The opinion of the court was delivered by: KRAM
MEMORANDUM OPINION AND ORDER
SHIRLEY WOHL KRAM, U.S.D.J.
On October 12, 1984 I issued my decision in the above-captioned matter. It has come to my attention that certain modifications of this Order are necessary. Such modifications are reflected in this amended opinion.
This case was tried in a one-day trial before the bench. In the intervening months, counsel for both sides have prepared and submitted post-trial memoranda. After careful consideration of the evidence adduced at trial and the arguments put forth in the post-trial briefs, and for the reasons set out below, the Court finds for plaintiff in the amount of $250,000.
Plaintiff Enrique Foster Gittes ("Gittes") is a businessman and financial consultant. In 1981, his services as a consultant were retained by an English company, NNC Energy plc ("NCC"), of which he was also a director. NCC's principal business was as a holding company, investing its capital in other businesses in return for a stake in those businesses. Gittes' activities for NCC were not made clear at trial; however, NCC believed his services to be useful and worthwhile, and compensated him at the rate of $100,000 per year and for his consultancy work.
One of NCC's investments was a substantial holding of the shares of an American company, Simplicity Pattern, Co., ("Simplicity"). For reasons which are not relevant here, Gittes' contract to perform consulting services for NCC was assigned to Simplicity. Prior to that assignment, Gittes was elected to the Board of Directors of Simplicity. It is this dual relationship between Gittes and Simplicity which led to this lawsuit.
In April, 1982, NCC found itself in difficult financial condition and decided to sell its holdings in Simplicity as a means of realizing badly needed cash. To that end, NCC began a search for a purchaser of the Simplicity shares, in which search Gittes was an active participant. The search led to offers to buy from at least two sources, one in New York and one in Europe. NCC apparently decided to accept the offer from the New York purchaser, while holding the European offer in reserve in the event the New York purchaser withdrew or otherwise failed to close the sale.
The sale by NCC of its Simplicity stock apparently made more urgent shortly before the agreement to sell the shares was to be consummated, by the threat of various financial sources to call outstanding debt, thereby forcing NCC into receivership. On May 7, 1982, the sale of the shares to the New York purchaser was scheduled to take place in the offices of the law firm Debevoise & Plimpton. Gittes and the individual defendant, Edward W. Cook, arrived together. At some point after the closing began, it came to Gittes' attention that the purchaser apparently required the resignation of the four directors of Simplicity who had been elected by NCC as a shareholder of Simplicity. These directors included Gittes and three other directors of NCC; of the four, only Gittes had failed to tender his resignation prior to the closing. Apparently, in fact, only Gittes had not been informed that these resignations were considered a necessary prerequisite to consummation of the purchase of the shares by the New York purchaser. When informed of this fact, Gittes initially flatly refused to tender his resignation from the Simplicity board. There is significant divergence, both of opinion and in the evidence adduced at trial, as to Gittes' motivation for refusing to resign. His motivation, however, is not relevant here.
Gittes' refusal to resign created serious problems, jeopardizing the closing. Clearly, some accommodation needed to be made, and eventually one was agreed upon; Gittes would resign from his position on the Simplicity board and his consultancy with Simplicity in return for a five year, $50,000 per year, consultancy contract with Cook International, Inc. ("Cook International"). Cook International, headed by Edward W. Cook and the largest shareholder of NCC, stood to be the greatest loser if the sale of the Simplicity shares failed to occur and resulted in NCC's going into receivership. Cook International, through its chairman Edward W. Cook, offered to employee Gittes as a financial consultant, an offer which Gittes accepted. Subsequently, however, Gittes was given no responsibilities*1 and was never paid, and on October 12, 1982, Cook International repudiated the contract by letter to Gittes. Tr. 48; PE 25. Shortly thereafter, Gittes commenced this action.
The issues in this case tend to overlap. Plaintiff claims that Cook's offer to employ him as a consultant was acepted by him and was sufficiently definite to constitute a contract. Defendants, in response, claim that any alleged contract based on the undisputed facts fails to satisfy the Statute of Frauds because it was never reduced to a writing signed by the party to be charged. Furthermore, defendants argue that the contract, assuming there was one, was made under duress and is therefore voidable. In reply, plaintiff points to several subsequent writings issuing from defendants in which reference is made to the consultancy agreement between Cook International and Gittes, and that these writings satisfy the Statute of Frauds. Furthermore, plaintiff claims that any pressure which Gittes exerted on Cook and Cook International did not rise to the level of duress within the meaning of contract law and that any duty which Gittes owed NCC to facilitate the sale of the Simplicity shares as a means of relieving NCC's financial difficulty is not assertable by Cook International either independently or as a shareholder of NCC.
1. The Consultancy Agreement
The logical starting place in this analysis is with the question whether there ever was a contract between Cook International and Gittes. It is undisputed that Edward W. Cook acting in his capacity as chairman of Cook International, offered Gittes a consultancy contract with Cook International for a five-year term at an annual compensation of $50,000, and that Gittes accepted the offer. Cook testified that he never intended to honor the offer, and that he had been advised by one of his attorneys, a partner at Debevoise & Plimpton, that such an agreement would be unenforceable in any event. Cook's lack of intent to honor his offer is relevant on two points: whether there was some fradulent inducement to Gittes' in entering the contract, and whether some element of promissory estoppel is present in Gittes' resigning the directorship and the consultancy which he held with Simplicity in reliance on Cook's offer of work with Cook International. The fraud issue we put aside for the moment. With respect to promissory estoppel, Gittes clearly relied on Cook's promise when he resigned from his positions at Simplicity. Furthermore, given the situation, his reliance was reasonable since Gittes has not reason to doubt ...