Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-13-02005/USCOURTS-ca7-13-02005-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

---

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 13-2005

TROVARE CAPITAL GROUP, LLC,

Plaintiff-Appellant,

v.

SIMKINS INDUSTRIES, INC., et al.,

Defendants-Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 08 C 3133 — Robert W. Gettleman, Judge.

____________________

ARGUED SEPTEMBER 15, 2014 — DECIDED JULY 23, 2015

____________________

Before FLAUM, KANNE, and SYKES, Circuit Judges.

KANNE, Circuit Judge. Trovare Capital Group, LLC 

(“Trovare”) sought to purchase an affiliated group of familyowned companies (collectively “Appellees”). The parties executed a Letter of Intent (“LOI”) that previewed their negotiations toward the sale. The LOI included a provision requiring Appellees, if they terminated negotiations in writing 

before a certain date, to pay Trovare a breakup fee. Trovare 

alleged that Appellees intentionally scuttled the deal prior to 

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2 No. 13-2005

the termination date, and then engaged in sham “negotiations” to avoid paying the breakup fee. After a bench trial, 

the district court concluded that Appellees had not terminated negotiations before the termination date, and that Trovare 

was therefore not entitled to the breakup fee. Trovare appeals that judgment. We affirm. 

I. BACKGROUND

This diversity case involves a failed business transaction 

between Appellees and Trovare. Appellees are an affiliated 

group of family-owned enterprises that manufacture and 

import cardboard boxes.1 At the relevant times, Leon Simkins was the controlling shareholder of the businesses. 

Randy Cecola was Trovare’s sole member. 

After decades at the helm, Simkins began to look toward 

retirement. Because none of his children were interested in 

running the family business, Simkins sought a buyer for the 

companies. Appellees engaged Mesirow Financial, Inc. 

(“Mesirow”) to act as broker, and through Mesirow, Trovare 

expressed interest in the purchase. After a lengthy negotiation, Trovare and Appellees executed the LOI on May 23, 

2007. The LOI set forth the parties’ intention to negotiate an 

asset purchase agreement (“APA”) that would govern the 

sale. The parties then attempted to negotiate the APA over a 

period of months. 

The majority of the LOI was explicitly nonbinding, but it 

did include several binding terms. At issue here, Paragraph 

 

1 The affiliated companies are Simkins Industries, Inc., Harvard Folding 

Box Co., Inc., Linden-Summer Realty Co., Inc., and South Union Company, Inc. 

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No. 13-2005 3

14, which was binding, provided that “[i]f ... the Seller provides to Buyer written notice that negotiations toward a definitive asset purchase agreement are terminated, then Seller 

shall pay Buyer a breakup fee of two hundred thousand dollars ($200,000).” In another, nonbinding provision, the LOI 

set a “termination date” of September 30, 2007, after which 

time neither party would be obligated to pursue the sale. 

The parties engaged in protracted and contentious negotiations following the LOI’s signing. On August 21, 2007, 

over a month before the September 30 termination date, 

Trovare sent Appellees a letter demanding payment of the 

$200,000 breakup fee. Trovare alleged that Appellees had internally decided that they no longer wished to pursue the 

sale, and therefore had terminated negotiations. All parties 

agree that Appellees never issued a written notice of termination—an event that concededly would have triggered the 

breakup fee provision of the LOI. 

Instead, according to Trovare, in order to avoid becoming 

liable for the breakup fee, Appellees were at that time engaging in sham, pretextual “negotiations.” In doing so, Trovare 

argued, Appellees were putting forward bad faith communications as a means of providing the appearance of good faith 

bargaining. Appellees, on the other hand, insisted that bona 

fide negotiations were ongoing, and they reiterated their desire to complete the sale. Following Trovare’s demand letter, 

communications continued to pass between the two parties 

through November 2007. Ultimately, however, the deal was 

never consummated. 

