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noting that a meeting of the minds indicates that the parties have a distinct and common intention which they have communicated to each other because "[i]n an express contract, the meeting of the minds is manifested by offer and acceptance."
Summary of this case from N. Side Bank v. Trinity Aviation, LLCOpinion
No. 88-279
Submitted March 8, 1989 —
Decided June 28, 1989.
Corporations — Acquisitions — "Business finder" and "business broker," contrasted — Misappropriation of finder's proprietary information — Recovery in quantum meruit permitted, when.
O.Jur 3d Brokers § 1.
1. A business finder is one who finds, interests, introduces, and brings parties together for a transaction that they themselves subsequently negotiate and consummate. Unlike a business broker, a finder is an intermediary or middleman who is not necessarily involved in negotiating any of the terms of the transaction.
O.Jur 3d Contracts §§ 342, 345.
2. Although a party to an acquisition is ordinarily held to have no liability to a business finder in the absence of a contract, express or implied in fact, to pay for such finder's services, an exception exists where the party or its agent misappropriates the finder's proprietary information and uses it to such party's benefit, in which case an agreement to pay may be implied in law and the finder can recover in quantum meruit.
APPEALS from the Court of Appeals for Cuyahoga County, Nos. 52888, 52889 and 52939.
Appellant Emile A. Legros, Jr., an investment banker, commenced this action in January 1982 to recover a finder's fee from appellees, Michael E. Tarr and Burning Hills Steel Company ("Burning Hills"), alleging that Tarr had misappropriated information supplied by Legros to Tarr's former employer, using such information for his own benefit and the benefit of Burning Hills. Legros' former employer, appellant Butcher Singer, Inc., intervened as a plaintiff in the action.
The pertinent facts pertaining to the issues presented are that, beginning in 1977, Legros was employed by Butcher Singer as a vice-president in the corporate finance department in the firm's Cleveland, Ohio, office. Butcher Singer is a licensed broker-dealer and investment banking house with its principal place of business located in Philadelphia, Pennsylvania.
Tarr was employed in July 1979 as vice-president of strategic planning of Union Metal Manufacturing Company ("Union Metal"). Tarr was responsible for developing a strategic business plan for Union Metal, and was in charge of acquisitions and divestitures. He reported directly to Union Metal's president, Kenneth E. Glass. The strategic plan and acquisition guidelines of Union Metal were considered highly confidential by the officers of the corporation.
In August or September 1979, Tarr (and possibly Glass) met with Legros to discuss hiring Butcher Singer to identify potential acquisition possibilities within the guidelines called for by Union Metal's strategic plan. On November 6, 1979, the parties executed a written contract whereby Butcher Singer would be paid $1,500 per month plus out-of-pocket expenses, and a two-percent fee on whatever consideration Union Metal paid for an acquisition brought to it by Butcher Singer. In addition, the contract provided:
"We would expect full compensation [ sic] on the basis set forth above in the event that, within one (1) year after termination of our employment, a sale or purchase is consummated with a party identified by B S. The agreement shall be exclusive with B S on a quarterly basis and may be extended at the end of each quarter by both parties * * *."
This agreement was extended by the parties to June 30, 1980. Both the original agreement and the extension were executed by "Emile A. Legros, Jr., Vice President" for Butcher Singer, and "Michael E. Tarr, Vice President" for Union Metal. Legros apparently was the only employee of Butcher Singer who worked with Union Metal and he reported to Tarr. Although it was not specifically expressed in the agreement, Legros understood that any information supplied by him to Union Metal was confidential.
