The opinion of the court was delivered by: SUZANNE CONLON, District Judge
MEMORANDUM OPINION AND ORDER
David Blender ("Blender") d/b/a Mustang Capital, LLC
("Mustang") sues American Feed and Farm Supply, Inc. ("American")
for breach of contract. Specifically, Blender contends he is
entitled to a $225,000 success fee and a $5000 monthly advisory
fee under the parties' consulting contract. American removed this
case from state court, and now moves for summary judgment under
The following facts are undisputed. Mustang provides
consulting, advisory and intermediary services to locate
third-party business financing sources for clients. American
Facts at ¶ 2. American distributes and supplies agricultural,
farm and ranch products. Id. at ¶ 3. On April 7, 2002, Mustang
and American signed an agreement, providing:
Advisor agrees to utilize "best efforts" in
identifying, negotiating, and structuring debt and/or
equity financing and/or strategic relationship(s) on
behalf of The Company. The Company agrees to pay
MUSTANG a cash success fee in the amount equal to
three percent (3%) of any Senior Loan(s)* and five
percent (5%) of any Equity* committed to The Company if The Company
closes a transaction with a source whom MUSTANG
interacts on behalf of The Company.
SUCCESS FEE PAYMENT
Success fees are due in full to the Advisor in the
state of Illinois when the transaction is closed or
funded (initially or fully). The Company authorizes
the funding sources to pay MUSTANG the full success
fee directly from the proceeds of any and all funding
obtained as a result of MUSTANG's direct or indirect
This Agreement may be terminated by either party upon
one party providing the other party 30 days prior
written notice, however, termination of this
Agreement by either party does not relinquish The
Company's fiduciary responsibility and contractual
obligations(s) to compensate Advisor upon successful
purchase transaction, funding or additional financing
with and all Advisor and non-Advisor identified
lending, financing, investment, and funding sources
or other such third-party financings with whom
Advisor has interacted on The Company's behalf and
shall remain in effect for a period of not less than
one (1) year from the date of termination of this
Agreement. If a transaction or an additional funding
with any company, individual, or funding source with
whom Advisor has interacted on The Company's behalf
occurs within 12 months after the date of termination
of this Agreement, the above noted success fee is
immediately due and payable to Advisor.
Id. at ¶ 8; Blender Add'l Facts at Ex. 4. In addition, the
agreement provided American would pay Mustang $5000 per month.
American Facts at ¶ 7. Joseph Hahn, American's president, asked
Blender to draft the agreement using plain language. Id. at ¶
9. American made minor changes to the draft agreement, but never
sought to add language regarding the term "interaction" as used
in the agreement. Blender Add'l Facts at ¶¶ 8-9. Blender and
American reviewed the termination provision language; American
did not object to the language.*fn1
Id. at ¶ 13.
Before seeking a financing lender, Blender and American
prepared a financing profile for American that did not identify
American by name. American Facts at ¶ 11. The profile was sent to potential funding sources; Blender was not authorized to disclose
American's identity to the funding source until the funding
source executed a confidentiality agreement, referred to as a
Non-Disclosure Agreement ("NDA"). Id. at ¶ 12; Blender Resp. to
American Facts at ¶ 12. Upon receipt of the signed NDA, Blender
identified American as the client and provided American's full
financial information to the potential lender. American Facts at
¶ 13. American was aware there was no language in the agreement
specifying that Blender was required to have a signed NDA or
identify American to the lending source to qualify for a
termination success fee. Blender Add'l Facts at ¶¶ 22-23.
In May 2002, Blender contacted Bruce Walderson, a sales
representative with Textron Financial Corporation's ("Textron")
Chicago office, on American's behalf. Id. at ¶ 27. Walderson's
initial response to Blender's call was favorable. Id. Blender
had a previous working relationship with Textron's Ft. Worth,
Texas office and initially contacted that office on American's
behalf. Id. at ¶ 30. Blender ultimately received Walderson's
name from a sales person in the Textron Dallas, Texas office.
American Facts at ¶ 15. Walderson telephoned Blender and told him
to contact James St. Clair, Walderson's boss. Blender Add'l Facts
at ¶ 29. Accordingly, on May 21, 2002, Blender sent an e-mail to
Walderson and St. Clair and attached the profile and NDA.
American Facts at ¶ 14. On September 18, 2002, Walderson and St.
Clair's employment with Textron terminated. Id. at ¶¶ 17-18.
Blender did not reveal American's identity to Walderson and St.
