Eastern Federal Corp. v. Avco-Embassy Pictures Corp.

• Decision Date: 25 June 1971
• Docket Number: Civ. A. No. 11895.
• Citation: 331 F. Supp. 1253
• Parties: EASTERN FEDERAL CORPORATION v. AVCO-EMBASSY PICTURES CORP.
• Court: U.S. District Court — Northern District of Georgia

331 F. Supp. 1253

EASTERN FEDERAL CORPORATION v. AVCO-EMBASSY PICTURES CORP.

Civ. A. No. 11895.

United States District Court, N. D. Georgia, Atlanta Division.

June 25, 1971.

Smith, Cohen, Ringel, Kohler, Martin & Lowe, I. T. Cohen and Scott Charlton, Atlanta, Ga., for plaintiff.

Troutman, Sams, Schroder & Lockerman, Robt. S. Sams, Tench C. Coxe, Milton A. Carlton, Jr., James E. Joiner, Atlanta, Ga., Javits, Trubin, Sillcocks & Edelman, New York City, for defendant.

ORDER ON MOTION TO VACATE OR TO ALTER

EDENFIELD, District Judge.

This diversity action for breach of contract was tried non-jury before this court and the court awarded plaintiff damages of $102,155.44 and allowed a set-off of $62,288.46 against plaintiff. Defendant has now moved this court to vacate or alter its order of December 29, 1970, 326 F.Supp. 1280, and the judgment entered on this order. In the motion to vacate or alter, defendant argues that the court's finding that the parties made a binding exhibition agreement on June 22, 1967, that was modified on February 3, 1968, is contrary to the evidence. Defendant also challenges the award of damages for loss of profits to the Miracle Theatre in Smyrna, Georgia, on the grounds that the award is unsupported by the evidence and that the award is unlawful because it exceeds the amount prayed for. Finally, defendant argues that the court erred in allowing plaintiff to recover pre-judgment interest on loss of profits damages.

I. Findings of Fact

Defendant challenges several of the court's findings of fact as being contrary to the evidence. Essentially the fact findings challenges are those relating to the finding of a contract on June 22, 1967, the finding of a modification of the contract on February 3, 1968, and the finding that the Miracle Theatre was included in the modified contract.

A. Contract of June 22:

In this motion for reconsideration, defendant does not deny that a contract was made on June 22, 1967, between plaintiff and defendant for exhibition of several of defendant's movies at several of plaintiff's theatres. However, defendant does contend that the contract of June 22, 1967, contained a firm play date of December 22, 1967 for exhibition of "The Graduate" at plaintiff's Coronet Theatre in Atlanta and Miracle Theatre in Smyrna. Defendant then argues that plaintiff materially breached its contract when it failed to exhibit "The Graduate" on December 22, 1967, and the court erred in not regarding the December 22, 1967 play date as being "of the essence" of the June 22, 1967 contract. The court is familiar with this contention. However, the court's factual findings are to the contrary. After a review of the findings of fact and the transcript, the court remains convinced that the factual findings are correct and the defendant's contentions are based on an erroneous interpretation of the facts. See the factual findings numbered 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 21, 43, 44, 45, 46, 47, 48 and the references to the transcript therein. Defendant further contends that the plaintiff's cancellation of the December 22, 1967 play date at the Coronet Theatre breached the exhibition contract for the Miracle Theatre in Smyrna as well as the Coronet, because the contract was not severable. This argument is premised on the assumption that plaintiff breached the contract when it cancelled the December 22, 1967 play date. As indicated above, this court has found to the contrary; and defendant's argument need not be considered further.

B. Modification of February 3, 1968:

Defendant contends that the parties did not intend to modify the June 22 contract when they met on February 3, 1968; rather, the parties were meeting to negotiate a new agreement. However, defendant claims this new agreement was never effected. These contentions are directly contrary to this court's findings that on February 3, 1968, the parties modified the existing contract of June 22, 1967, and that plaintiff's president, Meiselman, signed the blank forms with the understanding that the terms of the agreement, as modified, would be filled in. See findings of fact numbered 24, 25, 27 and 28, and the transcript references therein. Defendant also contends that its regional manager, James Frew, did not have the authority to bind defendant on a new contract or on modifications of an existing contract. The court has found that Frew did have actual authority to bind. See finding of fact numbered 25 and the transcript references therein. The court has reviewed the findings of fact and the transcript, and has discovered no reason to alter its findings.

