Hoxeng v. Topeka Broadcomm, Inc.

• Decision Date: 12 January 1996
• Docket Number: Civil Action No. 94-2284-GLR.
• Citation: 911 F. Supp. 1323
• Parties: David E. HOXENG, d/b/a ADX Communications, Plaintiff, v. TOPEKA BROADCOMM, INC., et al., Defendants.
• Court: U.S. District Court — District of Kansas

911 F. Supp. 1323

David E. HOXENG, d/b/a ADX Communications, Plaintiff, v. TOPEKA BROADCOMM, INC., et al., Defendants.

Civil Action No. 94-2284-GLR.

United States District Court, D. Kansas.

January 12, 1996.

COPYRIGHT MATERIAL OMITTED

Timothy H. Girard, Grant M. Glenn, Bruce J. Woner, Woner, Glenn, Reeder, Lowry & Girard, Topeka, KS, for David E. Hoxeng.

Marta Fisher Linenberger, Arthur E. Palmer, Goodell, Stratton, Edmonds & Palmer, Topeka, KS, for Topeka Broadcomm, Inc.

Charles A. Getto, McAnany, Van Cleave & Phillips, P.A., Kansas City, KS, for Recoll Management Corp.

Martha A. Peterson, Myron L. Listrom, Sloan, Listrom, Eisenbarth, Sloan & Glassman, Topeka, KS, for Twenty First Century Broadcasting, Inc., Marvin Wilson.

MEMORANDUM AND ORDER

RUSHFELT, United States Magistrate Judge.

On June 20, 1995, this case came on for trial by jury. On July 3, 1995, the jury returned a verdict in favor of plaintiff upon his claim against defendant TBI for breach of contract and his claims against defendants Recoll and Dr. Wilson for tortious interference with his contract. By special verdict the jury found that plaintiff and defendant TBI "entered into an enforceable contract whereby plaintiff agreed to purchase and defendant (TBI) agreed to sell radio station KTPK-FM free and clear of liens and encumbrances." The jury further found that defendant Recoll "consented to the contract." The jury awarded plaintiff actual damages in the aggregate amount of $350,000, applicable to all three claims. The court reserved the issue of specific performance of the contract, pending the jury verdict.

The case now comes before the court to determine post-trial matters. As directed, the parties have submitted proposed findings of fact and conclusions of law upon the claim for specific performance. They have also filed post-trial motions: Plaintiff's Motion to Alter or Amend the Judgment (doc. 238); Defendant Marvin Wilson's Renewal of Rule 50 Motion and/or in the Alternative for Judgment Not Withstanding (sic) the Verdict (doc. 240); Motion for Judgment as a Matter of Law (doc. 242), filed by defendant TBI; Defendant Recoll Management Corporation's Motion for Judgment as a Matter of Law, Judgment Notwithstanding the Verdict and Renewed Motion for Summary Judgment (doc. 251). On November 28, 1995, the court entertained oral arguments upon these motions and the request for specific performance. It now makes the following findings and rulings:

FACTS

This case involves the sale of a radio station in Topeka, Kansas. Plaintiff sued to enforce a written contract to buy Station KTPK-FM from its owner, Defendant Topeka Broadcomm, Inc. (TBI). TBI had bought the station in 1988 with proceeds of a loan from the Bank of New England in the amount of $2,262,000. It secured the loan with a first mortgage against the assets of the station. The station operated at a loss.

In 1990 defendant TBI engaged Blackburn & Co. (Blackburn) (a non-party) as broker to sell the station for $2,500,000. Its efforts to sell it at this price proved unsuccessful. In 1991 the New Connecticut Bank and Trust Co., successor to the Bank of New England, gave notice of default of the loan. The Federal Deposit Insurance Company (FDIC) as receiver took control of the assets of the bank. To manage liquidation of the loan and other receivables of the bank, the FDIC retained the co-defendant RECOLL Management Corp. (Recoll) as its agent and attorney in fact. On May 14, 1992, defendants TBI and Recoll and another creditor of the station entered into an agreement for TBI to continue to try to sell the station. It agreed to recover as much as possible to satisfy the outstanding indebtedness.

On November 10, 1992, defendant TBI and its broker Blackburn entered into a new agreement. It provided that Blackburn would try to sell the station for $2,000,000. A sale for this price would require the approval of Recoll as attorney in fact for the FDIC, in order to convey the assets free and clear of the lien of its mortgage. In June or July 1993 Anthony Rizzo on behalf of Blackburn told Sue Myskowski, loan officer for Recoll, that the station would probably not sell for $2,000,000. Upon his suggestion she obtained the approval of the Recoll Special Assets Committee for sale of the station for the highest offer above $1,250,000.

