*1 III. investigat- CONCLUSION follows when the NASD process Thus, rul- complaints. before ing customer grounds find no merit to the Bank’s We report, objection to the ing Bank’s on the appeal. Accordingly, AFFIRM the we testimony heard the court had the district district judgment of the court. general counsel associate of a former Barnes, member NASD, and a former Commit- Business Conduct the District that motivation- tee, Vining, concluded report so did not render problems

al require its exclusion.

untrustworthy as to that because Bank also contends of caution issued its letters

NASD DEVELOPMENT CORPO- FIRST case, listed the first factor trial of this KENTUCKY, RATION OF exclud- favored Advisory Committee Plaintiff-Appellee, Yet, first factor relates ing letters. to com- time it takes so much to the Harmony Landing Development Com- such as the thorough investigation, plete a (89-5136), Intervening pany, Inc. NASD, but to the by the one conducted Plaintiff-Appellant, events which the acts or time between investigating and the start

agency is Baker, F.2d at 558. investigation. MARIETTA MARTIN CORPORATION showing that cited no evidence The Bank (89-5093), Defendant-Appellant. investiga- begin its failed to the NASD had 89-5093, Nos. 89-5136. Bank’s com- receiving the shortly after tion plaint. Appeals, United States Court Circuit. Sixth factor, the district court the second

As to say admitting the letters to failed before 7, 1991. Argued Nov. skill expertise and veri- that the NASD’s 26, 1992. Decided March In the letters’ trustworthiness. fied the April Rehearing Denied fact, however, it findings of district court’s exper- “has extensive noted that the NASD propriety of a member analyzing

tise Therefore, it mark-up practices.”

firm’s its court relied on that the district

appears deciding to admit

finding expertise in letters into evidence. factor, the Bank

Finally, citing the third adequate trust- the letters lack

asserts that heard no the NASD because

worthiness Al- examination. testimony or cross

sworn not conduct

though the NASD did Baker, note, did in

hearings, we as we no reference to such

the rule “makes appears only to be

requirement; the factor Advisory suggested by the

one of those F.2d at 558.

Committee.” 588 sum, court hold that the district we that the reasonably have concluded

could Thus, trustworthiness.

letters did not lack court to find that the district

we refuse its discretion.

abused *2 briefed), (argued R. McCall

John Brown, Quinn, Hey- Thomas M. Todd & Louisville, burn, Ky., plaintiff-appellee. briefed), Croley (argued William P. Brammel, Yates, Croley, Moore & La- intervening plaintiff-ap- Grange, Ky., for pellant. (briefed), Doll, K.

John G. Carroll John Greenebaum, Boone, Treitz, Maggiolo, Zimmerman, Brown, Reisz & Charles H. Jr. briefed), (argued Foley, Zimmerman & Louisville, Ky., defendant-ap- Bryant, pellant. NELSON, Judge; and

Before: Circuit KRUPANSKY, Circuit BROWN and Senior Judges.

