RECORD NO. 730779

IN THE

SUPREME COURT OF APPEALS OF VIRGINIA

At Richmond

~AN§QR=P~T~ 9F~~±l9NP.r INC. and ~~T~A-P~P+~~ ~f ~~~IQ.At +.~~.,

v.

ATLANTIC LEASING, LTQ. and . 'CHRYSLER CORPORATION,

A:gg~l+a,~~~

Appellees.

APPENDIX

.. :. .... :' . .. ' ~

I

TABLE OF CONTENTS

Amended Motion for Judgment

Answer and Grounds of Defense to Motion in Detinue

Motion in Detinue

Motion for Judgment and. Petition for Attachment

Answer and Grounds of Defense

Agreed Statement of Facts

Order

Notice of Appeal and Assignments of Error

Pages

1 - 6

7 - 9

10 - 12

13 - 16

17 - 20

21 - 27

28 - 29

30 - 31

VIRGINIA: IN '!liE CIRCUIT COURT OF 1liE CITY OF VIRGINIA BEACH

BANGOR- PUNIJ\ OPURATIONS, INC. ,

Plaintiff,

v.

ATLANTIC LEASING, LTD. and

THE CHRYSLER CORPORATION,

Defendant.

AT LAW NO. 14490.

AMENDED ~10TION FOR JUDGMENT

Comes now the Plaintiff, Bangor-Punta Operations,

Inc., and respectfully alleges the following case:

1. On or about September 9, 1969, the Plaintiff

sold to the.Defendant Atlantic Leasing, Ltd. a certain

48' Houseboat, including twin Chrysler 260-horsepower

engines, manufactured and delivered by the Defendant,

The Chrysler Corporation. In addition to the conunon law

warranty of fitness applicable to said engines, the

Defendant Chrysler Corporation specifically warranted

said engines "to be free from defects in material and workman­

ship tmder nonnal use''.

2. Said vessel was sold in the normal course of

business by the Plaintiff, as manufacturer, to the Defendant

Atlantic Leas in~~' Ltd., as dealer, on the said 9th clay of

September, 1969, for the stun o [ Twenty Four 'I11ousand Five

Htmdred Forty-five and 95/100 Dollars ($24,545.95), the

Plaintiff.reserving a valid and lmvful security interest in

said boat.

3. Since that time, the Defendant Atlantic Leasing,.

Ltd. has lvrongfully failed and refused to pay the purchase

price for said vessel, which remains fully unpaid at this time.

4. At the time of delivery of said engines and

the installation of the same by the Defendant Chrysler

Corporation, there were material defects in the material

and worlonanship of said engines, which greatly hindered. the

Defendant Atlantic Leasing, Ltd. in its efforts to market

the vessel.

5. It is therefore alleged that the Defendant

Atlantic Leasing, Ltd. is guilty of a breach of its agree­

ment of purchase and security agreement with the Plaintiff,

and further that the Defendant Onysler Corporation is guilty

of a breach of warranty, and that as a direct and.proximate

result of each of said breaches by said Defendants, the

Plaintiff has sustained drunages ~n the following particulars:

(a) \~1en it became apparent that the Defendant

Atlantic Leasing did not intend to comply with its obligations

under the contract·, the Plaintiff peacefully repossessed said

vessel from Norfolk Shipbuilding & Drydock Co~)oration, to

which Atlantic had entrusted the boat for certain repairs

and upkeep. After such repossession, and after due advertise­

ment and reasonable.efforts to sell the vessel, the same was

sold privately, by virtue of a commercially reasonable gross

price of Fifteen 1housand Dollars ($15,000.00). The Defendant

Atlantic Leasing, Ltd., throught its attorney an.d through its

President, Mr. Gene Meekins, ·had actual advance ·notice of said

sale and an opportunity to purchase said vessel for this

price, but elected not to do so for the reason that, under

the circumstances then existing, and as communicated by

Mr. ~~ekins to the Counsel for the Plaintiff, the price

realized for the vessel was a reasonable one. 1he

Plaintiff, then, claims a deficiency in the amount of

Nine Thousand Five Hundred Forty-five and 95/100

Dollars ($9,545.95), with interest from September 9, 1969.

(b) Said vessel, at which time the Plaintiff

repossessed it, was held by the Norfolk Shipbuilding & Drydock Corporation pursuant to a statutory lien for

repairs, which were expressly authorized by the Defendant

Atlantic Leasing, Ltd., in the amount of Three· TI1ousand

Seven Hundred Fifty-three and 33/100 Dollars ($3,753.33).

In order to gain possession of said vessel, and since the

Defendant A~tic Leasing, Ltd, would have nothing further

to do with the matter, it was necessary for the Plaintiff,

on May 19, 1971, to pay Norfolk Shipbuilding the sum of

Three Thousand Seven Hundred Fifty-three ru1d 33/100 Dollars

($3,753.33), which stun, it is alleged, went jnto the repair

and improvements to said boat, and is a legitimate item of

damage in this suit.

(c) After repossession of the boat, and by virtue

of the fact that the Defendant Atlantic•Leasing, Ltd. had

effectively abandoned the boat for Jnany months, and in an

effort to put the boat in a saleable condition, it was

necessary for the Plaintiff to have the bottom scraped and

painted, and have certain engine work done on the boat so

that it could be demonstrated to prospective purchasers.

In this connection, the Plaintiff paid the sum of Seven

Hundred Ninety-six and 85/100 Dollars ($796.85) to Norfolk

Shipbuilding and Drydock Corporation on September 1, 1971,

which ~tern, it is alleged, is a legitimate item of damages

in this suit.

(d) In addition, and as a result of the Defendants'

aforesaid breach of contract, the Plaintff was caused to

expend the sum of Tiio Thousand Dollars ($2,000.00), in

advertising, travel, telephone expenses, and atto1ney's

fees other than those attributable to this suit. It is

alleged that all such attorney's fees incurred were

directly related to the Plaintiff's effort to repossess

and sell said boat, and that due diligence was exercised

by the Plaintiff to ITiin~ize said expenses.

(e) TI1e Plaintiff paid interest charges on said

contract in the amotmt of Three 111ousand Four I Iundrcd

Twenty-bio and 14/1.00 Dollars ($3,422.14) to General

Acceptance Corp~ration.

6. It is alleged ·that each of the aforesaid

consequential d~ages lvere sustained as a direct, prox~ate

and forseeable result of the aforesaid contractual breaches

by the Defendrmts Atlantic Leasing, Ltd. and Chrysler

Corporation.

WHEREFORE, the Plaintiff moves the Court for

judgment against bo:th of the Defendants in 1he amount of

Nineteen Thousand Five Hundred Eighteen and 27/100 Dollars

($19, 518. 27) , lvi th interest as follows: interest on

Twenty Four 'I11ousand Five Htmdred Forty-five and 95/100

Dollars ($24,545.95) from September 9, 1969, until

September 1, 1971; interest on Three 111ousand Seven Hundred

Fifty-three and 33/100 Dollars ($3,753.33) from May 19, 1971

until date; interest on Seven 11undred Ninety-six and 85/100

Dollars ($796.85) from September 1, 1971 until date; interest

on Three 1housand Four Hundred 1\venty-two and 14/100 Dollars

($3, 422.14) from April 19, 1971 tu1til date, plus the costs

of this proceeding.

Joseph L. Lyle, Jr. Counsel for Plaintiff 2413 Pacific Avenue Virginia Beach, Virginia 23451

BANGOR-PUN1~ OPERATIONS, INC.

By ----~~~=---~-------------0£ Cotn1sel

'!his is to certify that a true copy of the foregoing

Amended Mbtion for Judgment was duly served on Atlantic Leasing,

Ltd. by mailing a true copy of ·the same to Jame·s R. McKenry, Esq.,

Brydges, Broyles & McKenry, 1369 Laskin~Road, Virginia Beach,

Virginia, Co~1sel of record for Atlantic Leasing, Ltd. this

7th day of December, 1971.

VIRGINIA: IN TI-m CIRCUIT COURT OF 1HE 'CITY OF VIRGINIA BEAGI

BANGOR-PUNfA OPERATIONS, INC.,

Plaintiff,

v. AT LAW NO.

ATLANTIC LEASING, LTD.

and

NORFOLK SHIPBUILDING & DRYDOCK COMPANY,

Defendants.

ANSl\~3R AND GROUNDS OF DEFF~SE TO fv[)TION IN DETINUE

----

111e Defendant, Atlantic Leasing, Ltd., respectfully

states as its Answer and Grounds of Defense the following:

1. That the allegations in paragraph one and two

in the Motion in Detinue of the Plaintiff appear to be true,

however, strict proof is required.

2. That the Defendant, Norfolk Shipbuilding and

Drydock Company, holds the said boat as security for a statutory

lien for repairs which have been made thereon.

3. That the Defendant, Atlantic Leasing, Ltd. , does

not lmow whether the Plaintiff will satisfy the said lien

and therefore denies that allegation.

4. That the Defendant, Atlantic Leasing, Ltd., denies

that the Plaintiff is entitled to a judgment in detinue for

possession of said boat and such further relief.

And the Defendru1t, Atlantic Leasing, Ltd., sets

forth by way of its Grotmds of Defense· that:

5. The Defendant, Atlantic Leasing, Ltd.

bought the said boat from the Plaintiff - manufacturer

with the implied \varranties of merchantability; the

implied warranty of fitness for a particular purpose and ·

of an implied warranty arising from the course of dealing

and usage of trade. These warranties have not been excluded

or modified.

6. The boat at date of purchase was and continues

to be defective due to negligent design and manufacture of

the boat, and said boat was and continues to be totally tmfit

for the purposes for which the boat \vas intended to be used.

7. 1be Defendant has been damaged by lack of use

of said boat from date of purchase and by ntunerous repairs

made thereon and by cost of replacement, and will be gravely

damaged by repossession of said boat by the Plaintiff without

further relief.

WHEREFORE, it is prayed that this Honorable Court

grant relief to the Defendant, Atlantic Leasing, Ltd., in

the sum of $S,OOO.OO,plus satisfaction of the statutory lien

alleged by Norfolk Shipbuilding & Drydock Company and costs

of Court, and such other and further relief as the nature of

its case may require.

ATLANTIC LEASING, LTD. and NORFOLK SHIPBUILDING & DRYDOCK COMPANY

By --------~~----~--------------0£ Cotmsel

Ga)"!lor V. f<.lcNeal , p. d. Brydges, Broyles & McKenry 1369 Laskin Road ·Virginia Beach, Virginia 23451

I hereby certify that· I have mailed a true copy of

the foregoing Answer and Grounds of Defense to Motion in

Detinue to Joseph L. Lyle, Jr., 2413 Pacific Avenue,

Virginia Beach, Virginia 23451, cotmsel for the Plaintiff;

and Braden Vandeventer, One Conunercial Place, Norfolk,

Virginia 23510, this day of May, 1971. ---

Gaynor V. McNeal

VIRGINIA: IN 1HE .CIRCUIT COURT OF THE CI1Y OF VIRGINIA BEJ\0-1

BANCDR-PUWfA OPERATIONS, INC.,

Plaintiff,

v.

ATLANTIC LEASING, LTD.

Serve: Gene Meekins, President 1829 Laskin Road Virginia Beach, Virginia 23451;

and

NORFOLK SHIPBUILDING & DRYDOCK COMPANY

Serve: R. B. Richardson, Jr. Foot of West Liberty Street Post Office Box 2100 Norfolk, Virginia,

Defendants.

AT LAW NO.

J..tJTION IN DETINUE

-----

The. Plaintiff, Bangor-Punta Operations, Inc.,

respectfully alleges the followjng case:

1. The Defendant, Norfolk Shipbuilding & Drydock

Company is in possession of a certain 48' Fiberglass Seagoing

Houseboat manufactured by the Plaintiff, having taken possession

of said boat from the Defendant, Atlru1tic Leasing, Ltd., for

the purpose of making certain repairs thereto.

2. TI1e Plaintiff has a security interest in said

boat by virtue of a security agreement dated September 9, 1969,

bet\veen Atlantic Leasing, Ltd. and G.A. C. Credit Corporation.

By valid assignment, said security interest was assigned and

transferred to the Plaintiff by G.i\.C. Credit Corporation.

3. ·n1e Defendant, Norfolk Shipbuilding & Drydock

Company holds the said boat as security for its statutory

lien for repairs which have been made thereto. It is alleged

that the said Norfolk Shipbuilding & Drydock Company is

entitled to its statuto1y priority in the amount of Seventy­

five Dollars ($75.00), and the Plaintiff will, at t~e

proper time, tender said amount into Court in satisfaction

of said lien.

4. It is further alleged that,-upon the payment

of Seventy-five Dollars ($75.00) to Norf.olk Shipbuilding & Drydock Compru1y, the Plaintiff is entitled to judgment .in

detinue against the Defendants for the possession of said

boat.

WHEREFORE, the Plaintiff prays that it be allowed

to tender into Court the said Seventy-five Dollars ($75.00)

for the benefit· of the Defendant, Norfik Shipbuilding & Dry­

dock Company in satisfaction of its statutory lien; that this

Court grant judgment in detinue that ·the Plaintiff shall have

and recover possession of the aforesaid boat now in the pos­

session of the Defendant, Norfolk Shipbuilding & Drydock

Company; and that the Plaintiff shall have such other and

further relief as the nature of its case may require.

BANC.OR-PUNTA OPERATIONS, INC.

By ----~~=---~--------------0£ Counsel

Joseph L. Lyle, Jr. Counsel for Plaintiff 2413 Pacific Avenue Virginia Beach, Virginia 23451

STATE OF VIRGINIA,

CITY OF VIRGINIA Bf~CH, to-wit:

I, Mary Catherine ~full ins, a Notary Public in and for

the City and State aforesaid, do certity that Joseph L. Lyle,

Jr., Agent and Attorney for the Plaintiff herein, personally

appeared before me in my said City ru1d made oath that the

matters cont~ined in the foregoing pleading are· true and

correct to the best of his infonnation, knowledge and

belief.

GIVEN under my hand this 16th day of.April, 1971.

Notary PUblic

~if Commission Expires:

November 24·, 1974.

VIRGINIA: IN Till CIRCUIT COURT OF THE CHTY OF VIRGINIA BEAD-I

RENT-A-CRUISE OF AMERICA, INC. , a division of Bangor-Punta Operations, Inc.,

Plaintiff,

v. AT LAW NO.

ATLANfiC LEASING, LTD.

Serve: Gene Meekins, President 1829 Laskin Road Virginia Beach, Vnginia 23451;

and

NORFOLK SHIPBUILDING & DRYOOCK COMPANY

Serve: R.B. Richardson, Jr. Foot of West Liberty Street Post Office Box 2100 Norfolk, Virginia,

Defendants.