Trovare continued to demand the breakup fee, and Appellees continued to insist that no termination had occurred 

before the termination date (and thus that no breakup fee 

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4 No. 13-2005

was owed). Trovare eventually filed suit in the Northern District of Illinois alleging breach of contract, seeking damages 

in the amount of the $200,000 breakup fee. The district court 

granted summary judgment for Appellees. We reversed and 

remanded the case for further proceedings. We concluded 

that genuine disputes of material fact existed as to two issues: (1) whether Appellees had in fact ended negotiations 

prior to the termination date; and (2) if so, whether Appellees in bad faith refused to issue a written notice of termination. 

On remand, the district court held a bench trial in which 

it reviewed submissions and heard testimony from multiple 

witnesses. Much of the testimony concerned the history of 

communications between the parties. We will not recite the 

entire lengthy history of those communications; suffice it to 

say, the negotiations were contentious. We focus here on the 

areas of discussion that were central at trial and to the district court’s decision. 

A few topics, which we discuss below, were of particular 

importance: due diligence; “Phase II” environmental studies 

(“Phase IIs”); and a “termination email” dictated by Simkins. 

We treat these in turn.

A. Due Diligence

Two nonbinding paragraphs of the LOI referenced the 

due diligence previewed by the parties. Paragraph 9 specified that:

Completion of this transaction would be subject to 

conditions precedent to Buyer’s obligations to close as 

agreed to by the parties, including ... completion by 

Buyer and its advisors of a due diligence investigation 

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No. 13-2005 5

satisfactory to it, in its sole discretion, of the Business’ 

assets, prospects and other relevant information, including validation of relationships with key clients 

and approval by Buyer’s Board.

Paragraph 10 provided that:

Seller will provide Buyer and its representatives reasonable access to the books, records, financial statements, properties, personnel, key suppliers, and key 

customers of the Business. Seller will provide blind 

customer order history, volumes and related information to Buyer. ... Buyer and Seller will coordinate 

and mutually agree upon the timing, scope and content of any customer interaction. 

As negotiations proceeded, two types of due diligence 

became central to the parties’ discussions. First, Trovare 

sought to conduct its own diligence. Appellees’ Chief Financial Officer, Anthony Battaglia, testified that he provided 

Trovare with “historical financial records for the carton 

plants at Simkins Industries, balance sheets, P&Ls, sales by 

location ... blind customer lists [and] ... inventory listings.” 

He characterized the information provided as “your standard information that you would use in the due diligence 

process.” Battaglia also provided both unaudited and audited financial statements. In addition, Cecola visited all of the 

facilities that were implicated in the sale. Trovare indicated, 

however, that it wanted to receive customer lists in order to 

validate Appellees’ relationships with key clients. 

Second, Trovare represented to Appellees that in order to

issue a funding commitment letter, the bank that was financing the non-real estate portion of the transaction would need 

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6 No. 13-2005

to conduct its own diligence. The evidence indicates that, 

from the outset, Trovare notified Appellees that the purchase 

would be a financed transaction. Trovare represented that 

both debt and equity financing were possible avenues that it 

might pursue to fund the purchase. 

Trovare had approached TCF Bank about providing financing for the non-real estate portion of the purchase, and 

Andrew Harlan, vice president of commercial lending for 

TCF, testified to the bank’s involvement in the deal. Harlan 

testified that, as a standard practice in this type of transaction, the bank would conduct its own due diligence investigation. Apparently at Appellees’ request, TCF prepared a 

generic field audit list, informing Appellees of the areas of 

inquiry it would need to examine in its diligence process. 

One element of that inquiry concerned “customer validation.” During that process, the bank would contact existing 

customers to confirm outstanding debts to Appellees, in order to verify Appellees’ accounts receivable representations. 

Harlan testified that TCF would not have issued a commitment letter or provided financing without conducting its 

field audit.2

At trial, a number of Appellees' witnesses testified that 

they viewed the diligence requests as excessive. Steve 

Gadon, Appellees’ attorney and primary negotiator,3 characterized the customer invoice verification as “a fraud audit.” 