In December 1979, Legros provided the name of Speedrack, Inc., a materials handling company, to Tarr as a candidate for acquisition. The initial meeting between Tarr and the president of Speedrack was held on December 17, 1979 and, following subsequent negotiations, Union Metal made an offer to purchase Speedrack in January 1980. Speedrack responded with a counterproposal on or about March 31, 1980, in the amount of $5,000,000 ($4,000,000 in cash). This counter-proposal was unacceptable to Union Metal's president and was rejected. Although no further negotiations occurred between Union Metal and Speedrack, Inc., the facts show, and the trial court included within its findings of fact, that "[a]t no time did Union Metal lose interest in acquiring Speedrack * * *." Rather, Ken Glass decided to put the negotiations on hold and pursue Speedrack at some future date. In this latter regard, the facts show that Tarr was requested by the other officers to check back with Speedrack on two occasions between April and October 1980, and Tarr reported that Speedrack was not interested in selling at that time.
In June 1980, Legros provided the name of Wisconsin Bridge Iron Company ("Wisconsin Bridge") to Tarr as another candidate for acquisition. Wisconsin Bridge was in a turn-around situation with substantial net operating losses. Tarr developed a strategy whereby Wisconsin Bridge and Speedrack, Inc. would be acquired together, and the net operating losses of Wisconsin Bridge would be used to shelter the earnings and profits from Speedrack. The other officers of Union Metal, however, did not feel Wisconsin Bridge was a good acquisition candidate, and it was soon decided not to pursue it further.
On June 30, 1980, the agreement between Butcher Singer and Union Metal expired and was not renewed. Legros had been informed by Butcher Singer that it would close its Cleveland office effective July 31, 1980, and Legros was offered a position in Philadelphia, which he declined. Legros left Butcher Singer's employ sometime after June 30, 1980, but continued to pursue new business with Union Metal, and in August 1980, joined another investment banking firm and retained Union Metal as a client. Union Metal acquired three companies from 1979 to the end of 1980, each of which, it appears, had been identified by Legros and a fee paid.
Meanwhile, in June and again in July 1980, Tarr had discussions with a former business associate, Jack S. James, about the possibility of forming a holding company, knowing from his prior contacts that Speedrack and Wisconsin Bridge could be acquired. These discussions were general in nature, however, and Tarr did not specifically mention Speedrack or Wisconsin Bridge to James at those meetings. As a result of these discussions, James initiated the formation of appellee Burning Hills Steel Company in Oklahoma on August 11, 1980. Tarr was elected president of Burning Hills at the corporation's first meeting of the board of directors, held August 14, 1980. Tarr was made a forty-four-percent shareholder and paid an annual salary of $80,000 as president, in exchange for his expertise. In this regard, the trial court set forth at Section 28 of its "Finding[s] of Fact":
"Michael E. Tarr, in effect, traded the confidential information concerning Speedrack and Wisconsin Bridge for a 44% ownership interest in Burning Hills. He would also receive a five year written employment contract as President of Burning Hills at $80,000 per year in exchange for providing confidential information from Union Metal's strategic business plan."
In late August or early September 1980, Tarr gave James the names of Speedrack, Inc. and Wisconsin Bridge as possible acquisition candidates for Burning Hills. In September, shortly after its formation, Burning Hills began negotiating with Speedrack, Inc., although without Tarr's participation, and acquired that company (and related companies) on October 30, 1980 for some $7,000,000. This acquisition date was within one year of the June 30, 1980 termination date of the contract between Union Metal and Butcher Singer. Tarr resigned from Union Metal the next day, October 31, 1980. Tarr immediately joined Burning Hills and became involved in ongoing negotiations with Wisconsin Bridge, which had begun in October. Wisconsin Bridge was acquired by Burning Hills on November 17, 1980. The record shows that Tarr never told Legros about his involvement with Burning Hills, or about that company's acquisition of Speedrack and Wisconsin Bridge.
The officers of Union Metal first learned of Burning Hills' acquisition of Speedrack in November 1980, and immediately contacted Legros and stated their intention of filing litigation against Tarr. At no time did Legros inform Butcher Singer of the Burning Hills acquisitions. Tarr and Union Metal settled their differences pursuant to a written release on February 13, 1981. The officers of Burning Hills first learned of Legros' claim for a finder's fee in mid-September 1981. Tarr's employment with Burning Hills was terminated on September 21, 1981.
