Opinion
02 CIV. 111 (DLC)
September 10, 2003
William F. Mueller, Clement, Mueller Tobia, P.A., Morristown, New Jersey for Plaintiff and Counterclaim Defendants
Matthew A. Schiappa, Clement, Mueller Tobia, P.A., Morristown, New Jersey for Plaintiff and Counterclaim Defendants
Larry Krantz, Krantz Berman LLP, New York, New York for Defendant and Counterclaim Plaintiff
OPINION AND ORDER
This case has a tortured and topsy-turvy history for all involved. The defendant in this action, Sandeep Dalal ("Dalal"), brings this motion under Rule 59, Fed.R.Civ.P., to amend the judgment awarded on February 20, 2003 (the "February 20 Opinion"), or in the alternative for a new trial. The February 20 Opinion was itself a ruling on a Rule 59 motion. It found that judgment should be issued in favor of plaintiff India.com, Inc. ("ICI") and its corporate parent and counterclaim defendant EasyLink Services Corporation ("EasyLink"). The February 20 Opinion reversed the opinion issued following the bench trial on December 9, 2002 (the "December 9 Opinion") in favor of Dalal against ICI and EasyLink. Through the pending motion Dalal essentially seeks reinstatement of a trial verdict in his favor. For the reasons described below, judgment will once again be entered in Dalal's favor on his claim that he is a third-party beneficiary to a contract that EasyLink breached.
The judgment was actually entered on February 27, 2003.
This Opinion will refer only to EasyLink when discussing ICI and EasyLink, since ICI is essentially a defunct corporate subsidiary of EasyLink and was, during the relevant period, controlled completely by EasyLink.
In this motion, Dalal contends that the February 20 and December 9 Opinions overlooked controlling authority under New York law that would have permitted Dalal to recover on his breach of contract claim. Dalal argues additionally that he should have been granted a new trial because the February 20 Opinion applied the incorrect standard in its reversal of the December 9 Opinion and because he was severely prejudiced by the fact that EasyLink had not previously presented the legal argument on which the February 20 Opinion relied. EasyLink argues that Dalal cannot recover on his breach of contract claim under New York law. EasyLink further contends that Dalal is not entitled to a new trial and that Dalal's Rule 59 motion should be limited to issues raised by the first Rule 59 motion. Clearly, some history is in order.
Background
The findings of fact issued following the bench trial included in substance the following. This action arises from the failed sale of another casualty of the dot.com implosion. In May 2000, EasyLink formed ICI, an internet services company with offices in Bombay, India and New York City. ICI provided various services through its internet portal including information related to India, web consulting services, and the sale of hardware and software. After suffering heavy losses with ICI, EasyLink decided in March 2001 to sell its subsidiary.
The defendant, who had been employed as a senior corporate officer at ICI, signed on April 18, 2001, the first of three broker agreements with EasyLink for the sale of ICI (the "First Agreement"). The First Agreement provided, inter alia, that Dalal would be the exclusive broker for the sale of ICI, that Dalal would receive a commission based upon the amount and timing of the sale, that ICI could not refuse any offer above half a million dollars, and that the agreement would expire after a specified time period.
For our purposes, the critical provision of the First Agreement is Section 2(b), which limited EasyLink's ability to reject an offer for ICI and reads in pertinent part:
[I]n the event of a Sale of India.com's portal business, payable at closing of such Transaction a fee payable by [ICI] from the proceeds of the Transaction as follows. Mr. Dalal shall receive such fee (i) in the same form and at the same time as India.com or its shareholders receives such proceeds for the portion of the Aggregate Consideration received that does not constitute liabilities assumed by the buyer in the transaction and (ii) in cash for the portion of the Aggregate Consideration that constitutes liabilities assumed by the buyer in the Transaction. For Aggregate Consideration of (1) up to and including $1.5 million, five persent (5%), (2) above $1.5 million and up to and including $3.0 million, seven and one-half percent (7.5%), (3) above $3.0 million and up to and including $5.0 million, ten percent (10%), and (4) above $5.0 million, twelve and one-half percent (12.5%) (for example if the Aggregate Consideration is $3.7 million then Sandeep will receive 7.5% X $3.7 million). In no event will [ICI] elect not to accept such a Sale when the Aggregate Consideration represents a valuation on India.com's entire portal business of at least $0.5 million.