PER CURIAM. Appellants Corporation Marietta Martin Marietta) (Martin Harmony Land De- Land) (Harmony velopment Company have judgment of the district appealed from a permanently diversity in this case court selling enjoining Martin Marietta from parcel of riverfront real 15-acre ordering Harmony Land and convey parcel to First Marietta to the said Corporation Development (FDCK), plaintiff below. 9, 1988, entered May On 365-day listing agreement into a exclusive Banker, a real estate broker- with Coldwell firm, property here in con- age to sell the $750,000. troversy for Coldwell Banker (Gilmour) as its designated Don Gilmour agent. account 16, 1988, FDCK, through its On (Pollitt), sophis- president Sam Pollitt developer, real estate broker and an effort ticated accommodate parcel persuaded Gilmour an offer to Martin Marietta to re- submitted price consider $300,000. sale of the land. The offer was submitted on Board of Realtors a standard Louisville September 7, In a letter dated 1988 ad- *3 form, following open- and interlineated the Gilmour, dressed to Martin Marietta ended conditions: agreed acreage to following sell the on the obtaining satisfactory 1. a loan unconditional terms: purchaser; purchase price $550,000 cash; 1. — obtaining survey; satisfactory 2. money $20,000; 2. earnest — required zoning changes; obtaining 3. 3. option Martin Marietta to retain the obtaining sewage disposal; 4. on-site closing of the sale December 1989; January or and obtaining building permits; required 5. and 4. the counteroffer open to remain thirty days September from 1988. obtaining hazardous and sur- 6. waste face soil waivers. Upon receipt of the letter on required: immediately The FDCK offer Gilmour communicated its contents to telephone. Pollitt Pollitt contingencies These must be satisfied or copy received a of the letter from Gilmour days acceptance waived within 180 from on or about 1988. He initi- Closing of this contract. to be within inquiries ated no further or action concern- days from removal or waiver of these ing property the until contingencies. when him negotia- Gilmour advised that purchase accompanied by The offer to was tions for the sale of the to Harmo- money deposit an earnest evidenced ny Landing were about to be concluded. $1,000 payable check to Coldwell Banker. Harmony Landing pur- had initiated the deposit fully was refundable trans- property directly chase of the with Paxton completed fer of title to was not FDCK Badham, legal in-house counsel for Martin any except per- reason FDCK’s failure to Carolina, Raleigh, Marietta North within form, distinguished as from a nonrefunda- days expired Harvey Bill of FDCK’s offer. payment ble to a seller as consideration for (Harvey), president Harmony Landing, of option purchase realty speci- to within a parcel developing owned and was a 5-acre period. negotiated fied The check was not property contiguous of real to Martin Mar- ultimately returned to FDCK on or private yacht as a ietta’s land marina about 26 or 27 of 1988. Harvey, through club. a series of tele- purchase expire The offer to was to Badham, had phone conversations with 1988 at 6:00 o’clock agreed pay to a nonre- proposal essentially a 7V2- $10,000 for an fundable consideration option purchase month free to the 15 acres 60-day purchase prop- option initial to the land, during period Martin Mariet- During period, he erty. intended to disposing ta was foreclosed from of the permits County obtain from the Oldham buyer. to other interested Planning Zoning deposit Commission to purchase price Both the and satisfaction of upon excavation fill from his marina the open-ended incorporated conditions obtaining Upon Martin Marietta land. contingent purchase upon the offer to permits, Harvey pay Martin Mariet- would approval FDCK’s unilateral and satisfac- $40,000 ta an additional nonrefundable totally unacceptable tion and were to Mar- ten-month consideration for an additional Marietta, permitted tin the offer to and it Landing option. Harmony extension of the expire response. without had months from the date of the Immediately subsequent expira- option purchase proper- within which $500,000. purchase, ty Upon tion of for an additional prevailed land, upon Gilmour to seek a counter- exercise of the offer from Martin Marietta. as consideration for advanced servicing the site—essential- be sale would applied to be options would had been incor- the conditions ly, all 1550,000.00. price of original offer to expired into his porated incorporating drafted a contract Badham August 16. purchase dated executed An agreement. the terms that, conclud- Harvey by after Federal indicated He further delivered copy was lawyers, he his Monday, September ing conversation Express on contract, Har- receipt the executed on the bottom Upon typed an 7,1981 Badham, approved var- who vey telephoned letter Marietta insignificant modifications suggested it; attached physically that he signed ious Harvey executed “acceptance” to agreement. letter the executed contract, a check attached Realtors amended Board of form Louisville *4 two-page by over- it Badham $10,000 mailed agreement and standard September Express on either the night Federal check in 8/16/88, a together with the executed received Badham 21 or 22. $20,000 to Coldwell payable amount Sep- $10,000 on or about the contract into the documents He inserted Banker. 23, 1988.1 tember 22 or desk placed his envelope that into he not in- (Significantly, Pollitt did drawer. Gilmour, not who was September On $1,000 copy of the envelope a in the clude negotiations be- the fast-track current with the offer accompanied had check which Badham, advised Pollitt Harvey and tween 1988.) He expired on that the Mar- acquiring in Harvey’s interest accept- convey FDCK’s effort to made no non- remained land. Pollitt tin Marietta testified further Pollitt to Gilmour. ance negotiations concerning the committal 22, he morning of that on interest in no further communicated envelope and its contents placed during telephone conversa- that depository mail Suite’s talking Office his Executive that after testified tion. delivery to the U.S. stamping and he visited meter with Gilmour occurred be- pickup which riverfront Postal Service the 15-acre day. Again, p.m. each Dike partner 4:30 and 5:15 p.m. his tween 4:00 property at his Gilmour Bills of effort to advise engineer Phil he their made Gregory and Engineers. acceptance. Consulting purported Sayback and Wilson according meeting, During the indicated, a he returned previously As Gregory he, Bills and walked Sep- p.m. on at 2:30 telephone call Gilmour had studies that various and discussed following time tember decision to at a and arrived conducted been colloquy occurred: material from accept the *5 him? September 26 or 27. He initi- thereafter A. No. temporary ated the instant action for and Q. you him Had delivered to permanent injunction specific perform- and