--------

MITION FOR JUDGMENT AND PETITION FOR KITACHMENT

The Plaintiff, Rent-A-Cl~ise of America, Inc.,

a division of Bangor-Punta Operations, Inc., respectfully

alleges the following case:

1. On or about March 9, 1970, the Plaintiff sold

to the Defendant, on open accm.mt, a certain thirty-two

foot (32') Fiberglass Rent-A-Cruise Houseboat, equipped

with a t\'IO-htmdred (200) ·horsepower Chrysler engine and air

conditioner and biJ ge pumps, for a total price or Ten 'I11ousand

Nine Hundred and Thirty Dollars ($10,930.00). The engine

serial ntunber of said boat is ffED68186, and the outdrive serial

ntunber is #2517020B. On said day, delivery of said boat was

made by the Plaintiff to the Defendant, Atlantic Leasing, Ltd.

and the aforesaid purchase price was due and payable forthlvi th.

2. Since the said 9th day of ~furch, 1970, the Defendant,

Atlantic Leasing, Ltd. , has wrongfully failed and refused to pay

the Plaintiff the purchase price due for said boat, and the

full amoLmt of the purchase price remains due and owing at

this time.

WHEREFORE, the Plaintiff moves the Circuit Court of

the City of Virginia Beach for judgment against the Defendant,

Atlantic Leasing, Ltd. in the· amow1t ·of Ten Thousand Nine

Htmdred and Thirty Dollars ($10,930.00), with interest from

April 9, 197·0, plus the costs of this proceeding.

PETITION FOR ATfAO-frviENT

And now, by way of Petition for Attachment, the

said Plaintiff further alleges the following case:

3. Subsequent to the taking of possession of said

boat by the Defendant, Atlantic Leasing, Ltd. , the said

Defendant has delivered possession of said boat to the

Defendant Norfolk Shipbuilding & Drydock Company, forthe

purpose of making certain repairs to said boat. As a result,

the possession of said boat is being retained by the sn.id

Norfolk Shipbuilding & Dryc.lock Company by rc(Json of its

alleged repair bill in the amotmt of Four Hundred Ninety-seven

and 36/100 Dollars ($497.36), for which the said Defendant, it

is a~leged, claims a statutory lien.

· 4. It is further alleged that Norfolk Shipbuilding &

Drydock Company \vill nqt voltmtarily surrender possession of

said boat to anyone until its alleged lien is discharged and

paid.

5. It is.further alleged that the Defendant Atlantic

Leasing, Ltd. ·has assigned or dispose:! of, or is about to assign

ot dispose of its estate, or some part thereof, with intent to

hinder or delay its creditors. Further, it is alleged that

there is a clear and present dru1ger the said boat may be

disposed of or removed from this area, all of which will operate

to the prejudice of the Plaintiff, to \vhom the original purchase

price therefor is m~ed.

6. The Plaintiff further alleges that the principal

place of business of Atlantic Leasing, Ltd., and the residence

of Gene Meekins, its President, is in the City of Virginia

Beach, Virginia.

WHEREFORE, the Plaintiff prays that an Attachment be

grante~ it against the aforementioned property, to-wit: the

said thirty-two foot (32') Fiberglass Rent-A-Cruise Houseboat,

and that said property, or so much of it as would satisfy the

Plaintiff's claim be sold by order oF this Court, and the pro­

ceeds applied in satisfaction thereof; and that judgment be

entered herein as hereinbefore prayed for.

ATIEST:

Ass1stant Secretary

STATE OF CONNECT I CUr,

CITY OF GREEMVICH, to-wit:

RINf-A-CRUISE OF AMERICA, INC., a division of Bangor-Punta Operations, Inc.

By ------~~--~--~----------------Vice President

I, a Notary Public in and for the City and State

aforesaid, do hereby certify that Dudley C. Phillips and

Vincent J. Debo , \vhose names are signed to the foregoing

pleading, have persona~ appeared before me in my said

City and made oath that they are the duly authorized agents

of the Plaintiff corporation, and that the matters -set out

in the foregcing pleading are true and correct to-the best

of their knowledge, information and belief.

GIVEN under my hand this 18th day of March, 1971.

My Corrnnissioni~xpires: April 1, 1972 .

. Joseph L. Lyle, Jr. CJunsel for Plaintiff 2413 Pacific Avenue Virginia Beach, Virginia 23451 .

Notary Public

VIRGINIA: IN THE CIRCUIT COURT OF 11-IE CITY or: VIRGINIA BEACH

RENT-A-CRUISE OF ~lliRICA, INC., a division of Bangor-Punta Operations, Inc.,

Plaintiff,

v. AT I.J\W NO. ----ATLANTIC LEASING, LTD.

and NORFOLK SHIPBUILDING & DRYDOCK COMPANY,

Defendc:mts.

ANSWER AND GROUNDS OF DEFENSE

1U 11-IE HONORABLE JUDGES OF THE AFORESAID COURT:

The Defendant, Atlantic lelsing, Ltd., respectfully

states as its answer, the follmving:

1. That the Plaintiff did sell a certa"in 32 foot

fiberglass Rent-A-Cruise houseboat to the Defendnat, Atlantic

Leasing, Ltd., on March 9, 1970, on open account.

2. That the purchase price was not due and payable

from that date; that the Defendant, Atlantic Leasing, Ltd.,

has not lvrongfulLy failed in refusing to pay the Plaintiff

the purchase price for the said boat; that the full amount of

the purchase price is not due and owing at this time.

And further, by way of its Grounds of Defense, the

Defendant, Atlantic Leas:ing, Ltd., alleges:

3. 111at from elate of sale, f'.hrch 9, 1970, said boat

was and continues to be defective due to negligent design <-m<.l

manufacture and \vas cmd continues to be totally tmfit for the

purposes intended.

4. TI1at the Defendant, Atlantic Leasing, Ltd., bought

the said boat from the Plaintiff-manufacturer with all the

implied warranties as set out under the uniform commercial

code, in the Virginia Code Annotated of 1950 (as amended);

that these warranties have not-been excluded or modified.

5. That the Defendant has been damaged by lack of

use of.said boat from date of purchase and by numerous

repairs made thereon and by costs of replacement.

WHEREFORE, it is prayed that this Honorable Court.

grant relief to Defendant in the sum of $5,000.00 and costs

of court, and such other and further relief as the nature of

its case may require.

ANSWER AND GROUNDS OF DT~FENSE TO PETITION FOR A1TACHMENT

And now the Defendant, Atlantic Leasing, Ltd. , respect­

fully states as its Answer to the Petition for Attachment for

the aforesaid boat, the following:

6. That the allegations in par~graphs three and

four of the Petition for Attachment appear to be true, however,

strict proof is required;

7. Titat the Defendant, Atlantic Leasing, Ltd. , ex-

pressly denies the allegations in paragraph five of the

Petition for Attachment :md further states that it is not

about to assign or dispose of,. nor has ·it assigned or disposed

of its estate, or part thereof, with int&nt to hinder or

delay its creditors; and that there is no clear and

present danger that said boat may be disposed of or

removed from this area, to the prej~ice of plaintiff.

And now as its Grotmds of Defense to the

Petition for Attachment, the Plaintiff states that:

8. By way of set off, the Plaintiff is in­

debted to the Defendant, in the sum of $5,000.00 for

damages arising out of the negligent and defective mrulu­

facture of said boat· and the breach of warranties

attached thereto, and the express damages of the loss of use

of said boat and the expenses incurred by repairs made

thereon, and costs of replacement of said boat to Defendant.

. \\HEREBY, the Defendant moves the Circuit Court

of the City of Virginia Beach to grant relief in the sum of

$5,000. 00, \vi th costs of Court and such other and further

relief as the nature of its case may require.

ATLANTIC LEASING, LTD.

~ ~--~--~--~~~--------Gene Meekins, President

STATE OF VIRGINIA,

CITY OF VIR(;lNTA BIV\CH, to-wit:

Subscribed and sworn to before me, the tn1dcrs igncd

Notary Public in my aforesaid City and State, this the day

of May, 1971.

~o/ Commission Expires:

Notary Public

I hereby certify that I have mailed a true and

accurate copy of the foregoing Answer and Grounds of

Defense to Joseph L. Lyle, Jr., 2413 Pacific Avenue,

Virginia Beach, Virginia 23451, counsel for the plaintiff, and

to Braden Vandeventer, One Connnercial Place, Norfolk,

Virginia 23510, cotmsel for Norfolk Shipbuilding & Drydock

Company, this the day of May, 1971. --

Gaynor V. McNeal, Counsel for Atlantic Leasing,Ltd.

these matters for trial and disposition; •and the same. was

argued by Counsel.

The Court having considered the pleadings herein,

the depositions of James R. McKenry and Stanley P. Atwood,

the other evidence in this case in the fotm of the agreed

statement of facts and exhibits filed therewith, it appears

to the Court that an enforceable settlement agreement was

reached in this case in the runount of $23,000.00, to

which should be credited the various stm5 as listed in

said agreed sta~ement of facts, and that the Plaintiffs

should be allowed tl1e sum of $900.00 as atto1ney's fees

and reasonable· costs of sale of the boats which are the

subject of these proceedings. It is accordingly ORDERED

that the Plaintiffs have and recover from the Defendant

Atlantic Le3sing, Ltd. the SlDll of $590.61. The Plaintiffs,

by Counsel, duly objected and excepted to the Court's 1ulings

in these particulars.

REQUESTED:

ColDlsel for Plaint1ffs

Counsel for Atlant1c Leasing, Ltd.

Counsel for Chrysler Corporation

VIRGINIA: IN THE CIRCUIT COURT OF TI-lE Cl TY OF VIRGINIA BFAGI

BANC~R-PUNTA OP[RATIONS, INC.,

v.

ATLANTIC LEASING, LTD. and

CHRYSLER CORPORATION,

Plaintiff,

AT lAW NO. 14,4.90

Defendants.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

RENT-A-CRUISE OF AMERICA, INC. ,

Plaintiff,

v. AT LAW NO. 14,490-A

ATLANTIC LEASING, LTD.,

Defendant.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

ORDER

TillS MATTER came on to be heard upon the pleadings

hereinbefore filed, and stands ready for decision on the

issues joined between Bangor-Punta Operations, Inc. and·

Rent-A-Cruise of America, Inc., Plaintiffs and Atlantic

Leasing, Ltd., Defendant, the Defendant Chrysler Corporation

having been previot5ly dismissed as a party defendant

pursuant to its demurrer; upon the agrcc.cl statement of

facts, duly endorsed by cotulscl, and exhibits filed therewith,

and the depositions duly taken and filed herein of James R.

McKenry and Stanley P. Atwood; upon this Court's order consolidating

VIRGINIA: IN TII~ CIROJIT COURT OP 11-IE CYIY OF VIRGINIA BEArn

BANGOR-PUNTA OPERATIONS, INC.,

v.

ATLANTIC LEASING, LID. and

CHRYSLER CORPORKfiON,

Plaintiff,

LAW NO. 14,490

Defendants.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

RENT-A-CRUISE OF AMERICA, INC. ,

Plaintiff,

v.

ATLANTIC LEASING, LTD.,

Defendant.

LAW NO. 14,490-A

* * * * * * * * * * * * ~ * * * * * * * * * * * * * * * * * * * AGREED STATB1ENT OF .FAC..'TS

Counsel for the Plaintiff and the Defendant in the

above captioned cases, which may be consolidated for the purpose

of appeal, do hereby stipulate the following as a correct and

accurate statement of the facts in these cases:

Essentially, these cases arise out of two separate

sales of boats made by the Plaintiff in each case to the

Defendant, Atlantic Leasing, Ltd.; the vessels involved we.re

a 48' Seagojng Houseboat and a 32' Rent-A-Cruise Cabin Cruiser.

The facts relating to the t\vo boats will be dealt with separately.

48' Seagoing Houseboat: This vessel was sold by

·the Plaintiff, Bangor-Ptmta Operations, Inc. to Atlantic

Leasing, Ltd. on October 28, 1969 for the price of $24,545.95.

The Plaintiff received no cash for this vessel but retained

the lien of a security agreement executed by Atlantic

Leasing·, Ltd. on September 9, 1969. This security agreement

was regular on· its face, gave the Plaintiff the usual

remedies tmder the Uniform Commercial Code, and. was duly put

to record in the Circuit Court .of Vilginia Beach on

October 20, 1969, and in the office of the State Corporation

Commission on October 22, 1969. The note and security

agreement were assigned by the Plaintiff with recourse to

General Acceptru1ce Corporation.

Thereafter, there arose a series of disputes between

the parties relating to defects in the condition of the boat.

The boat was taken by Atlantic Leasing to the yacht basin at

Norfolk Shipbuilding & Drydock Company, with instructions to

make certain repairs. Some of these defects were attributable

to a defective.condition in the engine which was convered under

a warranty by its manufacturer, Chrysler Corporation. This matter

was settled between Atlantic-Leasing, Ltd. and Chrysler Corporation

for the swn of '$3,31.1.00 which was paid by Chrysler .Corporation

directly to Atlantic. Leasing, Ltd ..

J\t this approximate time, it is the contention of

Atlantic Leasing, Ltd. that the Seller and Purchaser reached a

settlement of the matter. 1his was conf.tnned by decision of

the Circuit Court of the City of Virginia Beach. It is,

however, the contention of Bangor-Punta Operations, Inc.

and Rent-A-Cruise of America, Inc., that no settlement

was reached. This opinion was rejected by the Judge of

the Circuit Court of the City of Virginia Beach, Virginia.-,

sitting as a trier of fact.

Bangor-Punta, determined to repossess the boat

rn1der the lien of its security agreement. At this point,

the boat was still at Norfolk Shipbuilding & Drydock being

held there tmder a lien for repairs done. In ~rder to gain

physical possession of the boat, therefore, it was necessary

. for Bangor-Punta to repurchase the .note from General Acceptance

Corporation, resulting in the payment of interest charges by

Bangor-Ptmta to General Acceptance Co1~oration in the amount

of $3,422.14. It was further necessary, in order to gain

physical possession of the boat that 13angor-~ta pay the repair

bill due Norfolk Shipbuilding & Drydock Company in the amount

of $3,753.33, for which sum Norfolk Shipbuilding held a superior

lien. This repair bill was for all repairs done to the boat.

Upon payment of these sums, the Plaintiff repossessed the boat.

In order to place the boat in saleable condition,

and in view of the fact that it had been sitting in the water

for several months, it was necessary that thePlaintiff have

the bottom scraped and painted, and have certain engine work done

so it would be in nmning condition. For this purpose, it

was necessary thatthe Plaintiff pay the additional stun of

$796.85 to Norfolk Shipbuilding & Drydock Company.

Thus, in possession of the boat in proper running

condition, the Plaintiff advertised the same for sale in a

commercially reasonable manner and it was in fact sold for

the stun of $15 ;000 .. 00 cash \vhich was agreed to be a reasonable

price for the boat in its then condition.