On January 12, 1982, Legros filed a three-count complaint against Tarr and Burning Hills, seeking an accounting and judgment pursuant to the Butcher Singer/Union Metal agreement or, in the alternative, seeking recovery of $150,000 as the amount of the value of his services. His third count sought recovery of $50,000 plus punitive damages from Tarr. Tarr and Burning Hills answered with general denials, and each filed cross-claims against the other, claiming a right to indemnification. On April 19, 1983, Butcher Singer intervened in the action, claiming a right as Legros' employer to his finder's fee. Following a bench trial, the court issued findings of fact and conclusions of law, stating that Butcher Singer was entitled to recover a two-percent commission on the $7,000,000 purchase price of Speedrack and the $3,000,000 purchase price of Wisconsin Bridge, based upon the theory of a contract implied in law or quantum meruit, or upon the theory of misappropriation of trade secret information. The court, in its initial "Conclusion of Law," denying Legros any recovery, set forth that "[t]he role of Legros concerning the acquisition and disclosure of information pertaining to Speedrack and Wisconsin Bridge was strickly in his capacity as an employee and agent of Butcher Singer."
The trial court also founs that both Tarr and Burning Hills were liable for the commissions for their use of the acquisition information supplied by Butcher Singer.
Upon review and reissuance of "Supplemental Findings of Fact and Conclusions of Law," the trial court again found that the defendants Tarr and Burning Hills were jointly and severally liable, but that such liability was to both Butcher Singer and Legros, and was only for the two-percent commission on the acquisition of Speedrack. Accordingly, the trial court stated in its entry of judgment, as follows:
"* * * The evidence presented by the two plaintiffs concerning which of the two should have the right to collection of the commission or in what manner it should be shared by them was not clear enough to be dispositive of this issue for either party. This being an action in equity, it is within the Court's discretion to make a determination on the manner in which the plaintiffs shall share in the judgment. In this regard, the Court has determined that plaintiffs shall be equally entitled to the investment broker's commissions.
"Upon review of the exhibits and the testimony regarding the two business opportunities that were appropriated by the defendants, the Court has determined that no commission will be allowed for the purchase of Wisconsin Steel [ sic] because of the manner in which the transaction was structured by the defendants."
The court of appeals reversed, holding that an implied contract had not been established whereby appellants could recover under the doctrine of quantum meruit. Further, the court held Legros could not recover under any theory since he acted solely as an agent for Butcher Singer, and was not personally entitled to a commission.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Carney Broadbent and Richard O. Mazanec, for appellant Legros.
Kohrman, Jackson Krantz, Gregory M. Lichko and Sarah Gabinet, for appellant Butcher Singer.
Weston, Hurd, Fallon, Paisley Howley, John S. Kluznik and Mary E. Golrick, for appellee Burning Hills Steel Co.
The controlling issue presented by this case is whether appellants are entitled to recover a commission, or finder's fee, in quantum meruit, from appellees, based upon the theory of quasi-contract, or contract implied in law. As to one of the appellants, Butcher Singer, we answer such query in the affirmative and thus, in this respect, reverse the court of appeals. However, we affirm the court of appeals' holding that appellant Legros, due to his employment relationship with appellant Butcher Singer, is not entitled herein to a share of the finder's fees awarded by the trial court.
As a threshold matter, we feel it is useful to clarify each appellant's role in the corporate acquisitions at issue here. Although the lower courts referred to Legros as an investment broker and spoke in terms of broker's commissions, there exists in the law a distinction between investment brokers and business opportunity finders. "A business finder is one who finds, interests, introduces, and brings parties together for a transaction that they themselves negotiate and consummate. A finder is an intermediary or middleman who is not necessarily involved in negotiating any of the terms of the transaction." Scharf, Shea Beck, Acquisitions, Mergers, Sales, Buyouts and Takeovers (1985) 39. Essentially, the business finder is selling confidential information he has developed himself. The identity of a potential acquisition candidate is the stock in trade of a finder or investment banking house.