check? ance. No, A. but ... any To credibility avoid assessments Q. your testimony you put It’s may assigned by which have been the trial time, point it in the mail at that in is arriving decision, in court at its this court’s that correct? charged resolutions of errors are confined My you talking A. about the U.S. —are undisputed to considerations of the facts mail? testimony developed during of Pollitt Q. Yes sir. impacted by as Kentucky trial law. A. No sir. Recognizing that FDCK’s initial condi- J.App. II at 55. purchase prop- tional offer to the riverfront law, Under an offer 24, 1988, expired August erty on the dis- accepted any must be “before intimation trict court nevertheless concluded that the withdrawn,” is received that offer is Shaw money by refundable earnest evidenced Co., 329, Ingram-Day Ky. v. Lumber 152 $1,000 check, payable posses- to and in the 335, 431, (1913) (emphasis 153 S.W. 434 period sion of Banker Coldwell added); express notice or use of the word was, controversy, by operation of this necessary “revoke” is not to revoke an law, into consideration for a 30- converted offer. An offer is revoked when the offer day option in irrevocable favor of FDCK to ee learns of acts the offeror that are purchase property in the riverfront accord- inconsistent with the continuance of the ance with the terms of Martin Marietta’s imply offer or that that the offer has been 7, September letter of 1988. Ingram, supra. revoked. See also Re (Second) properly statement 42 & The district court’s decision is Contracts §§ (1979); Williston, law, 43 1 judged against Kentucky S. A Treatise on the which is (3rd 1957). Law Contracts 57 ed. It is existing precedent prevailing accord with obvious from the context of Pollitt’s testi throughout the states. mony relating conversation, the above Kentucky, “It is well settled that

coupled with his conversation with Gilmour option purchase property] real is not on that Pollitt knew that the [to binding as a there is no “accepted” option agreement contract where between Mar accepted tin Marietta and Land consideration unless it is within was an option purchase the riverfront land. the time is limit and before the offer with- 622 purchase option to Turner, Ky. cussed an irrevocable Combs

drawn.”2 Mann, supported by valid considera- (1947); Noble v. 200 S.W.2d (1907). outright to an sale. as an alternative 105 S.W. tion Ky.L.Rptr. initial himself considered FDCK’s if the determine court must Initially, this expired August purchase, which offer to 7,1988 Marietta letter Martin 24,1988, purported acceptance consti- purported as 1988 offer to sell supported an irrevocable tuted He testified independent two transactions. the riverfront consideration that: Septem- thirty days from within contingent upon not, testimony, is it your 7. The answer is ber And it’s refundable significance of FDCK’s legal all of the checks Mr. by the money $1,000 earnest evidenced you tendered at time have Banker which payable to check Coldwell re- Martin-Marietta have been offer of initial attached to FDCK’s was you none of them were turned to purchase the 8/16/88 negotiated? ever property. testimony that we tendered a My deposit check on— dollar thousand complaint nor plaintiffs’ Neither original of around testimony an affirmative disclosed Pollitt’s August, and 16th or we 17th $1,000 check, which ac allegation that the deposit check with tendered another companied acceptance of the counter offer for an consideration purchase, They 22nd. accept 30-day option to irrevocable agent accepted by Don Gilmour Marietta’s offer of *6 (Both nor have affirmative checks FDCK for Martin-Marietta. Neither paid they negotiated returned.) or ly subsequently asserted that were 30-day option accept to for an irrevocable J.App. II at 51. Sep to sell dated Martin Marietta’s offer 116, Ky. 314 234 McGregor, In v. Ford 7, doc 1988. None of the relevant tember (1950), high court of Ken- S.W.2d 493 exchanged Martin Mariet uments between “option” that an without tucky concluded FDCK, including the initial both ta and any at time can be withdrawn consideration property purchase the riverfront offer to acceptance that a before refundable 24, 1988 or the expired on which pay- an advance deposit simply which is acceptance Martin subsequent purported of price, the sale purchase ment on the if of 7, September dated Marietta’s offer to sell ultimately consummat- the real estate is 1988, reflected an on behalf intention ed, consideration does not constitute negotiate op irrevocable party to an either option. an irrevocable prop purchase the tion to sell or riverfront it is that there was We think clear in consideration erty for a nonrefundable support monetary to consideration explic The is any amount. documentation There option contract here involved. parties, all of whom were itly clear that the option money paid was no itself experienced sophisticated businessmen simply an ad- The check was $650.00 estate, negotiating for brokering real if purchase price payment on vance option rather than an an unconditional sale but, not, through if to be the deal went Marietta’s initial offer agreement. Martin refunded. 9,May and its subse dated 1988 to sell Headley Co. 7, See New Tobacco Warehouse 1988 quent to sell 857, 860, Ex’r, 212 Ky. 307 Gentry’s v. buy. The unconditional offers to solicited (1948); 325, R. 326 Allen Krauss that the S.W.2d testimony to disclose record fails 125, Fox, 279 132 644 P.2d dis- Co. v. Ariz. parties representatives or their ever consideration, merely agreement sell is an to “option” not in An consideration is 2. without designated property time and to sell the may sense an the strict irrevocable at time within the time specified to sell real be withdrawn An offer within time. time, by specified unsupported limit. within a estate