In previous efforts to buy a radio station, plaintiff had been in communication with Blackburn. In early 1993 he learned from Rizzo that Station KTPK-FM was for sale. After rejection of one proposal to buy it for a lesser price, plaintiff David E. Hoxeng d/b/a ADX Communications (Hoxeng) on July 30, 1993, submitted to Rizzo a written, signed Letter of Intent. It proposed that TBI sell him the station for $1,500,000. Rizzo determined through Sue Myskowski that the FDIC and Recoll approved the proposed sale for $1,500,000.

Rizzo reported these developments to the plaintiff. Viewing his letter not as an offer to buy, but simply an invitation for TBI to offer to sell the station to him for $1,500,000, plaintiff sought assurance that TBI as owner and seller, in addition to Recoll for the lien-holder, agreed to the sale as he had proposed. Upon the request of Rizzo and Recoll, therefore, Pierce McNally, president of TBI, sent Rizzo two letters, dated respectively August 16 and 18, 1993. They expressed the desire of TBI to proceed with the potential sale of the station to plaintiff. The letter of August 18 included a signature line for Recoll. Rizzo sent copies of these letters to plaintiff.

Plaintiff told Rizzo this was not enough to assure him TBI was itself agreeing to his proposal of July 30, 1993. He also told Rizzo he would proceed no further and would not travel to Topeka to perform a "due diligence" inspection of the station, until he had additional assurance from TBI of its commitment to the proposed sale and to transfer to him its radio license and other assets free of liens. With the urging of Recoll, Rizzo requested McNally for TBI to provide such additional assurance to plaintiff.

McNally responded on August 19, 1993, by adding some text to his letter of the previous day. He specifically noted the following text of his original letter: "It is my understanding that the proposed purchase price of $1,500,000 is acceptable to RECOLL and upon satisfactory completion of the acquisition by ADX, any and all security agreements in RECOLL'S favor will be released." McNally signed and added to this the following handwritten, marginal text: "Topeka Broadcomm, Inc. is willing to accept the proposal set forth by the potential buyer as discussed herein and assign the broadcast license to the potential buyer at closing subject to (illegible)." After further oral communication with Rizzo and Myskowski, plaintiff concluded that he had an enforceable contract with TBI and the necessary approval of Recoll, notwithstanding the absence of its signature.

At some time during the period August 16 through 23, 1993, defendant Marvin Wilson, M.D. (Wilson), a former part owner of the station, contacted Recoll to determine if it was still for sale. Recoll said yes. It encouraged him to submit a bid.

On August 24, 1993, for himself and a group of fellow investors, Wilson submitted an offer to buy the station for $1,550,000. In September he increased the offer to $1,650,000. TBI and Recoll accepted this final offer by Wilson. They thus agreed to sell the station to his designee, the co-defendant Twenty-First Century Broadcasting, Inc. (Twenty-First Century). Defendants have deferred the final performance of that agreement, pending resolution of this law suit.

In this action plaintiff has asked the court to decree specific performance of his contract with defendant TBI. In the alternative he has sought damages against TBI for breach of contract. He has also asserted claims for damages against the co-defendants Recoll and Wilson for tortiously interfering with his contract with TBI. Plaintiff joined Twenty-First Century as a defendant, to terminate any right it might have to buy the radio station against a decree of specific performance of his contract.

WHETHER OR NOT A CONTRACT EXISTED

By their respective motions all defendants have challenged the sufficiency of the evidence to justify the verdict and special findings by the jury that a valid contract existed between plaintiff and defendant TBI and that Recoll consented to it. The court finds this issue basic to all others which the parties have asserted. Accordingly, it will address it first.

Defendants assert several reasons to support their contention that the evidence fails to show an enforceable contract between plaintiff and defendant TBI. First they contend that the contract must fail, because codefendant Recoll never signed it. They suggest that the addition of a signature line for Recoll created a condition precedent to the formation of any contract between plaintiff as buyer and TBI as seller. The court must decide the issue, of course, by determining whether substantial evidence exists upon which the jury could find as it did. In making that determination, the court notes what inferences may reasonably be drawn from the evidence.

Reduced to its basic elements, the contract consisted essentially of an offer and acceptance of the proposition that defendant TBI sell and plaintiff buy the station for $1,500,000 cash, free and clear of liens. Plaintiff insists he was the offeree, not the offeror in this transaction. Regardless of who was offeror and offeree, the parties reached a meeting of the minds on these basic elements. This justifies an assumption that they agreed upon the essential elements of an enforceable contract.

Notwithstanding this initial assumption, the court must consider whether other provisions of the agreement defeat a finding that an enforceable contract existed. For this reason it must determine whether or not the evidence requires finding that the additional signature of Recoll was a...