(Emphasis supplied.) Section 6 of the First Agreement provided that Dalal's right to payment would expire within 90 to 180 days depending upon various conditions.
By May 2001, EasyLink, with the assistance of the defendant, had found a buyer, Business India ("BI"), a media company based in India, willing to sign a term sheet. At the end of July, EasyLink and Dalal signed a second broker agreement (the "Second Agreement") which extended the expiration dates in the First Agreement by thirty days, to November 14, 2001. It confirmed that payment under the formula enumerated in Section 2(b) of the First Agreement would also be extended. EasyLink and BI signed an escrow agreement in August of 2001, which provided that BI would deposit a specified amount into the escrow account and that this amount would either be applied to the sale of ICI or would be forfeit to EasyLink in the event that the sale had not closed by the end of November 2001.
ICI continued to experience financial difficulties throughout the summer of 2001. For example, EasyLink could no longer afford its monthly lease payments for ICI's offices and defaulted on the lease. Under the threat of legal action from the landlord, ICI vacated the office space and signed a settlement agreement with its landlord, with EasyLink guaranteeing payment. Additionally, EasyLink's legal counsel in India stopped work for a portion of the summer because EasyLink had not paid its legal bills for six months. Finally, EasyLink negotiated a payment arrangement with ICI's management and staff who had not been fully paid during the summer.
On October 26, EasyLink and BI signed a Stock Purchase Agreement ("SPA") for the sale of ICI for a total consideration of $8 million. The SPA contained a clause which specifically identified Dalal as the broker for the sale and indicated that Dalal would be paid under a separate broker agreement. The SPA also contained a provision which expressly denied the creation of any third-party beneficiary rights under the contract (the "Negating Clause"). The SPA further required BI to apply for the required government approvals for the sale by November 7, 2001, and permitted EasyLink to terminate the SPA if the application for these approvals had not been made by this date. The SPA gave both parties the unilateral right to terminate the transaction if it had not closed by January 31, 2002, provided that the party seeking to terminate had not been the cause of the failure to close.
In general terms, the total consideration consisted of a cash payment at closing of $250,000, a promissory note (the "Note") for future cash payments of $6.75 million to be paid over 18 to 24 months and BI stock worth $1 million. The Note contained a discount or reward for earlier payment. The required total payments thus varied from $3.37 million on the earliest payment schedule up to $6.75 million for latest payment schedule.
Section 3.16 of the SPA entitled "Brokers: Payments" provides
Except as set forth in the Disclosure Schedules, no broker, investment banker, financial advisor or other person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement.
Schedule 3.16 of the SPA indicates
[EasyLink] has an agreement with Sandeep Dalal pursuant to which he is entitled to fees payable upon the terms and conditions set forth therein.
Section 12.5 of the SPA is entitled "No Third Party Beneficiaries" and provides:
Neither this Agreement or any provision hereof nor any Schedule, exhibit, certificate or other instrument delivered pursuant hereto, nor any agreement to be entered into pursuant hereto or any provision hereof, is intended to create any right, claim or remedy in favor of any person or entity, other than the parties hereto and their respective successors and permitted assigns and any other parties indemnified under Article XI.
