OVERSEAS DEVELOPMENT DISC v. Sangamo Const. Co., 77-3147.

• Decision Date: 03 December 1980
• Docket Number: No. 77-3147.,77-3147.
• Citation: 502 F. Supp. 1256
• Parties: OVERSEAS DEVELOPMENT DISC CORP., Plaintiff, and Universal Development Corp., Intervening Plaintiff, v. SANGAMO CONSTRUCTION CO., INC., Defendant. UNIVERSAL DEVELOPMENT CORP., Intervening Cross-Plaintiff, v. OVERSEAS DEVELOPMENT DISC CORP., Intervening Cross-Defendant.
• Court: U.S. District Court — Central District of Illinois

502 F. Supp. 1256

OVERSEAS DEVELOPMENT DISC CORP., Plaintiff, and Universal Development Corp., Intervening Plaintiff, v. SANGAMO CONSTRUCTION CO., INC., Defendant.

UNIVERSAL DEVELOPMENT CORP., Intervening Cross-Plaintiff, v. OVERSEAS DEVELOPMENT DISC CORP., Intervening Cross-Defendant.

No. 77-3147.

United States District Court, C. D. Illinois.

December 3, 1980.

John F. Bomster, Providence, R. I. and Kenneth H. Otten, Springfield, Ill., for Overseas Development Disc Corp.

Gary Green, Philadelphia, Pa. and R. H. Heckenkamp, Springfield, Ill., for Universal Development.

Jerold S. Solovy, Michael J. Rovell, Dorothy B. Zimbrakos, Chicago, Ill. and Robert B. Oxtoby, Springfield, Ill., for Sangamo Construction Co.

DECISION AND ORDERS

ROBERT D. MORGAN, Chief Judge.

This cause of action is before the court for decision and judgment following a bench trial.

The plaintiff, Overseas Development Disc Corp. (ODC), is a New York corporation having its principal place of business in New York City. It was at all material times engaged in international trade, principally in nations of the Middle East. Its complaint alleges that that engagement included both trading on its own account and its acting as finder or broker in bringing together potential buyers and sellers of goods and services. At all material times, Attila Turkkan was the president and chief executive officer of ODC.

Defendant, Sangamo Construction Co., Inc. (Sangamo), is a Delaware corporation having its principal place of business in Springfield, Illinois. At all material times, Sangamo was engaged principally in the business of constructing roads, bridges, and other highway facilities. At all material times, Alan Reyhan was the president and chief executive officer of Sangamo.

Universal Development Corporation (UDC) intervened as a party to this cause. UDC is incorporated under the laws of the Grand Cayman, British West Indies, and has its principal place of business in the State of New Jersey. Its corporate purpose includes the business of international trade. Since January 1976, Taj Farouki has been a vice president of UDC. To round out the parties' interrelationships, Farouki was a full-time employee of ODC from about August 1974 until October 1975, and he thereafter remained associated with ODC on a project-to-project basis until a time in 1977.

This controversy had its genesis in the stipulated fact that, in 1977, Sangamo was awarded a contract by the government of Kuwait for the construction by it of one part of a major highway construction project known, overall, as the Kuwait Motorway Project.

The pleadings involved some complexity, which was in part lessened by the court's rulings at the close of all of the evidence allowing several motions for directed findings.

ODC filed a complaint against Sangamo in three counts. In Count 1 it alleged that it became aware of the proposed Kuwait Motorway Project in early 1975; that it introduced the project to Sangamo; that an oral contract was made between ODC and Sangamo whereby ODC undertook to render to Sangamo those services which, hopefully, would permit Sangamo to participate in that project; that ODC did render to Sangamo assistance, advice, and services which enabled Sangamo to compete for contracts on the motorway project, and that, as a consequence thereof, Sangamo did obtain a contract in the amount of $60,000,000 for the construction of one phase of that project. ODC prays judgment against Sangamo for a commission under that oral contract in the amount of 1¼ percent of the gross amount of Sangamo's Kuwaiti contract, including any extras which may have enhanced the $60,000,000 value of its contract.

Alternative Count 2 of the complaint rests upon a quantum meruit theory for the recovery by ODC of the reasonable value of its services rendered to Sangamo related to the Kuwait project.

In Count 3 ODC prays a declaratory judgment that it is entitled to receive a commission and finder's fee not only upon the Motorway contract but also upon any other contracts which might be subsequently obtained by Sangamo in Kuwait or elsewhere in the Middle East, as a result of ODC's services in introducing Sangamo to the prospects in the geographic area.