 

2 Cecola had also himself expressed interest in verifying customer accounts through direct, non-blind customer interaction.

3 The evidence suggests that another individual, Barry Brant, took over 

lead negotiating responsibilities in or around September 2007. 

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No. 13-2005 7

He believed that to request such an audit was to intimate 

that Appellees “were a bunch of crooks.” 

In addition to Appellees’ opinion that the requested disclosures were unreasonable, they were also concerned about 

revealing the identities of their customers to an entity that 

they viewed as a competitor. Cecola already owned a business engaged in the cardboard box industry, and Appellees 

were hesitant to disclose sensitive information before a deal 

had been reached. 

This appears to have left Trovare and Appellees at an impasse: Trovare asserted that it couldn’t get a commitment letter without the requested diligence, and Appellees asserted 

that they wouldn’t allow diligence by a competitor without a 

commitment letter (or perhaps a signed APA). Cecola testified that eventually he dropped his personal request for customer interaction, stating that he was willing to accept his 

bank’s diligence in order to try to secure a deal. The bank’s 

diligence, however, was never completed.

B. Phase II Studies

The asset purchase pursued by the parties included a 

number of manufacturing facilities. Trovare made clear from 

the outset that it was concerned, unsurprisingly, about potential environmental liability and remediation costs arising 

from the real estate at issue. Both parties agreed that socalled “Phase I” environmental studies (“Phase Is”) would 

be commissioned and paid for by Trovare. This agreement is 

memorialized in Paragraph 6 (a nonbinding provision) of the 

LOI. The Phase Is involved a “paper review” of the real estate at issue. Using public records, the Phase Is aimed to 

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8 No. 13-2005

track the history of the properties, identifying whether there 

were any areas of potential environmental concern. 

Trovare had always maintained that if the Phase Is so indicated, Phase IIs would be necessary. Generally speaking, a 

Phase II entails the physical inspection of a property, including measures such as soil and water sampling. The LOI is 

silent on the issue of Phase IIs, so a number of matters remained for negotiation, including financial responsibility for 

the Phase IIs, timing, and selection of the analyst. Trovare 

also represented to Appellees that its bank would not provide financing for the real estate without the Phase IIs. 

Shortly after execution of the LOI, Trovare completed the 

Phase Is. The Phase Is indicated that Phase IIs would be necessary for all of Appellees’ properties, and Trovare promptly 

notified Appellees, through Mesirow, of that fact. Battaglia 

indicated to Trovare that a Phase II study consultant would 

be selected in mid-June and that studies would begin immediately thereafter. Appellees seem to have made further representations about promptly conducting the Phase IIs, 

though we need not discuss them at length.

At the same time, however, Appellees were concerned 

about financial liability that might arise from the results of 

the Phase IIs. Gadon testified about those concerns at trial. 

According to him, Appellees would have been required to 

turn over to the government the results of the Phase IIs. Appellees were concerned that if the Phase IIs (and the relevant 

statutory regimes) indicated a need for remediation, Appellees would be on the hook for those costs if the deal with 

Trovare didn’t materialize. Both parties opined that such 

costs might reach into the millions of dollars.

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No. 13-2005 9

So Appellees, contradicting their earlier statements, began representing to Trovare that they needed to receive at 

least a conditional showing of financing before they would 

order the Phase IIs. Gadon testified that “to do it before you 

know you’ve got a deal to me seemed to be ludicrous. I 

wanted to know I had a deal or at least the making of a deal 

before we spent the money.” At least in internal emails, if not 

external representations to Trovare, Appellees formulated 

the position that the Phase IIs would not be completed before an APA was signed. 

