Kramer Associates, Inc. v. Ikam, Ltd., No. 03-CV-1251.

• Decision Date: 22 December 2005
• Docket Number: No. 03-CV-1251.
• Citation: 888 A.2d 247
• Parties: KRAMER ASSOCIATES, INC., and Leo Kramer, Appellants v. IKAM, LTD., Appellee.
• Court: D.C. Court of Appeals

888 A.2d 247

KRAMER ASSOCIATES, INC., and Leo Kramer, Appellants v. IKAM, LTD., Appellee.

No. 03-CV-1251.

District of Columbia Court of Appeals.

Argued December 13, 2004.

Decided December 22, 2005.

COPYRIGHT MATERIAL OMITTED

Howard M. Liberman, Washington, DC, for appellants.

Kenneth D. Bynum, Alexandria, VA, for appellee.

Before TERRY, Associate Judge, and BELSON and NEBEKER, Senior Judges.

TERRY, Associate Judge:

Kramer Associates, Inc. ("KAI"), is an international management consulting firm based in the District of Columbia; Leo Kramer is its president. Ikam, Ltd., is a Ghana-based corporation, and Stephen K. Amoa-Marfo is its chairman of the board. In January of 1998, Mr. Amoa-Marfo sought investors for a housing construction project in Ghana. To that end, he entered into discussions with Mr. Kramer, first by telephone and then in person. As a result of these negotiations, Mr. Kramer agreed to secure financing for the development project, and Mr. Amoa-Marfo transferred a total of $75,000 to Mr. Kramer and KAI.

In September 2000 Ikam filed a complaint in the Superior Court against KAI and Mr. Kramer, seeking $75,000 in damages. The complaint alleged that KAI had breached its contract with Ikam by failing to raise capital for the construction project. After a non-jury trial, the court concluded that there was never a "meeting of the minds" between the parties, and thus no contract existed. Despite that fact, however, the court determined that "an unjust enrichment ... occurred, and justice and equity require that Defendant [KAI] make restitution." The court accordingly entered a judgment in favor of Ikam in the amount of $75,000. We affirm that judgment.

I

In January of 1998, Mr. Amoa-Marfo began to seek investors for a proposed housing development in Accra, Ghana. Stephen Poku-Kwateng (who is not a party to this litigation) introduced Mr. Amoa-Marfo to Mr. Kramer, who Mr. Poku-Kwateng believed would be helpful in Mr. Amoa-Marfo's endeavor to raise capital. The initial discussions took place over the telephone. On January 22, 1998, Mr. Amoa-Marfo faxed a "summary of the joint venture discussions" to Mr. Kramer, which stated that Ikam was "responsible for drawing up proposals," and that KAI was "responsible for sourcing finance for the projects." As part of the joint venture, Mr. Amoa-Marfo agreed to transfer $75,000 to KAI's bank account. Before approving the transfer, however, Mr. Amoa-Marfo traveled to the District of Columbia to meet with Mr. Kramer.

At that meeting, on March 13, 1998, Mr. Kramer offered a proposed contract which he had signed, but Mr. Amoa-Marfo did not sign it. According to Mr. Amoa-Marfo's testimony, "it was just not right. The kind of things he [Mr. Kramer] didn't put — that did not represent what he and I had discussed." Mr. Amoa-Marfo also said that the contract would have to be reviewed and approved by Ikam's attorney and board of directors before he could sign it. The proposed contract contained a clause stating that "Ikam will pay Kramer Associates, Inc.... a deposit of U.S. $75,000 which will be credited against any payment requirements." Without ever signing the proposed agreement, Mr. Amoa-Marfo ultimately transferred a total of $75,000 to KAI, which Mr. Kramer acknowledged in a March 19 fax. That fax also stated that "we are committed to each other."

Mr. Amoa-Marfo confirmed, in two faxes sent on March 30, that the payments had in fact been made.¹ The first fax made reference to a "joint venture" in "estate development," "marketing of Ikam products in the Middle East,"² and a "chocolate factory." The second fax stated, "I believe you are totally committed to this project.... [W]e are a winning team and I am sure you will do your utmost to ensure that this joint venture works out to our mutual benefit."

Between February and August of 1998, Mr. Kramer sent seven faxes to Mr. Amoa-Marfo asking for information about "the property" and "the lands." During that time, Mr. Kramer also made at least one inquiry into land development in Ghana.³ In September 1998, Ikam completed a feasibility report on the housing development project and informed Mr. Kramer that an additional three million dollars would be necessary to finance it. Mr. Amoa-Marfo asked Mr. Kramer to "let me know as soon as possible if and when you will be able to raise the finances...." Mr. Kramer acknowledged in a fax on November 10, 1998, that Ikam's "work on the property is excellent," but expressed skepticism over the financing aspects of the project.