On the same date the SPA was signed, the defendant and EasyLink signed their third broker agreement (the "Third Agreement"), an agreement that Dalal had drafted. The Third Agreement did not include the sliding scale on which the first two agreements relied to compute Dalal's compensation. Instead, it provided that the defendant would be paid the maximum amount of compensation — a commission of 12.5% of the total consideration — in the event that the transaction with BI closed pursuant to the SPA. The Third Agreement, unlike the Second Agreement, did not extend the expiration periods of the First Agreement, which were due to expire on November 14. As a consequence, the Third Agreement made any payment to Dalal entirely dependent on the SPA and the payment of consideration by the Buyer. There was no preservation of the obligation contained in Section 2(b) of the First Agreement (and extended by the Second Agreement) that EasyLink could not refuse any offer greater than one-half million dollars.
Upon the signing of the SPA the parties turned their attention to the application process for obtaining the appropriate government approvals. As both parties understood, the cooperation of both parties was necessary for the application process to be completed successfully. Prior to the November 7 deadline BI was prepared to file the application, but was thwarted when EasyLink's legal counsel in India engaged in another work stoppage because of unpaid bills. As a result, application for the government approvals was not made prior to the November 7 deadline. This failure was directly due to EasyLink's failure to pay its Indian counsel. The parties nonetheless continued to work together to obtain the government authorizations.
On December 19, prior to the closing of the sale, EasyLink sent a letter to BI terminating the SPA. The termination letter explained that EasyLink was terminating the sale because BI had not filed the application for a government approval by November 7, the deadline specified in the SPA. EasyLink informed BI, however, that it still wanted to pursue the transaction and offered new terms for the sale.
EasyLink breached the SPA by improperly terminating it. It had caused the failure to meet the November 7 deadline. EasyLink decided to terminate the SPA because it found itself trapped between the terms of the SPA and the demands of creditors. It was itself in breach of the SPA by that time and faced an obligation to pay $150,000 in liquidated damages. It hoped that by terminating the SPA it would have more freedom to reach agreements with its creditors and also to close a deal with BI under new terms. On December 20, the defendant told EasyLink that he believed that he was entitled to his full commission fee, since the transaction would have closed but for delays created by EasyLink in the closing of the transaction.
The SPA contained a clause that provided for liquidated damages in the amount of $150,00 to be paid by EasyLink if the closing had not occurred by January 31, 2002, and BI terminated the SPA as a result of the failure of EasyLink to comply with any requirements of the SPA.
On January 3, 2002, EasyLink filed this action under the name of its subsidiary ICI. The complaint alleged claims for breach of contract, breach of fiduciary duty, tortious interference with economic opportunity, misrepresentation, and breach of the covenant of good faith and fair dealing, and sought a declaratory judgment that it owed no fee to Dalal. Dalal asserted counterclaims of breach of contract, promissory estoppel, quantum meruit, tortious interference with contract, third-party beneficiary under the SPA, and breach of the covenant of good faith and fair dealing.
Following the close of discovery, in accordance with the Individual Practices of this Court in civil bench trials, and without objection, the parties simultaneously submitted the direct testimony of their trial witnesses by affidavit as well as their documentary evidence in advance of trial. These documents were submitted on November 23, along with their findings of fact, conclusions of law, and trial briefs. As permitted by the Individual Practices of this Court, Dalal submitted a reply memorandum of law. EasyLink elected not to submit a reply memorandum of law. Trial was scheduled to begin on December 9.
At the final pretrial conference held on December 4 (the "December 4 Conference"), the Court outlined the legal issues it believed the parties were pursuing at trial based on its review of their trial submissions. This review indicated that EasyLink was pursuing one claim: its declaratory judgment claim that it had not breached its broker agreements with Dalal; and that Dalal was pursuing two claims: (1) a breach of contract claim premised on Section 2(b) of the First Agreement when read in combination with all three broker agreements, and (2) a third-party beneficiary claim based upon the SPA. The review also confirmed that if Dalal prevailed on either claim, he also intended to press a bad faith dilution claim based upon EasyLink's forgiveness of a $5 million loan it had made to ICI. When both parties indicated after the Court's review of their claims that they wished to pursue the other claims they had asserted in their pleadings, the Court gave the parties one day to identify any legal analysis contained in their submissions that would support additional claims that the Court had not listed at the conference, and to present legal authority and argument as to why the trial should not be restricted to the legal issues the parties addressed in their November 23 submissions. Neither party made any such submission.