623 Lee, again, 270 (Ariz.Ct.App.1982); assignment Torlai v. Cal. Here of error is 854, 858, 239, (Cal. Cal.Rptr. by 242 resolved App.2d testimony Pollitt’s as it con- (Second) cerns Ct.App.1969); his activities of Restatement 21 and 22. 1; Stamper Contracts illus. see also § noted, previously As through FDCK Pol- Combs, Ky. 176 S.W. litt became aware of the executed irrevoca- (1915); Williston, S. A Treatise on option Harmony ble purchase Land to (3d 1957). the Law Contracts ed. the riverfront from his conversa- distinguish district court’s effort tion with Gilmour at approximately 2:30 pers Ford from the case at is not bar p.m. on 1988. To arrive at uasive.3 contrary suggested conclusion by Pol- litt, light foregoing, experienced, it the deci- knowledgeable real es- developer, sion of this court that the tate broker and option refunda- that the agreement money ble earnest evidenced a check between Martin Marietta and agreement Land accompanied was an which other option purchase than an riverfront riverfront land, 24, 1988, not, especially expired August within the context did within pronouncements existing Kentucky conversations occurred between Gilmour and law, Pollitt on 21 and 22 constitute “consideration” for a 30- as testified to day option accept defies common irrevocable Consequently, sense. this court Sep- Marietta’s offer to sell its land dated must de- if accepted cide FDCK findings The trial the Martin Marietta tember court’s offer to clearly sell before 2:30 contrary accordingly are er- 22, 1988. contrary roneous and to law.

Having concluded that FDCK did not law embraces “mail 30-day have a irrevocable within box rule” as defined in the Restatement accept (Second) Septem- Contracts, 63(a), which Martin Marietta’s section 7 offer controversy, provides ber to sell the land in that an of a contract had, this court must decide FDCK fact becomes “put effective when it is out of law, accepted and in the Martin possession.” Marietta Comment e to offeree’s *7 it, property FDCK, 63(a) provides to sell its before section that “communication longer that the by knew land was no available means of employee the offeree’s is ex cluded; and had employee’s possession been taken off the market.4 is treat- 3. FDCK’s deposit initial offer to was tendered for the “Oldham Co. [Old- 16, controversy August County deposit]". here in ham land It 1988 to is obvious that $1,000 payee money which the Marietta was not the and could earnest check was at- negotiated equally provided: not have apparent the check. It is tached was, pursuant that Coldwell Banker good binding As evidence of faith this con- law, Kentucky precluded disposing from tract, $1,000.00 deposit is made herein to represented by funds the check until the under- by applied held be Coldwell Banker and to be lying transaction for which the check was is- purchase price upon passing on the deed or performed sued had been either or terminated. completed refunded if is transfer title not (Banks-Baldwin Ky.Rev.Stat.Ann. 324.111 reason, except BUYER’S failure to 1991). offer, August together 16 perform obligation BUYER’S hereunder ... $1,000 check, expired the tendered had on Au- Appellant’s Brief at 17. 24, 1988, gust acceptance. without Coldwell $1,000 reasoning The trial court’s that FDCK’s not, thereafter, authority Banker did have the money by refundable earnest evidenced its check, negotiate the said check. The which had check, induced Martin Marietta to make its negotiated, posses- never been remained in the 7, counteroffer of 1988 because Mar- sion of Gilmour until its return on or about power nego- tin Marietta had "the unfettered Pugh, 26 or 1988. Guilt v. 311 money tiate” FDCK’s earnest check and that 90, 92, (1949). Ky. 223 S.W.2d 575 "Martin Marietta had access to the use of the funds," unsupported by is the record or Ken- Harmony op- 4. The effective date of the Land tucky Initially, law. it should be noted that the only consequence tion is of collateral in resolv- Banker, payable check was to Coldwell the bro- ing the date and FDCK’s ac- effective time of agent proper- ceptance, any, ker and escrow retained to sell the of the Martin Marietta offer to ty. clearly The check noted on its face that it sell. 624 property dated riverfront Restatement employer.” that of ed as through Pollitt that the it knew 1988before 63(a) e. cmt. Sim- (Second) Contracts § and had been longer available land rule, was adopting the stated,