32' Rent-A-Cruise Cabin Cruiser: This vessel was

sold by the ·Plaintiff, Rent-A-Cruise of America, Inc.

(a division of Bangor-Punta Operations_, Inc.) to the

Defendant, Atlantic Leasing, Ltd. on open account on March 9,

1970, for the contract price of $10,930.00 cash. The vessel

was delivere~ to Atlanti<:: Leasing, Ltd., which. did not pay any

portion of the purchase price becatise of defects. After taking

delivery, Atlantic Leasing, Ltd. delivered this boat also to

Norfolk Shipbuilding & Drydock Company for certain repair work,

which likewise remains unpaid. Since the Plaintiff had no lien

on or security interest in said vessel, it had no power to re­

possess it and it was subsequently sold to satisfy Norfolk

Shipbuilding's repair lien, by order of.the United States

District Court for the r:nstcrn District of V.irgin.in. 'l11c

net proceeds of snlc, after p:.1yrncnt of this lien and a11 costs,

was $4,253.39, which was paid to the Plaintiff and should be

credited on the purchase price.

In regard to this- boat also, it is the contention of

the Defendant, Atlantic Leasing, Ltd., and this was fotmd as

a matter of fact by the trier of fact, that a settlement

was reached on this vessel also ..

* * * * * * * * * Between September of 1970 and January of 1971,

while the dispute was pending, but before the aforesaid

repossessions and eA~enditures, there was certain settlement

negotiations between the attorneys for the parties: Stanley

P. Atwood for the Plaintiffs, and James R. McKenry for

Atlantic Leasing, Ltd. Evidence of these negotiations is

contai.ned in the depositions of Mr. Atwood and Mr. Mc.Kenry

which are adopted by the parties as evidence regarding such

settlement negotiations.

Chrysler Corporation filed a demurrer ru1d motion

to dismiss, based upon the fact that it had paid all sun~ ·

riue tmder its warranty to Atlantic Leasing~ Ltd. Atlantic

Leasing filed_ a plea of accord and satisfaction and moved

to dismiss on the ground that a settlement had in fact

been reached.

It was the contention of the l~fendant, Atlantic

Leasing, Ltd., that not only should the plea of accord and

satisfaction by virtue of the settlement be Jctcrmincd by

the Honorable .Judges of the Circuit Court of the City of

Virginia Beach, but it was the contention of the Defendant

that it should be awarded damages or at l-east no. cost be

assessed against it by virtue of their loss of profit and

the expenses incurred in attempting to resolve the situation.

The trial court determi~ed, as a matter of fact,

that a settlement had been reached.

1he trial court sustained both motions.

Chrysler's plea was sustained for the reason that

it had complied with all obligations '"hich it may have had

under the warranty, and was entitled to pay Atlantic Leasing,

Ltd., ~hich held title to the.boat.

Atlantic Leasing's plea of accord and satisfaction

\vas sustained for the reason that in the trial court's opinion

counsel had agreed on a settlement in the total amotmt of

$23,000.00, less monies then due Norfolk Shipbuilding & Drydock.

TI1erefore, the Court ruled that fron1 this $23,000.00 figure

should be deducted the following credits:

Received by Rent-A-Cruise for the sale of the 32' boat

Received by Bangor-Ptmta for the sale of the 48' boat

$4,253.39

15,000.00

Monies owing to Norfolk Shipbuilding & Drydock for repairs 4,056.00 Total Offsets $23,309. 39

The Court, hmvever, ruled that the Plaintiffs were en­

titled to an allowance of $900.00 for attorney's fees and expenses

incident to the repossession of and sale of the boats. Judgment

w.as accordingly entered by the Court against the Defendant,

Atlantic Leasing, Ltd. in the amount of $590.61 11le Plaintiffs

argued tmsuccessfully (1) that th~ evidence did not show as

a matter of law that a settlement had been consummated; and

(2) that even. if there had been a settlement, the Court

incorrectly computed the balance due the Plaintiffs, and the

credit to be allm'led thereon. Proper objections and exceptions

were taken by the Plaintiffs to the Court's rulings.

The foregoing is stipulated to be an agreed statement

· of facts in this case and therefore a part of the record

therein.

Joseph L. Lyle, Jr. , Counsel for Plaintiffs

James R. .McKenry, Cotn1sel for Atlantic Leasing, Ltd.

Joseph A. Leafe, Counsel for Chrysler Corporat1on

VlRGIHl!'~: IN THE CIRCUIT C:OORT Of" TUE CITY Of

VIRGINIA BEACH.

"BANGOR PUNTA OPE~ATIONS, IUC.,

ATLA;·ITIC LE/i.SIUG,. Llll., ;'lnd C H n Y S L E R C 0 P. P 0 RAT I 0 !4 ,

Plo1ntiff,

Defendants •

... -- ......... ----- .. - ............. -· .. - ... --- ......... ,. -- ............. ·- ....... .,. ..... - .. - ..... X

t),pril 17. 19i2 11:30 a.r.1. o'clock

~nc Greenwich Plaza Greanwi ch, Connecticut

EXiH'liUATIO:-t of Bft.NGOH PlJtiTA OPERATIOHS, II~C.,

b _..., an d t h r o u g h S T AN L E Y P • !\ 'f i~ 0 0 D t a n c m p 1 o y c e ,

tnken by Oc fend. ants. he 1 d pursuant to notice r!nd

stirulntions by counsel o ut One Gl"e:~CO'-tith Plaza.

Grponwich, Connecticut~ on April 17, 1972, at ll:3a

n • n • , b u f o r c R a 1 ph Ci • C tl r t' o t h '~ r s , n S h o r t h n n u

CARROTHERS REPORTING SERVICE 121 EAST STATE STREET

WESTPORT, CONN., 06880

203-227-0027

2

A P P E A R A~ C E S:

'PICKETT I SP!\Ifl r.. LYLE, ESQS. r~ t t o r n c y s f o 1" P 1 a i n t 1 f f ~~ ? 1 • ~, c r P u n t a 0 r e r a t f on s , I n c •

2B59 '11 rg1 ni a Beach noulc::vcJrd Virginia Beach, Virqinia 234!i2

H V : JOSEPH L. LYLE , JR. , ESQ. , on d 1 H 0 i-1A S S t'·J: T 0 RA , E S Q •

J r. Y D G E S ~ B R 0 Y l E S ~ t·i c t: E H R Y , E S Q S .. Attorn~ys for Defendant Atlnntic Lea5inq, Ltd.

1JC9 Laskin Road Vir~in1a Beach, Vir9inia 23452

n Y : J A i·l E S f~ • t1 c i·~ E fi R Y .. £ S Q •

JOSEPH A. LEAF£., ESQ. At tor~ey for Defendant Ch rys le r Cor~ora t ion

1 ooo r~~a r·i t 1 me To,.,e r Norfolk, Vir~1nia ?34~2

oOo

IT IS HEn£UY STIPULATED r~;~o ;1.GREEL by and

bat~·H:t~n counsel for the r·espective Pi.lrties hereto

t h ~ t a 11 r i <J it t s r ro v ·i d r. d lJ y t h c C • P .. L • H • , 1 n c 1 u d ..

ioq. th~ ri9ht tc object to any qur;stions, except

as to form, or to r.:cve to strike any testir::ony

a t t h 1 s e x a rn i n at i on a r e rc s '~ r v e d an d • i n add i t i on •

t h e f a i 1 u r e t o o lJ j e c t t o ? ny q tH: s t i c n o r t o move

t o s t r i k e t e s t i r~ on y ~ t t h i s e x a rd n a t i on s i1 a 11 11 o t

b c (' b il r o r 'tJ a 1 v c r t o rn i.l k c s u c ~~ rn o t i on tl t , ~~ n d i s

rc s ~ r v 12 d f o r t h r: t r i tl 1 n f t h i s o c t i c n .

IT IS FURTHEr\ STIPULAlED /';~~r, AG~f:ED that lids

r.>utr.-:ination may be suorn to by the witness b€!ing

0 x ~ rli ned h c f o \"C n Not. a ry Pub 1 i c (: t h c r than the

3

Notary Public before whom this examination \-laS

hequn but the failure to. do so. or to return the

original of this examination to counsel, shall not

be deemed a waiver of the rights provided by

Rules 3116 and 3117 of tho -c.P.L.H •• and shall lH!

controlled thereby.

oOo

S T A fl l E Y p • A T W n 0 n. called as a witness

on behalf of the O~fendant, was ~xam1ned and test1-

f i e d a s f o 1 1 o \II s :

E XA:1I NAT I ON flY

NR. ~lcKEH RY:

Q !J.h at is your narr:e 1

A Stanley Atwood.

Q What is your occu~atio~?

A Attorney at lnw.

Q Hilere are you pre!iently enployE~-:.~?·

A I ~~ the Town ~ttornay for the Town of Westport.

A twon(J 4

Ccnn~cticut.

Q ! I o \'~ 1 on ~ h a v P yo u t) ~~ c n i n t h a t o c c u p i~ t i on 7

A Since 5 January 1972 .

. 1:\ 12G Hill~ndale Road, Hestpnrt, Conne:cticut ..

0 ',lhat i·~as your former cccttpation prior to

bcco~.,1n? the ToHr.. Attorncyl

'' I \·J ·J ~ <' t t o r n e y f o r B a n 9 o r P u n t a C o r p o r a t i on •

Q i·: h a t \·,! 0. r e y o u r d u t i e s •.rii t h B a n g n r P u n t a Co r-

poration?

A Well, varied. I had responsibility for certain

c o 1'1 P :.Hl i e s .

Q ~~ere .You C ld e f C nuns e 1 for Dan f1 or Punt a 1

A No, I was nnt.

Q What would you consider your position?

A St~ff Attorney.

0 HoH r~an.v attornr!~'S h'E~re in the 8~nnor Punta

~taff?

1' Well -- seven.

Q H,Js there ll Chief Counsc: 1?

A Y f? s , il Ge n e rill C o u n s e 1 , P ~H'l r :,: C • Ph i 1 1 ·J p s •

(J Hbnt cr.·r.J('anies \'rel'·e you r~·!;pons·fble for in

yo tr r o c •: u rat i on a!: S t :1 f f r, t torn~ y ·?

A Gene r ~ 11 }' , t.;, e b Gat and re c rea t i c n ~ 1 co mp ani t:: s and

f,tHOOd 5

t h e 1 a~; r: n f o r c <~ r;~ c n t c on p an 1 e s •

Q H h a t \4 o u 1 d y rnrr d u t i ·~ s i n re q a r d s t n t JH~ s f;

c o r p o r n t 1 o n s b ~ • 'tJ o u 1 cJ .Y n u a d v i ~ ~ t tl e m 1 n n 11 1 c ~ ;1 1

matter3?

Dnngor· Punta?

1\ [l"i v -; s i o n s • ·

Q In this connc~ctii)n, I belicVf' t~nt thcr~ h'as

a c:onc~~r·n knoHn as Sengoin!' Beats; i:; thnt. corr·ect7

f-. Yes.

q T h 11 t H ~ ,., a D i v ; s i (i n o r n 3 :1 g o .~. P '1 n t a 1

!', Operations, Inf. ..

n 0 a n CJ o r P u n t a 0 p e l~ a t. 1 on 5 , I n c • 7

A Y~s ..

Q This conpan.1/ h~d it~ hf~cH~qu~rtet'S in Florenco,

Q H "s S e il qo in 0 B o !\ t $ t h \:? t:! ~ n u f tt c t l!l''£ r s c f both

o f t h c b ea ~ t 5 t :1 at ~ r c i n q u e s t 1 o H ·J n t J d s t;i n t t c r· a t h e

A Yt!s, they Her~.

Q il h e n d i ;~ I t f I .~ s t c or ... "~ ~ t: y n u r i! t t c r. t i o u t h a t

t h .:; r· .~ v1-2 r !! t" ~, o b 1 c :•! 5 1.: !-~ t ~-1 n e r~ S \~ a ':l o i r. !~ ilo a t s f\ n d 1\ t 1 an t i <:

A I ,,, ';' u 1 d s ~ y , r o u g I 1 1 .Y , ('? e r 1 y i n r~. u g u s t , 1 9 7 n •

Q I beli~vc that you, ~t that tirr.f:, o-n tJehalf

of lLHli}Or runta Opcrt'.ti(\nS ?nd/or S·.?~qn1no ?ntered into

certain ner.otlations with /U:lantic Leasinq and eonf~:!rences?

!\ .~ p p ..- o >: i r. 1 a t e 1 y t h a t t i ne •

q I be 11 ~, v c~ s u b s e q u e t1 t t o t h a t t i m ~ y OJJ tr; a de il

vi s 1 t t o r i t"1 i n i a B e 8 c h t o r c r !~ on a 11 v 1 o o k a t t he b o u t s

A T~e reas0n for my tr1p to Virsinia Be~ch was for

negotiations and I think. fn that connection I did insp(::ct

p 1 a 1 n t s ~ n be h a 1 f o f .a. t 1 a n t ·f r. L !"! as i n o i n r e g a r d t c t h e

s~itability of the boat ior the purposes intend.0d, ,.,ilich

was a plc~sure craft?

' . ~ ~ .. u 1 c

.~ r ~ o t p r .;~ s e n t 1 y - - I iH'i n n t ..

A Y ~~ s .

7

~ On th·c 2~··foct: bn.1t;J ~~10,930, ~~ot!s that sound

c orrc c t 7

A Ye~ ..

wer~ th~y sol~ directly bv Ban~nr Punta Operations to

Atlantfc L~flsinr;, or hc~·J NGS titis consumr·,atcJ?

r I don't rePer.:hf~r. In some casF.~s they \':ere SfJld

t"hrou~h dl"!aler5, und in nthcr c>1sc:: they t-lcrc~ sald

r'lirnt:"tly. t do not rerr.P.mber in tids instance Hidch

pcrt~inerl.

n '. J o u 1 d t h 1 s i n f o rm at i o n b e ~ v a i i a b 1 e t o y o u

o r .Y fJ !.~ r r> c o p 1 ~ ~ t B n n q o r P 'J n t ii 1

;HL NcKENRY:

[Discussion helr:f off the record.]

8

/\ R i ~lh t .

o~r.l)rnuer 2~-, 1970, and I~~~-~ y!'lu if :·ou r~c:)~nfzf.! that?

fl. Yr:s, I do.

1 o·id.you. in fact, recr:ive that lc~tter?

A I baliev0 I did.

fn ~v1dr:nc:e ..