At the December 4 Conference, the only legal argument that Dalal's attorney indicated that he might wish to press as an alternative claim was a quantum meruit claim.
At the December 4 Conference, the Court also outlined the host of defenses that both parties, but in particular EasyLink, was pressing. They included EasyLink's argument that the sale constituted a sale of securities, that Dalal was not a registered broker with the Securities and Exchange Commission ("SEC") as required by the Securities and Exchange Act of 1934, and that Dalal was therefore not entitled to a fee. EasyLink also asserted that the only operative agreement by the date of the termination of the SPA was the Third Agreement and that payment under that agreement was conditioned explicitly on the closing of the sale — an event which did not occur. It also argued that Dalal had not produced a ready, willing and able buyer. EasyLink never argued in its written submissions that, as a matter of New York law, Dalal could not be a third-party beneficiary under the SPA. In fact, EasyLink did not directly address the third-party beneficiary claim by Dalal. On December 6, the parties notified the Court that they had agreed not to cross-examine each others' afffiants.
At the trial held on December 9, the parties made brief opening statements, offered their objections to each others' evidentiary submissions, and presented their summation argument based on the trial record. Following a recess the Court delivered its findings of fact and conclusions of law. It noted that Dalal had relied on two theories of recovery in his own findings of fact and conclusions of law: "that he is entitled to a full commission for EasyLink's breach of the contract based on Section 2(b) of the [First Agreement], and that he's entitled to recover as a third-party beneficiary of the SPA for EasyLink's wrongful termination of the SPA." Dalal's claim for breach of contract was denied on the ground that the "Third Agreement had not extended the expiration period of the [First Agreement]" and that, consequently, "Section 2(b) of the [First Agreement] had expired by the time ICI terminated the SPA on December 19, 2001" and was therefore "no longer enforceable." The December 9 Opinion did find, however, that EasyLink had improperly terminated the SPA and was liable to Dalal as a third-party beneficiary. The determination that EasyLink had improperly terminated the SPA was based on the finding that it had brought about the failure of the condition precedent upon which it had relied to terminate the SPA. Specifically, the December 9 Opinion found that EasyLink's failure to pay the fees of its legal counsel in India had prevented BI from making its application for governmental approvals prior to the deadline in the SPA.
The December 9 Opinion did not address whether the Third Agreement could provide an independent basis for a breach of contract claim or a claim for breach of the covenant of good faith and fair dealing.
The December 9 Opinion also found that EasyLink had in any event waived its right to rely on this provision of the contract by continuing to attempt to close the sale for several weeks after the deadline had passed. The December 9 Opinion further held that the identification of the defendant as a broker within a schedule of the SPA was sufficient to establish him as a third-party beneficiary under the contract. Applying rules of contract construction, the December 9 Opinion held that that specific language in the schedule superseded the general language in the Negating Clause. It noted that the parties had specifically bargained for the inclusion of Dalal in the SPA as a beneficiary and both of them intended him to be its beneficiary. A final judgment for the defendant and against counterclaim defendant EasyLink was entered on December 17, and awarded Dalal $931,364.00.
The First Rule 59 Motion
Following the December 9 Opinion, EasyLink filed a motion pursuant to Rule 59, Fed.R.Civ.P., to amend the judgment reflected in the December 9 Opinion, or in the alternative for a new trial. EasyLink argued for the first time that Dalal could not be a third-party beneficiary as a matter of law, since the existence of the Negating Clause in the SPA was controlling under New York law. EasyLink further contended that, even assumingarguendo that Dalal was a third-party beneficiary, he could not stand in a better position than the parties to the SPA, and that his recovery was therefore limited to $150,000 by the SPA's liquidated damages clause. Finally, EasyLink argued that, Dalal had not sufficiently established the amount of his damages. It argued that Dalal had the burden of proving that the transaction would have closed but for EasyLink's breach, and that Dalal had not shown that BI was ready, willing and able to close the transaction. It also presented arguments about the calculation of damages. In response, Dalal asserted that EasyLink could not offer an entirely new argument and authority that had not been presented at trial, that he was in fact a third-party beneficiary of the SPA under New York law, that his damages were not limited by the liquidated damages clause in the SPA, and that he had proved his damages.
