Lovable Company v. Honeywell, Inc.

• Decision Date: 06 August 1970
• Docket Number: No. 28840.,28840.
• Citation: 431 F.2d 668
• Parties: The LOVABLE COMPANY, Plaintiff-Appellee, v. HONEYWELL, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

431 F.2d 668 (1970)

The LOVABLE COMPANY, Plaintiff-Appellee, v. HONEYWELL, INC., Defendant-Appellant.

No. 28840.

United States Court of Appeals, Fifth Circuit.

June 22, 1970.

Rehearing Denied August 6, 1970.

Eugene T. Branch, Atlanta, Ga., for defendant-appellant.

Edward E. Dorsey, Atlanta, Ga., for plaintiff-appellee.

Before TUTTLE and CLARK, Circuit Judges, and EDENFIELD, District Judge.

TUTTLE, Circuit Judge:

This appeal presents a relatively simple problem of construing a written contract, which deals with a complex subject matter. The subject matter is the installation of computer equipment by Honeywell in the offices of Lovable. The problem of construing the contract comes to us by reason of an order of the trial court denying a motion for summary judgment filed by Honeywell, an order which would not normally be reviewable, since it is an interlocutory order. However, under Title 28 U.S.C.A. § 1292(b), the trial court entered the appropriate certification and this court granted a petition that we consider an appeal of the interlocutory order.

Both parties here agree that the lawsuit must ultimately be disposed of by a determination of what the parties contracted to do as a result of the execution by them of four documents. The appellee, plaintiff below, The Lovable Company, argues that the four documents obligated Honeywell to install its computer equipment in the Lovable Company offices at a monthly cost to Lovable of approximately six thousand dollars and further that Honeywell guaranteed that the equipment "will handle the workload of Lovable Brassiere Company for the first twelve months of operation," and that "Honeywell guarantees the resulting three tape system will handle all of the workload defined in your proposal dated January 26, 1962, within a single shift operation."

Honeywell, to the contrary, contends that the contract documents obligated it to install the equipment and make it available to Lovable for a period of four years at a monthly rental of $6,004.00 and that it would furnish a senior systems analyst on a full time basis for a certain period to Lovable prior to this installation at Honeywell's expense to assist Lovable in "planning and designing a system for its use of the equipment," and that it would furnish Lovable, at Honeywell's expense, two full time resident field service engineers to maintain the equipment for a certain scheduled period of time, but that it did not undertake to promise or guarantee what the equipment would actually produce in terms of meeting the reasonable requirements of Lovable as a new system; that it agreed simply to a condition that if Lovable "reasonably determined within a year that the leased equipment will not handle the reasonable needs" of Lovable, the contract would terminate thirty days after notice of that fact.

As indicated, the parties, in their several briefs, reply briefs, and rebuttal briefs, ultimately agreed on the proposition that the four documents are controlling. The sole point of dispute which causes Lovable to insist that there is a triable issue of fact is its contention that a letter written by Lovable to Honeywell on February 13, 1962, thus some time prior to the execution of the contract dated March 22, 1962, expressed Lovable's position that the contract, thereafter written up, was to embody language creating an obligation by Honeywell in the terms which we have quoted above; that the contract thereafter written up must be construed as having embodied this obligation. It is Honeywell's contention that the documents before the trial court show without dispute that after the writing of the February 13th letter, Lovable, by a letter of February 21st, actually placed its order for the equipment for delivery in February, 1963, approximately one year later, "subject to final negotiation and approval of a formal contract," and that the formal contract, signed by Lovable on March 7 and by Honeywell on March 22, 1962, with its addendum, plainly and unambiguously demonstrated that the only issue before the court was the construction of four written contractual agreements, and that there remained no substantial issue of fact to be decided by a full blown trial.

The parties do not discuss, since there is no real disagreement between them, the principles surrounding the propriety of granting a motion for summary judgment. However, to make it clear what we are dealing with we quote from Rule 56 of the Rules of Civil Procedure, which provides that when a motion for summary judgment is filed "the judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

By the very nature of the motion, the granting of a motion for summary judgment is the exception rather than the rule. However, it is a tool made available to the courts for their proper use when nothing is to be gained by a full trial.

