USB Acquisition Co., Inc. v. Stamm

660 So. 2d 1075, 1995 WL 467820
CourtDistrict Court of Appeal of Florida
DecidedAugust 9, 1995
Docket92-3138
StatusPublished
Cited by20 cases

This text of 660 So. 2d 1075 (USB Acquisition Co., Inc. v. Stamm) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
USB Acquisition Co., Inc. v. Stamm, 660 So. 2d 1075, 1995 WL 467820 (Fla. Ct. App. 1995).

Opinion

660 So.2d 1075 (1995)

U.S.B. ACQUISITION COMPANY, INC., a Florida corporation, d/b/a U.S. Block Corporation, and Walter R. Sjogren, Sr., Appellants/Cross-Appellees,
v.
Allen G. STAMM, William Bell, and Thomas Lagano, Appellee/Cross-Appellants.
v.
UNITED STATES of America; Christiansen, Jacknin & Tuthill, P.A., a Florida professional association, as escrow agent, and T.A.W. Corporation, f/k/a U.S. Block Corporation, Appellees.

No. 92-3138.

District Court of Appeal of Florida, Fourth District.

August 9, 1995.
Rehearing Denied October 17, 1995.

*1077 Jane Kreusler-Walsh of Jane Kreusler-Walsh, P.A., West Palm Beach, for appellants/cross-appellees.

F. Lee Bailey and Ann Fishman of Bailey, Fishman, Freeman & Ferrin, West Palm Beach, for appellee/cross-appellant-Allen G. Stamm.

Basil E. Dalack of Saylor & Gwynn, West Palm Beach, for appellees/cross-appellants-William Bell and Thomas Lagano.

OWEN, WILLIAM C., Jr., Senior Judge.

Appellant, buyer of a concrete manufacturing business under the terms of an acquisition agreement, sued the sellers, Appellees, for damages alleging breach of contract and various tort theories. Appellees counterclaimed for the balance of the purchase price represented by promissory notes secured by mortgages on the equipment and real property. The issues raised by Appellant as well as the issues raised by Appellees as cross-appellants all arise out of rulings by the trial court on the parties' respective post-verdict motions. We affirm in part and reverse in part.

The following are the salient facts. Appellees Stamm, Bell and Lagano decided to operate a concrete manufacturing business under the corporate name of U.S. Block. Stamm, who owned 50% of the stock, provided the equipment, including a used ready mix plant with a capacity of 100 yards per hour. Bell and Lagano each owned 25% of the stock and operated the business. Production began in March 1986 but because of operating losses Appellees decided in July 1986, to look for a buyer. The business was listed with a broker who prepared sales brochures describing the ready mix plant as new with a capacity of 250 yards per hour. This brochure came to the attention of Mr. Sjogren, the owner of a sand extraction company in New Jersey, who was interested in learning the ready mix concrete business so that he could operate a similar type business in conjunction with his sand extraction business. Over the next three or four months Sjogren and several of his associates, including one Carl Stott, a CPA, and chief financial officer of his sand extraction company, made visits to the U.S. Block plant, inspecting the facilities and reviewing financial statements or compilations, and meeting with Lagano on several occasions. Stott, who was experienced in business acquisitions, recognized that the information in the sales brochure was unreliable and made his own examination of the equipment inventory. As to reviewing the financial condition of the business, however, Stott did little more than examine financial statements or compilations which showed losses for all of the preceding months of operation except for November and December, which showed profits. Although Stott had reservations about the purchase, particularly as to why the sellers would go through a period of losses and then *1078 wish to sell as soon as the business began to become profitable, he apparently felt satisfied after Lagano told him that January would also be a profitable month. These various negotiations led ultimately to the parties executing an asset purchase agreement and closing on the sale of the business in February 1987.

Following the sale of its assets, U.S. Block changed its name to T.A.W. Corp. and the buyer, U.S.B. Acquisition, Inc., changed its name to U.S. Block. By June 1987, when it became apparent that, contrary to Mr. Lagano's rosy predictions, the business was not going to turn profitable, Mr. Sjogren went to Stamm, Bell and Lagano and sought, unsuccessfully, to have the sale rescinded. In September of that year, Appellant brought this action against Stamm, Bell, Lagano and T.A.W. Corp. seeking rescission and, alternatively, damages for breach of contract and for fraud. Shortly thereafter, the buyer defaulted on payments due on the promissory notes which formed part of the consideration for the purchase, whereupon Lagano, with the knowledge and approval of Stamm and Bell, entered the premises of U.S. Block and removed some trucks and equipment. As a result of that conduct, Appellant amended its pleadings to add counts for trespass, conversion and the tort of intentional interference with a business relationship. In due course, Appellees brought an action against the buyer as maker, and Sjogren, as guarantor, for the balance due on the promissory notes.[1] At or before trial, the buyer's counts for rescission and fraud were dropped, and this case was tried on the remaining counts of the complaint and the sellers' counterclaim on the promissory notes. The court reserved ruling on the several motions for directed verdict of the respective parties and submitted the case to the jury with an itemized or special verdict form. Relative to the issues which we decide here, the jury (1) found that the sellers had breached the asset purchase agreement, for which it awarded to the buyer damages of $131,000 for the breach concerning the batch plant and damages of $800,000 for the breach concerning the operating losses; (2) found that Stamm and Lagano had committed a trespass for which it awarded damages of $4,244.36; and (3) found that Stamm, Bell and Lagano had tortiously interfered with the buyer's business relationships, for which it awarded damages of $16,000.

The first and principal issue raised by Appellant is that the trial court erred in granting the sellers' post-trial motion for directed verdict on the issue of Plaintiff's operating losses and deleting from the verdict and the subsequent judgment the award of $800,000. There was no error in that respect.

By paragraph 10 of the Asset Purchase Agreement, the sellers warranted and represented, relevant to this case, that (1) the permits and licenses required for operation of the business and use of the real property had been obtained and were in full force and effect; (2) the financial statement of the company dated January 11, 1987 reflecting the financial status of the company as of December 31, 1986 was accurate and complete in all material respects; (3) the company had no liabilities or obligations except as reflected on a separate exhibit; and (4) the company's accounts receivable to be assigned to the buyer at closing were currently collectible at the aggregate gross recorded amounts thereof. The buyer's count for breach of contract alleged in essence that these warranties had been breached as a result of which the consideration paid for the business was far greater than its actual value. The damage sought under this count was the difference between the value of the business as represented to the buyer by such warranties, and the actual value of the business as it existed on the date of closing. Although the buyer offered evidence from which the jury could and did find the sellers had breached the warranties, the buyer offered no evidence as to the damages alleged, i.e., the difference between the value of the business as it would have been had it been as represented and warranted by the sellers and the actual value of the business as it *1079 existed on the date of closing.

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Bluebook (online)
660 So. 2d 1075, 1995 WL 467820, Counsel Stack Legal Research, https://law.counselstack.com/opinion/usb-acquisition-co-inc-v-stamm-fladistctapp-1995.