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Ellerman v. Clark Products

OPINION FILED DECEMBER 18, 1978.

FRANK G. ELLERMAN, D/B/A ELLERMAN DEVELOPMENT COMPANY, PLAINTIFF-APPELLANT,

v.

CLARK PRODUCTS, INC., ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. WALTER J. KOWALSKI, Judge, presiding.

MR. JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:

This action was brought by Frank G. Ellerman to recover a commission allegedly owed him for finding a buyer for Clark Products, Inc., a corporation (hereinafter referred to as CPI). The complaint was based upon a written contract between Ellerman and CPI in which Ellerman agreed, for a commission, to find a purchaser for CPI. The complaint was later amended to add a second count which alleged a conspiracy to deprive plaintiff of his commission and which added as defendants the purchasers of CPI, Don J. Hindman and D.J.H., Inc. Pursuant to defendants' motion, the trial court granted a directed verdict on count II of the amended complaint. Plaintiff does not appeal from that order. The original contract action proceeded to trial before a jury which rendered a verdict in defendants' favor. The trial court entered judgment on this verdict and plaintiff now appeals from that judgment.

Plaintiff raises the following issues for our consideration: (1) whether the trial court erred in construing the meaning of the contract and thus erred in denying plaintiff's motion for directed verdict; (2) whether the trial court erred in denying plaintiff's motion for directed verdict under the trial court's construction of the contract; (3) whether the trial court erred in refusing to submit to the jury the special interrogatories offered by plaintiff; and (4) whether the trial court incorrectly determined the ultimate purchase price of the business and, thereby miscalculated the amount of commission due plaintiff.

We affirm.

According to the testimony presented at trial, Frank Ellerman solicited Richard Clark, the president of CPI, to retain Ellerman to find a purchaser for CPI, a finished paper products wholesale distributor. On July 12, 1973, Ellerman and CPI entered into a written contract prepared and presented by Ellerman under which Ellerman was engaged as the exclusive agent to find a purchaser for CPI. The relevant terms of that contract provided:

"Your appointment is exclusive for a period of six (6) months. All negotiations commenced within that time will be deemed to have originated from you. Your fee is earned if we conclude any sale (or equivalent transaction) with any purchaser who originated with you. If we do not conclude a sale within thirty (30) months, you are not entitled to any fee or reimbursement."

After entering into the contract, Ellerman engaged Frank Mason in the merger and acquisition department of Continental Illinois National Bank & Trust Company (hereinafter referred to as Continental) to act as Ellerman's intermediary. Under that contract, Ellerman promised to share with Continental any fee earned on the sale of CPI. After Ellerman received financial statements from CPI and presented them to Mason, Mason prepared a bulletin which described CPI in detail but which omitted the name of the company. Mason sent this "blind bulletin" and a cover letter to various individuals and companies which he considered to be prospects. Under a cover letter dated September 12, 1973, Mason sent the "blind bulletin" to Mr. Don J. Hindman, at that time the president of Time Industries, Inc. Mason sent a copy of the letter to Ellerman who notified Richard Clark that CPI had been offered to Hindman. Hindman wrote Mason shortly after receiving the "blind bulletin" and indicated that he was not interested. According to Mason's testimony, Mason spoke with Hindman over the telephone several days after receiving Hindman's letter. Mason disclosed the name of the company for sale and Mason and Hindman discussed the reasons why CPI was not a good deal at book value. Mason further testified that from September of 1973 to January of 1975 he did not converse with Ellerman concerning any interest by Hindman or Time Industries in CPI.

Don J. Hindman testified at trial that he could recall no telephone conversation with Mason shortly after he received the "blind bulletin" solicitation during which the name of the company described in the "blind bulletin" was disclosed. In fact, Hindman testified that Mason never told him the name of the company referred to in the "blind bulletin." Hindman indicated that he did confer with Mason over the phone in January of 1975 at which time Hindman told Mason that he had been negotiating with CPI for several months. Hindman stated that he became interested in CPI after discussing that company in September of 1974 with two employees of the Continental Bank named Lewin and Barr. According to Hindman's testimony, from September of 1974 to February of 1975, Hindman conducted negotiations with CPI which culminated in the sale of CPI to D.J.H., Inc., a corporation solely owned by Hindman. Hindman indicated that the negotiations between CPI and Hindman never included any mention of, or participation by, either Ellerman or his intermediary, Mason.

Frank Ellerman testified that numerous times he attempted to telephone Hindman between September 1973 and the end of 1974 but that Hindman never returned the calls. Ellerman also indicated that he sent a letter to Richard Clark notifying him of Mason's solicitation of Time Industries. Richard Clark testified that he could not recall such a letter.

Ellerman further testified that he sent Hindman a letter dated January 4, 1974. Enclosed in the letter was financial information on CPI. Ellerman testified that he sent the letter after a conversation with Mason during which Mason indicated that Hindman was interested in CPI. Ellerman could not recall on cross-examination whether this conversation occurred in 1973, 1974 or 1975. Hindman testified he never received the January 4, 1974, letter. Moreover, Mason testified that he could not recall having any conversation with Ellerman about actual interest by Hindman in CPI until January 14, 1975.

Ellerman also testified that he mailed letters to CPI dated January 8, 1975, and February 26, 1975, which identified Time Industries as one of the referrals he made through Mason. The January 8 letter, although listing 38 prospective contacts, states in addition:

"* * * We have done a lot of work on this situation since July 12, 1973 and thought we did an excellent job in finding a buyer for Clark, which had unattractive earnings based on sales and a book of $2 million. We made many referrals and found nobody interested but Sysco. In fact, the only other company interested was Midwest Paper which offered $1.5 million. After Sysco, we decided not to make any more referrals because of the lack of interest. * * *"

Also called by the defendants to testify were Philip Lewin and George Barr, both employees of the Continental Bank who handled the commercial accounts of CPI, Hindman and Time Industries. Barr testified that he learned CPI was for sale in the summer or fall of 1974 and that at no time prior to September of 1974 did he have a conversation with Richard Clark or Don Hindman concerning CPI. However, in September of 1974, Barr talked to Lewin and told him to contact Clark concerning a possible purchase of CPI by Hindman. Barr knew that Hindman had sold a substantial portion of his interest in Time Industries for cash and was in a strong liquid cash position. At no time prior to September of 1974 did Hindman tell Barr that he had an interest in CPI. Prior to September of 1974, Richard Clark never told Barr that he knew Hindman had any interest in CPI.

Lewin testified that he learned through Barr that CPI was for sale. Prior to the institution of the lawsuit, Lewin had never heard of Ellerman, nor at any time prior to the latter part of 1974, did he have any occasion to discuss CPI with Don Hindman or Frank Mason. In late 1974 Lewin had occasion to call Richard Clark. Lewin indicated to Clark that if his business was for sale Hindman might be interested in buying it. Clark was interested. Lewin indicated ...


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