That is O&f~ndant•s Exhibit 1

( A b o \' l~ d ~ s c r ·; b ~~ d 1 e t t i:· r· d.(} t e d D ~) c (: rr; !::. '? r· 2 4 , 1 ~) 7 t) , ~~ a r l~ e d a s 0-::f,_?ndant's Exhibit 1, ·~n c·v'i­d ~~ n r. !~ , b. s ~: f t ~ i s d a t c • ]

Q J ~lsc sho~ you a c~ry of a telegra~ addr~ssed

to J.P. 1-1cKenry, in Virgfniil B~ach, ~nrl sign·~d :;tanley

P. Atw0o<!, ~nd I a5k you 1f ycu rncoqnize that?

A Y~s, I do.

"'\ •-(

for ~tl~ntlc Le~sing?

ft. Plo '· es nr.nse .. ]

Q If y~u recall?

~-~:il, to answer that, I ~"ou·:d sa.v I believe there

U Ynu do not rec3ll a telephone conversation

of·aud1t1onal negctiati0n?

A t! o.

Q Could have been, but yo~ don•t recall?

(Abov~ described teleqram! d (1 t £· d .J i1 n ti 0 r·y f, ' 1 9 7 i ) r:: rl rl~ (? d ns Vcfer.dJ.nt's Exi1ibit 2, in !-! v 1 d :::· r1 c ~~ , c~ ~ o f t h i s ('! '1 t ~~~ .. ]

recoqi~iz0 th1.s and, if, in fact.il .vou received it?

1.\ Y ·~ s , I t 11 i n k I rl i d • B u t , ''~ i t h o u t t h i s n o t a t i c n •

·; The note at th~ bottnn i~ superfl~ot;s ..

f~R. LYLE:

no objection to itv

[Above rlescri~ed lett~r dated J ., n ,_J,, t·· y 7 , 1 '9 71 , ~d t h h r.1 n c.h" r i t t. en rr·ic':! f·!(ltJrt" helo•,·t ~.Jnt"!O~. n. r~cr:t.'nr·:.t •r:: !) i 'Jni\turc. r,,~rru~1 as i'Jeff!ncr~~tt 1 ~ fxl1ibit 3, in cvi-d :~ ll c ~ • :] r, () f t h 1 s c! ?.' t i~ • .1

.·\ t \·; c c· d 10

and I 3Sk yoti if you recogry1ze that?

r.. Yes, I C.o.

0 ni ~~ you, in fact, cause this lett(~r to· be st;nt?

i~ y ~5.

f1R;. f·1cK£NRY CONTI:~UING:

[Above descr·ibcd letter dated ,1 .-~ n r.u:q · y 1 • 1 :J 7 l , o n t h e 1 e t t e r­!n-~ad of Banr:nr· Punta Corpora-t.1 tdl a :·1 d ~ f ~'l n {: d vi t h t h c n ~..t r1~ "St.=J.n 1

:, marked as Oefandrtnt's ;: :-. h i tJ i ~· 1! , i n c-: v i ::.~ c n c e , a s o f this datE'.]

Q lloH, betwer;:n thP. le..,ter of icntulry the 7th

u r: v n t i 1 ~ ~l n :.J ~ r y · t h ,:.'\ ? 1 ~ t o ,.. 2 ?. ~, d , o r i n t h a t r e r i o <i o f

t i me , d 1 d you h a v e any a c d i t i on ~ 1 co r· r ~.: 5 p ~ n d c n <: c o r

co n v e r s a t ·i on s ~Ji t h C o u n s e 1 f o t• /\ t 1 an t i c L ~ J s i n 9 1 o r

anyone else with re~erd to Atlantic La~s,nn?

A Not t0 ~y r~coll~ction.

1 f :r o u , i n f a c t .. r (! c e 1 v e d t h i ~.; 1 P. t i: (! r- '?

1\ Yess T did ..

[1\!H)'·I·~ rf;Jscr·ibcd lett:~~r dat·~~d ,J ~ rll = ~ r y ,: ~ 11 1 9 71 , it. ~ r k e d e ~ Dr-!fi':ld1nt's E;;:~dbft !;, 'in

11 .

. evid0nce, a~ of this date.]

~ ; n .. r ·~ c :<, r ? I H Y C U ~I T I t J l' I ~·i 'l :

1 I :; h o '" yo tt a t e 1 e 1 ran· r1 ~ t ~ d .J a n u a r y 2 5 , 1 9 71 ~

P • i\ t ~·~ o '~ d. 7 a n d a ~ k y o u i ;: .Yo u c ~ us e d ., o r r.! 1 J"r. c t. ~·: d , t h i s

[Ab0ve.dcscribed tele9ra~ dated ~,1~nliitf." Z~ ~ 1071, ~~·at"'kCd ~5

Oe fen ci i1 r; t ' s E x h i b 1 t 6 , i n r~ vi -,, j'l I) f" •" ~ •" •\ f .!. h .; (:' .-J a t ~ ., t ... I _ ;. • 1,. .. t t.J ~ 'l I ,) '-\ ...,., ~· • J

to St;-•1 !~y P. 1\t'iloorJ and fror~ .Jnmes R. r~cK~nr.v. unc! I

.:1s~ you ff you, in fact,. r·ecoived t.;lis ietter?

!\ I ~lon't recall \'Jheth~r I rcct:iv~d th1s letter.

He H111 fil~ t.lds for icl~ntifi-

c a t. i c n p u ,. p o s e s on 1 y •

~1R .. !ic•~r:JnY cor:TI~ltii~,~=

r A L ... -: "' (" ... l. ~-.. l , 1 . t ,.. .. . . , "" .;. ~ d l. 1J 0 v ~ ! ... •w ..J :... r '·' i,. Cl € • \# 12 t u fJ Lo c J n tl t.u~ r .Y 2 ') ~ 1 9 71 , m ,~ r k e d a ~ D~ fc n dan t • s Exhibit 1 , f c: r

. i d ~ n t i f i c .:1 t ·i c~ n , a s o f t h i s d ate .. ]

d ~~ r. i ::; i on ;~ s t o t-.! h 'J t. h (~ r o r n o t t o fi ~ !: t 1 e t : r ·i s m a t t e r ~

12

'" c u 1 d t h J t be y o a t• d e c i s i on o r s o p· e on e e 1 s e ' s cl e c i s i c n 1

A Leisure Time

Gr·oup ..

Q Y o u \H) ul d d ·i s c u s s 1 t \·.Ji t h trl m a n cl yo u u o u 1 d

jnintly r~at!,e a decision?

1\ Yes.

Q H23s anyone consulted?

A \l r~ ·1 1 , I t h i n l< t o :t n s 'rN~ r t h ?. t conpl~taly -- possi-

b l y a t s om e e a r 11 e r t ·f m :} , it r . r; i on (-~ .Y \1 a. s P rf~ s i de n t n f

Q 3ut the final dt~cisicn 1nvol\•ed only you and

r\1·. iieck~~r?

Q S u b s e q u en t t o ,J'a ,, u a , .. y t h t~ 2 9 t h , I be l i P. v e

r: o r f c 1 k S h i p b IJ 11 d i n 9 a n d D r y no c k c .~ us e rl t h e s e h o a1. s

to be r~posscssed and sold?

f'-1 I d o n ' t k n r \1 ..

Q v o P d (J n r, t k n o ~~ \\' h u ~- t o c: k p l ace c: f t e r t h i s

point?

:1 T h o n I e r=' 5 u r e y ~H 1 do n o t k :·t c ·.·1 \'I h o t h e b o :l t 5

were ~0ld to or the net loss~ or 3nything elsE?

A :to, 1 don't.

13

Q Would yoO know whether B~n~or Punta brought

these bo~ts in or not?

A As of this no~cnt, I don'·t.

t~R. r1cKEi1 f\Y: T h at 1 !: a 11 I h ·a v e •

r~t f< .. l E ,'\ F [ :

'l t. ~~r. Atl'roorl .. to ycur knoHledge. \<Jere there any

w i t h r e ~, t1 r d t o t h e f t.r r n i s h 1 rq1 o f C h r· y s 1 c r e n ~rf n c s 7

f\ I do net know ..

A I don't know that~ e1th~r.

t·l P. .. L E i\ fE : I h a \'e not h f n q '~ 1 s e •

~l I H a n t t o q ~' o ., e r t h r: !) Q e x h i u i t c; c ~~ r o n o 1 o !J i c a l 1 y

Dr:cf-..";·h~·!r of 1970 and .. J~nu0ry of 1971 as counsel for

Bangor Punta and Atlantic l.cus1nn?

0 . [:1 f1 you h a vc t c l n ph on 0 c a 11 ~ \·d t h f1 r·. n c K•~ n ry

'' h 1 c h c x r 1 ;l i n e d , c o nm e n t e d , o r s u p p 1 e r11 c n t e d t h e s e f.: x h 1 b 1 t s

Hhich ho h~s 1ntl"3duced7

A I b ~~ ·1 i c; v c - -

f1 f:: X C U S e !1 e .. l r~ 1 t? P h 0 rl E' C n n V .-: r· $ ~ t 1 U n 5 0 r

p ~~ r ~ c n ;.11 ~ ~ n v r. ~· s " t 1 on ft o f a !': y ~ i :1 d 1

A I b ~ 11 P.. v e t h .~ t t h c r r: u r~ re - •· t hE! r·e ·,:as a t 1 e a s t on~

tel~phone conversation,

~·; You have ackno\·tl edg~d that you received tile

1 t t t <.? ~ o f D c c e nJ; e r 2 4 t h w h i c h h n ~ b e e n i n t ,. o d u c e d a s

Ext·ibit 1, \·:h~rt11n r·~r .. NcKPnry offet·t.'!ld to pay ~23 ,000 ..

Has th·1t. off~~r acr.t~pt.cd 0r r(-:jr:cted't

Q Th~ next ~:.xhibit is n te'te:~l"~m fl'Pri~ ~·tr. ncKcnry

to you , a rl vi s f n ~ that u n 1 e s s that off 1?. r y n u j us t r·r. fer r «1 d

t !/ ''!as a c \. e r t c c:i on J n n v u r y fl ~ i t "'' n u 1 d be w 1 t h tf ;" r.i tt,' n ; d i d

you ~ccP-pt. 1t?

A ll o ..

to be J te lr:~9ran datr:tl ~.lanunry 6 to :..1ou from i·1t·, i·i(.J~cnry.

l~ thttt a COP~l of 1t?

'1 I t i n c~ 1 c a t e !i t h a t u n 1 •'! s -:; t h e o f f ~~ t.. ~" i1 5

l\ c cr.;} t '·~ d (' n "1 an u .!} ry G t h f t ··H-' u 1 d ~.Ji.~ ~ ··! t :·1 d r· r. ·.u1 , ~ n d t h n t

l •·r:fer""·.·•1 to it as nn ~xhibit, but it 1s nnt rt'ld I

"d 11 i n t rod u c c t t n ow as E x h i b 1 t :17 .•

~~ e t t ·f n g b 1.! c k t o t h e t e 1 e 9 r am w h t c h t s t n e vi de n c e

~twood 15

as E):hibJt 4!2, \';i·dch you se:1t tc _i1r. ~TcKP~H'.Y• Hou1d you

r fU!t d t. h ti ·~ to y ~ u r s {! 1 r an d p l c tt :.~ ~-~ 'f' an~ i 11,1 t· i .r: e you r· s (~ 1 f

\tf1th it7

A (Mo resronse, witness ro~~lyi~~.]

Q On you r!?r.H?.m~er· tr,!tl

'' 'I e s •

Q D cH! s t h i s e r:t b o d y t h c o f f e r c f s e t t t"e r.· ~· n t H h i c h

y o u d i rJ c n ;] t:-t u n i c a t e t o n r ,. . ! .. , c !:. ::\ n r y ?

A Y~s ..

Q B R s ·i c a 11 y , · w h c'l t w a 5 t h ·1 t !) f f e r?

l\ }! C' I 1 • I t h ·1 n r. t o p u t t h i s: t n t o t h e p r n p e r s 1:2 t t i n n. ,

ti"ti.~ te1e1ram,. post-dated ··- E.xhin!~ ff7 ..

Q i·f.~.~·1 .vou r·ec·~·t ved Nr. ii·;Kc:n·y =~ tc~egrar!

t~~r-:atr:;~n~ t'' \·lit.hdra\·1 the cf··1~)1nal settlement offer

>·I h n n y, 11 s en t t 111 s t e ·1 e g r a n VI h 1 c h i s n r> \'1 E :'{ h i b i t Z ?

.t\ ·~:·,.~; .. Ti1is cx~<fbit H~r; l"t:r:~tved ~:~t 4:]0 p.m.~ on

t: {~ '~ ~-· t! rT C • 1 9 '11 , an d t h f s at a p p r o x 1 !1 a t e 1 y - - I can • t

s ~l·, ·the~ t i r~e on this, but

~- It 'nd1cates 5:10 p&~.

i\ :. i : -~ I d n an h o u r· an d I 0 m1 n u i: e ~~ I s e n t t h i s . t e ·1 e 9 r a.t:i •

r) Uh.3t was the offer that yc~J ~~~~~r~ ?J!Jk·in.q?

]\. 1 ~~ n ~· f f ~ r \•1 a s t o s e t t 1 P. tho r:~ rl t t e r f o r $ 2 !J , 0 0 0

if ~ .... l.i':nt:ic LP~sinq Pt11d it~ hills to

· Jtop rit:ht tho·rc ,· ;~inu~ e ..

. 15

\~ h a t do y o u r:w a n , " p rl. f d i t s b i 11 s ': 1

A P a ! d the l.J"I 11 s t n ;~ o r f o 1 ~ S fd p p i !l g •

Q Mr. McKenry has previously referred to th~

fact t 1H\t these boats have beer1 r·epossessed by Norfolk

S h 1 p pi n g its sec uri t y f o t' the i r t"'e rHd r 1 i ens 1 -­l\ · Yes-....... _.a _ __,....._.._,_, •

Q Is that true?

f, Yes.

tc Norfolk Shipping?

~. T c. t he he s t o f r.~ y r e co 11 ~~ c t ·i n n , i t \'1 as· i n t h c

neighborht1od of $4,00n.

r; That is the bill you C\rc rcfcrt•irt9 to \·then

you s il y =· ., p a f d i t s b i 11 s ., ?

tfh at do you mE~ a:1 by tf1 at Hhen .YOU s ;'ty,

A ~ell, it ~as ~Y opinion, at th~t time, that Bangor

h n d a cause of act. ·i on a ~J a i n s t Ch r y s 1 c r· for f fl t 1 u rc t ''

ac!just its \'larranty uork on thc-:~e engine~ and, so, I

to USa

17

! .. ;,1lir1·r· fo'· .. ('!'·,-lr· ;~,,...r ~·rlr~ , .• ,. .. t~7'"'·' <·,.1+ '-"'" l .~~ r ·· 1• • .~tJ: ~., , '" ,.\,; I.,.,y,. ~· ~

,, ••.• ~a~ .. ··n r·;·rl·~···Jrlvc·:ltic·r··\: .. , ... ·t ~.c""~t ,..r,·.;.r·f· . \, '· ,~ ..... i.l, , .. ~ ~ , .... , " <., . .-,.c t.l,u .. -•r1t ... ,r~ .... · fot ttself ..

