damages. The latter must be viewed in the context of defendant's counterclaims which will be more fully explained.
No punitive damages will be awarded. Plaintiff claims that IAM never intended to hold a bona fide public sale, and deliberately misrepresented and lulled plaintiff's representatives into not seeking to stop the sale. The Court rejects this claim of fraud. IAM proceeded with legal advice. It confronted an extremely complicated series of circumstances, largely not of its own making, and was placed at a disadvantage time and time again by the volatile and indecisive conduct of the Connex representative. Its involvement was not sought, but thrust upon it by the actions of Butler and Slatter. Moreover, a strong inference adverse to this claim by Connex exists because of its failure to produce Yellin, counsel for Slatter and Butler, who was deeply involved in all arrangements and discussions looking toward the sale, and whose conduct as shown by the documents is most ambiguous. Plaintiff did not establish by a preponderance of the evidence a fraudulent intent, bad faith or even reckless disregard of plaintiff's rights.
In setting aside the sale a number of consequences must be taken into account. Connex recognizes that IAM must be made whole. The parties are agreed that $259,758 covers certain itemized expenses that were reasonable and necessary relating to the repossession and custody of the plane prior to sale and cost of sale. The Court in addition finds that additional expenses for the same purposes totalling $45,571.17 were incurred and were reasonable and necessary, making a total of $305,329.71. This amount compares favorably with the $325,000 which IAM bid as a rough computation of what it had in the plane at the time of sale. Considering the vague nature of the financial arrangement made for repossession, the failure of Slatter to authorize prompt sale and the absence of any allowance of profit to IAM, the amount bid was reasonably owed for IAM's part in the venture.
IAM counterclaims for $50,000. It spent over $100,000 on the plane, largely in preparation for the March, 1975 resale. This sum included the $50,000 paid Rockwell for the engine. IAM says that after allowing for its expenses, and allowing for allocated overhead and profit, it lost $50,000 on the venture when the plane was resold in 1975 for $855,000. But on October 11, 1974, the day after the foreclosure sale, IAM certified that Connex had no further obligations to it. IAM's activities after the foreclosure sale cannot create new obligations in Connex. Thus the counterclaim will not be allowed.
The Court has decided that the appropriate disposition of the controversy entitles Connex to compensatory damages measured by the difference between the bid price and the fair market value at the time of sale, $375,000, plus interest at six percent from October 10, 1974. To the extent that IAM profits, or fails to profit, over and above its expenses is no concern of the Court.