Sachs v. Continental Oil Co.

• Decision Date: 15 June 1978
• Docket Number: Civ. A. No. 76-441.
• Citation: 454 F. Supp. 614
• Parties: Walter S. SACHS v. CONTINENTAL OIL COMPANY.
• Court: U.S. District Court — Eastern District of Pennsylvania

454 F. Supp. 614

Walter S. SACHS v. CONTINENTAL OIL COMPANY.

Civ. A. No. 76-441.

United States District Court, E. D. Pennsylvania.

June 15, 1978.

Carl T. Bogus, Steinberg, Greenstein, Gorelick & Price, Philadelphia, Pa., for plaintiff.

Walter R. Milbourne, Obermayer, Rebmann, Maxwell & Hippel, Philadelphia, Pa., for defendant.

MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

The plaintiff, Walter S. Sachs, a consultant in oil and gas investments, claims in a three-count complaint that he is entitled to recover from defendant, Continental Oil Company, $11,150 plus punitive damages in connection with defendant's sale in April 1975 of certain oil and gas interests owned by defendant in Texas. Jurisdiction is found on diversity of citizenship, 28 U.S.C. § 1332, inasmuch as plaintiff is a resident and citizen of Pennsylvania and the defendant is a Delaware corporation with its principal place of business in Connecticut. Count one of the complaint claims a contractual right to a commission or finder's fee; count two claims unjust enrichment; and count three alleges a tort claim, malicious interference with plaintiff's right to a commission or finder's fee. Defendant has filed a motion to dismiss for failure to state a cause of action or for summary judgment. Both parties have filed affidavits.¹ After a careful review of the record, the Court finds that there is no genuine issue as to any material fact and for the reasons hereinafter discussed, the Court will grant the defendant's motion for summary judgment.

Fed.R.Civ.P. 56(c) provides in pertinent part:

Summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Thus, in examining the propriety of a motion for summary judgment, the court must first determine whether there is a genuine issue as to any material fact.² Summary judgment may not be used to deprive a litigant of a full trial of genuine fact issues but may be granted where there are no disputed issues of material fact. Collins v. Pennsylvania Tel. Union, Local No. 1944, 431 F.Supp. 842, 846 (W.D.Pa.1977); West Virginia Housing Development Fund v. Sroka, 415 F.Supp. 1107, 1115 (W.D.Pa. 1976); Jackson v. Werner, 394 F.Supp. 805, 806 (W.D.Pa.1975). If there is a genuine issue as to any material fact, the motion for summary judgment will not be granted. Ettinger v. Johnson, 556 F.2d 692, 696 (3d Cir. 1977); Fairbanks, Morse & Co. v. Consolidated Fisheries Co., 190 F.2d 817, 824 (3d Cir. 1951); Toebelman v. Missouri-Kansas Pipe Line Co., 130 F.2d 1016, 1018 (3d Cir. 1942).

In all summary judgment motions, all doubts as to the existence of material facts should be resolved against the movant. Hicks v. ABT Associates, Inc., 572 F.2d 960 at 967 (3d Cir., filed January 19, 1978); Abdallah v. Caribbean Sec. Agency, 557 F.2d 61, 63 (3d Cir. 1977); Scott v. Plante, 532 F.2d 939, 945 (3d Cir. 1976). In addition, Fed.R.Civ.P. 56(e) provides in relevant part:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.

General Elec. Co. v. Hol-Gar Mfg. Corp., 431 F.Supp. 881, 884 (E.D.Pa.1977). If the opposing party does not so respond, summary judgment may appropriately be granted. First National Bank v. Cities Service, 391 U.S. 253, 288, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968); Proctor v. State Farm Mutual Automobile Insurance Co., 182 U.S.App.D.C. 264, 277, 561 F.2d 262, 275 (1977).

The following facts are uncontested: Plaintiff is an independent investment consultant in oil and gas interests. Defendant is engaged in the sale and purchase of oil and gas interests. On or about March 1, 1973, defendant purchased from Girard Bank interests in the Jo-Mill Unit, Borden and Dawson Counties, Texas ("Jo-Mill"), held by Girard as custodian for Charles B. Grace, Jr. et al., for eighty-five thousand dollars. This sale was for one-half of the holdings by Girard in Jo-Mill. Subsequently, a question was raised as to whether all of Girard's interest had been conveyed, and to resolve the matter an agreement was proposed by defendant in a letter dated November 11, 1974 and accepted by Girard on December 26, 1974. Under this agreement, Girard agreed to solicit bids for its remaining one-half interest in Jo-Mill, and further agreed to give defendant the right to purchase the remaining one-half interest for the amount of the highest bid received prior to December 31, 1974 or eighty-five thousand dollars, whichever was higher. Girard also agreed to send to the defendant "in confidence" a copy of the highest bid, and defendant had thirty-one days to exercise its right to purchase. The agreement further provided that Girard's written solicitation for bids would advise bidders of defendant's right to purchase the remaining one-half interest in Jo-Mill and that the name of the highest bidder would be disclosed "in confidence" to the defendant.

