Wooster Republican Printing Co. v. Channel Seventeen, Inc.

¶7PER CURIAM.

¶8The Wooster Republican Printing Company, a closely held family corporation based in Ohio, brought suit for specific performance of an alleged contract for the purchase of substantially all of the assets of Channel Seventeen, Inc., or, in the alternative, for damages for breach of that alleged contract. Channel Seventeen, a closely held Missouri corporation,1 owns and operates a *166UHF television station in Columbia, Missouri, under the call letters, “KCBJ-TV.” Tapeswitch Corporation, also a closely held family corporation, was joined as a party defendant. Both defendants counterclaimed, seeking rescission of the contract and damages on various theories. Tape-switch also brought a third-party action against the president of Channel Seventeen. The District Court2 granted Wooster’s request for specific performance of the alleged contract on June 4, 1981, issuing a decree of specific performance on September 1, 1981. 533 F.Supp. 601. The Court also granted, however, defendant’s motion for a stay pending appeal on the condition that defendants post a substantial bond. On defendant’s failure to post either this bond or a reduced bond,3 the District Court granted Wooster’s motion for enforcement of its original decree.

¶9Defendants now appeal the judgment and decree4 of the District Court and raise the following principal issues:5 that (1) the District Court erred in specifically enforcing an “unlawful” contract in derogation of minority stockholders’ rights under Mo.Rev. Stat. § 351.400; and that (2) the Court’s judgment is erroneous because it purports to reform and enforce an agreement impossible of performance.

¶10Defendants contend that the contract to sell Channel Seventeen was void because it was not ratified by Tapeswitch’s stockholders as required by Mo.Rev.Stat. § 351.400. The District Court held, however, that failure to comply with the technical requirements of the statute was not fatal to the sale of the company’s assets as long as the primary purpose of the statute was achieved. Because this is primarily a question of Missouri law, we defer to the views of the District Court. Jump v. Goldenhersh, 619 F.2d 11 (8th Cir. 1980). The Court also found that the minority stockholder, in the form of Robert Koenig as president and primary shareholder of Tape-switch, gave consent to the sale of Channel Seventeen’s assets. Based on the evidence in the case, we cannot say that this finding is clearly erroneous.

¶11The basis for defendant’s contention that the District Court’s decision purported to reform an agreement impossible of performance lies in the fact that the site upon which the transmitter tower of KCBJ-TV is located is owned by a third person who was not a party to the action. Sonja Koe-*167nig, the late wife of Robert, was owner of the land until her death, and the property is now part of her estate, which is presently in probate. (Her will leaves the land in question to Robert.) She had leased the site to Channel Seventeen for a period of several years. The District Court found that a new five-year lease had been executed, with an option to purchase the land, as part of the settlement of a dispute between the Koenig brothers over control of Channel Seventeen. Because this land could not be conveyed to Wooster upon closing of the contract, the District Court determined that reformation of the agreement was appropriate along with abatement in the purchase price. The Court further found that Channel Seventeen’s leasehold interest in the tower site could be assigned to the plaintiff corporation.

¶12These findings of fact by the District Court were both extensive and detailed and will not be overturned unless clearly erroneous. We are especially reluctant to set aside such findings where, as here, they rest, to a large extent, on the judge’s assessment of the credibility of witnesses. United States v. Dochterman, 630 F.2d 652, 653 (8th Cir. 1980). The judgment is affirmed substantially for the reasons stated in the District Court’s memorandum opinion. See 8th Cir. R. 14.

¶13Let the mandates issue forthwith.