Cohen v. William Goldberg & Co., Inc.

• Decision Date: 19 November 1991
• Docket Number: Nos. A91A1424,s. A91A1424
• Parties: COHEN v. WILLIAM GOLDBERG & COMPANY, INC., et al. (two cases). COHEN et al. v. WILLIAM GOLDBERG & COMPANY, INC., et al. (two cases). to A91A1427.
• Court: Georgia Court of Appeals

Page 759

413 S.E.2d 759

202 Ga.App. 172

COHEN v. WILLIAM GOLDBERG & COMPANY, INC., et al. (two cases).

COHEN et al. v. WILLIAM GOLDBERG & COMPANY, INC., et al. (two cases).

Nos. A91A1424 to A91A1427.

Court of Appeals of Georgia.

Nov. 19, 1991.

Reconsiderations Denied Dec. 4, 1991.

Certiorari Denied April 9, 1992.

Powell, Goldstein, Frazer & Murphy, Frank Love, Jr., William G. Leonard, James D. Meadows, Atlanta, for appellants.

Bedford, Kirschner & Venker, Andrew R. Kirschner, Gambrell, Clarke, Anderson & Stolz, Irwin W. Stolz, Jr., Seaton D. Purdom, Atlanta, for appellees.

SOGNIER, Chief Judge.

Jay Cohen, the sole stockholder in the T-Shirtery, Inc., and Steve Radford, the sole stockholder in Hightower Corporation, the holding company of All-Star Imprinting, Inc., entered into negotiations to sell the stock of the T-Shirtery and All-Star to William Goldberg & Company, Inc. (WGC), whose sole stockholder was Bill Goldberg, in exchange for Jay Cohen and Radford receiving, inter alia, 37.5 and 25 percent, respectively, of WGC's stock, executive positions in WGC, and, in Jay Cohen's case, certain additional remuneration for the T-Shirtery's stock. The deal collapsed, and Jay Cohen filed suit seeking a declaration that the negotiations had failed to produce an enforceable contract, the breach of which would entitle any party to damages. Jay Cohen's father, Joe Cohen, was allowed to intervene as a plaintiff. ¹ Numerous counterclaims were filed by Goldberg, WGC, Radford, Hightower, and All-Star. This opinion consolidates four appeals brought by Jay Cohen (who we will hereinafter refer to as "Cohen") and Joe Cohen from various rulings entered in the Superior Court of Fulton County.

1. The main issue in the appeals is the propriety of the trial court's ruling that genuine issues of material fact exist regarding the enforceability of the sale contract negotiated by Cohen and appellees. The pertinent facts as revealed by the record are that the T-Shirtery and All-Star were two t-shirt imprinting businesses experiencing financial difficulties. Goldberg was a business broker providing financial advice to both companies. A proposal was made in late 1985 to combine the T-Shirtery and WGC, with All-Star entering into the negotiations shortly afterwards, so that the basic concept of the proposal was that the two imprinting companies would sell some or all of their stock to WGC in exchange for a percentage of WGC stock, and that the imprinting companies would merge essential operations with Cohen and Radford selling and marketing for their respective former companies but with WGC handling the administrative and financial arrangements.

The record is clear that when the parties and counsel met in April, the documents prepared by Goldberg/WGC's attorney, Steve Merlin, set forth terms different from those originally contemplated by the parties, especially regarding the additional remuneration Cohen was to receive for his T-Shirtery stock. By the April 23, 1986 meeting, it was agreed Cohen would receive payment for his stock in the form of deferred compensation, and that meeting concluded with Cohen's attorney, Bob Hipple, stating he would draft another version of the agreement regarding Cohen's deferred compensation for the meeting the following day.

The April 24 meeting lies at the core of this dispute. Hipple was not able to attend that meeting in person, and the parties did not review any deferred compensation documents drafted by him. The parties present at the meeting, Cohen, Goldberg (with his attorney, Merlin), and Radford (with his attorney) signed numerous documents including a shareholders' agreement, a stock exchange agreement, a management agreement, and an employment agreement between Cohen and WGC, which provided that Cohen would forfeit all remaining unpaid deferred compensation if he were fired for cause. It is uncontroverted that Cohen also signed a deferred compensation agreement ("DCA"). The copy of the DCA in the record is a typewritten document with certain handwritten interlineations. The handwritten terms provide for compensation terms less favorable to Cohen. Only Goldberg's initials appear beside the most significant handwritten changes. It is uncontroverted that Cohen signed the DCA without the handwritten interlineations.