On February 12, 1999, Mr. Kramer stated in a fax that he had "people actively reviewing the [property] investment," although he was concerned about the progress of the project because it "took a long time for the documents to come forward" from Ikam. In May of 1999, however, Mr. Amoa-Marfo began requesting a full refund of the $75,000 after Mr. Kramer had failed to find any investors.⁴ The "joint venture" disintegrated, and an August 30, 1999, fax from Mr. Kramer to Mr. Amoa-Marfo confirmed that business dealings between the two had ceased.

The primary dispute at trial involved the purpose of the $75,000 transfer. KAI and Mr. Kramer characterized the money as "a payment to our company to justify our working on the projects." Mr. Amoa-Marfo testified, however, that it was "seed money to show credibility to the people that this is not just anybody but somebody who is credible enough to go to business with." Mr. Poku-Kwateng also testified about his understanding of the purpose of the $75,000 payment: "And if Mr. Marfo gives him $75,000 as seed, he will refund the money back to him when the project is about to take off, he will refund the money back to Mr. Marfo."

After reviewing this evidence, the trial court first found that there was never "a meeting of the minds between the parties." According to the court:

This is especially true with respect to the $75,000. What is clear is that the Defendant accepted the $75,000 and did virtually nothing to secure financing for the project. Under these circumstances, an unjust enrichment has occurred, and justice and equity require that Defendant make restitution.

The court went on to find that Mr. Kramer's testimony regarding his efforts to secure financing was not credible. It also held that corporate formalities had not been observed, and thus it was appropriate to pierce the corporate veil and hold Mr. Kramer individually liable, along with KAI, for the $75,000 restitution.

II

Appellants contend that the trial court erred in concluding that there was no agreement between the parties⁵ and in awarding damages for unjust enrichment. We address each contention in turn.

A. The Alleged Agreement

"The determination whether an enforceable contract exists, when based on the contract documents, is a question of law ...." Rosenthal v. National Produce Co., 573 A.2d 365, 369 n. 9 (D.C.1990). When the determination is based on oral representations, it is "likewise [a question] of law." Id. We therefore review de novo the trial court's decision that no contract existed; the "clearly erroneous" standard of review does not apply. See L.K. Comstock & Co. v. United Engineers & Constructors, Inc., 880 F.2d 219, 221 (9th Cir.1989) ("factual findings [by the court] as to what the parties said or did are reviewed under the `clearly erroneous' standard, while principles of contract interpretation applied to the facts are reviewed de novo"); United States v. John McShain, Inc., 103 U.S.App. D.C. 328, 330-331, 258 F.2d 422, 424-425, cert. denied, 358 U.S. 832, 79 S.Ct. 52, 3 L.Ed.2d 70 (1958).

As the parties asserting the existence of a contract, appellants have the burden of proving that one existed. Jack Baker, Inc. v. Office Space Development Corp., 664 A.2d 1236, 1238 (D.C.1995). In the District of Columbia and virtually everywhere else, "[f]or an enforceable contract to exist, there must be both (1) agreement as to all material terms, and (2) intention of the parties to be bound." Georgetown Entertainment Corp. v. District of Columbia, 496 A.2d 587, 590 (D.C.1985) (citation omitted); accord, e.g., Davis v. Winfield, 664 A.2d 836, 838 (D.C.1995) ("`to establish a contract the minds of the parties must be in agreement as to its terms'" (citations omitted)). Unless the statute of frauds requires otherwise in a particular case, the contract need not be written; "parties may be bound by their oral agreement if it meets the dual requirements of intent and completeness." Jack Baker, 664 A.2d at 1238 (citations omitted).

Appellants maintain that "the agreement between KAI and Ikam was embodied in the document that KAI executed on March 13, 1998, even though Ikam never executed that document." Specifically, the proposed contract contained a clause stating that "Ikam will pay Kramer Associates, Inc.... a deposit of U.S. $75,000 which will be credited against any payment requirements." It also contained two paragraphs which provided for "start-up" payments of $50,000 for financing work (paragraph 3) and $25,000 for marketing (paragraph 5). Mr. Kramer stated at trial that "[paragraphs] three and five add up to seventy-five thousand and those are the two projects ... that we worked on."⁶ Thus, appellants argue, the fact that Mr. Amoa-Marfo ultimately transferred a total of $75,000 to KAI and Mr. Kramer (even though Mr. Amoa-Marfo did not sign the document), coupled with the fact that KAI "embarked on the work agreed to," is evidence that "the parties were proceeding in accordance with the arrangements described in the agreement...."

Appellants are correct in asserting that the absence of Mr. Amoa-Marfo's signature on the proposed contract does not, by itself, invalidate any potential agreement between the parties. See Davis v. Winfield, 664 A.2d at 838. While a "meeting of the minds," or mutual assent, "is most clearly evidenced by the terms of a signed written agreement ... such a signed writing is not essential to the formation of...