Sonesta International Hotels Corporation, Plaintiff-appellant, v. Colony Square Company et al., Defendants-appellees, 482 F.2d 281 (5th Cir. 1973)

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US Court of Appeals for the Fifth Circuit - 482 F.2d 281 (5th Cir. 1973) July 5, 1973

Charles R. Holman, Jr., William R. King, Atlanta, Ga., for plaintiff-appellant.

R. Neal Batson, Oscar N. Persons, J. Randolph Pelzer, Atlanta, Ga., for defendant-appellee.

Before JOHN R. BROWN, Chief Judge, and COLEMAN and DYER, Circuit Judges.


Sonesta International Hotels Corporation brought this action in the district court seeking specific performance or, in the alternative, damages for the breach of a letter of intent entered into by it and Colony Square Company, a real estate developer, to cooperate in the development of a hotel to be constructed by Colony and to be leased by Sonesta. After Sonesta had presented its evidence Colony moved for an involuntary dismissal with prejudice pursuant to Fed. R. Civ. P. 41(b), and the motion was granted. This appeal followed.

In its findings of fact and conclusions of law the district court carefully analyzed the letter of intent, as well as the extensive negotiations that preceded and followed it. Based on this review, the district court concluded that the letter did not create a binding contract with enforceable obligations; that, if the letter imposed on Colony an obligation of good faith bargaining, that obligation had been met; and that Colony was not estopped from contesting the effect of the letter of intent. Our examination of the record convinces us that the district court's findings of fact are not clearly erroneous, that it applied the proper legal principles to those facts, and that the ultimate construction placed on the contract is correct.