ply court’s The district the market. Restatement, taken off in pronouncements clearly is erroneous contrary resolution 333 S.W.2d Wadlington, States United and law. in fact both that: “Ordi- provides (Ky.1960), mailing accepted by may be narily an offer if the must determine Finally, this court ad- stamped and acceptance, properly in errors fact court committed district dressed." arriving at its decision that and/or law Martin Marietta’s “acceptance” of case, conceded that instant In the 7, 1988 was to sell dated containing FDCK’s envelope unequivocal and unconditional. manned depository placed into mail was metering stamp employees by his pur- approach Pollitt’s cautious Service.5 delivery the U.S. Postal property was re- of the riverfront chase posses- however, left his never envelope, negotiations for throughout his its flected by his effort- as evidenced sion or control and knowl- experienced As an acquisition. from the of the documents obviously retrieval did developer, less edgeable aware of drop he became mail of an office to the risks intend to commit FDCK after $300,- Land to in favor of expenditure of between irrevocable point in At that property. purchase the assurances that 000 and without me- stamp time, envelope developed highest not been for its the land could be anticipated hand-delivered land use tered. He thereafter use. His best Gilmour, who envelope significant contingencies and its contents re- required incorporated 4:15 accepted it at flected conditions and for- one hour approximately purchase dated This was first offer to knew the provided following: minutes after he ty-five That offer of 1988. pro- Kentucky law market. off the proposal obligations under this Buyer’s accepted “be- an offer must be vides that upon satisfaction or contingent shall be that offer is received fore'any intimation buyers of the conditions by the waiver withdrawn,” Lum- Ingram-Day Shaw v. title, sur- closing for precedent prior to Co., Ky. S.W. ber might change zoning that be vey, any added); express notice or (1913)(emphasis water, sight electricity, on sew- required, necessary is not use of the word “revoke” being building permits ob- age disposal, is revoked An offer an offer. to revoke soil tained, and surface hazard wastes of acts when the offeree learns precedent conditions, conditions the con- that are inconsistent with offeror acceptable in content in the form shall be *8 imply that the offer or tinuance of contingencies must be buyers. These supra. Ingram, offer has been revoked. days within 180 from or waived satisfied (Second) Con- also Restatement See contract, closing to be of acceptance this of Williston, 43; A Trea- 1 S. 42 & tracts §§ or days the removal waiv- from within (3rd ed. Contracts tise on the Law contingencies. these er of of 1957). dated P-4: Offer of Purchase Ex. paragraph 12. at considered Accordingly, is the it acceptance of determining if FDCK’s In had not this court that FDCK opinion of offer was unconditional September 7 to sell the accepted Martin Marietta’s A. No sir. on cross-examination: 5. Pollitt testified post Q. not a office box? That was you given people this Q. had These whom fact, post on were, are office boxes employees A. No sir. There they of package, they part incoming essentially, premises This is mail. yours not? were you paid outgoing? for? Q. of the service But not for Yes. outgoing, right. A. Q. A. Not for employees, They postal were were they? unequivocal, again finds A. I’m this court res- not—a conservation district —I’ll give you developed layman’s a testimony olution in Pollitt’s definition. A conservation district is a district within the context of this case. they using where are as a conserva- conversing recapitulate, To after with tory. on Pollitt met with Gilmour Q. you you Do only know that can build consulting engineer on the riverfront his density per houses at a of one house development prop- site to discuss the acre in such a conservation district? projected plans. erty accordance with his true, yes. A. think that’s meeting, After his returned to office Q. you And you want to want to build— immediately lawyers consulted with his undertake a develop- more intense Brown, Heyburn “regarding Todd & acre, per ment than one house cor- acceptance rect? [the offer of A. Yes. 7.]” Q. part And so why you reason Q. My you notes indicate that testified had Phil part Bills out there and you consulted with Brown Todd you the reason had consulted Brown Heyburn regarding & a contract for Heyburn Todd & you was because of this offer? change zoning, needed to cor- go A. What should in the offer. rect? words, other terms and conditions of A. many things, That’s one yes contract, here, right this contract sir. building We had deal with okay? permits, septic systems, on-site wa- ^[*] ^[*] ^[*] ^[*] ^[*] ^[*] ter, electricity, all the other utili- A. That’s correct. Q. Louisville Board of And includes the sales and ^[*] ^[*] purchase ^[*] two-page ^[*] contract? Realtors, ^[*] standard Inc. ^[*] A. Yes sir. Q. Q. And So right? application ties you that would be you had to line to the Oldham going servicing up those to make an the site. County things, Planning Zoning Q. Commission you Did consult with Brown Todd & change zoning in the tract Heyburn zoning about the of that it, you purchased correct? property? likely, yes A. Most sir. point, A. yes. That was one you Notably, all of the conditions that Pollitt your Do know from own knowl- immediately lawyers discussed be- edge or from what Mr. Bills said drafting executing fore ac- anyone you that Wilson or else told ceptance Mariet- bottom Martin present zoning what’s the of that ta’s to sell letter offer property, Mr. Pollitt? incorporated been

