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LIBERTY PRODS. CORP. v. H.K. FERGUSON CO.

May 23, 1950

LIBERTY PRODUCTS CORPORATION
v.
H. K. FERGUSON CO.



The opinion of the court was delivered by: BYERS

Two motions have been referred to the undersigned, the first being by plaintiff to dismiss the first and second complete defenses and the counterclaim set forth in the amended answer.

The second is by the defendant for summary judgment in its favor, as to the first alleged cause stated in the complaint.

The important question is as to the legal sufficiency of the first complete defense set forth in the amended answer, which is presented in this dual form. The decision of that issue may be regarded as the second instalment of what has been written of this controversy in 88 F.Supp. 445.

 The defendant's position is that the plaintiff is in default under the contract and therefore may not maintain this cause, for the reason that whether recovery may be had for unpaid services may not be decided in a court of law, since the parties have otherwise stipulated. To put it bluntly, that the plaintiff has contracted to accept as its remuneration whatever may be awarded to it by a representative of the Atomic Commission with which it had no contractual relation.

 It is unnecessary to repeat the provisions of Section 9 of the sub-contract as set forth in the prior opinion.

 The original answer pleaded that a dispute had arisen as to the balance due which had not been disposed of by mutual agreement (pursuant to the termination clause of paragraph 23?), nor by decision by a duly authorized representative of the Atomic Commission as said to have been contemplated by paragraph 9.

 It was held that, in order to rely upon default on the part of the plaintiff as to the latter provision, the defendant should have averred not only the fact of the dispute, but also the fact of the decision, if it were to be in a position to offer proof to sustain the plea in bar.

 The view so stated is adhered to.

 The opportunity to amend was granted to enable the defendant to plead such a decision, if so advised. The amended answer contains no such averment and hence the permission has not been availed of.

 Instead, the contract is alleged, being Exhibit A attached to the complaint, and Section 9 is set forth in haec verba. It is then stated that a dispute arose 'under said agreement' which has not been disposed of by mutual agreement or decision under said section, thus excluding mutual agreement as contemplated by paragraph 23.

 Whether the dispute is within the quoted words is to be discussed.

 It is next alleged that the plaintiff has refused 'to enter upon and continue negotiations with the defendant with a view to a possible disposition of the said dispute by mutual agreement, as required by section '9' aforesaid'.

 So much is clearly within the contemplation of that section as to matters 'which may arise under this subcontract'.

 The amount claimed to be due after performance has been completed would be such a matter, unless the parties by apt expression have restricted the definition of a 'dispute' which is subject to the sole decision so contemplated; the concluding sentence of that section is thought to mean just that: 'Pending decision of a dispute hereunder, the ...


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