As stated by this court in Liberty Leasing Co. v. Hillsum Sales Corp., 5 Cir., 1967, 380 F.2d 1013, "The burden is upon the moving party here Honeywell to establish that there is no genuine issue of fact, Kilfoyle v. Wright, 5 Cir., 1962, 300 F.2d 626, 629; Bragen v. Hudson County News Co., 3 Cir., 1960, 278 F.2d 615, 617, and the party opposing the motion should be given the benefit of every reasonable doubt, Heyward v. Public Housing Administration, 5 Cir. 1956, 238 F.2d 689, 696. However, rule 56 requires that the opposing party be diligent in countering a motion for summary judgment, Southern Rambler Sales, Inc. v. American Motors Corp., 5 Cir. 1967, 375 F.2d 932, and mere general allegations which do not reveal detailed and precise facts will not prevent the award of summary judgment, Federal R. of Civ.P. 56 (e), Robin Construction v. United States, 3 Cir., 1965, 345 F.2d 610, 613-614." 380 F.2d 1013, 1014-1015.

It is against this standard that we test the correctness of the trial court's denial of the motion for summary judgment in this case. Fortunately, we are faced with a record which, as stated above, discloses that both parties agree that the problem must be resolved by a construction of four written documents. The disagreement between the parties lies in the fact that Lovable contends that an additional document, a letter written by its president, apparently dealing with an entirely different contract, expressed Lovable's understanding of obligations on the part of Honeywell, which, since they were not expressly repudiated by Honeywell prior to the execution of the final contract, must, as a matter of construction of the language in the final contract be held to control. While the case is simplified by the fact that it comes to us on an agreed appendix setting forth the affidavits and exhibits, it is nevertheless somewhat cumbersome to deal with, because of the fact that in the several documents there is much that is irrelevant to our decision here. We refer only to the facts that are necessary to our decision.

Fortunately, also, it is correct to say that there is no single disputed fact at issue between the parties — that is to say there is no dispute as to the existence of any of the documents, their genuineness or their execution. There is a dispute as to the effect of the documents.

We think it most convenient to detail the facts by stating chronologically what appears from the record.

(1) By an affidavit filed in response to the motion for summary judgment, Dan Garson, Vice President of Lovable, presented a letter written and mailed by him on or about February 13, 1962, to Honeywell. The affidavit then stated as follows:

"Deponent further states that said letter was written in response to a letter dated February 9, 1962,¹ from Mr. J. L. Richardson, Jr., to the deponent in his capacity as Executive Vice President of the plaintiff company, and to confirm the understanding between the parties as expressed in said letter of February 9, 1962, and in other conversations and communications between the parties that Honeywell, Inc. would design and implement for The Lovable Company an electronic computer system capable of performing within one prime shift time certain specified functions generally described and defined by Honeywell, Inc. as timekeeping, accounts receivable, production control, inventory control, statistics, order writing, billing and payroll. Deponent further states that such understanding was agreed to by Honeywell, Inc. and embodied in the Contract between the parties and the Addendum thereto."

This letter, then, dated February 13, is the first document in chronological order that is before the court. It is addressed to Mr. Joseph L. Richardson, Area Sales Manager, Minneapolis Honeywell Regulator Company, at an Atlanta address. The material part states: "The Lovable Brassiere Company the former name of plaintiff plans to install a Honeywell 400 Computer System at our manufacturing facility in Atlanta, Georgia. Accordingly, I have signed the enclosed contract,² subject to Honeywell's agreement that the commitments enumerated in your letter to me dated February 9, 1962³ plus the additional conditions defined in this letter represent a part of the contract. * * *

"We understand that the initial equipment configuration to be delivered by Honeywell will include a central processor, high speed printer, high speed card reader, card punch, one magnetic tape unit, and console. The monthly rental for this configuration is $6,004.00. This configuration will handle the workload of the Lovable Brassiere Company for the first twelve months of operation, whereupon two additional magnetic tape units will be added to the system. It is further understood that Honeywell guarantees the resulting three tape systems will handle all of the workload defined in your proposal dated January 26, 1962...