Trovare, on the other hand, represented to Appellees that 

it would be impossible to secure even a conditional offer of 

financing without the Phase IIs. Trovare continued to insist 

that the Phase IIs be completed prior to the signing of the 

APA. It appears that Trovare did not provide Appellees with 

any written verification that their real estate lender, whose 

identity remains unclear, indeed required the Phase IIs. No 

real estate lender testified at trial. Gadon testified that at 

some point in the later phases of negotiation, in either August or September, he “did concede and say, okay, we’ll do it. 

I just got tired of arguing about it and said, okay, we’ll do a 

Phase II. We didn’t do it, but we got close to it.” The Phase 

IIs were never completed.

C. The Simkins Email

On August 2, 2007, Simkins’s secretary, Barbara Camera, 

sent an email to Barry Brant, one of Appellees’ advisors and 

negotiators. The email stated, “Leon just called me and said 

to tell you that he definitely does not want to go through 

with the Trovare transaction. He has intentions of operating 

with his children in charge.” Appellees do not dispute that 

this email was sent, or that Simkins made the statement refCase: 13-2005 Document: 45 Filed: 07/23/2015 Pages: 19
10 No. 13-2005

erenced in the email. Simkins did not issue a subsequent 

email or other written communication retracting that statement. Appellees did not communicate the contents of this 

email to Trovare. 

Trovare sees this e-mail as a smoking gun. Trovare argued at trial that it constituted a definitive termination of 

negotiations between the parties. Trovare argued that communications between the parties after this point proceeded 

without Simkins’s authorization, and therefore were not bona 

fide negotiations. 

Brant testified at trial that after giving Simkins a few 

days to “cool off,” he spoke to Simkins about the negotiations. Brant stated that he had assumed Simkins sent the 

email in anger because something “set him off,” likely contentious negotiations following a July 27 conference call with 

Trovare. He also believed that Simkins was upset as a result 

of operating under some misconceptions concerning the 

deal. Brant testified that he expressed his opinion to Simkins 

that going through with the Trovare deal represented the 

best financial option for both the Simkins family and the 

company. Brant testified that after their conversation, he understood that he was to continue negotiating the APA, and 

that he did in fact continue to negotiate on Simkins’s behalf.

Gadon also testified that he communicated with Simkins 

following the email, which had been forwarded to him by 

Brant. He outlined to Simkins the reasons why Simkins 

should continue to pursue the sale to Trovare. Gadon testified that after those communications, it was his understanding that he still had the authority to negotiate on Simkins’s 

behalf, and that he did so.

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No. 13-2005 11

At the conclusion of the trial, the district court found in 

favor of Appellees. It concluded that negotiations continued 

up to and beyond the September 30 termination date, and 

that Appellees participated in those negotiations in good 

faith. Therefore, the court held, Appellees had not terminated negotiations, and Trovare was not entitled to the termination fee. 

II. ANALYSIS

Following a bench trial, we review findings of fact for 

clear error. Levenstein v. Salafsky, 414 F.3d 767, 773 (7th Cir. 

2005). We review mixed questions of fact and law (that do 

not involve constitutional rights) for clear error. Id. A finding 

of fact is clearly erroneous “only when the reviewing court is 

left with the definite and firm conviction that a mistake has 

been committed.” Carnes Co. v. Stone Creek Mech., Inc., 412 

F.3d 845, 847 (7th Cir. 2005). 

This was undoubtedly a close case for the district court, 

but we conclude that the court did not commit clear error in 

finding that Appellees continued to engage in bona fide negotiations through the LOI’s termination date. 

All parties agree that Illinois law governs this diversity 

dispute, and that Paragraph 14 constituted an enforceable 

contractual obligation between the parties. As we noted in 

our prior opinion in this case, this paragraph “contained a 

condition precedent to [Appellees’] enforceable duty to pay 

the breakup fee: their provision of written notice that negotiations toward a definitive asset purchase agreement [were] 

terminated.” Trovare Capital Grp., LLC v. Simkins Indus., Inc., 

646 F.3d 994, 998 (7th Cir. 2011) (internal quotation marks 

omitted).