The February 20 Opinion reversed the December 9 Opinion.India.com, Inc. v. Dalal, No. 02 CIV. 111 (DLC), 2003 WL 359293 (S.D.N.Y. Feb. 20, 2003). It held that the December 9 Opinion had erred as a matter of law in finding that Dalal was a third-party beneficiary under the SPA. It concluded that the Negating Clause of the SPA was controlling under New York law. Id. at *3. The February 20 Opinion also concluded that Rule 59(e) afforded trial courts discretion and that a district court may consider newly submitted legal authority in the exercise of this discretion. Id. at *4. The February 20 Opinion consequently vacated the previous judgment and ordered the entry of judgment for EasyLink. Discussion
The February 20 Opinion indicated that Dalal's breach of contract claim had been denied because the "third broker contract" required a "closing of the transaction and that the transaction had not in fact closed pursuant to the SPA." Id. While the December 9 Opinion did find that the Third Agreement "made any payment to Dalal entirely dependent on the SPA and the payment of consideration by the Buyer", and that the "only contractual right of the defendant which survived the expiration" of the First and Second Agreements "was his right to payment of the specified fee if the deal closed pursuant to the SPA", as noted earlier, the December 9 Opinion rejected the breach of contract claim because it found that Section 2(b) in the First Agreement had expired.
In his Rule 59 motion, Dalal makes three arguments. First, he contends that he is entitled to a judgment in his favor because EasyLink breached its obligation of good faith and fair dealing under the Third Agreement. Second, he argues that the Court overlooked evidence that the transaction had not closed within the time frames covered by the first two agreements with Dalal due to EasyLink's wrongful conduct. Third, he requests a new trial to address EasyLink's post-trial arguments concerning his third-party beneficiary status, and to assert a defense of equitable estoppel in response to those arguments. The third-party beneficiary claim will be addressed first.
Third-Party Beneficiary Claim
Dalal argues that he was severely prejudiced by EasyLink's failure at trial to contest his third-party beneficiary status under the SPA, and specifically, by its failure to argue at trial that the SPA's Negating Clause barred his recovery as a third-party beneficiary. In the initial Rule 59 litigation, resolved by the February 20 Opinion, Dalal had argued unsuccessfully that EasyLink could not present new arguments and legal authority that it had not presented at trial. He points out that if the Court is going to allow EasyLink to present new arguments, then in fairness he should be entitled to a new trial to elicit further evidence and to respond with appropriate legal arguments, including an equitable estoppel argument.
Dalal is correct that he was prejudiced by EasyLink's failure to raise at trial that the Negating Clause barred his recovery as a third-party beneficiary. Dalal had significant evidence in his favor that both EasyLink and Dalal understood and intended that he would be a beneficiary of the SPA. Indeed, the December 9 Opinion found that "Dalal and EasyLink specifically bargained for Dalal's inclusion in the SPA as an intended beneficiary of it and both of them intended him to be its beneficiary."
The February 20 Opinion corrected the description of legal principles that govern contract interpretation in the context of a third-party beneficiary claim. The correction was based on law presented by EasyLink for the first time in its post-trial motion. The Opinion concluded that the Court had discretion under Rule 59(e) to consider newly submitted legal authority. Dalal, 2003 WL 359293, at *3 (collecting cases).