, . . ~· ":; '

f·!H. LYLE:

;·.·P .. L.YLt' COf.ITl!'JUtfiG:

18

A Yr!s.

Q A fj a mil t t ~ r of fa r. t \ h a d y o u r· co r.1 p a t1y h a d a n y

de a 11 n q 11 i t "a n o r f o 1 k S h 1 p b td 1 d i n g a n d D r y 0 o c k C om p a n y ?

A · Non·~.

Q Had you au'!:horized the boat to ba repaired?

A Hone~ no.

Q Uho did?

1\ I Hould assuMe that Atlantic Leasfnq did it.

Q 1's a matter o·f fact: is it tdthfn ~;our r~neHl-

e.dgc that .'\tl·lntic Leasin9 has bePn paid a certain

!lFr.OIJnt of tno!ley by Cltrysl-?.r Corp.nr3tion?

l\ H<:ll, I think by ref~rt·i.n~ to Exhibit 4 --Defend ...

ant's £x!1ib·it 4,.1 can put tlii~ into cr.ntext.

'1 All rl ght.

A Eith:~r simultaneous, or· appt~ox.imate1y s1r.1ultaneously

'~d t h t iH~ s t: n d ·t n g of t h i s t e 1 ·':': rn· .. 1::1 , I 1 n a r· n c d f n r t h ~

f·l1··st t·Jn(! th'lt, in fnct, Chrysler· nnd paid directly

t o i"\ t 1 C& r; t i c l c as i n g f! n s moun t :; or.' t= \~r hr.: rt.: b t~ t w f! c n ~ 3 , 0 0 0

and $3)500 ..

Q F rom \": h o rn d i d y n u 1 e ·:l r n t h rt t ?

/\ frnrr i·1r.. !icf~cn ry.

q T h l' t C h r y s 1 e r h a d p a ·1 d t'l. t. 1 a n t i c l e ·l 5 i n 9 , w a ~

t h a t u n d c r t he \tHt r ran t y ?

the. cn·;ir·n ..

i'. Y \~ on ' t f: n rn·J •

. - .. ;·,· h i c h i s 1 n a ~ F. '~ h i b 1 t :f 4 - ...

r, : ·~ t 0 ;,. 'J •• •. (

~ .. •·.( : 'tl

19

20

P r of; h c t p rob l ~ m s \·t 1 t h t I 1 n C! n n 1 n ~ :~ 1 n t h e b o a t . "

Q Dirl you think Ganqo1· Punta \•las ~oinp to havt:!

A ~ro ..

A ~ lr.~ 11 , t he s ~ t t 1 e r-1 ~ ~ n t o f f e r L' ~ !j t o :; c t t 1 c f o r

a c t f c n o <J lr ·; n s t · C h r }' s 1 e r~ t o u s ..

A Very Jnffn1tc1y~

q You mQ n t. 1 one d the t c rm ··· .~ 2 5 J: 0 0 " j u ~; t t h c n l#

was the basis of ycur t€ls~ram?

21

ft. r~s ..

\fh y?

A Tht"·ou9h ncnot1ations t·dth t·:r. r·!r.:Kcnry ..

1\ Yr.!:; ..

Q I take it th~t you aqrcc~ t~ acc~pt $23~000

inst0~d of $2~,0GO?

~~ Y~s, on the. same ·~~ri1,s.

~ ~·lere ther€ any nthr::r tt::rns cont~1ned in your

tcle~ra~ changed?

A Nn.

E';tplrdning th1nr:s that de not ne~d expl~:irdn9.

tAR. LYLE CONTir~UING:

·Q Tell us, based

on the corrrspondence nnd tclr~~.:;r~ms Hhich are io evidence~

and ynu~· narroti(ltions \!ith Nro t1cKr.nl·y, ~1hat your con­

clus·ivr.~ settl<n:H~nt offei" \·Ins,. .vour oltit':late settle offer?

1\ i ~! e tr 1 t f n ll t e s c t. t le o f fer ~d t h ,'\ t 1 an t 1 t. L 'i2: \l5 i n 9 w fl s

the saHe as that contDincd in tht! tele!_1t"i\lr' of ... 7anui\r·y 6th,

\-i i t i • t h .e c x c e p t f on r:t r t h !? r r i c e t e r r : , w h f <: h f s r1 o cH f ·f ~ c:f

frorn 25.000 to 21.000.

fJ D1d .vou confirt'J th0t n~od1f1cation to 2~~,000

At\IOOd

','i 1 t h y ·::! u r 1 e t t ~ r· o f ,J an u a r y 7 t h ?

A Yf'•~

Q H as t h 1 s p u r s u an t to you r can vc rs at i on ~-ti t. h

t·~ r. ~·! c Ken ry?

·A Yes ..

Q Has ·it your intention to chang!~ any other

terms contained in your previous tel~gra~?

r, Ho ..

HR .. ;~cKEilRY:

you ft, sPttler::Pnt by Atlantic t~ns1ng?

f N0ne, to ~Y knowledg~.

f} Not to you?

,'\ ih:.-.t to ~e.

PfL ·LYLE:·

1\ t ·.r o o rl 1 e f t t h c ll e tJ r i n :! r. u ~ l"" i! '' , ' r e t , n" r. 0 d f f v c

r.inut~$ lat~r.]

0n the r~ ~:o r·d ..

'He. L Y I.E CONTI t1 U l H C:

22

23

n r . r-t c K ·: n r y u n i 1 n t e r a 1 1 y s t a t ·f n q t h tt t. t h c:· n ~ t t (~ r H e. s

sett1~~ for 23,001, nnd you stJte th~t you received that?

t. Y0~ ..

f'. r b c 1 i e v e i t i s s n t f o t" ~: h 1 n t: n o t f·H:~ r e x h 1 b i t .

:; "tt: h ~ t w a s t h at. ~~ c.t o .'!'" {! !.:: r ~: c <1 1 1 ?

Pi·d ynu C0nf1l .. m this ~lith Nr- .. r:lcK~nry, tflt)t 1t .• .,as

f\ Nn.

Q Did you also 1·ecr.ive r;r'. t·:JcKenry's letter11

'Nhic~1 h1~ bet1'1 introducerl as Exhibit il5, which suq~ests

that f;ar.~vH·· Punta i~ respons·iule f·or Nor·folr~ Shipbui "ld1nq's

b1l'l~.: :·r:Hr r!-:c~1vec:! that, cid you not(

l\ Yer. ~

G I beleive y0u state~ th~t you sent the telegram

H hi c ~~ '::a~ i n trod u c e d as Ex hi ) i t ~]{i 1

1:; T? 11 us o b c u t: t h a t ; \·I h y d i d yo u s !? n d. t il a t an d

in rc~r·::nse tc- ~·l!lat?

f\ 1 think \lhen I r·cr~iVQd 'ir. ncl·:cnry·'s letter of

January 21 -- Defendnr.t ·~ Exhfb·l t f5 _.., I r'r.al fzed that

~·r • r.; c K ·:~ n , .. y an d I d 1 d :1 o t h a v ;_? ~ !r: e e t i 11 q o f t he m i n d s •

~1r·. f1cl<.enry appal .. (!ntly thought that ·thQ.rP. h·ad hct-~n

o. s 0 t t 1 e r.: c n t • H h i c h h' as (~ 3 , n '1 o r. ,":. i d t o ~1 i': 1 :1 o r P u n t a ,.

tt"'IOOd

ho·,reveri it \':as not subsequent to paying ilorfnlk Ship

~h·ich Has nev!-:r our underst~nd1n(,, ar.d I iPn:ediatelyo

u p c :l r c c c i vi n g t h r1 t - - I. b ~ 11 c v e t h e d a t e i s t h e 2 5 t h

24

the san:e day sent a t~legram, ~1hich iz· Defcndant,s Exhibit

f6, characterizing his letter· as a ~ount~, .. offer· ..

Q Settling it. or rejecting 1t?

A Rejecting it.

Q As a matter of feet, dicl you ever agree to

p ~ .Y n c r f o 1 k S h i p b u i 1 <.H n q rt~ p a i r ~} i 1 l s "f

A Never ..

q n 1 c~ y o u . e v E' r- J u t h o r i z ~ ;~ n y t h i l1 ~ i n c on n e c t 1 on

\·.dth ·tt?

A r~ r; •

t~ P ., t E r. rT ~

f·1 R ., I. Y l E :

l·!P.. LE l\rE:

·That is a 11 I h n ve ..

I have f: fr:n..r <1 ur.~ s t ions •

Q n r· ,: .l\ t r~ o o d , I t' c l·f <:! ve t ~'at y e: u stat r~ d t h at i n

yo u r 1 t; t t e t' Q f ~J a iHJ ~ r' }' 7 t h p t h :? t y a u c on s 1 de r :~ d n o t n ·1 n g

c h R t1 g e d f , .. <H~ yo fJJ. tH" o p Q s a 1 . o f ,J a r1u a r .v 6 , trd t h t h e (~ x c e p t 1 on

A Yes.

t~ :~o\1/, in ynuv· telcgr·!t·m or· .J<:Hl1.H~r·y 6, you are

r ~~ f ,~ r r i n g t o a s s i ~! n i n ~J 1\ t 1 a r. t i c l. e as ·i n g ' s c a us e t; f .~. c t ·i on

25

af.jainst Chrysl~r; 1s that correct?

!\ Yes.

Q In your lettar of Januftry 7th, you confirmed

tho cnnversation ~lfith t·tr ... PcKr.nli"Y• at t•lh~ch tine Nr ..

HcKenry told you that they, Atlantic Lea51ng, harl settled

f.. F o t" t he f i rs t t i me , I 1 c ~ r It e d t h a t .

::? But that \c.J ~s r. ri e t" to t !J ~ \1 r·i tin q of y :] ttt•

1"'- T h ~ t I 1 earn ad that?

0 'res, sir?

nc~ lnn~;r=-r· hfld a cause of action ao.ainst Chryslflr?

A Dirl 1 kno~ that?

0 Yes , sir?

1\ 1: ot n e cess at"' i 1 y. I don't ...... I don•t re c ~ ll that ..

·1 l.: !:.~ () u 1 d it not be .YOI.J t• understanding that if a

c a u :; r~ o f ;; c t ! on n o 1 on ~ e r c• x i s t r1 d b r:.! t we e n t l1 o 5 e t "~' o

p a r t 1 e s. , n ~ ·t h e s •.d.J .1 c c t m a t t e r i n q u e s t i 0 n 1

A Lookino back in retrospect, yes.

Q That Has the purport of your conversation \t1th

I: t.wood .... ,.. L..U

Q Do you know the date on which yoti recaived Mr.

~·1cKr:r.ry~::- letter~ of \January 7, 197'1 .. f

. . fiR. lYLE: 1•! h a t e r. h i b i t i 5 t h r'\ t ?

f·1 P. • L E ft. FE C 0 il T I U U I N G :

Atl~nt~c Leasin~ to that l~tter?

ft p 0.

Q Then 1t iG ~Y understAnding, then~ that it was·

on 1 y u p n r: r e c e ·f v i n g H r . ~1 c I~ c n r· y • ~ 1 ~ t t ~~ -r o f a an u a r y 2 1

A '.·t! s.

I thJnk I catt e:xpla1n thAt~ if yot! l·!kH ..

Q · E x 1> 1 a i n why you d i dn ' t

~~ o u 1 d you 1 ·t k r: ~~if.' t n ~~ x i' 1 a 1 n 1 t '£

27

CenerJl 1\ccep.tance r.crporntfon, and 1

to th,.. bPst of my l"eccll~cf;·io~r, '.·!il_r~n I rr-c:~ived hfs

letter of the 7th on the 11th of January, I~ of cours~~

th~.1~!~ 1 ht that his reference to a 1 \en was the GAC lien

;;r1·~ not .:no the r 1 ~en.

It o:1ly becnrn-~ apparant ti•c.:~·t ~~hat Wc1S not what ;-.c

~~s talking about whtn I received the l~tter of tho 21st~

0 Prior to the r•~ct i pt 0f the let tor of January 7,

1 9 71 , f rom i:~ r • M c ~ e n r y , .Y o u we r·e , t h o u 9- h , a'·' a re t h a t b o t 11

boats ;,·et·e beinn held by Uorfoli~ Ship purs·uant to these

re p a i r 1 f en s ?

A I knew that they f1ad been tur·ned over to :·loa~folk

Shipping.

0 Pr1nr to the 7th nf Janu~ry?

A Prior to that date, yes, sir.

Q You have statec.1 that Y(iU considered, in addition

to Atlantic leasing's war~anty clair1, that Danaor Punt~

a 1 s o !I <H! a c 1 a i r~ n q a 1 n s t C h r y s 1 ~J r Co r p o r u t i c n ; i s t h at

cor·rec t?

A Yes.

Q On \li:nt b~sis did YO!l consider t.hi\t Ganqor Puntil

had an inder-ond011t c;l;J1r·l il9Jin:t f.h;';,. .. .;;(~···r

.ft. i.~el!:. on the ba::1is t~lat, ;!5 ~1 l'()St:lt (lf the ~.:nqfnc!S

not bt~ in~ t'£!pai rt?d and adjust':!d, and the \'tnrrt'lnt1es not

b e i n g c:. d J u ~1 t. r. d 1 n - a t ·~ m c 1 y r.~ a :1 n ~ 1, , C a n q o r r u n t ~ u 1 t i ....

r.; i! t. ·~ 1 r ~ , . ~ s t o t a k e n fa 1 r l.Y s u b $ t il n t i a 1 1 o s ~ or. t he

f' 1 o ~ r r ., ;H1 n ·1 n g l'd t h G A C •

2B

Q ~.fl!re bo~h boats r.qutpped \·lit-h Chryslar engines?

A l don't know.

Q H ~-'tt"t? t h c s ~ b c at ~ ._, .:~ 1 ::! b .v n ,~i n g c r.. t o At l an t ·t r:

r.c i! s i r; ~?

A ~1.e ,.. ~~ t h -~: y s o 1 d 7

Q Y~!S, sir?

A 1 · b r~ ·i 1 a v a s o ,. f\. s I s n 1 d h -~ f :) , c: , I iHC n o ~ 5 u r· e ·.-: IH~ t he r

t h r··c u 9 ii ·:.\'1 s t r i b u t or s o r de a 1 r.:: r s "'

Q Does Bangor Punt~ give a written wnrranty

Hhc:~ it s1~lls. boats?