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12 No. 13-2005

Trovare concedes that Appellees did not send a written 

notice of termination, and therefore did not satisfy the condition precedent to payment of the breakup fee. Trovare relies 

instead on the implied covenant of good faith and fair dealing imposed on parties to a contract under Illinois law. See 

Seip v. Rogers Raw Materials Fund, L.P., 948 N.E.2d 628, 637

(Ill. App. Ct. 2011) (stating “[t]he duty of good faith and fair 

dealing is implied in every contract and requires a party 

vested with contractual discretion to exercise it reasonably, 

and not arbitrarily, capriciously, or in a manner inconsistent 

with the reasonable expectations of [the] parties” (quoting 

Kirkpatrick v. Strosberg, 385 N.E.2d 781 (Ill. App. Ct. 2008))).

This implied covenant applies in circumstances where one 

party has complete control over the occurrence of a condition precedent, and the covenant seeks to prevent that party 

from behaving “arbitrarily, capriciously, or in a manner inconsistent with the reasonable expectations of the parties.” 

Midwest Builder Distrib., Inc. v. Lord & Essex, Inc., 891 N.E.2d 

1, 26 (Ill. App. Ct. 2007).

In this case, Appellees had complete control over the occurrence of the condition precedent—providing written notice of termination to Trovare. In order to prove a violation of 

the implied covenant of good faith and fair dealing, Trovare 

would have to show that Appellees caused the nonoccurrence of the condition, so that they would not have to 

pay the breakup fee. In other words, Trovare must show that 

Appellees (1) had no intention of completing the deal, but (2)

continued sham negotiations, rather than providing written 

notice of termination. Trovare tries to make the required 

showing by pointing to several pieces of evidence, which we 

address in turn.

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No. 13-2005 13

A. The Simkins Email

Trovare argues that Simkins’s August 2 email proves the 

first point, that Appellees had, at least by that date, decided 

to end negotiations. Trovare argues that any communications that occurred after this date cannot be classified as bona 

fide negotiations, because Simkins’s email shows that Appellees had no real intention of seeing them through, particularly as Simkins never retracted his statement expressly in writing. The district court disagreed, and we find no clear error 

in its conclusion.

In short, the district court credited the testimony of both 

Brant and Gadon regarding whether negotiations continued 

after the Simkins email. The court found that “Gadon counseled Mr. Simkins, according to his testimony, which I believe because it makes perfect sense[.] [H]e counseled [Simkins] to calm down, because everybody was frustrated at 

that point in early August of 2007, and to continue negotiating with the plaintiff, because they had to sell the business.” 

The district court also concluded that “it was really Mr. 

Gadon and Mr. Brant who sort of filled in all the holes ... 

that painted this picture a lot more clearly to me and convinced me that Simkins never terminated his desire to negotiate an asset purchase agreement.” 

The district court did not clearly err when it held that 

Simkins’s August 2 email did not spell the end of negotiations or of Appellees’ desire to continue them in good faith. 

We give great deference to a trial court’s determination of 

credibility. See Carnes, 412 F.3d at 848 (stating “[w]e also afford great deference to the trial court's assessment of witness 

credibility; indeed, we have stated that a trial court's credibility determination can virtually never amount to clear erCase: 13-2005 Document: 45 Filed: 07/23/2015 Pages: 19
14 No. 13-2005

ror” (internal quotation marks omitted)). The court found 

both Brant’s and Gadon’s testimony credible concerning 

Simkins’s state of mind when he sent the email, his intent to 

continue negotiations, and the scope of Brant’s and Gadon’s 

authority to negotiate on Simkins’s behalf. We see no evidence that would mandate a finding of error on that credibility determination. 