Clair because they did not sign and return the NDA. Id. at ¶
16. Blender advised American he contacted Textron on its behalf.
Blender Add'l Facts at ¶ 32. American was unaware of Textron as a
potential lending source until Blender identified Textron to
American. Id. at ¶ 33. Between May and August 2002, Blender obtained NDAs and term
sheet financing proposals from lenders other than Textron. Id.
at ¶ 19. At American's request, Blender also assisted American's
attempt to negotiate, structure and close financing with Sunrock
Capital. Id. at ¶ 20. The Sunrock Capital loan fell through in
August 2002 and did not close. Id. Blender did not identify
Sunrock Capital as a potential funding source. Blender Add'l
Facts at ¶ 35. American paid Blender a $170,343.32 success fee
for his work on the Sunrock deal. Id. at ¶¶ 38-39. On August
12, 2002, Blender sent American a letter at American's request
listing the funding sources with whom Blender had interacted on
American's behalf, including a contact person and phone number
for each source. American Facts at ¶ 21; Blender Resp. to
American Facts at ¶ 21 and Exs. 5-6. Textron and Walderson were
on the list. Blender Resp. to American Facts Ex. 6. American did
not dispute the contents of Blender's list. Blender Add'l Facts
at ¶ 46.
Blender did not have an exclusive agreement with American, and
American was free to use services of other consultants in its
effort to secure a lender. American Facts at ¶ 10. On August 23,
2002, American signed a contract with a second loan intermediary
broker, Steve Clapp of Credit Access Corporation ("CAC"), located
in Denver, Colorado. Id. at ¶ 22. American's contract with CAC
specifically prohibited CAC from contacting any of the sources
Blender identified in his August 12, 2002 letter, so that Blender
would continue to have opportunities to put together a deal for
American. Id. at ¶ 23. In mid-September, the CAC contract was
modified to permit CAC to seek financing from any lenders except
those with whom Blender had obtained signed NDA's, or lenders
with whom Blender negotiated at American's request. Id. at ¶
On October 23, 2002, CAC contacted Gary Collins in Textron's
Oswega, Oregon office; CAC and Collins compiled a written term
sheet proposal from Textron to American. Id. at ¶ 25. Collins never had any contact with Blender, nor was he aware of
Blender's previous contacts with Walderson. Id. at ¶ 26.
American did not accept Textron's October 23, 2002 term sheet.
Id. at ¶ 27.
On October 24, 2002, American signed a consulting agreement
with a third broker, Morris Anderson & Associates, Ltd.
("Morris"). Id. at ¶ 29. Robert Swett, Morris' consultant,
recommended that American terminate its contract with Mustang to
save $5000 per month in expenses. Id. at ¶¶ 30-31. On October
29, 2002, American sent Blender written notice that it was
terminating their agreement. Id. at ¶ 32. As of October 29,
2002, none of the potential funding sources Blender contacted had
any active or pending financing negotiations with American. Id.
at ¶ 33. Blender stopped performing work for American shortly
after receipt of the termination notice, and he did not send
American an invoice for any November 2002 advisory services.
Id. at ¶¶ 34-35. American paid all monthly $5000 retainer and
expense invoices from April 2002 through October 31, 2002. Id.
at ¶ 44.
In November 2002, Collins' boss, who was located in Textron's
Alpharetta, Georgia office, informed Collins that Swett contacted
another Textron sales representative in Alpharetta regarding
financing for American. Id. at ¶ 36. Collins had previously
proposed a Textron terms sheet; because American was located in
Collins' territory, he worked with Swett to prepare a new term
sheet financing proposal. Id. American accepted Textron's
November 23, 2002 term sheet financing proposal and on February
18, 2003, Textron issued financing to American. Id. at ¶¶
37-38. Blender did not negotiate, structure or close any
financing with Textron on American's behalf. Id. at ¶ 41.
American paid CAC a broker's commission as a result of its
obtaining the initial Collins proposal. Id. at ¶ 42. DISCUSSION
I. Summary Judgment Standards
Summary judgment is appropriate when the moving papers and
affidavits show there is no genuine issue of material fact and
the movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986). Once a moving party meets its burden, the non-moving
party must go beyond the pleadings and set forth specific facts
showing there is a genuine issue for trial. Fed.R.Civ.P.
56(e); Silk v. City of Chicago, 194 F.3d 788, 798 (7th Cir.
1999). The court considers the record as a whole and draws all
reasonable inferences in the light most favorable to the party
opposing the motion. Bay v. Cassens Transport Co.,
212 F.3d 969, 972 (7th Cir. 2000). A genuine issue of material fact exists
when "the evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).