In contrast, a broker not only introduces the parties but also negotiates on behalf of one of the parties with the best interests of such party being his charge. Id.; French v. Toledo (1909), 81 Ohio St. 160, 167, 90 N.E. 160, 161; see, also, 13B Fox, Business Organizations (1987), Section 30.02, and cases cited therein; 1 Herz Baller, Business Acquisitions (2 Ed. 1981) 91, Section 3.101; Augustine Fass, Finder's Fees in Security and Real Estate Transactions (1980), 35 Bus. Law. 485, 486. In the instant case it is obvious, both from the contract between the parties and the actual activities of Legros, that Union Metal employed Butcher Singer to act merely as a business finder, not a broker.
Although the distinction between a finder and a broker is often more apparent than real, inasmuch as a person may act as a finder in one transaction and as a broker in another. Herz Baller, supra, at 92, and is an area of the law which the courts of Ohio have heretofore not addressed, a review of the law of other jurisdictions demonstrates that an important difference exists in the circumstances under which finders and brokers may be compensated. In general, a broker retained to procure a buyer or seller of a business is entitled to a commission if he (1) produces a buyer or seller who is ready, willing and able to buy or sell on the principal's terms, and (2) the transaction, or the readiness to perform on the principal's terms, directly results from the broker's efforts, without a break in continuity. Fox, supra, at Section 30.04[1]. In essence, a broker earns his fee only if he was the "procuring cause" of the transaction, Canaday v. Brainard (1958), 51 Del. 226, 144 A.2d 240; Bauman v. Worley (1957), 166 Ohio St. 471, 2 O.O. 2d 473, 143 N.E.2d 820 (real estate brokers), even if the transaction is never actually finalized. Lane — The Real Estate Dept. Store, Inc. v. Lawlett Corp. (1971), 28 N.Y. 2d 36, 319 N.Y. Supp. 2d 836, 268 N.E.2d 635 (real estate); Alphen v. Bryant's Market (1952), 329 Mass. 540, 109 N.E.2d 152; Rainier v. Champion Container Co. (C.A. 3, 1961), 294 F.2d 96; John F. Fleming, Inc. v. Beutel (C.A. 7, 1968), 395 F.2d 21.
On the other hand, in the absence of contractual terms to the contrary, a finder is entitled to a commission or fee only if his introduction results in a transaction, irrespective of whether a third person brings the parties to agreement. Consolidated Oil Gas, Inc. v. Roberts (Colo. 1967), 425 P.2d 282; Minichiello v. Royal Bus. Funds Corp. (1966), 18 N.Y. 2d 521, 277 N.Y. Supp. 2d 268, 223 N.E.2d 793, certiorari denied (1967), 389 U.S. 820; Peebles v. Prudential Ins. Co. (C.A. 6, 1940), 110 F.2d 76. The causation, or "procuring cause," requirement is satisfied by the mere introduction, even if negotiations are abandoned and later succesfully resumed, provided the renewed negotiations are connected to and stem from the original introduction. Bushkin Assoc., Inc. v. Raytheon Co. (C.A. 1, 1987), 815 F.2d 142, 151-152; Simon v. Electrospace Corp. (1971), 28 N.Y. 2d 136, 320 N.Y. Supp. 2d 225, 269 N.E.2d 21; Schaller v. Litton Indus., Inc. (E.D. Wis. 1969), 307 F. Supp. 126; Slotkin v. Willmering (C.A. 8, 1972), 464 F.2d 418. Although the contract between Butcher Singer and Union Metal states that, in addition to locating acquisition prospects, Butcher Singer will assist Union Metal "in negotiations * * * as we both deem appropriate to completing the transaction," the payment of compensation was contingent solely on a completed acquisition or divestiture with a party identified by Butcher Singer. This contract form, in addition to the evidence in the record that Legros did not actively negotiate on behalf of Union Metal with either Speedrack or Wisconsin Bridge, establishes appellants as mere finders with respect to these transactions.