Sangamo answered, denying the material allegations of the complaint. By its affirmative defenses, Sangamo asserted that the claim is barred by the statute of frauds, and averred that any purported agreement between ODC and Sangamo is illegal under Kuwaiti law and thus not enforceable. It also submitted an amended affirmative defense averring illegality of payments.

UDC entered the cause by intervention, with a complaint against Sangamo and a cross-complaint against ODC. Its counts against Sangamo are predicated upon its allegations that there existed a joint venture between Farouki and ODC with respect to the services rendered to Sangamo related to the highway project; that UDC is the assignee of Farouki's rights in that joint venture; and that UDC is entitled to recover from Sangamo compensation for services rendered by that alleged joint venture.

Its counts against ODC are predicated upon its allegations that such a joint venture existed, that Farouki agreed with ODC that ODC would obtain a written contract with Sangamo for the payment to the joint venture of a commission of between 2 and 5 percent of the gross price of the Sangamo construction project, and that ODC negligently failed to obtain such written contract. It prays judgment for damages against ODC in the event that the court should find that no binding obligation of Sangamo existed for the payment of a commission of between 2 and 5 percent of the construction contract price. Its Count 5 prays judgment that UDC, as assignee of Farouki, is entitled to 50 percent participation in any judgment entered for ODC against Sangamo.

Sangamo and ODC denied all material allegations of the intervening complaint and the cross-complaint, respectively.

At the outset of the trial the court ruled that the substantive rights of the respective parties are governed by the law of Kuwait. At the close of the evidentiary record, Sangamo moved for a directed finding in its favor upon each of the three counts of ODC's complaint and upon all counts of UDC's intervening complaint which purported to state a cause of action against Sangamo. ODC moved for a directed finding upon each count of the cross-complaint, and for a directed finding against Sangamo upon each of its defenses.

Responsive to those motions, the court ruled that directed findings would be entered:

a. In favor of Sangamo on Count 3 of ODC's complaint and on Counts 1 through 3, inclusive, of UDC's intervening complaint against Sangamo.

b. In favor of ODC upon Counts 4 and 6, the negligence counts, of UDC's cross-complaint.

c. In favor of ODC, against Sangamo, rejecting the defense based upon the statute of frauds and rejecting the amended defense of illegality.

Judgment will now enter finalizing those rulings.

The critical factual issues presented by the remaining Counts 1 and 2 of the original complaint and the remaining Count 5 of UDC's cross-complaint against ODC can thus be framed. First, was there an oral contract between ODC and Sangamo under which Sangamo agreed to compensate ODC for services extended to Sangamo related to the Motorway project? Second, if there be no proved oral contract, did ODC render to Sangamo services related to that project for which ODC is entitled to compensation under an implied contract or quantum meruit theory? Third, in the event that ODC does recover from Sangamo under either theory, is UDC entitled to a judgment against ODC for its participation in the proceeds of that judgment? Fourth, as a mixed question of law and fact, were the proved activities of ODC and/or Farouki on behalf of Sangamo, related to the project, illegal under the law of Kuwait, with the consequent result that any recovery is barred?

At the outset, the court must dispose of a motion by UDC to, in effect, reopen the evidentiary record to permit it to introduce seven additional exhibits. The evidentiary record, made over a period of four days, was concluded on December 1, 1979. In addition to the reporter's transcript of testimony, it includes more than 150 exhibits introduced by the several parties and the transcripts of six depositions. The pending motion was filed on March 20, 1980.

The thrust of the motion is that the seven exhibits sought to be introduced were identified by trial testimony; that, inadvertently, UDC failed to move their admission in evidence before the evidentiary record was closed; and that counsel first became aware of that omission when a list of exhibits in evidence was received by counsel several weeks after December 1. It is noted that the motion does not specifically indicate what relevant bearing each of the proposed exhibits would have upon the evidentiary record.

The motion is denied. The principle that a trial court is vested with a large discretion in the conduct of trials and in dealing with the order in which evidence will be received, requires no citation of authority. There can be no doubt that that discretion extends to the reopening of a previously-closed evidentiary record in a proper case. However, that discretion to reopen should not be exercised in a situation such as this, which would either preclude an orderly procedure or would require the reconvening of a trial proceeding. Although the court has no reason to doubt the sincerity of counsel's conclusion that no party would be prejudiced by the supplementation of the record with these exhibits, the court, nevertheless, must take the position that the exhibits should not be received absent a context which would afford all parties a full opportunity to record their respective positions with respect thereto.

In addition to the evidentiary record, the several parties have presented for the court's consideration voluminous sets of proposed...