Cohen also signed an escrow and modification agreement at the April 24 meeting. That agreement first witnessed that the parties had executed certain documents, specifically including the DCA. It then provided that the documents would be held in escrow by Merlin's firm; that the stock exchange agreement would be modified in numerous particulars; and that the parties stated that certain agreements, including the DCA, "shall become effective immediately" with the proviso that all the agreements "shall ... terminate in the event that all of the conditions of this escrow are not satisfied." Under the caption "Additional Conditions Precedent to Release of the Escrow" were conditions requiring the delivery of: letters of opinion of counsel in form and substance satisfactory to the parties; lenders' consents; and deliveries required under Article 6 of the Stock Exchange Agreement such as the delivery of stock certificates, corporate seals, and stock record books, certifications that warranties and representations made in the stock exchange agreement were true and correct on the closing date, the resignations of corporate officers, and corporate minutes setting forth the appointments of Goldberg, Cohen, and Radford as new directors.

Cohen moved for summary judgment on the ground that the evidence of record established as a matter of law that no enforceable contract was executed on April 24. We do not agree, and accordingly we affirm the trial court's denial of his motion for summary judgment on this issue.

(a) First, we do not agree with Cohen that the evidence conclusively established that there was no meeting of the minds of the parties on the terms of the DCA, a material part of the sale contract, so that under OCGA §§ 13-3-1, 13-3-2 no valid contract was created. Cohen uncontrovertedly signed the typewritten agreement. Although Hipple was not present at the meeting, Cohen conferred with him by telephone during the meeting, and the evidence is clear that Goldberg insisted on maintaining an arm's length relationship with Cohen during the meeting. Although Cohen deposed that he has difficulty understanding legal documents, he does not contend that he was prevented from reading the DCA or from consulting with Hipple regarding its terms. See generally Fore v. Parnell-Martin Cos., 192 Ga.App. 851, 852(1), 386 S.E.2d 723 (1989). Moreover, while the parties were anxious to complete the transaction, the evidence uncontrovertedly establishes that the behavior of the parties was not such that Cohen's signature on the DCA was coerced. See Tidwell v. Critz, 248 Ga. 201, 203-204(1), 282 S.E.2d 104 (1981). The record thus establishes that Cohen, by signing the unaltered, typewritten DCA, assented to its terms.

Although parol evidence may be used to show no valid agreement ever went into existence, Citizens, etc., Nat. Bank v. Williams, 147 Ga.App. 205, 207-208(4), 249 S.E.2d 289 (1978), it cannot be used to contradict or vary the terms of a valid written agreement. Id. Cohen's deposition testimony regarding his understanding that even after signing the documents, Hipple's review of the documents was necessary before they could be considered final was not evidence regarding the parties' meeting of the minds, but instead was evidence that the executed documents were subject to Hipple's modifications notwithstanding Cohen's acceptance, and accordingly constituted inadmissible parol evidence.

(b) Second, a clear question of material fact exists whether Goldberg assented to the terms of the typewritten DCA. ² The evidence conflicted whether Goldberg accepted the typewritten agreement by signing it, as Goldberg and Merlin deposed, or whether Goldberg rejected the typewritten agreement by inserting material handwritten changes before signing the document, as Cohen deposed. We note that although Radford and his attorney deposed that they did not observe this aspect of the transaction, Radford's attorney wrote Merlin the following day that the DCA was an issue "left open with respect to the closing."

The conflicting evidence raises the possibility that while Cohen, by signing the typewritten agreement, accepted the offer on the terms set forth, Goldberg responded by inserting the material handwritten changes in the terms, thereby constituting a counteroffer. See State of Ga. v. U.S. Oil Co., 194 Ga.App. 1, 2, 389 S.E.2d 498 (1989). Since it is uncontroverted that Cohen did not initial the changes, if it is established that the typewritten agreement without interlineations was not executed by both parties, Cohen's refusal to accept the counteroffer would mean there was no sale contract.

(c) The parties place great emphasis on the actions of the parties regarding the DCA after the April 24th meeting. Basically, this evidence reflects that while Cohen accepted the unaltered typewritten agreement (which, together with the employment agreement, provided that his deferred compensation, payable in four years with no limitations based on net profits, would be forfeited should he be fired for cause), he rejected the handwritten proposals in the DCA as well as other subsequently proffered terms made by Goldberg (which provided that payment for his deferred compensation would be spread over a minimum of ten years or longer because of net profit requirements), unless the clause authorizing forfeiture of the payments upon his discharge for cause was eliminated. While other aspects of the transaction were modified by written agreement of the parties after April 24, the record establishes that no subsequent proposal concerning the DCA was accepted by both Cohen and Goldberg/WGC. Accordingly, the evidence...