A. I believe it’s COI. offer to which ex- Q. COI? pired August 24 of 1988. It was to this Yes, or it’s Conservation District. *9 two-page interlineated standard Louisville Q. District, It’s a Conservation correct? form, copy Board of Realtors absent a Right. A. $1,000 money accompanying the earnest Q. check, And what does that mean? physically that Pollitt attached6 pages you 6. Pollitt testified on direct examination as fol- are the two would describe doc- lows: ument. you Q. Mr. would look at this A. This the counter we re- doc- is offer which previously ument marked as Plaintiffs Exhib- Septem- ceived from Martin-Marietta [dated it 6 and tell us what that is. I will hand a 1988]; accept- ber and at the bottom is the copy document, page Court first of that by Develop- ance of that counter offer First explain and we will what the other I and, therefore, respectfully I dissent. Septem- “acceptance” Marietta’s of Martin majori- property. The at- disagree to sell the with the conclusions ber offer $20,000 pages a cheek controlling tached three with The first is issues. ty on two p.m. at on to 4:15 were delivered Gilmour that “FDCK majority’s the conclusion September 22. offer to sell accepted Martin Marietta’s not knew property before it the riverfront the physical attachment of The longer through the was no Pollitt that land single a doc pages three to constitute off the mar- had been taken available and ument, explanation consti further without op. The second is Majority at 623. ket.” acceptance—a counter conditional tuted a “ac- conclusion that FDCK’s Although opportunity, majority’s the the offer. afforded meaningful explana a counter plaintiff ceptance advanced conditional and was was combining the physically tion or reason unconditional proposal to Martin Marietta’s single into a document. pages three Ma- property.” sell the riverfront are op. 626. These conclusions jority at minds, meeting of Accordingly, absent a by Kentucky nor compelled neither law acceptance was conditional supported by the district court’s factual proposal to Martin Mariet- was a counter clearly findings, are erroneous. which offer to sell the river- ta’s unconditional findings The trial court’s property. front that, majority holds because Pollitt con- conclusions of law to the of fact and candidly that he aware of the admitted was clearly trary erroneous. are Harmony Landing option contract before It is decision of this court that acceptance to hand delivered FDCK’s decision is trial court’s REVERSED Gilmour, Marietta’s counteroffer is REMANDED with instructions ease effectively prior to FDCK was revoked restraining order heretofore to dissolve the It reaches attempted acceptance. judgment enter not inconsist- issued and to by making factual inferenc- this conclusion opinion. ent this with by made the district court es that were not in the support to find record. fail BROWN, Judge, BAILEY Circuit Senior dissenting. indirectly if “the An offer is revoked takes definite action inconsistent the dis- offeror judgment affirm the would case, proposed into the diversity an intention to enter non-jury, trict in this with court Corporation Kentucky, myself reporter's note indicated that Plaintiffs Court ment counter offer from Exhibit 6 included: The President. Q. acceptance by two-page with the First what is document Martin-Marietta And Development Corporation is Exhibit 6? bottom attached Plaintiffs original two-page re- A. offer that was made offer attached was This is the a by Development Au- First Plaintiffs Exhibit Martin-Marietta ceived into evidence as gust 16. Number 6. Zimmerman, Q. by are And what it that those documents On Mr. cross-examination together way they are? attached Pollitt testified further. Well, was A. this first document envelope. 8/16/88 Development MR. Honor, On the Your ZIMMERMAN: First top says, offer that made at the where it Mr. Dale $1,000 $300,000, deposit spelling) (phonetic at Ahern the bottom property, and received, this to Martin-Marietta for signed says, where it 4:15 Development, myself. This First BY MR. ZIMMERMAN: is a counter offer. document copy is this check [the Now $1,000 (The deposit check alluded to in that was delivered? check] included answer was not attached to or above Yes A. sir. Sep- envelope delivered to Gilmour on copy Q. Is of the Martin-Marietta doc- 22.) tember ument, you [referring signed ****** letter (Plaintiffs counsel) 1988]? Honor, Yes sir. *10 move the McCALL: Your we MR. [two-page And attached