IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 96-20364
_____________________
AMERICOM PAGING CORP
Plaintiff-Appellant
v.
MOTOROLA INC; MOTOROLA COMMUNICATIONS & ELECTRONICS INC
Defendants-Appellees
_________________________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
(CA-H-95-434)
_________________________________________________________________
May 9, 1997
Before REAVLEY, KING, and BARKSDALE, Circuit Judges.
PER CURIAM:*
Americom appeals the district court’s grant of summary
judgment in favor of Motorola. Finding no error, we affirm.
I. BACKGROUND
Americom was in the business of selling and leasing pagers.
Motorola manufactured and supplied pagers to Americom on credit.
In July 1994, Americom stopped making payments on the
*
Pursuant to Local Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
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approximately $2 million debt it had incurred. In August,
Motorola notified Americom that it was in default and accelerated
the debt, pursuant to the credit agreements between Motorola and
Americom. Americom, then in the process of selling the company,
prepared and sent Motorola a letter attempting to work out terms
of repayment. The final version of the letter agreement, dated
November 15, 1994, set out the terms of repayment and stated that
Motorola would forbear from collecting the overdue loans for a
specified period of time. The letter agreement contained a
release by Americom of all of its claims against Motorola. Based
on the letter agreement, Motorola exercised forbearance as to its
legal rights and did not sue Americom to recover the money owed
during the time specified in the letter.
Americom sued Motorola in early 1995, alleging breach of
contract and various tort claims. Motorola removed the suit to
federal court and moved to dismiss and for summary judgment,
claiming that all of Americom’s claims except one were barred by
the release in the November 15 letter. The district court found
that Americom had relinquished its right to sue and granted
summary judgment in favor of Motorola. Americom challenges this
decision on the grounds that the letter agreement was not a valid
and binding contract and that the release was procured by duress.
II. DISCUSSION
A. Standard of Review
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We review a grant of summary judgment de novo, applying the
same criteria used by the district court in the first instance.
Norman v. Apache Corp., 19 F.3d 1017, 1021 (5th Cir. 1994).
Summary judgment is proper “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to
judgment as a matter of law.” FED. R. CIV. P. 56(c).
B. Choice of Law
When federal court jurisdiction is based solely on diversity
of citizenship, we must apply the choice of law rules of the
forum state. Exxon Corp. v. Burglin, 4 F.3d 1294, 1298 (5th Cir.
1993). According to Texas law, “in all choice-of-law cases,
except those contract cases in which the parties have agreed to a
valid choice-of-law clause, the law of the state with the most
significant relationship to the particular substantive issue will
be applied to resolve that issue.” De Aguilar v. Boeing Co., 47
F.3d 1404, 1413 (5th Cir.)(quoting Duncan v. Cessna Aircraft Co.,
665 S.W.2d 414, 421 (Tex. 1984)), cert. denied, 116 S.Ct. 180
(1995). The district court correctly concluded that Texas was
the state with the most significant relationship to the letter
agreement and applied Texas law to determine its validity as a
contract. Pursuant to the choice of law provision in the letter
agreement, however, the district court correctly applied Illinois
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law to resolve the duress issue.
C. Contract Analysis
Americom insists that the letter agreement is not a valid
contract because Americom never signed the letter agreement,
Motorola never returned a signed copy of the letter agreement to
Americom, and there was no consideration. In fact, Americom
mailed the first version of the letter agreement to Motorola with
an executed signature page. From that point, Americom itself
made all of the subsequent changes that were incorporated into
the agreement. Americom and Motorola disagree over whether
Americom sent the signature page with the final version of the
letter agreement or whether Motorola simply detached the
signature page from the first version of the agreement and
attached it to the final version. Americom’s claim that it never
signed the final version of the letter agreement, which Americom
refers to as a “draft proposal,” does not create a genuine issue
of material fact to defeat summary judgment.
Regardless of whether Americom signed the final version, its
conduct led Motorola “reasonably to believe that a power to
create a contract [had been] conferred.” CORBIN ON CONTRACTS § 1.11
(1993). Not only did Americom prepare and sign the first draft
of the letter agreement and make any subsequent changes to the
document itself, but also Americom’s statement on the fax cover
sheet transmitted with the final version read: “Here is a copy of
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the agreement. Please forward a signed copy to me as soon as
possible . . . .” Furthermore, Americom’s conduct after November
15 showed attempted compliance with the terms of the letter
agreement.
Americom also makes much of the fact that Motorola did not
return a signed copy of the letter agreement. However, for
acceptance of a contract to be valid, physical delivery of the
executed document is not required. Hearthshire Braeswood v. Bill
Kelly Co., 849 S.W.2d 380, 392 (Tex. App.--Houston [14th Dist.]
1993, writ denied). A party may accept a contract “by his acts,
conduct or acquiescence in the terms of the contract.” Id.
Motorola accepted the contract by exercising forbearance as to
its legal rights for the time period specified in the agreement.
Americom’s argument that it received no consideration for
the contract is without merit. Americom’s purpose in drafting
the letter agreement was to have Motorola forbear from suing to
collect the debt. Thus, Motorola’s forbearance for the time
period specified in the letter agreement constitutes
consideration for the contract. Gooch v. American Sling Co., 902
S.W.2d 181, 185 (Tex. App.--Fort Worth 1995, no writ); Duke v.
First Nat’l Bank, 698 S.W.2d 230, 232 (Tex. App.--Beaumont 1985,
no writ).
Americom argues that if any release agreement existed, its
performance was excused because the agreement was a product of
duress. Americom asserts that Motorola exploited its financial
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difficulties and forced it to enter into the letter agreement by
cutting off its source of supply for paging equipment and
threatening Americom with involuntary bankruptcy. Under Illinois
law, duress is an objective test. Allen v. Board of Trustees,
675 N.E.2d 187, 190 (Ill. App. Ct. 1996). “Duress is a condition
where one is induced by a wrongful act or threat of another to
make a contract under circumstances that deprive one of the
exercise of free will.” Id. “Duress cannot be predicated upon a
demand which is lawful or upon one’s doing or threatening to do
that which one has a legal right to do.” Carlile v. Snap-on
Tools, 648 N.E.2d 317, 322 (Ill. App. Ct. 1995). Americom has
presented no evidence that Motorola’s demand on it was wrongful
or unlawful in any way. Motorola was merely enforcing its rights
under the contract. Duress simply does not exist where a party
has secured consent to an agreement by “hard bargaining or the
pressure of financial circumstances.” Id. Americom has not
shown that a material fact issue exists as to whether it
consented to the terms of the letter agreement under duress.
Americom raises several new legal theories for the first
time on appeal. Americom argues that Motorola anticipatorily
breached the agreement by not returning a signed copy of the
agreement. It further alleges that fraud in the inducement of
the release was not waived by Americom in the agreement.
Finally, Americom asserts that when its outstanding debt was paid
in full to Motorola from the proceeds of the sale of Americom,
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there was accord and satisfaction for the letter agreement, and
Americom was therefore freed from its release of claims against
Motorola. We do not address these theories because our review is
limited to the summary judgment record before the trial court.
Little v. Liquid Air Corp., 37 F.3d 1069, 1071 n.1 (5th Cir.
1994)(en banc).
III. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the
district court.
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