Appellees' chief contention, and the basis of the court of appeals' opinion, is that no contract was established between appellants and appellees such that appellants were entitled to recovery of a fee. It is clear that the only express contract was the one between Butcher Singer and Union Metal, and that this contract, standing alone, cannot bind Burning Hills.
However, it is well-established that there are three classes of simple contracts: express, implied in fact, and implied in law. Hummel v. Hummel (1938), 133 Ohio St. 520, 525, 11 O.O. 221, 223, 14 N.E.2d 923, 925-926; Rice v. Wheeling Dollar Savings Trust (1951), 155 Ohio St. 391, 44 O.O. 374, 99 N.E.2d 301. "In express contracts the assent to its terms is actually expressed in offer and acceptance. In contract implied in fact the meeting of the minds, manifested in express contracts by offer and acceptance, is shown by the surrounding circumstances which made it inferable that the contract exists as a matter of tacit understanding. In contracts implied in law there is no meeting of the minds, but civil liability arises out of the obligation cast by law upon a person in receipt of benefits which he is not justly entitled to retain and for which he may be made to respond to another in an action in the nature of assumpsit. Contracts implied in law are not true contracts; the relationship springing therefrom is not in a strict sense contractual but quasi-contractual or constructively contractual. In truth contracts implied in law are often called quasi contracts or constructive contracts. Columbus, Hocking Valley Toledo Ry. Co. v. Gaffney, 65 Ohio St. 104, 61 N.E. 152." Hummel, supra.
The court of appeals below correctly held that no contract implied in fact existed here, stating, "[n]o circumstances existed which could have reasonably caused Burning Hills to believe it would have to compensate Legros or B S [Butcher Singer] for their services, since Burning Hills did not authorize Legros or B S to act as its procuring agents." The case relied on by the court of appeals, Ostendorf-Morris Co. v. Slyman (1982), 6 Ohio App.3d 46, 6 OBR 156, 452 N.E.2d 1343, dealt solely with the issue of an implied-in-fact contract, concerning a real estate broker who volunteered his services without the knowledge or assent of the defendants. Similarly, in Suter v. Farmers Fertilizer Co. (1919), 100 Ohio St. 403, 126 N.E. 304, the court held that a valid contract implied in fact had been established where the services of the broker involved were ratified and a written contract of compensation had been prepared, even though the broker's services were originally volunteered. This court noted: "If his services were rendered without employment, express or implied, as a mere volunteer and without acceptance under the circumstances named, he cannot recover." Id. at 408-409, 126 N.E. at 305. In the instant case, since no "meeting of the minds" was shown between appellants and Burning Hills by the surrounding circumstances, no contract implied in fact existed.
However, it is also clear that appellants' services were not volunteered, but followed from a valid finder's agreement with Union Metal, through Tarr, its former agent. Although a party to an acquisition is ordinarily held to have no liability to a finder in the absence of a contract, express or implied in fact, to pay for such finder's services, an exception exists where the party or its agent misappropriates the finder's proprietary information and uses it to such party's benefit, in which case an agreement to pay may be implied in law and the finder can recover in quantum meruit. Fox, supra, at Sections 30.02[1] and 30.05[2][e]; Bradkin v. Leverton (1970), 26 N.Y. 2d 192, 309 N.Y. Supp. 2d 192, 257 N.E.2d 643. We hold that such a quasi-contract existed here, which precluded Tarr and his principal, Burning Hills, from denying an obligation to pay for the information supplied by appellants and misappropriated by Tarr.
Ostendorf-Morris Co., supra, and Suter, supra, are thus not dispositive here as they do not reach the issue of a contract implied in law, or quasi-contract.