to that was has Exhibit which admission of Plaintiffs Realtors, Louisville Board Inc. interlineated] witness. described been of form, objection, standard real estate contract correct? If there is THE COURT: Yes sir. will be admitted. acquires contract and the offeree reliable Louisville Board Realtors form transmo- information to that effect.” Restatement grified the unequivocal otherwise and un- (Second) (1981). Contracts Gil- § acceptance conditional into a mere counter- provided mour’s disclosure Pollitt with in- offer.2 The district court found that “Pol- formation that Martin Marietta had entered acceptance litt’s of the counteroffer was only option into an contract Harmony with acceptance] unconditional. says sim- [The Landing. This information does not consti- ply ‘the above counteroffer is accepted this tute definite action inconsistent with an day September, 1988,’ 21st signed and is proposed intention to enter con- by Pollitt in capacity his as President of law, tract with Kentucky FDCK. Under an Development.” First option proper- contract is not a sale of the that, Gilmour testified Sep- ty, binding sell, nor even a contract to but tember with conversation only right a privilege to exercise a therein asked Pollitt if the terms and conditions defined. See Central Bank & Trust Co. v. the Louisville Board of Realtors form were Kincaid, (Ky.1981). S.W.2d intended to part be the contract. FDCK, through Pollitt, did not know Gilmour testified that Pollitt indicated that rights option what granted contract they were so court, intended. The district Harmony Landing; only it knew however, did not believe Gilmour’s version option option contract’s existence. The of the conversation. Given the district might have subject rejec- been to FDCK’s court’s decision to discredit Gilmour’s testi- tion of Martin outstanding Marietta’s coun- mony regarding the attachment teroffer. binding “Even a contract with a original offer to acceptance its of Martin person may third expressly subject be Marietta’s counteroffer, majority’s and the any rights arising outstanding under the decision to avoid credibility assess- (Second) offer.” Restatement Con- ments, Majority op. see at we are left (1981). tracts 43 comment d If binding with unequivocal acceptance written on contract with a person may subject third be the face counteroffer, of Martin Marietta’s any rights arising under an outstanding copy attached of the Louisville Board counteroffer, fortiori, option form, of Realtors and Martin Marietta’s person may with a third subject be to any bald contention that the inclusion of the rights under an outstanding counteroffer. Louisville Board of Realtors form was an The district court’s conclusion that notice attempt vary the terms of the counterof- option existence of the contract with fer. light of the district court’s Harmony Landing did not constitute notice finding unequivocal and the terms of the of revocation of Martin Marietta’s counter- acceptance, I am unable to conclude that offer to FDCK is correct. majority’s the district court erred. reversal of the issue, district court on this based on its inference unstated that FDCK There are several reasons for FDCK’s knew that option to Harmony Landing attachment of the Board Louisville of Real- unconditional, compelled neither tors form that are consistent with an ac- Kentucky supported law1 nor by the facts ceptance of Martin Marietta’s counteroffer. of this case. First, Martin Marietta’s counteroffer disagree also the majority’s expressly final FDCK refers Louisville conclusion: that acceptance form, was Board of Realtors which contains ineffective because Next, the attachment of the FDCK’s offer. without ref- ed, majority 1. It should be noted majority’s is unable discussion of this issue is supporting to cite case law the conclu- unnecessary to its decision of ultimate this case. that, law, sion as a matter of notice of the If, holds, majority as the Martin Marietta effec- existence of contract with tively accepted, revoked before FDCK then no Landing constituted notice of revocation of the majority agreed contract could exist even if the offer. unequivocal that FDCK’s unconditional. previous 2. Given its conclusion that Martin Marietta revoked its accept- offer before FDCK *11 offer, Martin original to FDCK’s erence adequate- does counteroffer Marietta’s subject that is ly describe Additionally, FDCK’s the counteroffer. only document is the original offer deposit that $1,000 good-faith

