Noonan v. Midland Capital Corporation, 269

• Decision Date: 04 January 1972
• Docket Number: Docket 71-1130.,No. 269,269
• Citation: 453 F.2d 459
• Parties: Dermott NOONAN, Plaintiff-Appellant, v. MIDLAND CAPITAL CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

453 F.2d 459 (1972)

Dermott NOONAN, Plaintiff-Appellant, v. MIDLAND CAPITAL CORPORATION, Defendant-Appellee.

No. 269, Docket 71-1130.

United States Court of Appeals, Second Circuit.

Argued November 10, 1971.

Decided January 4, 1972.

James P. Costello, New York City (John J. Lynch, New York City, of counsel), for plaintiff-appellant.

Joseph Chase, New York City (Cleary, Gottlieb, Steen & Hamilton, and Edwin B. Mishkin, New York City, of counsel), for defendant-appellee.

Before LUMBARD and FEINBERG, Circuit Judges, and DAVIS, Judge.^*

DAVIS, Judge:

In this diversity case, Dermott Noonan, an experienced accountant and management consultant, sues Midland Capital Corporation, a small business investment company, for failing to fulfill an alleged oral contract to pay him for personal business services. The major defense is that no such agreement was ever made. The trial was to a jury which was unable to agree after prolonged deliberation. The defendant then renewed its motion for a directed verdict which was granted by Judge Frankel because there was no evidence from which a jury could reasonably find the purported agreement between Noonan and Midland underlying this action. We uphold the District Court.

The matrix of the claim is this:—in 1966 and the first part of 1967 Midland loaned large sums to an ailing Georgia manufacturer, Textured Products Company, taking the latter's stock in pledge. As the trial judge put it: "Contrary to the expectations of all those interested, Textured Products did not prosper. By the spring of 1967, it had lost a great deal of money, and its imminent demise was a substantial possibility." Appellant Noonan had previously worked with Midland on a comparable project to save another corporate debtor, and early in 1967 Midland's president, Schabacker, asked him to consult on Textured's problem. After a couple of visits to the Georgia plant, plaintiff advised Midland that the operation could be salvaged and that he was willing to assist. Midland, through Schabacker, agreed to this "rescue attempt." It was understood that Noonan himself would spend considerable time at the factory and would also retain a full-time production expert. For its part, defendant would lend Textured large sums for its operating expenses during this period, and this was done. Plaintiff's fee was set at $7,500 per month. He and his associates worked on the project for some months beginning in April 1967, but the Georgia firm was not to be saved. By June or July 1967 manufacturing stopped there, and early in August the interested persons agreed that nothing more should or could be done. Plaintiff then prepared for Midland two reports on the matter.

Beginning in May 1967, Noonan submitted bills to Textured for his firm's work from April through October 1967.¹ Textured paid those for April and May, out of the funds advanced by Midland, and also an additional $2,500 in October (after the advances had stopped). Plaintiff sent Textured bills, which were not honored, until late in 1967, and in January 1968 first billed defendant for his unrecovered fees (which he sets at over $33,000). Defendant refused to pay and this suit resulted.

The case was tried and presented to the jury, with the concurrence of both sides, solely on the theory that there was an express oral agreement by Midland to pay Noonan, at the stated rate of $7,500 per month, for the services in connection with Textured, i.e. a direct, primary obligation on Midland's part, rather than Textured's being the direct and primary obligor. There was no attempt to show that Midland was secondarily liable if Textured, as primary obligor, failed to pay.² Nor was there any effort to prove that Midland breached its promise to make funds available to Textured. There was, moreover, neither a claim of a written contract nor a demand in quantum meruit for the value of services rendered. Plaintiff built his entire structure on the basis that Schabacker had verbally undertaken to have Midland itself pay the fee of $7,500 a month. It is the evidentiary strength of that foundation which is now before us, the dispositive issue being the sufficiency of the evidence to go to the jury.

We apply, of course, the accepted rule that "whether the motion is one to direct a verdict or to set aside a verdict which the jury has returned, the test applied by the court is the same. The evidence must be viewed in the light most favorable to the party other than the movant. The motion will be granted only if (1) there is a complete absence of probative evidence to support a verdict for the non-movant or (2) the evidence is so strongly and overwhelmingly in favor of the movant that reasonable and fair minded men in the exercise of impartial judgment could not arrive at a verdict against him." Armstrong v. Commerce Tankers Corp., 423 F.2d 957, 959 (2d Cir. 1970). See, also, Diapulse Corp. of America v. Birtcher Corp., 362 F.2d 736, 743 (2d Cir. 1966); Lifetime Siding Inc. v. United States, 359 F.2d 657, 662 (2d Cir. 1966). It may be noted, in this diversity action, that the New York rule on the granting of directed verdicts, if it is to be followed here (Calvert v. Katy Taxi, Inc., 413 F.2d 841, 846 (2d Cir. 1969)), accords with the general formulation. O'Connor v. Pennsylvania R.R. Co., 308 F.2d 911, 914-915 (2d Cir. 1962).

Under this standard, plaintiff's own version of his crucial conversation with Schabacker about the fee is quite enough, or at least very nearly so, to negative the existence of any undertaking by Midland to pay plaintiff for his services. Noonan testified that "Schabacker agreed * * * that Midland Capital would * * * authorize advancing of funds to Textured Products for operations, based upon a schedule to be submitted by the people at Textured Products and approved by me Noonan"; that "I advised Mr. Schabacker that our fee would be $7,500 a month * * * which was perfectly satisfactory to Mr....