Defendants-Appellants-Cross-Appellees Donald L. Terwilliger, III ("Donald") and John Terwilliger ("John") (collectively "the Sons") appeal from so much of a summary judgment as awards payment in the sum of $351,586.74, entered in the United States District Court for the Southern District of New York (Casey, J.) on the motion of their father, plaintiff-appellee-cross-appellant Donald L. Terwilliger, Jr. ("Terwilliger"). Terwilliger cross-appeals from so much of the judgment as denied him prejudgment interest. Terwilliger sued the Sons for breach of contract, alleging that the Sons failed to fulfill their obligations under a stock redemption agreement ("Agreement") entered into by Terwilliger, the Sons, and D.L. Terwilliger Company, Inc. ("Company"). Terwilliger contended that the Sons were liable for monies due under a promissory note ("Note") issued by the Company as consideration for his controlling shares in the Company, either on the theory that (1) the Agreement constituted a direct contract between the Sons and himself, rendering the Sons personally liable to him for the Company's default on the Note or (2) the Agreement included the Sons' guaranty of the Company's obligations under the Note. The Sons contended that Terwilliger's only remedy was against the Company, which is now bankrupt. The district court held that (1) the Sons were liable, pursuant to the Agreement, as guarantors of the Note, (2) Terwilliger was not a third-party beneficiary under the Agreement, (3) a stipulation ("Stipulation") entered into by the Company and Terwilliger, in settlement of his claims against the Company in the bankruptcy proceeding, did not preclude recovery against the Sons, and (4) Terwilliger's recovery should not include prejudgment interest.
For the reasons that follow, we affirm the summary judgment in plaintiff's favor on the issue of liability on alternative grounds, vacate so much of the judgment as awards damages and remand for the reassessment of damages and the computation of prejudgment interest.
Miner '56, Roger J., "Terwilliger v. Terwilliger, 206 F. 3d 240 - Court of Appeals, 2nd Circuit 2000" (2000). Circuit Court Opinions. 170.