The opinion of the court was delivered by: HARRY D. LEINENWEBER
At the time the events occurred leading up to this law suit, defendant, GRM Industries, Inc. ("GRM"), was indebted to Comerica Bank ("Comerica") for loans totaling $ 23,000,000. GRM was in arrears and Comerica was pressing for payment. Comerica suggested that to avoid foreclosure GRM refinance the loans elsewhere and gave GRM a list of six firms, including plaintiff, Hindin/Owen/Engelke, Inc. ("Hindin"), to assist GRM in obtaining refinancing.
In the event Hindin obtained a commitment or a proposal within the range of the above amounts, GRM was obligated to use its best efforts to bring the financing to fruition. GRM's failure to use its best efforts would entitle Hindin to its finder's fee even if the refinancing did not go forward. Paragraph 4.1 of the agreement governed when the company failed to use its best efforts after receiving a commitment or proposal. Specifically, paragraph 4.1 provided as follows:
4.1 Finder's Fee Due in the Event the Company Fails to Use Its Best Efforts After Receiving a Proposal of Financing.
It is further understood and agreed that such Finder's Fee shall be deemed immediately earned, and shall be immediately due and payable by the Company, in the event that: (i) a Lender during the term of this agreement makes a funding commitment within the range of terms set forth in Schedule A which the Company accepts, rejects, fails to act upon, or allows to expire without accepting it; (ii) the Company, for any reason rejects, fails to accept, or fails to take such steps as may be required by the Lender to convert a non-binding proposal of financing into a lending commitment which may be submitted to the Company by any Lender during the term of this agreement and which proposal of financing contains terms within the range set forth in Schedule A plus such other terms as are customary for transactions of this type; (iii) the Company, by reason of its acts or omissions, fails to consummate or prevents the consummation of the financing contemplated by any such proposal of financing or funding commitment; (iv) the Company after receiving a nonbinding proposal of financing within the range of terms set forth in Schedule A does not permit a Lender to engage in or complete its due diligence, or fails to accept the Lender's appraised value of the Company's collateral; (v) the Company, for any reason, decides to terminate or materially alter its attempt to obtain financing, after receiving a non-binding proposal of financing within the range of terms set forth in Schedule A; (vi) the Company fails to use its best efforts to obtain a funding commitment from a Lender after it receives a non-binding proposal of financing within the range of terms set forth in Schedule A; or (vii) a Lender makes a funding commitment that is not within the range set forth in Schedule A, but is reasonable by lending industry standards, given the company's then existing financial condition and collateral base, which the Company accepts, rejects, fails to act upon, or allows to expire without accepting it.
All of the scenarios require a commitment or proposal for financing within the range set forth in Schedule A except number (vii). The difference between a proposal and a commitment is that a proposal is issued prior to a lender performing its field audit and due diligence study and is not binding on the lender until a commitment is issued. A commitment, on the other hand, is a binding agreement to lend a specific amount of money if the borrower meets certain stated conditions.
On June 29, 1993, during the term of the agreement, Congress Financial Corporation ("Congress") issued a proposal to GRM for a revolving line of credit in the amount of $ 8,000,000 and a term loan in the amount of $ 1,500,000. The proposal also included a closing fee of 1.5 points and an annual servicing fee of $ 40,000. The term of the loan was three years. The proposal included a condition that Comerica refinance "not less than $ 13,500,000" of the outstanding indebtedness. This proposal was accepted in writing by GRM on July 2, 1993. No commitment was ever issued by Congress.
Both GRM and Hindin negotiated with Comerica about refinancing the portion of the debt required under Congress' proposal. The parties dispute whether Comerica agreed to refinance. It is, however, undisputed that Comerica did not issue a written proposal or commitment for any amount of refinancing. Hindin contends that Comerica orally proposed to refinance between $ 12,000,000 and $ 14,000,000 of its loan to GRM. The evidentiary basis for this assertion is the deposition testimony of Stephen Pinsly ("Pinsly"), president of GRM, and Geary Meunch ("Meunch"), assistant vice president of commercial loans for Hindin. Pinsly testified as follows:
Q. At that time, had Comerica Bank agreed to retain twelve million dollars of the financing, or continue to finance twelve million dollars, based on the stock as collateral?
Q. When you say, "we," who do you mean?
Q. Did you discuss that issue with Mr. Meunch at Hindin/Owen/ Engelke?
Q. Did you have contact with anyone at Comerica Bank, Mr. Laplant or anybody else, that made you believe that Comerica could agree to continue a financing obligation of twelve million dollars?
Q. With respect to the issue of continued financing by Comerica Bank, what did Mr. Laplant say to you and what did you say to him?
A. I asked him if he would be interested, would the bank consider taking a position on the Johnston Industry stock, if we could reduce their loan to a about twelve or thirteen million dollars. He didn't commit the bank to a number. He had hoped the number would be in the area of fourteen million dollars, but we were basically negotiating at ...