Opinion ID: 2972197
Heading Depth: 4
Heading Rank: 2

Heading: Evidence Of An Oral Contract

Text: The Plaintiffs contend that the district court ignored evidence that raised a question of -10- No. 04-1107 Digital 2000 v. Bear Communications material fact as to whether the parties formed an oral acquisition agreement covering all of Digital’s assets and liabilities. An enforceable contract is not created unless there is an offer, an acceptance, and a mutual assent on all essential terms. Eerdmans v. Maki, 573 N.W.2d 329, 332 (Mich. Ct. App. 1997). “Mere discussions and negotiations cannot be a substitute for the formal requirements of a contract.” Id. Contracting parties may enter into an oral contract. In that case, the parties’ course of dealing and performance demonstrates the contract’s terms. H.J. Tucker & Assoc. v. Allied Chucker & Eng’g Co., 595 N.W.2d 176, 185 (Mich. Ct. App. 1999). In support of their argument, the Plaintiffs offer five points supporting the existence of an oral contract between BearCom and Digital. None of the proffered evidence shows the existence of any final agreement. First, Plaintiff Wisniewski testified that Craig Wilkins of BearCom assured Wisniewski that the Assignment Agreement “would address [his] concerns” about the assumption of all of Digital’s liabilities. [J.A. 173]. As discussed above, the Assignment Agreement only provided that BearCom would assume the Brightpoint debt. Wisniewski testified that he was not concerned that Digital’s other liabilities were not itemized in the Assignment Agreement because of Recital B’s language that referred to furthering an acquisition of all of Digital’s assets and liabilities. Whether or not Wisniewski reasonably felt assured by the language in Recital B, Craig Wilkins’s assurances to him are not evidence of a completed oral contract. Wilkins referred only to the terms of the written Assignment Agreement, and not any oral agreement. Second, Popa testified that Dave and Craig Wilkins repeatedly promised the Plaintiffs that -11- No. 04-1107 Digital 2000 v. Bear Communications BearCom would assume all of Digital’s liabilities. Popa said that on two occasions before the parties signed the Assignment Agreement, Dave and Craig Wilkins agreed that BearCom would purchase both the Nextel residual payment stream and “everything else Digital 2000 had.” [J.A. 88, 90]. But Popa also testified that details of the larger acquisition by BearCom still remained unresolved after November 1. Wisniewski offered similar testimony: Q. So there were details regarding how this transaction was going to occur -- A. Yes. Q. -- that were not contained in the November 1st Assignment Agreement? A. That’s correct. Q. And these details were going to be worked out after the November 1st Assignment Agreement? A. That’s right. Q. Were those details ever worked out? A. No. [J.A. 180]. Even if BearCom’s representatives made a general offer to purchase all of Digital’s assets and liabilities before signing the Assignment Agreement, it is clear that the parties never resolved all of the essential details of the larger transaction. Third, the Plaintiffs say that the only issue remaining between the parties was how the agreement would be implemented, not whether there was an agreement. Wisniewski testified that after November 1, 1999, the parties still needed to resolve the manner in which BearCom would pay -12- No. 04-1107 Digital 2000 v. Bear Communications Digital’s liabilities. Popa also testified that at the time he signed the Assignment Agreement, he and Wisniewski expected to receive another agreement from BearCom. Taken together, this testimony indicates that essential elements of the agreement to assume Digital’s liabilities remained unresolved, thereby precluding the formation of an oral contract. Fourth, Popa testified that after the parties signed the Assignment Agreement, BearCom prepared two draft acquisition agreements covering the larger acquisition. Popa rejected these documents because they were not consistent with his understanding of the oral agreement. Again, Popa’s testimony does not indicate that the parties had reached a definite oral agreement. The more reasonable inference is that BearCom and Digital had conflicting views on the essential terms of any such oral agreement. Fifth, the Plaintiffs say BearCom never paid for Digital’s name, goodwill, business telephone numbers, customer information, and other Digital assets. Under the Assignment Agreement, BearCom purchased all of Digital’s rights and obligations under the Nextel ISP Agreement. The Assignment Agreement thus included Digital’s Nextel subscriber information and lists. Wisniewski also testified that BearCom paid for all assets it received from Digital: Q: I’m interested in assets sitting here as of today [BearCom] has not paid for they received from Digital 2000. A: I think they paid for, you know, those assets. [J.A. 178]. Digital had contracts with other cellular providers, and Wisniewski testified that negotiations as to whether BearCom would purchase those contracts continued after November 1, 1999. This -13- No. 04-1107 Digital 2000 v. Bear Communications suggests that, as of November 1, 1999, there was no overall oral agreement regarding whether BearCom would acquire all of Digital’s assets and liabilities. Despite what the recital language may say, Wisniewski recognized that BearCom had not yet committed to buying everything. The Plaintiffs offer no evidence regarding the value of the non-Nextel contracts. Popa testified that Digital received commissions upon signing new cellular customers for Sprint PCS, OMNI Point, and AT&T Wireless, but did not have residual income streams from those providers. Those contracts thus provided no immediate income upon transfer to BearCom. Other than Nextel, Digital received a residual income stream only from LDMI. The LDMI income stream was only $5 per month as of November 1999. BearCom purchased additional assets from Digital on a piecemeal basis. In November 1999, BearCom paid Popa $3138 for various Digital office equipment. In January 2000, BearCom paid Popa $3240 for other office equipment. In February 2000, BearCom paid $5113.60 for Digital’s inventory of cellular phones. The only remaining assets that Digital transferred to BearCom, supposedly without receiving payment, were Digital’s name, goodwill, and business telephone numbers. According to Popa, after closing the Assignment Agreement BearCom began to use the Digital 2000 business name and phone numbers. Digital transferred its office phone numbers to BearCom, and BearCom personnel answered incoming calls by saying “BearCom-Digital 2000.” These circumstances might offer some support for Digital’s oral contract theory, if not for Popa’s and Wisniewski’s own testimony. Popa and Wisniewski both make clear that many issues remained unresolved after November 1, 1999, and that the parties never reached a firm oral agreement. -14- No. 04-1107 Digital 2000 v. Bear Communications Viewing the facts in the light most favorable to the Plaintiffs, we cannot say that there is evidence that the parties formed a final oral contract for BearCom’s purchase of all of Digital’s assets and liabilities. For this reason, we affirm the judgment of the district court.