Crowe-Thomas Consulting Group, Inc. v. Fresh Pak Candy Co., Inc.

• Decision Date: 27 October 1992
• Docket Number: CROWE-THOMAS,No. 91-1782,91-1782
• Citation: 494 N.W.2d 442
• Parties: CONSULTING GROUP, INC., Appellant, v. FRESH PAK CANDY CO., INC., and Sieg Co., Appellees.
• Court: Iowa Court of Appeals

Page 442

494 N.W.2d 442

CROWE-THOMAS CONSULTING GROUP, INC., Appellant, v. FRESH PAK CANDY CO., INC., and Sieg Co., Appellees.

No. 91-1782.

Court of Appeals of Iowa.

Oct. 27, 1992.

John J. Carlin of Carlin, Hellstrom & Bittner, Davenport, for appellant.

Thomas D. Hanson of Hanson, Bjork & Russell, Des Moines, for appellees.

Considered by DONIELSON, P.J., and SACKETT and HABHAB, JJ.

HABHAB, Judge.

FACTS

During 1988, Fresh Pak Candy Co. was a wholly-owned subsidiary of the Sieg Company. On March 23, 1988, Fresh Pak entered into an agreement with Crowe-Thomas Consulting Group, Inc. According to the agreement, Crowe-Thomas was to perform certain services in connection with the sale of Fresh Pak. The agreement specifically provided for fees to be paid to Crowe-Thomas in unnumbered paragraph 5 which states:

For his services as a Consultant, John M. Crowe shall be paid compensation for his services at no less than $2,500.00. Consultant shall also be reimbursed by Fresh Pak for Consultant's subsequent sale of Fresh Pak at the rate of $45,000 due and payable at closing less his $2,500.00 non-refundable retainer fee. The $42,500 will be payable only if an acceptable sale to Seller is made within six months.

On September 26, 1988, the parties executed an "addendum" to the agreement. The addendum in its entirety provides as follows:

Pursuant to our discussions regarding our mutual agreement to sell the assets of the Fresh Pak Candy Co., signed on March 23, 1988, following is the modification to that agreement that our companies have agreed upon.

"The fees for our sales assistance will be $45,000.00, due and payable upon the acceptance of any offers by both the buyer and seller, less the $2,500.00 non-refundable retainer fee Sieg Co. advanced upon the acceptance of the original agreement dated on March 23, 1988. Our exclusivity for the sale agreement shall extend to March 31, 1989 for all new prospects introduced by our firm to the Sieg Co. and Fresh Pak Candy Co. Additionally, the same fee of $42,500.00 shall become due and payable should any previously introduced Crowe-Thomas prospects purchase the assets or enter into a joint venture with Sieg Co. and/or the Fresh Pak Candy Co."

I believe this covers all the contingencies we have discussed. Once again Thank you for allowing us to be of service.

Crowe-Thomas attempted to find buyers for the business. However, Jerry Lorber, a Fresh Pak official who had a contractual option to purchase Fresh Pak, was also attempting to locate buyers. Lorber was successful in finding a prospective buyer, a group of investors (the Investor Group) led by Ned E. Mitchell and Bruce Shankman. As negotiations proceeded, Sheldon Harris, a board member of the Sieg Company, drafted and transmitted a letter of intent dated November 9, 1988, to the Investor Group which provided:

14. This is a letter of interest only and is subject to the negotiation and execution of a definitive agreement which will incorporate all of the terms and conditions of this proposal, and any such additional terms or conditions as negotiated, and which will require the approval of the Boards of Directors of the Sieg Company and Fresh Pak, as well as, all of the members of the Investor Group and any shareholder approvals which are required. No claim may be asserted against the Investor Group or Sieg/Fresh Pak for failure to negotiate or to execute a definitive agreement.

Sieg/Fresh Pak invites the parties to sign copies of this letter and turn this matter over to our respective attorneys for purposes of forming a definite contract.

(emphasis added).

The November 9, 1988, letter was signed by the Investor Group through Mitchell and Shankman and then returned to the Sieg Company. Fresh Pak turned the matter over to its attorney who then drafted a definitive agreement. However, as negotiations continued, the Investor Group began changing material terms, and the negotiations eventually terminated.

Crowe-Thomas instituted these proceedings claiming it was entitled to compensation from both Fresh Pak and the Sieg Company under the consulting agreement based on Sheldon Harris's letter dated November 9, 1988. The matter was submitted to the trial court upon a written factual record. The court found Sheldon Harris's letter did not constitute an offer. It found the letter was merely an invitation to continue more definitive negotiations. It ultimately concluded Crowe-Thomas was not entitled to compensation because there was no offer and acceptance of any sales agreement. The court dismissed Crowe-Thomas's claim for a consulting fee. Crowe-Thomas appeals. We affirm.

SCOPE OF REVIEW

Our review in this case is for correction of errors at law. Iowa R.App.P. 4. Findings of facts in a law action are binding on us if supported by substantial evidence. Iowa R.App.P. 14(f)(1). We construe the trial court's findings broadly and liberally. Grinnell Mut. Reins. Co. v. Voeltz, 431 N.W.2d 783, 785 (Iowa 1988). In case of doubt or ambiguity, we construe the findings to uphold, rather than defeat, the trial court's judgment. Id. We are prohibited from weighing the evidence or the credibility of the witnesses. Id.

A finding of fact is supported by substantial evidence if the finding may be reasonably inferred from the evidence. In evaluating sufficiency of the evidence, we view it in its light most favorable to sustaining the court's judgment. We need only consider evidence favorable to the judgment, whether or not it was contradicted.

Briggs Transp. Co. v. Starr Sales Co., 262 N.W.2d 805, 808 (Iowa 1978).

"Evidence is substantial or sufficient when a reasonable mind could accept it as adequate to reach the...