While it may have been appropriate to provide this description of relevant legal authority, the February 20 Opinion should also have recognized a separate, remaining barrier to entering judgment in EasyLink's favor. EasyLink did not rely at trial on the defense that the Negating Clause prevented recovery under a third-party beneficiary claim. EasyLink can point to no argument overlooked by the Court in this regard. Indeed, as EasyLink has conceded in both of its Rule 59 submissions, its trial submissions did not even contain a defense specifically targeting the third-party beneficiary claim and its opening and closing statements at trial made no reference to the Negating Clause. Therefore, while it may have been appropriate to consider newly presented legal authority in rendering the February 20 Opinion, the Court should have considered more carefully the separate issue of whether EasyLink was entitled to relief under Rule 59 for a defense it had not presented at trial.
A timely briefing of the Negating Clause issue would have permitted the parties and the Court to address the tension that may exist between two lines of cases addressing recovery under a third-party beneficiary theory. The precedent described in the February 20 Opinion has its origins in the context of construction or building maintenance contracts. See, e.g., Morse/Diesel, Inc. v. Trinity Indus., Inc., 859 F.2d 242, 248-49 (2d Cir. 1988); Edward B. Fitzpatrick, Jr. Constr. Corp. v. County of Suffolk, 525 N.Y.S.2d 863, 866 (2d Dep't 1988); Nepco Forged Products, Inc. v. Consol. Edison Co., 470 N.Y.S.2d 680, 681 (2d Dep't 1984); Schuler-Haas Electric Corp. v. Wagner Constr. Corp., 395 N.Y.S.2d 272, 274 (4th Dep't 1977). The precedent upon which Dalal relies arises in the context of payments to brokers and does not directly address the issue of negating clauses. See, e.g., Ambrose Mar-Elia Co. v. Dinstein, 543 N.Y.S.2d 658, 660 (1st Dep't 1989); Edward S. Gordon Co. v. Blodnick, Schultz Abramowitz, P.C., 540 N.Y.S.2d 816, 816 (1st Dep't 1989).
Eliminating this defense from the equation, the December 9 Opinion had a more than sufficient factual and legal basis for finding Dalal to be a third-party beneficiary. EasyLink was therefore not entitled to a judgment in its favor vacating the award to Dalal based on the third-party beneficiary claim. Consequently, the February 20 Opinion should not have vacated the judgment entered in Dalal's favor.
Dalal's Remaining Arguments
Given Dalal's right to recover under the third-party beneficiary claim, it is unnecessary to discuss at length his two alternative arguments supporting his right to recovery. First, Dalal argues that he is also entitled to a judgment in his favor because EasyLink breached its obligation of good faith and fair dealing under the Third Agreement. It is a close question whether Dalal preserved that argument at trial. It was mentioned in the reply brief he submitted before trial and in his summation. It was not given sufficient prominence, however, for the Court to identify it as an issue he was presenting as a basis for recovery. Consequently, it was not identified at the final pretrial conference as an issue that would be tried and it was not addressed in the December 9 Opinion. Instead, Dalal relied at trial on his argument under Section 2(b) of the First Agreement and his third-party beneficiary claim, and the December 9 Opinion addressed those two arguments.
Dalal presents an additional argument based on the first two agreements. He contends that the transaction would have closed within the time frames required by those agreements in order for Dalal to earn a commission — by November 14, 2001 — but for the wrongful conduct of EasyLink. He argues that EasyLink had an obligation specifically under Section 2(b) and generally under the doctrine of good faith and fair dealing to close the transaction prior to the expiration of the Second Agreement on November 14, 2001. Dalal avers that the reason that EasyLink did not close the transaction prior to this date is due to (1) its delay in negotiations to pursue another buyer, (2) work stoppages by its Indian counsel because EasyLink did not pay him, (3) EasyLink's failure to pay the employees and management of ICI, and (4) the initiation of litigation in India resulting from its failure to pay ICI's former landlord in India.
