Kule Resources, Ltd. v. Reliance Group, Inc.

69 A.D.2d 753, 415 N.Y.S.2d 13, 1979 N.Y. App. Div. LEXIS 11363

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: April 3, 1979
• Status: Published

Opinions

Order of the Supreme Court, New York County, entered October 20, 1978, denying defendant’s motion for summary judgment reversed, on the law, and the motion for summary judgment granted, without costs or disbursements. Plaintiff (Resources) sues to recover a finder’s fee. It alleges that on or about September 14, 1976, it was retained by defendant (Reliance) to find a purchaser for Disclosure Incorporated (Disclosure) a subsidiary of defendant; that it procured Snyder, Hixon & Associates (Snyder, Hixon) as purchaser and that by reason thereof it became entitled to the fee fixed in the agreement between the parties. By letter agreement dated September 14, 1976, Reliance retained Resources to effect the sale of all of the stock of Disclosure, or the sale of substantially all of its assets, to a third party or parties. In return therefor, Reliance agreed to make certain payments to Resources. Among other provisions, the agreement contained a stipulation that "Resources agrees to obtain the prior written consent of Reliance before approaching third parties with respect to a proposed Disclosure sale. Reliance may withhold its consent in its sole discretion.” It is undisputed that Resources was aware of Reliance’s desire to divest itself of Disclosure prior to the entry into the agreement of September 14, 1976. Indeed, it is conceded that Resources suggested two potential purchasers of Disclosure prior to that date, one of which was Butler Publishing Company (Butler). Resources contends that the other prospective purchaser named by it was Snyder, Hixon. Reliance does not dispute that a second potential purchaser was mentioned to it. However, it contends that it has no recollection of the name. Reliance indicated its willingness to pursue the proposed sale to Butler. Indeed, on September 16, 1976, it sent a letter to Resources authorizing it to go forward with the Butler discussions and requiring, as a condition thereto, a letter from Smith, Barney & Co., Inc., (which apparently was working together with Resources on the Butler deal). No such letter was ever sent. Insofar as Snyder, Hixon was concerned, Reliance directed that it be placed "on the back burner”. While the proposed acquisition by Butler was pursued vigorously, it never matured. In June, 1977 Reliance was approached by representatives of Snyder, Hixon regarding the purchase of Disclosure. Seemingly, Snyder, Hixon had ascertained at a trade show that Disclosure was for sale and decided to enter the bidding for its purchase. On July 29, 1977 the sale of Disclosure by Reliance to Snyder, Hixon was consummated. Special Term, citing Jordan v Levy (16 AD2d 64) held that the timing of the motion so as to make it returnable "on the eve of trial” frustrated the purpose of summary judgment and denied the motion. We think that Jordan is here inapplicable. The depositions were not completed until July 14, 1978. As soon as the transcripts were available, this motion was made. Inasmuch as the motion depends largely on evidence adduced at the depositions it could not have been made sooner. Accordingly, timeliness should not have been made the basis for denial. There is here no issue to be determined by the trier of the fact. Concededly, Rebanee never gave Resources its prior written consent to deal with Snyder, Hixon, a condition to which both parties, by their agreement, assented. Nor is there any claim that Reliance wrongfully used the disclosure of the name of Snyder, Hixon by Resources. In short, there is no more than the not unusual coincidence in cases such as this that Resources mentioned the name of a party which might be interested in the acquisition of Disclosure and that the party mentioned, through sources having absolutely no relationship to Resources, ultimately became the purchaser. This is scarcely enough to require a trial. Concur—Sullivan, Silverman and Bloom, JJ.