Bushkin Associates, Inc. v. Raytheon Co.
| Citation | 906 F.2d 11 |
| Decision Date | 10 May 1990 |
| Docket Number | No. 89-2093,89-2093 |
| Parties | BUSHKIN ASSOCIATES, INC., et al., Plaintiffs, Appellees, v. RAYTHEON COMPANY, Defendant, Appellant. . Heard |
| Court | United States Courts of Appeals. United States Court of Appeals (1st Circuit) |
James S. Dittmar, with whom Leonard G. Learner, Kathleen B. Rogers and Widett, Slater & Goldman, were on brief, Boston, Mass., for defendant, appellant.
F. Lee Bailey, with whom Kenneth J. Fishman, Daniel Patrick Leonard, and Bailey, Fishman & Leonard, were on brief, Boston, Mass., for plaintiffs, appellees.
Before CAMPBELL, Circuit Judge, BOWNES, Senior Circuit Judge, and TORRUELLA, Circuit Judge.
Plaintiffs-Appellees Bushkin Associates, Inc., et al. were awarded $600,000 by a jury against defendant-appellant Raytheon Company on a quantum meruit claim. The district court added $706,191.70 in prejudgment interest, resulting in a total judgment against Raytheon of $1,306,191.70. Raytheon has appealed the interest award. There are two issues to be decided: whether any prejudgment interest at all should have been added to the verdict, and, if so, what is the date from which prejudgment interest should be computed. We affirm.
This case has a long and tortuous procedural history. Bushkin filed a complaint against Raytheon in federal district court on April 28, 1981, alleging breach of an oral fee contract for services rendered relative to the merger of Beech Aircraft Corporation and Raytheon, a quantum meruit claim for the reasonable value of the services, and violations of Mass.Gen.Laws Ann. ch. 93A. The complaint was dismissed by the district court on September 2, 1983 on the ground that under New York law, 1 which the district court found applicable, the alleged oral contract and the quantum meruit claim were void and unenforceable. Bushkin Associates, Inc. v. Raytheon Co., 570 F.Supp. 596 (D.Mass.1983).
On appeal we certified questions of law to the Supreme Judicial Court of Massachusetts. It held that Massachusetts law, not New York law, was applicable to the alleged oral contract and that the complaint did not state a cause of action under Mass.Gen.Laws Ann. ch. 93A. Bushkin Associates, Inc. v. Raytheon Co., 393 Mass. 622 Trial commenced in November 1985. After Bushkin had presented its evidence, the district court directed a verdict for Raytheon on all counts. Bushkin appealed. We reversed, holding that the evidence on breach of the alleged oral contract and on the quantum merit claim was sufficient for jury determination. The case was again remanded for trial. Bushkin Associates, Inc. v. Raytheon Co., 815 F.2d 142 (1st Cir.1987).
473 N.E.2d 662 (1985). We then remanded the case for trial in the district court. Bushkin Associates, Inc. v. Raytheon Co., 760 F.2d 251 (1st Cir.1985).
Prior to the start of the scheduled trial, the district court disqualified Bushkin's counsel because they had telephonically interviewed jurors who had sat on the case held in November, 1985. The disqualification order was appealed. We affirmed the district court. In re Bushkin Associates, Inc., 864 F.2d 241 (1st Cir.1989).
Bushkin retained new counsel and trial proceeded in July of 1989. The jury returned its verdict on July 12 by its answers to the following four interrogatories.
1. Do you find that the plaintiffs have established by a preponderance of the evidence that the defendant entered into an express oral contract with the plaintiffs under the terms of which contract defendant would pay the plaintiffs a fee for plaintiffs' help in defendant's acquisition of or merger with Beech Aircraft Corporation?
Answer YES or NO.
2. Do you find that the plaintiffs have established by a preponderance of the evidence that the defendant entered into an implied in fact contract with the plaintiffs under which contract defendant would pay the plaintiffs a reasonable fee for plaintiffs' help in defendant's acquisition of or merger with Beech Aircraft Corporation?
Answer YES or NO.
5. Do you find that the plaintiffs have established by a preponderance of the evidence that the defendant received a benefit from the information or services provided by the plaintiffs to the defendant with respect to defendant's acquisition of or merger with Beech Aircraft Corporation?
Answer YES or NO.
6. What amount of fee do you find that the plaintiffs have established by a preponderance of the evidence to be necessary to compensate the plaintiffs either in accordance with the terms of an express oral contract, or as the reasonable fee in an implied in fact contract, or for the reasonable value of the information or services provided by the plaintiffs to the defendant?