This argument fails. This is certainly a new argument by Dalal. While the parties contested at trial what caused the delay in the closing of the transaction, at trial Dalal did not specifically argue that he was entitled to recovery because the transaction would have closed by November 14, 2001, but for EasyLink's wrongful conduct. Rather, he argued that EasyLink's improper termination of the SPA resulted in a violation of Section 2(b) when the three agreements were read together.
Damages
EasyLink contends that any judgment in Dalal's favor must be vacated or at least reduced because of Dalal's failure to prove his right to damages. First, it argues that to the extent Dalal is recovering as a third-party beneficiary to the SPA, then his damages are limited by the SPA's liquidated damages clause. EasyLink did not make any argument at trial or in any of its trial submissions that Dalal's right to recover damages under his third-party beneficiary theory was capped by this provision of the SPA. It cannot point to any law or argument in this connection that the Court overlooked. As a consequence, it is not entitled to an amendment of the judgment on this ground.
In any event, the liquidated damages cap is inapplicable in this situation. The provision requiring EasyLink to pay $150,000 in liquidated damages was only triggered if the closing had not occurred by January 31, 2002 and BI terminated the SPA because of a failure by EasyLink to comply with the terms of the SPA. EasyLink's argument based on this liquidated damages clause is therefore unavailing.
Next, EasyLink contends that Dalal failed to carry his burden of proving that the transaction would have closed but for EasyLink's breach since he did not show that BI was a ready, willing and able buyer. Several portions of the December 9 Opinion are relevant to this argument. The December 9 Opinion found, in connection with EasyLink's argument at trial that its termination of the SPA was justified by BI's lack of financing as of December 19, that the SPA was not due to close until January 31, and "it is pure speculation whether [BI] would have been unable to close by [January 31] because of a lack of financing." Similarly, in connection with its argument at trial that Dalal was not entitled to receive his fee because Dalal did not produce a ready, willing and able buyer, the December 9 Opinion found that that common law defense did not apply to a contract claim, and that in any event, "since EasyLink prematurely and wrongfully breached the SPA, it will never be known whether the Buyer would have complied with its obligation on or before January 31. EasyLink certainly has not shown that the Buyer would not have done so."
The burden of proving every element of his cause of action remained on Dalal throughout the trial. That included the burden of proving his entitlement to damages. Dalal succeeded in proving at trial that EasyLink terminated the SPA wrongfully and prematurely such that BI never had to take the steps it would have had to take to close the transaction over one month later. Dalal also succeeded at trial in proving that the termination was motivated by EasyLink's own financial difficulties, including complications arising from a lawsuit over its breach of its lease, and the concerns that it had that it itself would be in breach of the SPA and required to pay damages to BI. Dalal also succeeded at trial in proving that these concerns, and not concerns over BI's willingness to purchase ICI, drove EasyLink to terminate the SPA prematurely. Dalal showed that EasyLink continued after the termination of the SPA to negotiate with BI in an effort to enter a revised agreement for its purchase of ICI. Dalal also showed that, although unhappy about the premature termination of the SPA, BI for its part was willing to sign the amendment to the SPA proposed by EasyLink and to negotiate for a revision of its terms. In short, Dalal showed that EasyLink continued to treat BI as a ready, willing and able buyer even after the termination, and BI acted as such. This is sufficient to entitle Dalal to damages.
Finally, EasyLink contends that it requires a new trial with respect to the damages awarded to Dalal to the extent that those damages were calculated as percentages of payments that BI was to make under a Note. EasyLink argues that the Note had only nominal value since BI would not have made its required payments under the Note and that if it had made its payments it would have elected the earlier dates specified for the installment payments and reduced the overall amount it was required to pay. This argument fails. EasyLink asserted this same argument in post-trial correspondence. In an Order dated December 19, 2002, the Court rejected EasyLink's objection as untimely, since it could have raised this issue during the discussion of damages at the trial but did not. This argument is still untimely.
Conclusion For the reasons stated, the February 20 Opinion is reversed. The judgment entered in favor of Dalal on December 20, 2002, is reinstated.