Howard H. Larson, Plaintiff-appellee, v. Health Concepts Corporation, Defendant-appellant, 891 F.2d 291 (6th Cir. 1989)

Defendant-appellant Health Concepts Corporation (HCC) appeals from a judgment for plaintiff-appellee Howard H. Larson (Larson) in this diversity action on a promissory note and stock purchase agreement.

Larson and HCC had entered into a purchase agreement (agreement) in which HCC agreed to purchase all of the issued and outstanding shares of the capital stock of Northern Care, Inc. (NCI), operator of two nursing homes, from Larson in exchange for $2,841,000, of which $2,712,500 was to be paid in cash, with the balance of $129,140 to be paid in accordance with terms of a promissory note (note) executed simultaneously with the agreement. Both the final purchase price and payment due on the note were to be adjusted per terms of the agreement.

The agreement contained a schedule of adjustments to the final price based on current liabilities, and a dispute ensued as to whether this included accrued vacation and sick leave, with HCC asserting that it was entitled to a right of setoff for the amount accrued as of January 31, 1986. HCC filed a countersuit for the balance it claims is due them after setoff.

Subsequent to a bench trial, the district court entered judgment for Larson in both the action on the note and in the countersuit by HCC.

In construing a contract, the primary rule is to give effect to the intention of the parties. Central Jersey Dodge Truck Center v. Sightseer Corp., 608 F.2d 1106, 1108 (6th Cir. 1979). This court concludes that the district court properly applied that rule. Accordingly, for that reason and for the reasons articulated in the December 13, 1988 memorandum opinion of the district court, the judgment of the district court is AFFIRMED.