A r o t h e be s t c f my r c c f\ 1 1 e c t i on , t h e re w as n o

rl r 1 t t e 11 \'l a r ran t y on t h e s e •

'1 !~ ~ v '·~ r any s e i the r }/'i t h the f! l1 q i n e nr· t. he :; o ~ t

i t !; ~: 1 -r ·r

!\ fin.

t·H\.. LE AFE: That is a 11 I have ..

Mr: .. LYLE: I h a v~~ o fr.;r·; ;-:,ore quest ·J on s ..

Ex l\'; r n kr I (~N n Y

f! r. • L 'f 1. r: :

1 Did you feel

0ncc again, I object to anything

29

th"t he feels.

~ Dur1ng your neryotiations with Mr. McKenry,

an d f n y 0 u r t"c f e re n c e s t o the p o s t - cause o f act i on

n~ a p;:.t"ty rf£:fendant for that purpose in this suit?

(! 1\ Y0~. I d1 d not part~kc in that part cf the proce~d-

1 n gs ..

Q D ·1 d y o u n e c d an yt h i n ~~ 1: r o :n ft. t 1 an t i c L ~ a s i n g

by ~ ... : i.~ y o f co o p c r n t i on i n c o rt n e c t 1 on \I i t h an yo c a us e o f

act.i(;n aqn1nst ChryslGr?

{ .. •' -\

.. , ,.. -,.. ll \.i ..

You di c not&·

fJ D i d yo u k n o ~-~ w he t h f! r ! i o r· f o 1 k S h i p b u i 1 d i n H o n d

r. y ~: ·:: r

!~~~. LYLE:

29a

~l'r\ .·:•· .. f:tcKEiiRY: flo further qucst1ons.

LEArE:

--·--·-·--··· -~~--: .. :or-, ,.n·:! subscr·Jbcd to be·for·e nH

t!-;i:;~ 1.]ay of~-· 19n.

-·) '} '_) '1

-·------~L:cJ _ _!J. __ /.s;!-'' : C'~:~ Not~ l'Y r u!' 11 c RUTH 8. I(E:I::LF.R

NOT/\n\' l'UH!..IG MY COi.lMISSION EXPinES MAR. :H. H\ltl

... ·" • f ·"' ..... - ...... , .......

•' ·.: ...

-,

f. ~ . E. T. J:.. .F_ 1 .~. [!;_ I.. E

STl\T£ q;- CO;HJECTICLIT) s s.

COUitTY OF FAIRFIELD )

JD

an d ~: o t ~ r· y P u b 1 i c \·d t h i n t ~ ~ e S ·~ a t e o f Con n e c t i c u t ,

T h i! t the e ~~am i n o t i on o f S T l\N 1.. F. Y P o · AT H 0 0 D •

\·Jhic.h· 1s horcinbefOl"C 5et forth, is a trui~ record

o f t h c t P. s t i r.1 on y q i v r: n by ~- u c: 1 w f t iH~ s !i •

I furthc r ce rt 1 fy tftat I am not re 1 a ted to

any of the pa rt"1 es to t~1 is action by b 1 ood, or

t·lf:lr·riag~ an.t1 that I nM in na Hay interested in the

IN HITUESS ~-HtEP.EOf, I have he·,"eunto set my

h"nd this_/_· ___ day of __ ])J!::::~}~----·--·' 1972.

VIRGINIA: IN THE CIRCUIT COURT OF 'IHE CYfY OF VIRGINIA BEACH

BANGOR-PUNTA OPERATIONS, INC.,

v.

ATLANTIC LEASING, LTD. and

CHRYSLER CORPORATION,

Plaintiff,

AT LAW NO. 14,490

Defendants.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

~-A-CRUISE OF MmRICA, INC.,

Plaintiff,

v.

ATLANTIC LEASING, L1D.,

Defendant.

AT LAW NO. 14,490-A

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

NOTICE OF APPEAL AND ASSIG~['-NJ'S OF ERROR

The Plaintiffs in these consolidated actions,

Bangor-Punta Operations, Inc. and Rent-A-Cruise of America,

Inc. , pursuant to Rule 5:6 of the Rule·s of the Supreme Court

of Appeals of Vhginia, hereby files its notice of appeal to

the Supreme Court of Appeals of Virginia from the judgment

of this Court entered on July 11, 1973. In lieu of a trans­

cript of testimony, an agreed statement or facts hns previously

been filed herein, duly endorsed by all cotmsel or record, and

such agreed statement of facts, together with the depositions

referred to therein and in this Court's prior order, and to-

gether with all other pleadings, doctunen-ts and exhibits on

file, shall constitute the record in this case by agreement

of cotmsel.

ASSIGNMENTS OF ERROR

For their .Assigrunents of Error,. the said Appellants

assert as follows:

1. ·1he trial court erred in ruling that a settle-

ment had been reached between cotmsel in this case, there

having been no settlement and no meeting of the minds between

the parties regarding the tenns of any settlement.

2. Even if a settlement had been reached, \vhich

is expressly denied, the trial court erred in computingthe

amount due to the Plaintiffs by the Defendants under the

supposed tenns of such settlement.

Joseph L. Lyle, Jr. Pickett, Spain & Lvle Post Office Box 2241 Virginia Beach, Virginia 23452

BANGOR-PUNTA OPERATIONS, INC. and It6NT-A-CRUISE OF ~lliRICA, INC.

By Of Cotmsel

TI1is is to certify that true copies of the foregoing

pleading were mailed to all counse 1. of record,. this the

~ay of July, 1973.

' VIRGINIAa

a IN THE CIRCUIT COURT OF THE CITY OF VIRGINIA B£ACH

.- BA.t"JGO~-PU:'ITA O~RATIONS, INC., ) ) ) ) ) ) ) ) ) )

II Plaintiff,

e V AT LAW NO. 14,490

7 ATLANTIC LEASING, LTD., AND CHRYSLER CORPORATION,

e

10

u

12

13

14

111

18

17

18

18

20

21

22

23

24

2!5

Defendants.

Disc~very deposition of James R. McKenry, taken

before Kay L. Neidhart, Notary Public for the State of

Virginia at Large, pursuant to notice, at the law offices of

Messrs. Brydges, Broyles.and McKenry, 1369 Laskin Road,

Virginia Beach, Virginia, at 4aOO o'clock p.m., June 26,

1972, to be used in the triai of the above-captioned cause

pending in the Circuit Court. of the City o~ Virginia Beach.

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APPE.~"qANC!ES: Messrs. Pickett, Spain and Lyle (Mr. Joseph L. Lyle), attorneys for the plaintiff.

Messrs. Brydges, Broyles a.'"ld McKenry (Mr. Ronald F. Hammers), attorn~ys for the dsfendant Atlantic Leasing, Ltd.

Messrs. Rixey and Rixey (Mr. Joseph A, Leafe), attorneys for the defendant Chrysler Corporation.

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3 COPY

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4 McKenry, J. R. Examination by Mr. Hammers. • • • • • • • • • • • • • • • • • • • • • • • • • . 4, 25

ti Examination by Mr. Lyle.. • • • • • • • • • • • • • • • • • . • • • • • • . • • 17, 28 Examination by Mr. Leafe •••••••••••••••••••••••••••• 26

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13 EXHIBITS DESCRIPTION

u Defendant Chrysler Corporation's Exhibits 1 a~d 2 Telegram and letter 27

IS

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4 CO?Y

JM~ES R. we KENRY, called as a witness on

a discovery having been first sworn, wa~ exaMined and

s testified as follows;

a EXAfv1INATION BY MR. HAl'IIMERS:

• Q You are James R. McKenry, a partner in the

7 law firm of Brydges, Broyles and McKenry, at Virginia Beach,

a Virginia, is that correct?

• A Yes, sir.

10 Q And in your capacity as an attorney and a

n partner with this firm, do you repres~nt Atlantic Leasing,

12 Limited?

Ul A Yes, sir.

14 Q Now, with what company, if any, is that

us located and with whom is it connected'?

te A Well, Atlantic Leasing is the s:une physical

17 cor:tplex with Meekins Pontiac and Linkhorn Associates and

te Nationc:.l Rental. Gene Meekins is president of /"tlantic

20 Q All ·right. Basically, what is their business,

~ just for the record?

22 A

23 Q

24 A

Well, Atlantic

As

A. e-..

pe:rtair~s to thi2 case

~;e rt a.:r..s. to t.hi~ cas-e

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. J th-s:-Jr sold -- C!'' a

J. ~. fJlcKenry r! r" r' -:"V _, .,_, ·-- _;

Q All right, sir. What is their connection

a pertaining to this case with Bangor-Punta Corporation?

3 A Well, they purchased a 48-foot houseboat and

• a 32-~oot houseboat sometime back in 1969 and 1970 -- I

a can't remember the exact dates -- and shortly thereafter

a began -having various difficulties with both of these boats,

7 primarily with the 48-foot Seagoing boat. The main difficultiEs

a were with -- although they were having problems with both,

a such as the -- the 48-foot boat listed very badly to -- to

so the starboard to the point that it was question~tble whether

u it could ever be repaired or not. It was -- we were led to

1a believe that it could never be totally corrected, would

13 always have a very definite list.

14

115

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22

23

24

as

MR. LYLE: For the purpose of the record,

I'm just going to request an understanding with

Mr. McKenry that this testimony is only being

introduced as relates to settlement negotiations

and not as it relates to whether therg was

something wrong with the boat or ~ct.

THE WITN~SS: I understand th2t. I understand

that.

- M?.. LYL2:: Okay, all right.

Tl-fP WIT:'-~ 2SS: So tr3-: about so~ewhere at

point -- a:1d. I '!!1 net ver:" :;ood on· dc;::tes -- Mr.

Meekins ccntacted me in reg~~1 to these

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J. R. McKenry

The boats had been at Norfolk Ship .. Norfolk Ship

wanted their money and so w~ at that point

contacted Chrysler Corporation, who were the

manufacturers of the engines, and Mr. Meekins had

previously been in touch with Mr. Gibney and who

was the president, I believe, of Pleasure Crafts,

or something of this sort, which was the company

the subsidiary company of Bangor-Punta that

actually manufactured these -- the particular

boats in question. And, then, correspondence went

back and forth between, first, Mr. Meekins and

then with me and various people. Finally a

meeting was set up between the representatives of

Chrysler and Mr. Atwood representing Bangor-Punta.

us BY VI~ • HAMMERS 1

!7

t8

Q

A

Is that Mr. Stanley P. Atwood?

That's Mr. Stanley P. ~twood. Mr. Atwood

te came do'w'.rn to Virginia Beach. We met in my office along with

20 M~. Meekins and a representative of Chrysle~ just about all

a1 day long one Friday, if my memory serves r.:e co~~"ect, at

22 'N~ich tj_ne l\·~r. At·wood and Chrysler Corporation reviewed the

u bill f~om Norfolk Shi~building and D~y Dock, as well as th~

24 other bills that had been incurred. In fact, one of these

JAIME 8c BROWNING CERTIFIED SHORTHAND REPORTERS

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had been 2 fi~e 2~d

6 cc:?Y

7 80PY

ther~ had to be -- emergency repairs had to be done somewhere,

a I think, over in Hampton a.""l.d, th.en, that boat was brought

3 back into Norfolk Ship and Nor~olk Ship, as I recall, paid

~ the man off in Hampton and, then, they would look -- I don't

• know. It was all sorts of problems. So, anyway --

e Q Was the meeting with Mr. Atwood here in your

, office and a representative of Chrysler -- was that sometime

• before December

10

"

A

Q

A

Yes.

-- of 1970?

Yes, that was in -- I don't remember. I

1a could check the file and probably give you the exact date.

13 I believe it was September the 18th. I'm not sure now.

14 MR. LYLE: What year?

Ul THE WITNESSa 19?0, that we had our meeting.

Ul

t7 BY HAr~.'IERS :

ta Q Mr. McKenry, I'm going to show you a --· severa

as sheets of paper which are stapled together which purpart to

ao be a bill from Norfolk S~ipbuildin.:; and Dry Dock Corpo!'ation,

~ dated April J, 19?0, and I ask you can you identify this as

az a bill which r.ad ~een se~t conc~~irg these vessels from

a3 Nor:'olk Shipb~.1ilding to Atlantic Lee.sin.;.

&4 A

as

Well, now, this, I belie,.:::;·, just co:1~ern:: t~1e

Sea..zoing, ~Nc.:: sent to Atla;.:.7ic

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Q What is the total amount of mone~r due?

a A $4,)1.J.4.6J.

Q All right. Now, afte~ you~ meeting with r·.~r,

• Atwood, sometime p!'ior -- you :,elieve September of 1970 --

s did you have an·occasion, because of the problems with the

e boats, to enter into negotiations with Mr. Atwood?

8 COPY

7 A Yes, we did. One of the things that we -- we

a discussed and one of the areas of contention initially by

• Mr. Atwood and I believe Chrysler mc;y have mentioned this

to as well was the fact that Norfolk Ship, in his opinion,

u was way overcharging Meekins -- or, strike that -- Atlantic

ta Leasing and it was at that point that '.'le advised Chrysler

ta and Bangor-Pun~a that if they wanted to deal with Norfolk

•• Ship and they had the expertise to show where the repairs

ts were too high or something of this sort:, that that was fine

1e f·'Jr us and we simply wanted the liens released, the boat:;

t7 p._tt in as g0od shape as possible sc that we;; ccu~.d sell ths·:-1

1a because they we!'e, of course, not doing anybody any good

ts simply si ttine; at Norfolk Ship.

20 Q At the tiM9 you first met 2.!1d W'.!~e negotiating

at 2.:1d t::::.lking w2. th ~V:r. Atwood, do you. know ·.;.;!-1::i.t his position

az v-;::13 at that time with Bangor-Pu"!'lta Opr.··ra:ti0::.?

23

as

He ·.,.,.as staf.:' att o~:r.::~r and w2.s

JAIME Be BROWNING

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+'h:.:.. Ltle.·..., att:J!':Ley O!'.

J. R. McKenry

division of Ba!'l.gor-Punta. He was chief counsel, I believe,

2 for that company.

a Q Did you ever negotiate with or were you ever

• told to ~egotiate with anyone at Bangor-Punta other tha.l"l

a Stanley P. Atwood?

e A No. I have correspondence from Mr. Atwood

7 confirming that he wa~ the man to negotiate with.

8 Q All right, sir. Directing your attention now

a to December 24, 1970 -- I believe these have been introduced

10 before but I want to introduce them again.

II (Papers shown to Mr. Lyle and Mr. Leafe).)

12

ta BY MR. HA.MMEHS :

14 Q All right. I'm going to refer to Exhibit

ns number 1, which has already been numbered, dated December 24,·

1e 1970, from Sta.l'lley -- to Stanley Atwood and I p~esume it was

t7 signed by you. Can you tell us in essence what that says?

