Voyager Comm V Inc v. HMW Communications ( 1997 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
VOYAGER COMMUNICATIONS V,
INCORPORATED,
Plaintiff-Appellant,
v. No. 96-2319
HMW COMMUNICATIONS,
INCORPORATED,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
W. Earl Britt, District Judge.
(CA-96-371-5-BR-3)
Argued: May 9, 1997
Decided: June 23, 1997
Before MURNAGHAN and NIEMEYER, Circuit Judges, and
FABER, United States District Judge for the
Southern District of West Virginia, sitting by designation.
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Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: Thomas W. Steed, Jr., Raleigh, North Carolina, for
Appellant. T. Ray Guy, WEIL, GOTSHAL & MANGES, L.L.P., Dal-
las, Texas, for Appellee. ON BRIEF: Pamela S. Francis, WEIL,
GOTSHAL & MANGES, L.L.P., Dallas, Texas; Catharine Arrowood,
Melanie Dubis, PARKER, POE, ADAMS & BERNSTEIN, L.L.P.,
Raleigh, North Carolina, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
The diversity case involved application of North Carolina law.
There was a contract covering the sale of two radio stations between
Voyager Communications ("Seller") and HMW ("Buyer"). The con-
tract included a provision under which the Buyer, after the sale, could
holdback part of the purchase price if the station did not reach a cer-
tain ratings level. The contract also provided that if there was a hold-
back from the Seller, the Seller would be entitled to a rebate of part
of the holdback if the station's ratings increased above a certain level
in the next ratings period. Such an increase did not occur and the
Seller sought payment of part of the holdback, nevertheless, asserting
that the requisite increase would have occurred but for an antenna
failure causing the station to operate at only 20% of its power. The
Seller argues that it is entitled to the rebate due to frustration of pur-
pose.
The district court, under Fed. R. Civ. P. § 12(b)(6), treating all alle-
gations of the complaint as true, dismissed it for failure to state a
claim.
The Seller's reliance on the doctrine of commercial frustration and
failure of presupposed conditions is misplaced. The law of North Car-
olina controls and it provides that frustration is to be used in a defen-
sive, not an offensive manner. Brenner v. Little Red School House,
274 S.E.2d 206, 209 (N.C. 1981); see also Fraver v. North Carolina
Farm Bureau Mutual Ins. Co., 318 S.E.2d 340, 343 (N.C. App.
1984)(the doctrine of frustration of purpose operates to excuse perfor-
mance of a contract, not to compel performance by the other party.).
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Here, the Seller of the radio station seeks to compel performance
not to excuse performance. The risk of antenna failure was foresee-
able and the Seller failed to provide for it in the sales contract and so
assumed the risk.
Accordingly, the judgment is
AFFIRMED.
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