(Six Hundred Thousand Dollars)
(Emphasis added).
The district court issued a written opinion explaining its reasons for finding that prejudgment interest should be added to the verdict. Bushkin Associates, Inc. v. Raytheon Co., 717 F.Supp. 18 (D.Mass.1989). This appeal followed the denial of Raytheon's post-trial motions to alter or amend the judgment by deleting the interest entirely or reducing it.
We recount only those facts necessary to understand the issues. Bushkin Associates, Inc. is an investment banking firm in New York specializing in mergers and acquisitions. Its principal officer and major actor in this case is Merle J. Bushkin. Bushkin's relationship with Raytheon began in 1971, prior to his forming the investment firm in August 1972. Bushkin provided merger and acquisition information to Raytheon. Between 1972 and 1978 Bushkin gave Raytheon information about 65 different business entities for acquisition consideration.
In 1973 Bushkin investigated the possibility of the acquisition of Beech Aircraft Corporation by Ethyl Corporation. After a year of investigation and negotiations, the acquisition fell through. Bushkin, of course, had obtained a great deal of information about Beech during the negotiations.
In 1974 Bushkin inquired of Raytheon executives if they were interested in acquisitions in the aviation field. The replies did not reject such an acquisition outright, but they were not encouraging. In January of 1975, Bushkin approached Robert L. Seaman, vice-president for planning of Raytheon and the person who screened all proposed acquisitions. Bushkin specifically proposed Beech for acquisition by Raytheon. Negotiations continued between Bushkin and Seaman for six months during which time Seaman obtained a great deal of information from Bushkin about Beech. On July 29, 1975, Seaman told Bushkin that Raytheon's chairman of the board, Thomas L. Phillips, was not interested in Beech.
In the fall of 1975, Bushkin was working with Raytheon on another potential acquisition. He met with Phillips and raised the subject of Raytheon acquiring Beech. According to Bushkin, Phillips said he was not interested. Phillips testified that he could not recall this conversation.
In August, 1976, Raytheon entered into a consulting agreement for mergers and acquisitions with Lonsdale Enterprises, Inc. On November 25, 1976, Lonsdale proposed that Raytheon acquire Beech. In February, 1977, Bushkin was working on another potential acquisition for Raytheon. Bushkin testified that he again suggested to Phillips that he consider acquisition of Beech and that Phillips responded by saying that he had no interest in general aviation. Phillips testified that he did not recall such a discussion.
A merger agreement was entered into between Raytheon and Beech in November, 1979, effective February 8, 1980. The value of the transaction was put at $816 million. Raytheon paid fees of $500,000 to one Angus MacDonald and $600,000 to Lonsdale.
In early October, 1979, Bushkin read in a newspaper about the impending merger between Beech and Raytheon. On October 5, he wrote Phillips stating, inter alia, "I trust that our fee agreement will be honored." Raytheon refused to pay Bushkin anything and this lawsuit resulted.
The first issue is whether prejudgment interest should be added to a recovery in quantum meruit. The applicable Massachusetts statute states:
In all actions based on contractual obligations, upon a verdict, finding or order for judgment for pecuniary damages, interest shall be added by the clerk of the court to the amount of damages, at the contract rate, if established, or at the rate of twelve per cent per annum from the date of the breach or demand. If the date of the breach or demand is not established, interest shall be added by the clerk of the court, at such contractual rate, or at the rate of twelve per cent per annum from the date of the commencement of the action.
Mass.Gen.Laws Ann. ch. 231, Sec. 6C (West 1990).
Before we begin our exegesis of the Massachusetts cases, we point out that in our opinion remanding the case for trial, 815 F.2d 142, we assumed that quantum meruit was a variation of a contract claim. In discussing the viability of the quantum meruit claim, we held that plaintiffs "were certainly entitled to plead in the alternative, arguing a quantum meruit theory as well as an express contract theory." 815 F.2d at 149. We then stated:
More importantly, restitution on quasi-contractual grounds often enters into the remedial calculus in a contractual context. See generally Perillo, Restitution in a Contractual Context, 73 Colum.L.Rev. 1208 (1973). It is established that a party to a contract may have the right to a quasi-contractual remedy when the other party has breached. See, e.g., Salamon v. Terra, 394 Mass. 857, 477 N.E.2d 1029, 1032 (1985); Restatement of Restitution, Sec. 107(1) (1936).
815 F.2d at 149-50 (footnote omitted).
We do not suggest that this became "the law of the case," but we do assume that the court below and the parties were familiar with our opinion. We also note that neither party objected to the definition of quantum meruit given in the court's instructions...
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