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S. Stone Co. v. Singer - 665 F.2d 698 (5th Cir. 1982)

Rule:

The mere failure to respond to a letter does not indicate an adoption unless it was reasonable under the circumstances for the sender to expect the recipient to respond and to correct erroneous assertions.

Facts:

In this diversity case, appellee Southern Stone Company, Inc. ("Southern Stone") sought to pierce the corporate veil of a former client, S&M Materials Company, Inc. ("S&M"). In an earlier suit on account for S&M's purchase of Southern Stone's limestone rock, Southern Stone obtained a judgment in its favor. Southern Stone's attempt to collect on that judgment by levying upon S&M's property, money or other valuables proved fruitless. Consequently, Southern Stone brought this action against Thomas D. Moore, Sam M. Singer and Susan M. Singer, the officers, directors and shareholders of S&M, and against The Singer Company, a corporation wholly owned by Sam Singer at all times relevant to this action.

Southern Stone alleged that after the decision was made to discontinue S&M's failing business, the individual defendants continued to purchase through S&M as much Southern Stone lime as they could, with no plans ever to pay for it. At the same time, Southern Stone argued, the individual defendants selectively transferred S&M's assets to themselves, including S&M's accounts receivable for the sale of Southern Stone lime, without considering the need for payment of S& M's account with Southern Stone. In addition, Southern Stone contended that the assets and business of S&M and The Singer Company were so commingled and confused that S&M should be treated not as a separate corporation, but merely as a branch of The Singer Company's operation. The jury returned a verdict in favor of Susan Singer and The Singer Company, but against appellants Sam Singer and Moore. On appeal, Sam Singer and Moore contended that parol evidence was improperly admitted with respect to explaining the phrase "all claims" in a release given by Southern Stone to an Moore and that the district court erred in admitting a letter which recited a conversation between an Moore and counsel for Southern Stone, the contents of which Moore never denied.

Issue:

Was the letter to Moore from Southern Stone's counsel improperly admitted?

Answer:

No

Conclusion:

The Court held that under applicable Georgia law, the parole evidence rule was properly invoked as to the release. However, the Court reversed and ordered a new trial, because it concluded that the letter did not meet the requirements of Fed. R. Evid. 801(d)(2)(B) for a statement in which appellant manifested his belief in its truth, and that its admission constituted prejudice to appellants.

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