At all times during the above transactions, the plaintiff was acting as a consultant to Girard. It was understood between Girard and the plaintiff that if the plaintiff effected a sale of any oil or gas interests plaintiff would be entitled to the customary five percent finder's fee. Plaintiff solicited offers to purchase the remaining one-half interest in Jo-Mill and in January 1975, plaintiff received a bid from Austral Oil Company through its agent, Chandler and Savage, Midland, Texas to purchase Girard's remaining one-half interest for two hundred twenty-three thousand dollars. The plaintiff discussed Austral's bid with Girard and consented to permit Girard to send the bid to the defendant pursuant to Girard's December 26, 1974 agreement with the defendant.

The defendant was notified in a letter from Girard, dated January 27, 1975, of Austral's bid.³ On February 11, 1975, in a telephone conversation with Austral, the defendant confirmed the authority of Chandler and Savage to make the two hundred twenty-three thousand dollar offer on behalf of Austral, and in that conversation Austral advised defendant that it would be interested in buying defendant's one-half interest in Jo-Mill. Subsequently, defendant, in a letter dated March 3, 1975, declined to exercise its preferential right to purchase Girard's remaining one-half interest in Jo-Mill and instead, on April 14, 1975, conveyed its own interest in Jo-Mill to Austral for two hundred twenty-three thousand dollars.⁴ The defendant did not know of any interest or activity of the plaintiff in connection with Girard's sale of the one-half interest to defendant in 1973 nor did it know of any interest or activity of the plaintiff in connection with the sale of the remaining one-half interest by Girard to Austral in 1975. Further, Girard's correspondence with Chandler and Savage does not contain any information concerning the interest or activity of the plaintiff in the transactions.

Plaintiff contends that he had a "property right" consisting of the possession of the offer of Austral to purchase oil and gas interests. He argues that defendant, contrary to its December 26, 1974 agreement with Girard, took "unlawful advantage" of the knowledge of Austral's bid released by Girard to defendant "in confidence" and sold its own interest in Jo-Mill directly to Austral for two hundred twenty-three thousand dollars, which sale was the direct result of "fraudulent misappropriation" of confidential information solicited by plaintiff and disclosed to defendant by Girard. Plaintiff urges that he is entitled to a five percent finder's fee from defendant on the grounds that defendant was "unjustly enriched" at the expense of plaintiff and that defendant's actions were an "intentional wanton and malicious interference" with the right of plaintiff to a finder's fee for services rendered resulting in the sale by defendant to Austral of its one-half interest in Jo-Mill. A careful review of the record reveals that plaintiff is not entitled to a finder's fee from defendant on any of the theories advanced by the plaintiff, i. e., unjust enrichment, intentional interference with the business relations, property rights, and potential economic advantage of plaintiff, or any contractual argument.⁵

A "finder's fee" contract may be defined as an arrangement by which an intermediary (or "finder") finds, introduces, and brings together parties to a business opportunity . . ." "Finder's Fee" Contract, 24 A.L.R.3d 1160, 1164 (1969). A finder may be distinguished from a broker by the limited subject matter of a finder's activities and by the respective duties of finders and brokers. The duties of a finder were laid out in Amerofina, Inc. v. U. S. Industries, Inc., 232 Pa.Super. 394, 399, 335 A.2d 448, 451 (1975):

In general, a finder is an independent actor whose role is that of a middleman who introduces the parties, supplies information to one or both about the other and is required to do little else, whereas a broker "negotiates on behalf of one of the parties or performs or is required to perform some other act identified with the interests of one party and against the interests of the other."

Plaintiff solicited a bid from Austral to purchase Girard's interest in Jo-Mill. Plaintiff agreed to let Girard reveal this bid to defendant in accordance with the December 26, 1974 agreement between Girard and defendant in strictest "confidence", and for the purpose of fixing the price at which defendant could exercise its preferential right of purchase. Although plaintiff dutifully obtained bids as a finder for Girard's interest in Jo-Mill, a close examination of the record does not reveal...