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PENICK v. FRANK E. BASIL

January 30, 1984

NORMAN D. PENICK, et al., Plaintiffs,
v.
FRANK E. BASIL, INC. Of DELAWARE, et al., Defendants



The opinion of the court was delivered by: SMITH

 Plaintiffs Norman D. and Marlene J. Penick bring this action for breach of contract against defendants Frank E. Basil, Inc., and David Descoteau, an employee of the corporate defendant. Plaintiffs allege that defendant Basil offered a two-year contract to plaintiffs regarding employment in its Saudi Arabian operation, that defendant Descoteau personally guaranteed the contract, that plaintiffs accepted and began performance, and that defendants subsequently terminated the contract after only five months. Defendants contend that a Saudi corporation, and not Basil, is the party to plaintiffs' alleged contract, that no personal guarantee was ever made, that enforcement of the contract or the guarantee is barred by the Statute of Frauds, that Norman Penick abandoned his employment, and that plaintiffs failed to satisfactorily prove damages. The case was tried before the Court on November 15-18, 1983. Upon consideration of the testimony of the witnesses, evaluation of the credibility of the witnesses, the exhibits, and the entire record, the Court, pursuant to Fed.R.Civ.P. 52, enters the following findings of fact and conclusions of law.

 FINDINGS OF FACT

 1) Plaintiffs Norman D. and Marlene J. Penick, husband and wife, are citizens of the State of California.

 2) Defendant Frank E. Basil, Inc. ("Basil") is a Delaware corporation, with its principal place of business in the District of Columbia.

 3) Defendant David Descoteau ("Descoteau") is, and at all times relevant has been, employed by Basil as Director of Basil Health Systems, an unincorporated division of Basil.

 4) Saudi Maintenance Co. ("Siyanco") is a Saudi Arabian limited liability company. Frank E. Basil, Inc., a Liberian corporation, owns 50% of Siyanco, and the remaining 50% is owned by a Saudi prince, Abdul Rahman bin Abdul Aziz Al-Saud. A document prepared by Descoteau in December 1980, entitled "The Basil Group of Companies[-]Capability Statement[-]Siyanco-Basil Health Systems" describes Siyanco as a Basil "subsidiary," founded in 1968 to "provide an extension of corporate capability and services" in Saudi Arabia. The document states that Siyanco performs "life support, logistics management, facilities maintenance and operations and training projects and programs in Saudi Arabia."

 5) In late 1980, Basil and Siyanco maintained an ongoing business relationship of some duration. Basil provided employment recruiting and procurement services for Siyanco, including assistance in obtaining official papers for Siyanco employees from the United States. Basil periodically billed for and Siyanco paid for these services.

 6) In late 1980, Siyanco was party to a contract with the United States Army Corps of Engineers to provide operation, maintenance, and medical services at King Khalid Military City, Hafar Al-Batin, Saudi Arabia ("KKMC"). Siyanco intended to terminate its medical services subcontract with Hospital Corporation International, Ltd., and begin performance of those services itself. Consequently, Siyanco sought to hire qualified health services personnel, including an administrator for the KKMC project.

 7) In late 1980, Descoteau traveled to Saudi Arabia and began recruiting efforts. Descoteau contacted Michael J. Hurd, who declined an offer of employment at the Siyanco project but provided Descoteau with several names, including that of plaintiff Norman Penick. Descoteau contacted several other candidates regarding the KKMC position, and offered it to Gary Bell, who declined.

 8) In late November and early December 1980, Descoteau contacted Norman Penick, the Health Systems Administrator for Saudi Arabian Parsons, Ltd. ("SAPL"), Yanbu, Saudi Arabia, and discussed the KKMC position.

 9) On December 10, 1980, Penick traveled to the Siyanco compound in Riyadh, Saudi Arabia, to meet with Descoteau. Marlene Penick was not present. Numerous signs throughout the compound displayed the name "Siyanco;" there were no signs displaying the name "Basil."

 10) On December 10 and 11, 1980, Penick and Descoteau discussed Penick's employment experience and the KKMC position in great detail. Descoteau and Penick discussed the terms of the Siyanco form employment contract, its employee benefits provisions, and the possibility of employment for Marlene Penick.

 11) On December 11, 1980, Descoteau, after receiving the approval of Arthur Stephens, Deputy General Manager of Siyanco, prepared a typewritten letter offering employment to Penick.

 12) The letter offer was prepared on Siyanco letterhead, offered a position with "our Company," and described the position as "Hospital Executive Director -- KKMC-Siyanco." Item 6 of the letter makes reference to the Siyanco form employment contract discussed by Descoteau and Penick. Item 7 refers to a "verbal offer regarding contract deletions," a reference to Penick's insistence in negotiations that a standard 90-day probationary period be waived. The letter conditioned the offer on Penick's obtaining a letter of release from his present employer. The letter concluded:

 "Very truly yours,

 SAUDI MAINTENANCE COMPANY, LTD. ...


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