As already stated, see Hummel, supra, a quasi-contract or contract implied in law is not really a contract at all, but is an "obligation that is created by the law without regard to expressions of assent by either words or acts," 1 Corbin on Contracts (1963) 44, Section 19, and is imposed to prevent a party from retaining money or benefits which in justice and equity belong to another. Hummel, supra, at 528, 11 O.O. at 224-225, 14 N.E.2d at 927; 1 Williston on Contracts (3 Ed. 1957), Section 3A; Corbin on Contracts, supra; Rice, supra. In Bradkin v. Leverton, supra, Bradkin was employed by H.L. Federman Co., Inc. to find corporations which needed financing, pursuant to a written finder's fee contract. Bradkin supplied such information to Federman Co., of which Leverton was an officer, director and nonvoting stockholder. As a result of his position, Leverton used the information provided regarding Mauchly Associates, Inc., to arrange a private financing, without Bradkin's knowledge, and took a finder's fee for himself. The New York Court of Appeals, finding the complaint stated a cause of action in quasi-contract, held that "[s]ince the defendant * * * took unto himself the Mauchly financing, he obtained the benefit of the plaintiff's labors and must compensate him for such services." Id. at 197-198, 309 N.Y. Supp. 2d at 196, 257 N.E.2d at 646.
The court noted that the defendants' obligation could not be defeated by the absence of a writing between plaintiff and defendant. "[T]he contract required to be in writing [by the Statute of Frauds] is one between the finder and the principal or employer with whom he has assertedly contracted and from whom he seeks compensation. * * * Quite manifestly, the purpose of the statute is to protect against fraudulent dealings between the finder and his employer, not between the finder and a third party, such as the defendant before us. Since there is no danger of `unfounded and multiple claims for commissions' where a third party is concerned, the Statute of Frauds provides no defense to him. When, therefore, a finder's contract meets all the requirements of the statute, a third party may not `take over' that contract and then evade his obligation to the finder by relying upon the statute. This is precisely what the present defendant is attempting to do. * * *" (Emphasis sic and footnote added.) Id. at 199, 309 N.Y. Supp. 2d at 197-198, 257 N.E.2d at 646-647. See, also, Hummel, supra, at 528-529, 11 O.O. at 225, 14 N.E.2d at 927; but, see, Hughes v. Oberholtzer (1954), 162 Ohio St. 330, 55 O.O. 199, 123 N.E.2d 393. We find this reasoning persuasive in the case before us.
New York's Statute of Frauds, contained in Section 5-701 of the General Obligations Law, contained a specific provision for business finders contracts of the type at issue here:
"Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking:
"* * *
"10. Is a contract to pay compensation for services rendered in negotiating a loan, or in negotiating the purchase, sale, exchange, renting or leasing of any real estate or interest therein, or of a business opportunity, business, its good will, inventory, fixtures or an interest therein * * *. `Negotiating' includes procuring an introduction to a party to the transaction or assisting in the negotiation or consummation of the transaction. This provision shall apply to a contract implied in fact or in law to pay reasonable compensation." (Emphasis added.)
Ohio's Statute of Frauds, R.C. Chapter 1335, contains no similar provision.
The record below demontrates that Tarr, solely through his position with Union Metal and its contract with appellants, learned of the opportunity of acquiring Speedrack, and used such proprietary information to engage in personal dealings with Jack James (including the formation of Burning Hills). The record reflects that Union Metal never lost interest in acquisition of Speedrack, and never released it to Legros for his use in other dealings.
Due to his general experience and his specific knowledge of Speedrack and Wisconsin Bridge, which were subsequently acquired by Burning Hills, Tarr received the benefit of a substantial salary from, and forty-four-percent interest in, Burning Hills. Thus, both Tarr and Burning Hills obtained a benefit from Legros' services, and are liable in quasi-contract to pay for those services. In this respect, we cannot agree with the court of appeals' view of the record, nor its treatment of the law, and thus reverse that court's decision and reinstate the judgment for Butcher Singer against appellees.
However, we concur in the holding of the court of appeals that Legros is not entitled to any amount as ordered herein as he was, at all relevant times, an employee-agent of Butcher Singer, paid by salary, and with no arrangement for any payment from commissions. The record reflects that Legros was employed by Butcher Singer at the time he provided and developed the names of Speedrack, Inc. and Wisconsin Bridge to Union Metal — through Tarr. The only evidence relating to employees sharing in commissions was that of Legros upon cross-examination where he testified that commissions earned by the finders would go into a "pot" and would be divided between the members of the group; "but the pot never had anything in it," apparently due to Butcher Singer's negative cash flow. Also, the contract with Union Metal stated that Butcher Singer, not its employee-agent, would be entitled to a commission up to one year after termination of their agreement for acquisitions with a party identified by Butcher Singer. Although Union Metal reimbursed Legros for expenses, all payments were made to Butcher Singer. Additionally, an officer of Butcher Singer testified, and the trial court found, that when Butcher Singer closed its Cleveland offices in July 1980 its former employees were free to pursue any new business it wished, but any ongoing business or any transaction initiated at the firm remained the property of Butcher Singer. The departing employee had an obligation to disclose such ongoing business to Butcher Singer, but Legros failed to so disclose the purchase of Speedrack by Burning Hills.
In that Butcher Singer was the principal contracting party to whom any commission would have to be paid pursuant to the contract, and in that the evidence supports the trial court's findings of fact that Legros was an employee of Butcher Singer paid by salary and that there was no commission arrangement with Legros as an agent-employee, the commission found to be due herein must be paid to the principal, Butcher Singer. If any amounts are in fact due to Legros from this commission it must be so proven in another proceeding between him and his former employer.
For all the foregoing reasons, the judgment of the court of appeals is affirmed in part and reversed in part, and this cause is remanded to the trial court to enter the appropriate judgment for Butcher Singer in accordance with this opinion.
Judgment accordingly.
MOYER, C.J., DOUGLAS, WRIGHT, H. BROWN and RESNICK, JJ., concur.
SWEENEY, J., concurs in part and dissents in part.
While I agree with the majority's holding that this case involves a business finder and not a broker, I am compelled to dissent from the majority's opinion herein because I believe that there can be no liability to the business finder in this case in the absence of a contract, express or implied in fact.
In essence, it seems that the majority hopes to reach a desired result by failing to consider important facts which are determinative of the outcome of this case. In its second syllabus paragraph, the majority holds that a finder's contract may be implied in law where a party or its agent misappropriates the finder's proprietary information and uses it to such party's benefit. Upon a careful review of the record, I believe that this proposition must fail because the facts adduced below show that no misappropriation of information occurred. Rather, as the record below demonstrates, on February 13, 1981, Union Metal entered into an accord and satisfaction with Michael Tarr. See State, ex rel. Shady Acres Nursing Home, Inc., v. Rhodes (1983), 7 Ohio St.3d 7, 7 OBR 318, 455 N.E.2d 489. In consideration of five thousand dollars, Union Metal authorized Tarr and Burning Hills to acquire Speedrack and Wisconsin Bridge, and thus use the information gained by Tarr concerning these corporations while he was employed at Union Metal. As a result of this accord and satisfaction, it cannot be said that Tarr misappropriated proprietary information while at his former position with Union Metal.
Hence, it is my view that this renders the majority's second syllabus paragraph superfluous, ineffective and inapplicable because the basis of its decision in finding a contract implied in law rests on the erroneous conclusion that Tarr misappropriated the information he received while in the scope of his employment with Union Metal. Consequently, under these circumstances, an agreement to pay the appellants cannot be implied in law or by a contract expressed or implied in fact.
Additionally, I find the majority's reliance on Bradkin v. Leverton (1970), 26 N.Y. 2d 192, 309 N.Y. Supp. 2d 192, 257 N.E.2d 643, to be misplaced since that cause is inapposite to the one before us. In Bradkin, the determinative issue involved a third party's attempt to take over a finder's contract and then avoid his obligation to the finder by relying on New York's Statute of Frauds. In the case sub judice, however, the Statute of Frauds was never an issue and is not determinative of the issues developed below. Thus, unlike the majority, I find the reasoning in Bradkin not persuasive since it is readily distinguishable from the case at bar.
Therefore, based on these reasons, I would affirm the judgment of the court of appeals below in its entirety.