In addition, circumstantial evidence supports the district 

court’s conclusion. The evidence established that Simkins 

was aware that communications continued to pass between 

Appellees and Trovare after the email was sent. He continued to engage Mesirow to broker the deal. And he asked 

Brant to take over primary responsibility for negotiations in 

or around September, apparently because negotiations had 

become either too contentious or too slow with Gadon. Had 

Simkins intended to terminate negotiations on August 2, we 

can only assume he would have stepped in to stop negotiations when he saw that they were continuing. 

Because we cannot disturb the court’s credibility finding, 

and because the finding is supported by ample record evidence, we find no clear error in the court’s conclusions regarding the August 2 email and Simkins’s intention to go 

forward in good faith.

B. Appellees’ Course of Conduct 

Trovare next argues that Appellees’ course of conduct 

makes evident that Appellees had, prior to September 30, 

decided to end negotiations. Trovare contends that Appellees imposed impossible conditions on Trovare in order to 

prevent it from securing funding—thereby scuttling the deal. 

In particular, Trovare contends that Appellees’ positions reCase: 13-2005 Document: 45 Filed: 07/23/2015 Pages: 19
No. 13-2005 15

garding due diligence and the Phase IIs made a deal impossible, and that Appellees intended such an outcome. 

The district court concluded that Appellees’ course of 

conduct constituted bona fide negotiation, not pretextual

sham negotiations. Once again, we find no clear error in the 

court’s conclusion. 

1. Due Diligence

It is undisputed that Appellees refused to provide the full 

scope of due diligence information that Trovare requested. 

Trovare argues that Appellees knew that Trovare could not 

secure financing without the diligence items it requested. So, 

Trovare argues, Appellees refused to provide that information (imposing an impossible condition) in order to impair Trovare’s access to financing. That, in turn, would scuttle the deal. Appellees argue, on the other hand, that they 

(1) considered Trovare’s requests to be unreasonable; and 

(2) viewed Trovare as a competitor in the cardboard box 

market, and were therefore particularly sensitive about disclosing information such as customer lists. 

First, while some aspects of the due diligence process 

were described in nonbinding LOI provisions, many of the 

details remained for further negotiation. Appellees were not 

required to acquiesce to any and all diligence items requested by Trovare or its lender, so a certain amount of bargaining 

was undoubtedly expected by both parties. 

As events unfolded, Appellees were not satisfied with 

some of the diligence items that Trovare requested. Gadon 

testified that he believed that at least the “field audit” portions of Trovare’s (or the lender’s) requests were excessive 

and were tantamount to calling Appellees “a bunch of 

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16 No. 13-2005

crooks.” Trovare counters by pointing to trial testimony that 

indicated that other individuals, such as Harlan from TCF 

Bank, considered the diligence requests to be reasonable. But 

that testimony does nothing to undermine Gadon’s contention that he, negotiating on behalf of Simkins, considered the 

requests unreasonable. 

The district court did not make a factual finding as to 

whether the diligence requests were reasonable. The court 

stated that “Appellees provided audited financial statements, and yet Mr. Cecola wanted apparently to verify some 

of those audited financial statements to actually trace cash 

receipts into bank accounts and that sort of thing, which I 

think the seller’s people thought was a bit too much.” So the 

district court credited Gadon’s testimony that he believed the 

requests to be unreasonable. That belief constitutes a plausible explanation for why Appellees opposed the scope of 

Trovare’s requests—an explanation other than the supposition that Appellees were stringing along false negotiations. 

Second, the district court concluded that Trovare and 

Appellees were indeed competitors. It “credit[ed] Appellees’ 

evidence that the plaintiff and the defendant were competitors, at least in some of the markets that they competed in.” 

As such, the court concluded that Appellees were justified in 

their heightened sensitivity to disclosing customer information. The district court concluded that “the defendant in 

good faith objected to the plaintiff’s contacting its customers 

and employees directly.” 