18 A Yeah, this is -- we had had negotiations and

1s I don't -- I don't r'::ca.ll exactly what r.Jr. Atwood's posi -:io!'l

20 was at that ti~e but· in ~his letter I told him that we

~ would pay $23,000.00 total and that was the total amount

u tha~ Mecki~s Pontiac -- strike -- Meekins Pontiac a~d

a!S to pa:/ ~~?J ono nn ~ .... !~ +h~7 1,•:~~ +t,.::-. -t-n-t-~ 1 ~mou.,..,t t~~t th-~it ~"'- ' - • ""'- - ... ~..J. "" _.,, '-.....:J """_..,.,.._. v- .. 4c;;;._ -·' .:.J. j._,_ ••-,.}

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J. R. McKer .. ry 10 CG?Y

were going to·pay.

a Q Now, that letter was dated December 24, 1970.

A Yes, sir.

Q I'm going to refer to exhibit marked number 2,

a which is a copy of a telegram purporting to be from Stanley

e Atwood to James R. McKenry. The date on this is January 6,

7 '71. Is this the next written correspondence that you

• raceived from Mr. Atwood following your December 24 letter?

A Yes, sir, to the best of my knowledge, this is

to the next written correspondence.

Q For the record, what does that say?

ta A Well, this said, "Received your telegram of

ta January 6 at 4 p.m. Attempted reaching you via telephone

'4 four times with no luck. Offered to settle for 25,000 if you

us pay yard bills and assign complete cause of act:.on against

,. Chrysler Wiarine to us. Please contact immedi2.t::~ly."

t7 Q All right. Now, I'm going to :r·afer you to

ta Exhibit number 3, which is a copy of a· letter t'J Stanley

's Atwood from you dated January 7, 1S".?1, and I 2:;;~ you did you

ao write that letter to· Mr. Atwood anc whr::"!: does i-'~ sa~r?

21 A YeE~.h, I wrote this tor.:::. .... At~,··iJc,:l stating that,

22 "This is to confirm that w~~ settle'.:! the n:.a-:t·:·!' with the

a4 that this would completely relea::-2 t~e S1 1..t3_;:---:~··:, free of

2s a~y lien," a~d this was to be the total payment by Atlantic

JAIME Be BROWNING CERTIFIED SHORTHAND REPORTERS

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J. R. 1-..·!cKenry

z All right. Now, before you wrote that letter

a to him and after you received the telegram, did you contact

4 Mr. Atwood or vice versa by telephone?

II A We talked by telephone. Frankly -- and I have

e requested my bookkeeper to go through and look through the

7 telephone I hope he kept them that long -- to see whether

a or not I placed the call. But I think that information

a would be available as to who. But we did talk by telephone,

to I believe, more than once during the period between the time

n I got the telegram on the 6th and the .letter I wrote late the

tz afternoon of the 7th.

ta Q All right. Now, what did that conversation

t" entail? What was decided upon that time, if an~rthing?

til A Well, we were back and forth as to what was

te going to be done and I think we were both anxious to conclude

17 it b-:;~a.use GAC, which had financed the boats or one of them

1a the l~8-foot, I believe -- I don't believe they financed the

ta 32, b~Jt the 48-foot boat -- they· were -- interest was running.

2o The Jan.:;o~-Pur:.ta peot,le evidGntly had a -- a !"'lold harmless

~ agreo2cnt with GAC so that if Atl2ntic Lea~in~ didn't pay,

Ar .. d

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~ ...... --. vw~-

c..T. R. McK~n ~~r 12 COPY

whereby we were going to -- we would stick by -- we stuck by

2 all the way through our original demand that ws would pay

3 $2),000.00 a~d that was all and that the -- from that was to

~ coMe the interest, late charges, Norfolk Ship liens, any --

e anything that was due and owing on the boats at the time.

e And the purpose being is because of the previous -- as I

, mentioned previously, there had been some discussion that

e Atwood felt very strongly that the Norfolk Ship was

e overcharging us and our position simply was that t~ey could

10 deal with Norfolk Ship and do as they pleased. If they

u could get it lower, if they could get Norfolk Ship to take

12 $1,000.00, th~t was fine with us. We just wanted to get out

13 of the thing.

14 Q Now, also, I'm going to show you at this ti~e ~-

115 I've provider'! counsel with copies -- tl.n original of a yellow

1e note pad here and I'm going to ask you can you identify that.

t7 Is that your handwriting?

18 A Yes, that's my scribbling. I have a habit,

ss whenever I settle a.'l1y case or make anything of any real

20 consoquence, I put a· note in the file. And this is dated

21 1/7/71. Now, this says, "Re: Ivieekins"

22

23

24

2!5

MR. LYL~: For the purpose of the record,

:th8t docqment.

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13 ;-'0i')V

BY MR. H AMr.t2:R S :

2 Q Mr. McKenry, did you write that yourself?

3 A Yes.

• Q Did you write it on the 7th of January, 1971 -

II A Yes,

8 Q -- to the best of your knowledge?

7 A Yes,

e Q Do you consider this a record kept in the

• ordinary course of business?

to

II

12

A

Q

A

Yes.

All right.

As I said, I keep -- I try to do this in

t3 every file that I handle, if it's settled or an:rthing of any

t4 con~0qucnce that's done. 0 .1\nd this ir; a note si!"tply to me

111 to -- which I then wrote the letter in regard to. Says,

us "Re: Meekins, et cetera, adverse Sca.:;oing." I refer to

1a M·~ckins Pontiac and Atlantic Len~ir:.f!' --....... 0

1s $2J, 000.00 total, Gent) to r2y 23, 000. "

23

Atwnrr!."

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11+ ('11"\ .., ....

A Yes, 2ir.

2 Q Explain~ that. Now, let me show you exhibit

3 marked num~sr 4, v;tich is a lettf.:~ to you fr'Jm Stc.~"lle~r At\·~ocd

• dated January the 7th, '71. Also could you tell us what

IS that says •

e A "This is to confirm our agreeme~t of January

7 6' to settle the above matter by payment of 23,000 in certified

e funds within the next week." I think he made a mistake. I

• think it's January 7 we actually did it but that's neither

10 here nor there. "As I said, your check should be made

n payable to Bangor-Punta Operations, Inc. You will prepare

12 mutual releas€s. I understand from our conversation that

13 you were paid by Chrysler Corporation 1:'he amount you attribute(

•• to th~ product problorn~, engine of the boat. Needless to

ss say, I appreciate any information you might be able to give

se ~vi th regard to where Mr. Meekins got the erroneous

t7 infor~3tion that we would be willin~ to settle this matter

1a for $20,000.00. I gather this information wac siven to

1s Mr. r:!~ekins by an exemplo:y·ee of Bar:gor-Punta or one of its

20 divisions. "

21 show you exhibit

22 .J::1nu2rJ 21, '71-, to Stanle:r Atwood from you. C:Ln you tell U8

24 .\ Y2~h, I h~d previou~ly -- I b~~~sve nft:r

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J. R. r~!cKenry 15 SO?Y

on that. Ar.yway, I wrote Mr. Atwood because of the situation

2 once again with Norfolk Ship as to how he was going to deal

s with them, how he wanted it, did he want me to send him the

• 2J,OOO and w9 pay Norfolk Ship or did he want us to send the

a entire 2),000 to him and he would deal with Norfolk Ship

e direct. I simply wanted instructions as to how he wanted to

7 receive payment. This is fourteen days after the other letter

8 Q All right. Now, I hand you exhibit marked

a number 6, whi·~h is dated January 25, '71, which is a copy of

to a telegram from Stanley Atwood to you. Can you tell us what

u that ·states for the record?

12 A Says, "Because of counteroffer received today

1s dated January 21 and because of your client's default on

14 agreement to settle, we have decided to repossess boats and

1s to seek deficiency against your client. I've tried to reach

te you by phone to no avail."

17 Q Now, I show you -- did you have a telephone

t8 conversation that you recall after you received this

1s t~1e~ram or do you recall?

20 A I had one prior to that -- prior- to my sendinc

21 t"~-.:c: J.~tte'!' with I\~r. Atwood tclli:1.r': hi~ th2.t I had -- iust - "' -

24

.~ ,.., ~~ ~ .. ,,.., ,... t; .-· .a.. i .-,,..... ,., ~ + .-:- y. • h :;"1 + '- v .. , - ·- - - -· - ....., - .. .. - .. ~.- .... v.. _.... ~ •

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J. R. i:JicKenry 16 CGPY

letter dated January 29, '71. Can you tell us what that se.:),.s? ·

a A I said, "Dear Stan: I'm sorry that you feel

a there was a count~~offer. I think if you will reread my

.. letter of Ja"tuar:l 7, you will see that there's no question

a but 2),000 was all Meekins was going to pay for anything and

o that was to include the amount due Norf~lk Shipbuilding and

7 Dry Dock. Be that as it may, we shall await further

a developments."

Q Mr. McKenry, in all of your negotiations with

10 Stanley Atwood, which you testified is the only person with

" whom you negotiated at Bangor-Punta concerning this matter,

12 did you ever at any time offer any sum other than $2),000.00,

1a to your knowledge?

14 A No, sir.

1D Q Did at any t~me this include -- did at all

10 times, rather, this sum, as far as you were concerned --

17

18

ua

ao

21

22

23

24

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MR. LYLE: Objection. That's a leading

question, He's testified to that.

MR. H .. ~.MMER3: Are you. objecting because it's

leading or· because it's repetitive?

MR. LYLS: Both reasc~s. He's alre~dy stated

what .he'~ -- the letters s;·22.k for th8m;.e:lv88 a:1d

he's testified about the corvcrsation.

T .1.

think he has, too. I don't have any further questic ·7.

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EXAlVII~ATION BY MR. LYLE:

J. R. McKenry

.... '":•

a Q Mr. McKenry, let me see if I got this right,

3 now. This involved the purchase of two boats --

IS

e

7

A

Q

A

Q

Yes, sir.

-- by your client from ours.

Yes, sir.

. One which is in the approximate amount of

a $24,750.00 for the 48-foot boat, right? I mean, is that

• approximately

10 A That was the -- that was the -- you mean --

n you're talking about the original retail price?

12 Q Purchase price.

18 A I'll have to say your figures are correct. I

14 think that's correct. I. can • t recall.

liS Q And the )2-foot boat, I believe, was

1e $10,930.00, is that correct?

,'7 That sounds approximately correct.

18

A

Q Plus, of course, interest was running with

19 GAC to your client's knowledge, was it not?

20 A Right, yes, sir.

21 Q And is it yo"'..l;: test.i.mony th2.t you felt .. ll. '.·,ras

22 settled for $23., coo. 00 cash, all the.:;·: i te:ns, is that •. h-'-4") r~c~- l.o ;

28 A

24 re as ~n::; w2s is "that we fra!!kly had grave douhtc c.s to

2s · whether the 48-:'oot boat could be sold at all bec2.:J:-e tf'c

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J. · R. r.Tc K·~n!'y 18 CO?Y

customer that it had been ordered for refused to take it due

a to its list, due to its leaks and due to the other problens.

a And when we were advised that the list which was very

• noticeable si ttin~ in the water, which even Mr. Atwood

s commented on -- it looked like it would -- I mean, any water

• at all would put it under -- whether it could be sold at all.

7 Q Okay. Now, I'm aware that there were some

• problems with regard to the 48~foot boat but I'm not aware of

• any problems as regards the 32-foot boat. Can you tell us

to about that?

u A I think they were primarily with the engines.

ta I think they were primarily -- I think you're correct. I

ta think they were primarily with the eng:~nes and not with the

14 structure. I

us Q

t8 A

17 Q

18 A

IS Q

20 estimated to

21 A

22 Q

23 A

24 Ship , 19? 0

believe that's correct.

The engines en the 32-foot boat were --Yes, sir.

-- defective?

Yes, I believe that's correct.

Do you remember what amount that was

be in?

Let's see; let's see.

· If :..'(),J kr.a~.v.

Well, there's oth~r t~ings. I've got No~~olk

1970 .model 32 Seagoing electrical wiring

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19 ~OPY

Q Relatively insignificant matter, wasn't it?

a A Yeah, I think that's correct. Let's see. I

a tell you, I'm not a boatsman and I have trouble keeping all

• this straight. Things are so -- these things are

• interchangeable. I can't really answer your question. I

e know that the problems with the 32-foot were not nearly as

7 great as with the 48-foot and I've got this things all -- I've

• got this thing

10

11

12

18

Q

A

Q

A

Q

Okay.

And I can't remember.

I understand.

Frankly.

There's nothing in your recollection, is there

14 that indicates that the 32-foot boat was defective to the

•• point of being unmarketable, is there?

1G • A No; no, I don't think so. No, I don't think sp.

17 Q All right. So, basically, your client

1a purchased a boat for 24, 000 and some odd dollars, wh i.ch is

~ alleged was defective, materially defectiv~.

ao

21

22

23

24

2!5

A Yes,· sir.

Q And a bc8.t fo!:' :.~~10, ?J'J. 08 v·thich v;s.:; in

substantially marketable condition, isn't tha~ a r::l..-.+? -- -·'· ....

A

Q

C"'!.;;:-"'1-t" -- •• .• ..1

.li.ll ri.;h t. Now, l. ""' r• \..• .._; also fc..ct,

'h-.~ .!. .. ·•

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is it n.Jt,

J. R. M~Kr.~nry

of th0se two boatG? Isn't that a fact?

2 A W~ll, now, to my knowledge he hasn't and

a that• s --

Right. And can yo~; tell us wh~: nothing was

a paid 0n the account of the 32-foot boat?

e A Well -- and, once again, I may be getting them

, confused but there was certain equipment that was ordered for

e the 32-foot boat such as the flybridge, I believe, and things

e of this sort, which never did come in. And -- well, now; I

10 thought something-- nothing was -- w~ll, I can't ask you the

u question.

12

18

14

,, 18

17

18

19

20

21

22

MR. HAMMERS 1 I don't vrant to interrupt and I

probably let it go on but for the record I want to

object to this. line of questioni~z ~~cause it was

my understanding these depositions v1ere on the

point of negotiations betwt?en Mr. r:IcK~~nry and 1~.1r.

Atwood. Most of what Ivir. Lyle is aGking would be

hearsay and it's somethi~6 tha7. ~::-. U~cKenry would

MR. LYLE: Well, I'll lir:it rr:~-:- ::r ... test.lo~s to

quecti8n.

24 ~y ... ,.,., ~' 0 .... LYI.~:

2!5 Q

JAIME Be BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK, VIRGINIA

21 ';C1 :"'V

fact that you received in excess of $3,000.00 from Chrysler

a Ccr1Jor2.tion a.s a payn~nt on their warranty of the engine in

a the ~-8-foot boat?

• A Yes.

IS Q When was that received and how much was it?

A That was $3,311.81 and it was received in

7 December of 1970.

• Q This money, then, was received substantially

e simultaneously with the negotiations with Mr. Atwood which

to you've referred to, was it not?

u A Yes.

