A/S Apothekernes Laboratorium for Specialpraeparater v. I.M.C. Chemical Group, Inc., 83-1186

• Decision Date: 23 January 1984
• Docket Number: No. 83-1186,83-1186
• Parties: A/S APOTHEKERNES LABORATORIUM FOR SPECIALPRAEPARATER, Plaintiff-Appellant, v. I.M.C. CHEMICAL GROUP, INC., and Dr. M.B. Gillis, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1140

725 F.2d 1140

A/S APOTHEKERNES LABORATORIUM FOR SPECIALPRAEPARATER Plaintiff-Appellant, v. I.M.C. CHEMICAL GROUP, INC., and Dr. M.B. Gillis Defendants-Appellees.

No. 83-1186.

United States Court of Appeals Seventh Circuit.

Argued Nov. 10, 1983.

Decided Jan. 23, 1984.

Robert E. Shapiro, Kirkland & Ellis, Chicago, Ill., for plaintiff-appellant.

John J. Arado, Wildman, Harrold, Allen & Dixon, Chicago, Ill., for defendants-appellees.

Before ESCHBACH, POSNER and FLAUM, Circuit Judges.

POSNER, Circuit Judge.

This diversity suit grows out of unsuccessful negotiations between the plaintiff, a Norwegian company we shall call Apothekernes for short, and the defendants, an American company called IMC Chemical Group and its president, Dr. Gillis, for the sale by IMC to Apothekernes of IMC's Biochemicals Division. The district court granted summary judgment for IMC on three of the five counts in the complaint and certified its dismissal of those counts for an immediate appeal under Rule 54(b) of the Federal Rules of Civil Procedure. Although the defendants have not contested our appellate jurisdiction, we have, of course, an independent obligation to make sure we do not exceed it. Rule 54(b) allows a district judge to certify for immediate appeal a judgment that does not dispose of the entire lawsuit before him if "more than one claim for relief is presented," but we must decide whether the dismissed and the retained counts are separate claims or only one claim.

After prolonged negotiations Apothekernes and IMC signed in December 1977 a letter of intent that set forth in considerable detail "the terms upon which we ... intend to negotiate and consummate an Agreement of Sale" for the Biochemicals Division's assets but that stated in the concluding paragraph, "All of the above is subject to our concluding an Agreement of Sale which shall be acceptable to the Boards of Directors of our respective corporations, whose discretion shall in no way be limited by this letter ...." Negotiations continued over several issues that had not been resolved in the letter of intent and by February 23 only three remained. IMC refused to budge on any of these issues. The next day (according to Apothekernes) Apothekernes' president met with Gillis and accepted IMC's terms. Three days later, however, the president of IMC's parent corporation told Gillis that the deal was a "no go," whereupon Gillis got the members of IMC's board of directors to sign a "Unanimous Written Consent of Directors in Lieu of Meeting"--dated the same day (February 27)--rejecting the terms set forth in the letter of intent. Counts I and II of the complaint allege that IMC broke its contract to sell the Biochemicals Division to Apothekernes (Count I seeks specific performance, Count II damages); Count III that the defendants are "estopped from refusing to pay to plaintiff any and all damages suffered by plaintiff as a result of" the defendants' "representations, promises and agreements ... to sell the Assets and Business to plaintiff ..."; and Counts IV and V that the defendants, either intentionally or recklessly, "fraudulently misrepresented" that IMC intended to sell Apothekernes the Biochemicals Division.

If Counts I and II had alleged that the letter of intent was the complete contract between the parties that the defendants had broken, and if the district judge had dismissed just those two counts, it might be possible to view the retained counts as setting forth a separate claim from the dismissed counts. The contract claim of Counts I and II would then rest on a single document while the claims in the remaining counts, claims sounding in estoppel and misrepresentation, would rest on statements made and intentions conceived by the defendants apart from the document itself. Although all the claims would have arisen from a common factual setting--the negotiations--there might be enough factual differences between the documentary contract claim on the one hand and the estoppel and fraud claims on the other to allow the district judge to enter an appealable judgment on the contract claim alone. See Minority Police Officers Ass'n v. City of South Bend, 721 F.2d 197 (7th Cir.1983).

However, the contract claim does not rest on just the letter of intent; nor did the district court enter judgment on that claim alone. Concerned that the "whose discretion shall in no way be limited by this letter" clause in the letter of intent would prevent a reasonable trier of fact from construing the letter as a contract, Apothekernes has been careful not to rest its contract claim on so narrow a base. Rather, as explained in its opening brief in this court, its claim is "that the parties intended to be bound when they reached a full 'meeting of the minds' on February 24, 1978." This is the date not of the letter of intent but of the last meeting between the presidents of the two companies. And the evidence that Apothekernes relies on to show that a contract was made on that date includes statements during the negotiations up to and including February 27, when they were broken off--includes, in Apothekernes' words, "IMC's repeated statement that it intended to dispose of the Terre Haute assets, a long history of tough negotiations leading to a Letter Agreement setting out the basic elements of the sale, an ultimate 'meeting of the minds' on all outstanding terms of the sale contract, and an ill-disguised effort [the "Unanimous Consent" signed by IMC's board] by IMC to find some way out of what it recognized was a completed deal." Apothekernes also has an alternative...