reflects Martin delivered previously FDCK offer, Finally, FDCK’s Marietta. form, of Realtors Board Louisville ir- that is term $300,000 price contained in Martin price term with

reconcilable is, There there- counteroffer. Marietta’s construe

fore, way sensibly counterof- Marietta’s Martin ac- unconditional anything but

fer counteroffer.

ceptance Mariet- accepted Martin FDCK

Because Marietta before counteroffer

ta's effectively FDCK it and because revoked counteroffer, AF- would accepted the court and district the decision

FIRM proceed- further for this case REMAND this dissent.

ings consistent Franzel, FRANZEL;

Shirley and Fred

Plaintiffs-Appellants, COMPANY, MANUFACTURING

KERR Defendant-Appellee. 89-1929.

No. Appeals, Court States

United

Sixth Circuit. briefed), (argued and Counard J. Allen 17, 1991. Argued Sept. Mich., plaintiffs-appellants. Trenton, March Decided (argued and Suilichem A. Van Donald Brown, Bloom- & briefed), Suilichem Van defendant-appellee. Mich., Hills, field NORRIS, Circuit KEITH Before: JOHNSTONE, District Judges; and Judge.* designation. sitting by Johnstone, Kentucky, United H. Edward Honorable

*The Judge Western District States District notes your then to Q. you refer Would Martin Marietta. pre- us his and tell what [Gilmour’s] he that did further Pollitt testified you? cise words were accept Martin convey decision notes.) (Witness refers to September 7 to Gilmour offer of Marietta’s Don 9/22/88, Don’s call. A. returned after that meeting. He testified after that Martin-Marietta Gilmour said site, re- meeting on the riverfront the riv- accepted an had immediately con- to his office and turned property. er Brown, Hey- attorneys, Todd and sulted his notes, quotes? in is that your in Q. And ac- burn, “regarding A. Yes sir. Mariet- Martin ceptance [the J.App. II at 57. The discussion ta 7.J” offer of advised Pollitt Gilmour had changes, After zoning necessity included the option to executed an Marietta had building permits, require- acquisition Landing, Pol- property to sell the systems, availabili- septic for on-site ments responded: litt other water, electricity all utilities ty of Harvey Mariet- exchanged and Martin Verbatim, conformed, between copies re- clean ta. and thereafter executed on Don, got problem. First He longer we’ve knew that the land was no avail- Corporation Development has al- able and off the market. offer, ready accepted the counter Pollitt went on to testify that he advised n given which was to them Martin- Gilmour that he personally would deliver Marietta; “acceptance” and check to him is, Q. you point tell him at that That did understanding with the it would be you accepted had time that forwarded to Martin Marietta for review. contract? that, Pollitt testified at the conclusion of A. Yes sir. telephone conversation, he retrieved time, Q. point you At that deliv- envelope containing unmetered his “ac- ered to him a check? ceptance” from his office’s drop mail A. No sir. delivered it to Gilmour. Gilmour noted the Q. you Had delivered to him a contract delivery time of envelope on the face of the any kind that had been ... and its envelope contents as 4:15 per- him you conveyed Had that to contents, and its including the check for you sonally? Had delivered it to $20,000 was returned to Pollitt on or about