In short, the district court credited Appellees’ explanations as to why they opposed the scope of Trovare’s requested diligence. Necessarily, then, the court rejected Trovare’s 

argument that Appellees refused due diligence requests in 

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No. 13-2005 17

order to scuttle the deal. Instead, the court concluded that 

“[t]his was something that never got resolved. It might have 

gotten resolved if they had gotten closer to the negotiation of 

an agreement.” Record evidence supports the district court’s 

conclusions, and we cannot find them to be clearly erroneous. 

2. Phase IIs

The Phase IIs loomed large both in the parties’ negotiations and in the trial testimony. Trovare argues here that, as 

with the due diligence, Appellees refused to conduct the 

Phase IIs in order to impair Trovare’s access to financing, and 

thereby scuttle the deal. Appellees argue that they refused to 

perform the Phase IIs until they received at least a conditional financing commitment. This was in an effort to minimize their financial liability for environmental remediation, 

should the deal fall through. 

The district court’s findings on the Phase II issue are not 

entirely clear. The court did not mention the Phase IIs prior 

to reaching its holding that no termination had occurred. After concluding that Simkins did not terminate negotiations 

prior to September 30, the court made the following statement:

One more word before I finish, and that is about this 

environmental study issue, which a lot of testimony 

and evidence was presented. Mr. Cecola testified that 

his financing bank always demanded the Phase II, 

and that because he didn’t get the Phase II, that frustrated and basically killed his ability to finance the 

deal.

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18 No. 13-2005

But Andrew Harlan, who was the banking witness 

presented by the [defendant], testified, he was at TCF 

Bank, testified that that bank did not demand a Phase 

II, because they weren’t financing the real estate. So 

there is a definite inconsistency between that testimony and Mr. Cecola’s, which really calls Mr. Cecola’s 

credibility into question. 

Trovare argues that this statement by the district court 

constitutes clear error and calls for reversal. Trovare argues 

that the court misunderstood either the nature of Harlan’s 

testimony or Cecola’s representations and made a clearly erroneous factual finding. As the court itself noted, TCF Bank 

was not providing the real estate financing, so it did not require the Phase IIs. Cecola never represented that it did. Instead, he represented that another bank—the one financing 

the real estate—demanded the Phase IIs. Therefore, Trovare 

argues, Cecola’s credibility could not properly have been 

called into question by Harlan’s testimony. 

We agree with Trovare that Harlan’s testimony, as far as 

we can tell, should have had no impact on Cecola’s credibility. However, this statement by the district court does not 

constitute clear error requiring reversal, for the following 

reasons. First, it seems to us that the Phase II issue had little 

or no bearing on the district court’s reasoning or conclusion 

as to termination. The court mentions the Phase IIs after 

reaching its holding, and we have no reason to believe that 

the court’s “[o]ne more word” influenced its already established view on the question of termination. 

Second, Trovare does not establish that the only reasonable explanation for Appellees’ refusal to conduct the Phase 

IIs was a desire to scuttle the deal. Appellees put forward a 

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No. 13-2005 19

plausible explanation as to their reluctance—their possible 

financial liability for remediation—and Trovare’s arguments 

do not render that explanation implausible.

To be sure, Appellees’ actions relative to the Phase IIs 

give us some pause. At best, Appellees changed their negotiation position regarding the Phase IIs, and at worst, they engaged in misrepresentation about whether the Phase IIs 

would occur. After Battaglia represented that Appellees 

would begin the Phase II process, Gadon then represented 

on multiple occasions that no Phase IIs would be completed 

until after an APA had been signed. This was a position that 

Trovare indicated would be a deal-breaker. Gadon also testified, however, that he ultimately “got tired of arguing about 

it,” and indicated that Appellees would do the Phase IIs prior to signing an APA. 

The district court credited Gadon’s testimony, and 

Trovare does not establish that the district court was clearly 

erroneous. 

III. CONCLUSION

In sum, we conclude that the district court did not clearly 

err when it concluded that Appellees continued negotiations 

in good faith through September 30, 2007. Accordingly, we 

AFFIRM the judgment of the district court. 

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