the Court stated that contingent promises to pay a debt barred by the statute of limitations would not be enforced. However, at the same time the underlying liability was admitted, the debtor in Glass stated that he had no intention of paying that liability.

103 Mich. 173, 174-5, 61 N.W. 270 (1894) (promise by defendant to pay plaintiff attorneys as much as defendant paid to another attorney enforced despite claim that contract uncertain; "(w)hatever of uncertainty existed was the uncertainty that might arise from or grow out of a contingency, which might have resulted in a failure of consideration, but did not."); Illinois Roofing & Supply Co. v. Aerial Advertising Co., 142 Mich. 698, 106 N.W. 274 (1906).

'It has ever since been recognized in England and generally in the United States, that the effect of an admission of acknowledgment is merely that of evidence of a promise implied in fact. And if, taking all the circumstances into account, the admission does not indicate an intention to pay, no liability arises from it.'

(T)he acknowledgment ought to contain an unqualified and direct admission of a present subsisting debt which the party is liable and willing to pay, and be unaccompanied by any circumstances or declarations which repel the presumption of a promise or intention to pay. (citations omitted).

Id. at 34-5, 295 N.W. 547. Here, the requirements of the Glass case are met. We in fact have an unqualified promise to pay a subsisting debt. No evidence indicates that contemporaneously with making the revival Ira J. Spoon did not intend to pay.

Similarly, in Halladay v. Weeks, 127 Mich. 363, 86 N.W. 799 (1901), the Court held that a promise to pay "as soon as I can" was too conditional to make the revival effective. We are not presented with so tenuous a promise; rather, in the instant case only the final amount due is arguably uncertain. And, as we have already seen, that kind of uncertainty has been insufficient to prohibit enforcement of a valid contractual obligation. In Rumsey v. Settle's Estate, 120 Mich. 372, 79 N.W. 579 (1899), the promise was sufficiently definite where the debtor promised to pay "every cent I owe you," although the precise amount was not specified. We find the reasoning behind Rumsey to be applicable here.

AMOUNT IN CONTROVERSY

In an analogous argument, defendant claims that since the amount he ultimately owes is indeterminate, plaintiff could not satisfy the amount-in-controversy requirement prerequisite to diversity of citizenship. See 28 U.S.C. § 1332(a) (1).

In Weinberger v. Wiesenfeld, 420 U.S. 636, 95 S.Ct. 1225, 43 L.Ed.2d 514 (1975), the Court reiterated the long-standing rule that "the jurisdictional amount of $10,000 ... is established as long as it does not 'appear to be a legal certainty' that the matter in controversy does not total $10,000 ...". Id. at 642 n.10, 95 S.Ct. at n.10. See also Mt. Healthy City Board of Ed. v. Doyle, 429 U.S. 274, 276-7, 97 S.Ct. 568, 570-71, 50 L.Ed.2d 471 (1977); St. Paul Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938). We have little difficulty concluding that plaintiff has satisfied the amount-in-controversy requirement by pleading for recovery of $14,500.00. Certainly defendant cannot successfully argue that it appeared to a "legal certainty" that plaintiff was not entitled to such an amount.

MINIMUM CONTACTS

The issue of whether the District Court improperly asserted in personam jurisdiction over the defendant is not so easily resolved. There are two separate inquiries that must be made. First, whether Michigan courts would assert jurisdiction, and second, if so, whether such an assertion would be constitutional.

...

To continue reading

Request your trial
13 cases
  • Theunissen v. Matthews, 90-1647
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • 24 Junio 1991
    ...1525, 108 L.Ed.2d 764 (1990); Michigan Nat. Bank v. Quality Dinette, Inc., 888 F.2d 462, 464 (6th Cir.1989); Hertzberg & Noveck v. Spoon, 681 F.2d 474, 478 (6th Cir.1982); Chrysler Corp. v. Fedders Corp., 643 F.2d 1229, 1236 (6th Cir.), cert. denied, 454 U.S. 893, 102 S.Ct. 388, 70 L.Ed.2d ......
  • Gen. Motors Co. v. Dinatale, Case No. 09-14445.
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • 20 Julio 2010
    ...195, 199 n. 2, 188 N.W.2d 623, 624 n. 2 (1971)) ]. This construction applies with equal force to section 705. Hertzberg & Noveck v. Spoon, 681 F.2d 474, 478 (6th Theunissen, 935 F.2d at 1463-64. A transaction of business includes “contact with Michigan customers through the mail and the wir......
  • Children's Legal Servs. v. Shor Levin & Derita, PC, Case No. 10–13000.
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • 28 Marzo 2012
    ...195, 199 n. 2, 188 N.W.2d 623, 624 n. 2 (1971)). This construction applies with equal force to section 705. Hertzberg & Noveck v. Spoon, 681 F.2d 474, 478 (6th Cir.1982).Theunissen, 935 F.2d at 1463–64. A transaction of business includes “contact with Michigan customers through the mail and......
  • Heidenbreicht v. Nevilog Inc, Case No. 09-12101.
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • 30 Marzo 2010
    ...195, 199 n. 2, 188 N.W.2d 623, 624 n. 2 (1971)) ]. This construction applies with equal force to section 705. Hertzberg & Noveck v. Spoon, 681 F.2d 474, 478 (6th Cir.1982). Theunissen, 935 F.2d at 1463-64. A transaction of business includes “contact with Michigan customers through the mail ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT