MI-TECH SALES INC V FOCUS ENHANCEMENTS INC
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STATE OF MICHIGAN
COURT OF APPEALS
MI-TECH SALES, INC.,
UNPUBLISHED
April 15, 2003
Plaintiff-Appellant,
v
No. 237565
Oakland Circuit Court
LC No. 99-017710-CK
FOCUS ENHANCEMENTS, INC.,
Defendant-Appellee.
Before: Jansen, P.J. and Kelly and Fort Hood, JJ.
PER CURIAM.
Plaintiff appeals as of right from the trial court’s judgment. We affirm.
On September 23, 1996 plaintiff, a sales representative specializing in electronics, and
defendant, a manufacturer of computers and electronics, entered into a contract that designated
plaintiff as defendant’s exclusive sales representative within a specific geographical area.
Paragraph 8 provided both that the contract would terminate one year from its commencement
date unless renewed in writing, and that either party could terminate the contract upon sixty days
written notice. The parties did not renew the contract in writing; however, plaintiff continued to
act as defendant’s sales representative after September 23, 1997, and defendant continued to pay
plaintiff commissions.
In 1996 and 1997 plaintiff attempted without success to procure an agreement for the sale
of defendant’s products at Office Max stores. In early 1998 defendant developed a
computer/television product in which Office Max expressed interest. Thereafter, defendant
notified plaintiff that it was terminating the parties’ relationship effective June 1, 1998.
Defendant entered into a contract with Astro-Kam, Inc., pursuant to which Astro-Kam agreed to
serve as defendant’s exclusive sales representative for the same geographical territory served by
plaintiff. Subsequently, Office Max entered into an agreement with defendant for the purchase
of the computer/television product. The purchase totaled $1.428 million dollars. Defendant did
not pay plaintiff a commission on the sale.
Plaintiff filed suit alleging that defendant breached the parties’ contract and violated the
sales representatives’ commissions act, MCL 600.2961, by failing to pay commissions due under
the contract. Plaintiff alleged that defendant’s termination letter was received on April 30, 1998,
and that pursuant to the contract’s sixty-day termination provision, the contract terminated on
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June 29, 1998. Plaintiff asserted that pursuant to MCL 600.2961(5)(b) it was entitled to an
amount equal to twice the amount of commissions due or $100,000, whichever was less.
The trial court conducted a two-day bench trial. At the conclusion of the proceedings the
trial court found that because the parties did not execute a writing to renew the contract, the
contract terminated on September 23, 1997. After that date, plaintiff was no longer defendant’s
exclusive sales representative. The trial court found that the parties did not have an implied in
fact contract because there was no meeting of the minds; neither did the parties have a contract
implied in law. The trial court found that defendant’s letter and the contract’s sixty-day
termination provision served to terminate the parties’ relationship effective June 29, 1998.
In a subsequent written decision the trial court rejected plaintiff’s assertion that it was
entitled to a commission on defendant’s contract with Office Max pursuant to the procuring
cause doctrine. The procuring cause doctrine provides that an agent is entitled to recover
commissions if his efforts were the procuring cause of a sale, even if he did not personally
complete the sale. However, an agent who does not participate in the negotiation of a particular
contract cannot be said to be the procuring cause of a sale. Reed v Kurdziel, 352 Mich 287, 294;
89 NW2d 479 (1958); Roberts Assoc Inc v Blazer Int’l Corp, 741 F Supp 650, 653 (ED Mich,
1990). The trial court found that no evidence showed that plaintiff participated in the actual
negotiation of defendant’s contract with Office Max; therefore, plaintiff was not entitled to a
commission on that contract. The trial court entered judgment awarding plaintiff a total of
$16,975.22.1
A contract implied in fact arises when services were performed by a party who at the time
expected compensation from another party who expected to pay for the services. A meeting of
the minds must exist for a contract implied in fact to be formed. A contract implied in law is an
obligation imposed by law to do justice even though there was no promise made or intended by
either party. A contract may be implied in law if a party received a benefit from another party
and if retention of the benefit would be inequitable absent reasonable compensation. In re
McKim Estate, 238 Mich App 453, 457-458; 606 NW2d 30 (1999).
When construing a contract, the trial court must ascertain the intent of the parties from
the language of the contract. Zurich Ins Co v CCR & Co (On Rehearing), 226 Mich App 599,
604; 576 NW2d 392 (1997). Generally, the language of a contract is interpreted according to its
plain and ordinary meaning. Schroeder v Terra Energy, Ltd, 223 Mich App 176, 182; 565
NW2d 887 (1997). The interpretation of a contract presents a question of law that we review de
novo on appeal. Archambo v Lawyers Title Ins Co, 466 Mich 402, 408; 646 NW2d 170 (2002).
We review a trial court’s findings of fact for clear error. MCR 2.613(C).
Plaintiff argues that the trial court erred in concluding that it was not entitled to a
commission on defendant’s contract with Office Max under either the terms of the original
contract or the procuring cause doctrine. We disagree and affirm the trial court’s judgment. The
parties’ original contract stated that the agreement would terminate one year from the date of
1
The trial court awarded plaintiff commissions on several other sales. Those commissions are
not at issue in this appeal.
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commencement unless it was renewed in writing. This language was unambiguous, and the trial
court did not clearly err in finding that it expressed the intent of the parties. Schroeder, supra;
Zurich, supra. It was undisputed that the parties did not renew the contract in writing; therefore,
the trial court did not clearly err in finding that the contract terminated September 23, 1997.
Plaintiff continued to act as a sales representative for defendant after that date and defendant
continued to pay plaintiff commissions; however, plaintiff points to no evidence that showed that
both parties intended that the relationship would continue to be exclusive. Given the lack of
evidence of a meeting of the minds on the issue of the exclusivity of the relationship, we
conclude that the trial court did not clearly err in finding that after September 23, 1997 plaintiff
was no longer defendant’s exclusive sales representative. The trial court did not err in finding
that the parties did not have an implied in fact contract. McKim, supra, 458.
Furthermore, the trial court did not clearly err in finding that plaintiff did not procure the
Office Max account for defendant and thus was not entitled to a commission on that contract.
The evidence showed that plaintiff introduced defendant’s computer/television product to Office
Max, and talked with the company about carrying the product, but no evidence showed that those
talks progressed to the negotiation stage. Defendant and Office Max entered into a contract only
after plaintiff was no longer involved in the process. The trial court did not clearly err in finding
that plaintiff was not the procuring cause of the contract between defendant and Office Max, and
that it was not entitled to a commission for that reason. Reed, supra; Roberts, supra.
Affirmed.
/s/ Kathleen Jansen
/s/ Kirsten Frank Kelly
/s/ Karen M. Fort Hood
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