12 Q And it is a fact that that money has never

ta been paid to or tendered to Bangor-Punta. Isn't that a fact?

14 A Well, that money was to be kept by Atlantic

ts Leasing for the engine problem because. thsy were going to

1e ·have additional expenses that were not included in the Norfolk

t7 Ship bill, I believe, for the engine repairs.

18 In other words, you were going to rec~ivc the

~ money from -- in other words, your client was going to

ao receive the money from Chrysler and not pay the liens off,

21 is that it?

22 A

2s rcp2..ir3.

24

. Well, the lien was from Norfolk Ship for the

I knov;, but the repairs were due to a

JAIME & BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK, VIRGINIA

22 r.oPY

A No; no, defects were lots of others -- I mean,

a the defects we"!"e -- I mean, the list I doY'l. 't believe was

s cause d. 'by the engl~e s,

Q There's ~~ item on here in your exhibit from

• Norfolk Ship, item three, involving the main engines, which

e purports to show engine defects in the amount of $1,680.00.

7 Is that the 48-foot boat?

• Yeah; yeah •

8 That would be a Chrysler warranty, would it no ?

tO A You're asking me a technical question that I'm

" not --

ta Q Okay, all right. But, at any rate, you have

ta received or yc~ur client has received this sum from Chrysler --

14 A Yes, sir.

. us Q -- and have not undertu.ken to pay Norfolk Ship

18 with this fund or to reimburse Bangor-Punta.

!7 A· Well, Norfolk -- shortly thereafter we got

te into litigation. Norfolk Ship reposse3sed the boats, sold

te them ~t pu~lic auction and I unde~stood, to a r~prssent~tive

ao ·:>f Ba~gor-Punta but that • s n·~t clear to me. .And we advi~~d

at Banga~-Punta that we would -- v;e consid~:-ed the mc..tter

22 ~ettl~1 and that they were acti~g from that point on at th~i~

as reril.

24 Q So .your client tal:e::; the position that

JAIME 8c BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK, VtRCliNIA

?.J C!OPY

right? Or ~rou take the position that that • s so?

a A Off -- well, no, I don't take that position,

3 fra:1kl;/.

• Q Do you think t.tnder the terms of your

s settlement or your alleged settlement this money from

e Chrysler ought to be paid to Bangor-Punta since they are

, concerned with the engine defects which gave rise to the

• problem?

A I'll be quite frank with you. I don't know

•o because of th,~ -- because of the situation. We were going to

u receive it. 'Ne were going to buy the boats. Now, the boats

•a are gone and, frankly, I would say without prejudice I think

ta probably you-all perhaps are entitled to the money since we

•• didn't get the boats.

IS Q Okay. Have you -- other than this settlement

te with Chrysler which you received, have you ever tendered or

t7 offered any specific amount to Bangor-Punta to Seagoi:1g boats

ta or into court? Have :)rou ever specifically tendered a.ny money

sa to any part in respect to this settlement?

20 A Well, yeah, th~ 2),000.

at Q Have you tende~ed it?

22 A Well, I -- I offered it, yes, sir. I did not

z3 send it, no. No, I was advised not ta s~nd it but I had tho

24 check a'laila~le in.~y escrow acco~nt ta send.

as Q

JAIME 8: BROWNING

CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK, VJRCINIA

J. ~. JV:cKS>nry

hav~ you, at any point?

2 A Of course, that, once again, is a conclusion

a as to whe!'! do. you tendt=?r, when you say it's a'railable and

4 you say not to send tt.

IS Q Well, by the word tender

• A I offered i~, yes, sir.

7 Q By the word te.nder I mean sent an actual

a check, draft, cash or money order purporting to represent

a this settlement.

10 A I had a check made out for $2),000.00 to

u Bangor-Punta as directed on my desk, 1t1hich I wrote Mr.

12 Atwood and asked did he want me to send that to me -- to him

•a in its entir~ty -- I could not reach him by phone -- or

1• deduct the amount of Norfolk Ship and send him the balance,

us exactly how did he want me to handle lt. And that's when he

•• '"wrote back and said that there was sor1e -- he considered it

t7 as a counteroffer a'!'ld that --

18 Q Well, isn't it a fact that what he considered

sa to be a counteroffer was the fact that you were trying to

20 take the Norfolk Ship bill out of the ~23,000.00?

21 A No, I don' "t -- w~ ll, I do!'l' t knov.· w!:.at ~s

22 thought, frankly. That would be

23

z4 dra 1.'\'~ in th~:

2!5

amount cf $2),000.00?

Yes, si~.

JAIME & BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK, VIRCINIA

J. R. McKenry 2.5

Q Was that on your firm account or Ivir. Meekins's

a account?

3 A I'm no-: sure.

Q But you haven't sent a check o~ tendered,

• physically tendered, a check.

• 7

• a no, sir.

to

u has been

12

13

14

us

A

Q

A

Q

paid

A

As far as physically

Either by mail or otherwise.

As far as physically putting it in the mail,

And, of course, the record shows that no money

into court. That is correct, isn't it?

Right.

MR. LYLE: Okay. That's all I have.

MR. HAMMERS: Let me just ask a couple.

us EXA~:.INATION BY M~. HA.r.1MERS &

17 Q Mr. McKenry, do you know of your own

te knowledge who bought the boats in?

18 A No.

20 Q You were present when depo2itio:1s were tak8n

~ of Mr. Atwood, is that correct?

22 A

23

24 th-~ boats in?

2!5

Yes.

D,.... ___ -~ ..... -.. r,.-.. 1. •••. ?""~""·---·· ':".~ r-_.,_·_,....·=· o··- ~ ...... - ... , -...::~-- .,,,_,"' h-.-.--1.-,+ .6 ~ ~~ _ .... ~ \( __ ,.J _ __ • • • i ~ 1 : ·.__ r ! .. .~ · . _ -:· . .....£. ..._j :.:.; '-~• :-! _ _, L- ~ .. .: · ·'- (_, ;. •.

No.

JAIME Be BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK, VIRGINIA

• I

2

II

• 7

a

to

lt

t2

ta

J. R. I'llcKenry

MR. LYLE: Objection. I don't think he knows.

I think --

THE WITNESS: He was asked to supply the

infor~ation if it became available.

MR. HAMMERS: And he has not to date?

THE WITNESS: No •

MR. LYLEa For the record, he doesn't know.

These boats were bought by private parties and

we'll, of course, prove that at the trial.

MR. LEAFE: Let me ask just a couple of

questions. I want to get a couple of documents

· identified.

•• EXAMINATION BY MR. I3AF2:

us Q Mr. McKenry, I show you a copy of a telegram.

•• Would you identify that, please, sir.

!7 A This was a telegram that I caused to be s8nt

ta to Stan S21Ta of Chrysler Corpo!'a.tion ..

18

20

21

22

23

24

25

MR. LYL~~: C:J.n I loo}: at that b-efo-r.t?. I :iecid']

whether we'll ma1'7·~ z.r: cbj~cticn or no-t?

M~. L.::AF'2': Yes.

"+ 1 \ .•

JAIME & BROWNING CERTIFIED SHORTHAND REPORfERS

COURT REPORTERS

NORFOL.K, VIRGINIA

thi~ l-... '-'- ~ .L:! "'' ·" .. -·

r.r.~v ,_ . .,_1- •

J. R. ":!cY.enr:" 2? 80?~

BY M~. LEAF2:

a Q And th0. purpose of this tel€gram v12.s to

4 Leasi~g and Chrysler Corporation in the amount of $J,J11.81

II on the 48-foot boat.

e A Yes, sir, we -- we at that time thought we

7 had the whole matter settled.

• Q I show you this letter. Did you later receive

e that letter from Chrysler?

10 A Yes, sir, I believe I did. That's my

u signature.

12 Q And it's your signature at the bottom and

1a would that be the signature of Mr. Meekins also?

14

Ul

18 Meekins'

!7 that was

18 against

18

ao

21

22

23

24

25

A It's faint but it appears to be, yes, sir.

And the purpose of your signature and Mr.

signature on the letter was 4:;o confirm the agreement

set forth in the lette~ settlir.g the -- any claim

Chrysler on the 48-fovt boat.

A Yes, sir.

lV!R. LYLE: Is thc:.t it? .Are you through with

him?

!::1'!"'1_. _d ,., -_ ... ~_.,.._ .. t.ce~ h ... :.; t_h_,c_::. ~,...·,rt vo~-no""+pY' ) ._ - - - - -· \,.' ·-~ - :_ ·::. J:· '· .... ~· .;. .... •

JAIME & BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK. VIRGINIA

cJ. ? . McKenry ?8

EXA!·.:INATION BY MR. LYLE:

2 Q This telegram which Mr. Leafe has referred to

a is !!!~rk9d !'ec~~ved D~c~Sr..ber 21. I dor.'t suppos8 :lou rern~:::ber

.. what day you sent that -- I see. It's marked Dt::cember 21.

s I'm sorry. So you, in essence, reached an independent a

e settlement with Chrysler on behalf of Atlantic Leasing.

7 A Well, it was-- actually it was done somewhat·-

• we had hoped simultaneously because Mr. Atwood had -- it's

• my belief that Mr. Atwood had made the offer to settle for

•o 25, 000 and they would pay the bills and that would be our

u total payment and I, frankly, think and this is an opinion·-

12 that Mr. Meekins would have taken that had we not been able

sa to hold out for the-- for·the $2),000.00 figure.

14 Q In other words, if you had not settled, in

•a your opinion, with Mr. Atwood, Mr. Meekins would have

we accepted $),311.00 as settlement for these alleged defective

t7 conditions, is that correct?

ta A Ask me that again.

18 Q Is that what you were saying? I'm trying to

ao confi~m -- what I think

21

22

23

24

215

MR. LEAP2: I den'~ thinJ~ th2.-t's whc.t h::· 22.id

but I.'ll let -- I'll ·wait tc.· obj·2ct.

answer, then, b.::cans0 m2.~·b::; I got th9 ,.-rorg d:-ift.

( .A..?;. s we ~ on l i '!'! e ? re 3. =. b 2 c k by t h-?

JAIME & BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK, VIRGINIA

J. R. McKenry ':)Q . -.

BY r,1~. LYLE:

a Q I gather from your testimony, Mr. McKenry, tha

a in your opinion Mr. Meekins could have accepted $3,311.00 had

• you not been able to consummate a settlement with

s Bangor-Punta.

e

7

A

Q

No; no; no; no, no way.

Well, explain what you meant by -- because

e I'm not sure I understand what you meant.

A What I'm saying is that at the time Chrysler

10 offered to pay three thousand some odd dollars for the

n defective· engines, Stanley Atwood -- and this is the best

12 of my recollection -- had said that the same terms that I

1a consider the matter settled on would apply except we would

•• pay- them $25, 000. 00 for both boats. They would, then, late

ts charges, interest, liens, Norfolk Ship, the whole business,

te they would pay that. But, as you know, in negotiating you

t7 try to hold out for the best possible deal and I h~ld out

ta that we would pay a total of 2),000, which r:rr. Atwood

~ sub~e~uently accepted. We would pay 23,000 and they would

ao pa~r ~-Torfolk Ship liens, interest ar..d sa fo!"th and that

21 would be our total pa;;rmc:nt.

22 Q Did yotl cons~~l t anybody, At·,vood or anybod:>r

23 el s'::, a~out you~ co~sum~~~in: a 2ettle~s~t

u a~d ~ release of Chrysler on your tehnlf or on your client's

.as behs.l:'?

JAIME Be BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK, VIRGINIA

~""f"iPV •.J ,_.- ·-

JO

A I believe I did. Seems to me I even referred

a to •• l.t.. in one o:f the letters to r.1r. At·vood or he referred to

a it to me in cne of the letters to me.

• .Q But oth~r than the letters would speak for

II themselves, you don't recall.

e A I think I mentioned it to him but I have no

7 independent recollection.

• Q All right. And did you request that the

a check from Chrysler be made out jointly between you and

10 Bangor-Punta or was that discussed?

II A That wasn't discussed, That was at that

1a point, actually, I think Mr. Sava and lVIr. Meekins were doing

1a moE;t of the negotiating be tween themse 1 ve s.

I.

18

18

17

18

18

ao

at

22

23

24

25

MR. LYLE: Okay. Go ahead. That's all the

questions I have.

TH3 WITN~SS: I'll waive my signature.

MR. LYL2: Let the record show that by

agreement of couns9l the invoice from Norfolk

Shipbuilding and Dry Dock dated April J, 1970,

. may be admitted in evidence. Mr. r·t1cK~nry' s

memcrandu:-.1 dated Ja!"luary '?, 19?1, i.: ~;pscific~:tlly

objected to by counsel fo~ the plai~t~ff.

-----~00---- ....

JAIME Be BROWNING CERTIFIED SHORTHAND REPORTERS

COURT REPORTERS

NORFOLK. VIRGINIA

("ri'PV ·-· ••• L.

31 COPY

a

a STATE OF VIRGINIA,

• CITY OF NO~FOLK, to-wit:

II

• I, Kay L. Neidhart, C.S.R., a Notary Public

7 for the State of Virginia at Large, certify that the

• foregoing deposition of James R. McKenry was duly taken and

a sworn to before me at the time and place, and for the. purpose

1o in the caption mentioned.

n I further certify that I am not a relative or

12 employee or attorney or counsel of any·or the parties, or a

1a relative or employee of such attorney or counsel, or

•• financially interested in the action.

Ill

•• t7

18

18

20

21

22

23

24

25

Given under my hand this /3-~\_ day of

Notary Public.

JAIME & BROWNING

CERTIFIED SHORTH4ND REPORTERS

COURT REPORTERS

NORFOLK, V1RGINI4

VIRGINIA: IN THE CIRCUIT COURT OF THE CITY OF

VIRGINIA 3EJ\.CH.

----------------------------r----------------X BANGOR PUNTA OPERATIONS s INC.,

-against-

ATLANTIC LEASING, LTD., and CHRYSLER CORPORATION,

Plaintiff,

Defendants.

-----------------------~---------------------x

NOT I C E 0 F F I L I U G

P 1 ease Take !loti ce that on the tf--aa.v of

i~ay, ·1972, I filed Nith the Clerk of the above

Court a deposition of Stanley P. At~ood, Esq.,

on behalf of the defendant, taken on the 17th

day of April, 1972.

I certify that on the p-day of l•iay, 1972,

q t rue co p y of t h.e f o rc go i n g Not i c e o f F i 1 i n g

was mailed to each of the agencies hereinabove.

' _,.··' \ (··· . . ) . I . ·. . .' . ' / . . . . \. {I ··----- ·-

--L~'~t~~~C~-~ :-~~i;o·~~-k1:__L~ Notary Public and Shorthand Renorter