C. Award of Damages for Miracle:

Defendant contends that the Miracle Theatre in Smyrna dropped from the minds of the parties after the December 22, 1967 play date was cancelled for the Coronet in Atlanta and the Miracle in Smyrna. Defendant states that no subsequent play date was requested by plaintiff for exhibiting "The Graduate" at the Miracle. Specifically, defendant points to the absence of the Miracle in the modifications effected February 3, 1968. For these reasons defendant contends the Miracle somehow was removed from the contract. The court has found that the Miracle Theatre was included in the contract of June 22, 1967,¹ and that the contract of June 22, 1967 was not altered insofar as it applied to the exhibition of "The Graduate" at the Miracle Theatre in Smyrna, Georgia.² As defendant points out, the Miracle Theatre was not mentioned at the February 3, 1968 meeting which resulted in a modification of the June 22, 1967 agreement. However, the failure of the parties to modify the contract as it related to the Miracle, whether that failure to modify was intentional or not, does not make the agreement regarding the exhibition of "The Graduate" at the Miracle go away. Nothing short of a finding of an agreement to eliminate the Miracle from the contract, or a termination of the June 22, 1967 contract can eliminate the obligations of the parties regarding the Miracle in Smyrna. The evidence does not warrant either of these findings.

After reviewing the evidence admitted, the court remains convinced that the findings of fact initially entered on December 29, 1970, were correct. Insofar as defendant has moved to vacate this court's order because of erroneous findings of fact, this motion is denied.

II. Legal Questions

A. Damages for loss of profits at Miracle:

Defendant contends the court's award of damages for loss of profits at the Miracle Theatre in Smyrna was unlawful because it exceeded the amount sought by plaintiff. Apparently, defendant's contention is based on an item of documentary evidence submitted by plaintiff. It is true that one of plaintiff's exhibits (P-35) contained plaintiff's version of the computation of damages. This computation showed a loss of profits of $12,858.06 at the Miracle in Smyrna while this court awarded $22,779.75. However, the loss of profits indicated on P-35 is not the amount claimed in the complaint. Paragraph "17.a" of Count Two of the amended complaint by reference to paragraphs 10 and 11 of Count One seeks recovery of $300,000 for loss of profits at plaintiff's theatres as a result of the breach of the alleged contract by defendants. Paragraphs 10 and 11 do not separate the damage into loss of profits at specific theatres. Rather, the paragraphs merely claim $300,000 loss of profits at plaintiff's theatres for loss of profits. The total award for the loss of profits at the Miracle and the Cherokee was $102,155.44. Thus it is difficult to see how defendant can say that the court awarded more than was claimed by plaintiff.³ The real test must be whether the award of damages is supported by the evidence. This court is convinced that the award is supported by the evidence. The court cannot be bound by the plaintiff's own computation of damages.⁴

B. Award of Damages for Pre-Judgment Interest:

Defendant contends that this court allowed plaintiff to recover pre-judgment interest on unliquidated damages contrary to Georgia law. In the court's computation of damages in Appendix II of the order of December 30, 1970, the court computed damages of $19,061.91 for the Miracle Theatre in Smyrna and $65,913.16 for the Cherokee in Atlanta. No award for interest was indicated in this computation. However, the narrative portion of the court's order concludes: "It is FURTHER ORDERED that the plaintiff have and recover interest at 7% per annum on the net amount of its recovery regarding the Cherokee and the Miracle. The interest shall date from February 21, 1968, concerning plaintiff's recovery on the amount of Cherokee's damages. The interest shall date from April 10, 1968 concerning the plaintiff's recovery on the amount of the Miracle's damages."

The Georgia statutes frame the question of whether pre-judgment interest must be allowed in terms of whether the damages are liquidated or unliquidated. Regarding liquidated damages, pre-judgment interest is required by Ga. Code Ann. § 57-110.⁵ However, Ga.Code Ann. § 20-1408⁶ has been construed in a breach of contract action involving unliquidated damages as allowing the jury, in its discretion, to include in the award an amount for pre-judgment interest. Tifton, T. & G. Ry. Co. v. Butler, 4 Ga. App. 191, 60 S.E. 1087 (1908). See also Western & Atlantic R. R. Co. v. Brown, 102 Ga. 13, 29 S.E. 130 (1897) (tort action referring to Ga.Code Ann. § 20-1408). Where the damages are unliquidated, it has been held error for the judge to charge that if the jury finds for the plaintiff on the contract it must award interest from the date of the breach. Snowden v. Waterman & Co., 110 Ga. 99, 35 S.E. 309 (1899); Mendenhall v. Nalley, 81 Ga.App. 517, 59 S.E.2d 283 (1950). Rather, the Court of Appeals has held the trial court should instruct the jury that it may in its discretion award pre-judgment interest on the unliquidated damages. Tifton, T. & G. Ry. Co., supra.⁷

On the basis of the...