| Azimut-Benetti S.p.A. v Magnum Mar. Corp. |
| 2008 NY Slip Op 08260 [55 AD3d 483] |
| October 30, 2008 |
| Appellate Division, First Department |
| Azimut-Benetti S.p.A., Appellant-Respondent, v MagnumMarine Corporation et al., Respondents-Appellants. |
—[*1] Pavia & Harcourt, LLP, New York (Adam D. Mitzner of counsel), forrespondents-appellants.
Orders, Supreme Court, New York County (Karla Moskowitz, J.), entered July 11, 2007,which denied defendants' motion for summary judgment dismissing the complaint, and denied inpart plaintiffs' motion to compel disclosure, unanimously modified, on the law, to grant themotion for summary judgment, and the appeal otherwise dismissed as academic, without costs.The Clerk is directed to enter judgment dismissing the complaint.
Plaintiff seeks to enforce a two-page "preliminary contract," drafted by its chairman, topurchase the assets of defendant Magnum, a manufacturer of luxury power yachts, fromdefendant Theodoli, Magnum's president, CEO and sole stockholder, for $10 million. Thepreliminary contract, as translated from Italian, states that the parties "bind themselves to sign afinal contract and to execute the sale within 90 days from today . . . bindingthemselves to create any ulterior contract, declaration and writing necessary or useful to producethe effect foreseen by the present preliminary." At the bottom of the writing Theodoli wrote byhand "Agreed to in principal [sic] subject to approval by my attorney—thesalary/remuneration is in exchange for 10 working days" (a clause in the typed portion of thepreliminary contract called for an "emolument" of $100,000 yearly for four years). Plaintiffadmits that it never received any communication from any lawyer for defendants approving thepreliminary contract, but asserts that circumstances, including the preparation of a draft licenseagreement by defendants' attorney, "lead[ ] to the conclusion that [defendants'] attorney approvalwas initially attained" within the time contemplated by the preliminary contract and that therewas "never any clear indication that said approval was ever withheld" in the aftermath of thepreliminary contract. Based on these circumstances, plaintiff allegedly began performance of thepreliminary contract and presently seeks disclosure of communications between defendants andtheir attorneys.
We hold that defendants' attorney's approval of the preliminary contract within the stipulated90-day period was a condition precedent to the formation of a binding contract (see TroutAcquisition Corp. v Penn Cent. Corp., 156 AD2d 298, 299 [1989]), and find that suchapproval was never obtained. This conclusion is reinforced by the language calling for a "finalcontract" and indeed the very denomination of the contract as "preliminary" (see RichbellInfo. Servs. v Jupiter Partners, 309 [*2]AD2d 288, 297[2003]). While Theodoli's e-mails to Vitelli conveyed optimism concerning the likelihood andimminence of attorney approval, they did not suggest that approval had been obtained, andindeed persisted in the necessity of such approval. Defendants' attorney's preparation of a draftlicence agreement, rather than an asset purchase agreement suggests, if anything, disapproval ofthe preliminary contract. Nor is there merit to plaintiff's other causes of action. There can be novalid claim of implied contract or promissory estoppel where the purported contract indicates alack of intent to be bound (see Prestige Foods v Whale Sec. Co., 243 AD2d 281 [1997];Steele v Delverde S.R.L., 242 AD2d 414, 415 [1997] [promise must be "clear andunambiguous"]), and a contract cannot be implied where there is an express contract covering thesame subject matter (see Julien J. Studley, Inc. v New York News, 70 NY2d 628, 629[1987]). Nothing in the record suggests bad faith on defendants' part. In view of the foregoing,the balance of the appeal relating to disclosure is academic. Concur—Lippman, P.J.,Mazzarelli, Williams, Buckley and Renwick, JJ. [See 2007 NY Slip Op 32109(U).]