Opinion ID: 751559
Heading Depth: 3
Heading Rank: 1

Heading: Mandate/Fiduciary Relationship

Text: 11 Willingham and Corim argue that the district court erred in applying German law to determine what type of relationship existed between the parties. Paragraph Nine of the Letter from Willingham to Tschira reads as follows: Fur das Auftragsverhaltnis zwischen uns, unserer Firma und Ihnen gilt deutsches Recht, im ubrigen U.S.-Recht. J.A. at 172. Appellants claim that the sentence translates: For the contractual relationship between us, our company and yourself, German law is applicable, otherwise U.S. law. Appellants' Br. at 16 (emphasis omitted). The Tschiras, on the other hand, interpret the phrase to read: For the mandate relationship between us, our company and yourself, German law is applicable, otherwise U.S. law. Tschiras' Br. at 6. Appellants argue that, because the letter from Willingham to the Tschiras is not a contract, the parties did not enter into a valid choice of law agreement and Tennessee law, rather than German law, should therefore apply. Appellants further argue that under the law of either Tennessee or Germany, a fiduciary relationship did not exist between Appellants and the Tschiras. We review a district court's factual determinations for clear error and review its conclusions of law de novo. See Friedrich v. Friedrich, 78 F.3d 1060, 1064 (6th Cir.1996). The district court's determination of foreign law is a question of law subject to de novo review. See id.; Fed.R.Civ.P. 44.1 (West 1997). 4 12 Under Tennessee law, parties are to free to choose the law of a particular jurisdiction, provided that the choice of law is made in good faith and the chosen law bears a reasonable relation to the transaction. See Goodwin Bros. Leasing, Inc. v. H & B Inc., 597 S.W.2d 303, 306 (Tenn.1980). Regardless of what type of relationship Paragraph Nine seeks to establish, it certainly appears that the parties intended for German law to apply to that relationship. Appellants, however, now argue that German law does not apply because the letter from Willingham to the Tschiras is not a valid contract. They claim that Willingham did not intend for his Letter to the Tschiras to be regarded as a contract and, thus, the requisite meeting of the minds was not present. However, Willingham's trial testimony establishes that he intended for the November 26 Letter to be binding, and he intended for German law to apply. The following colloquy establishes Willingham's intent: 13 Q. At the Jacksonville meeting Mr. Wipfler presented the [Letter] to you, right? In substance? 14 A. No, sir. He talked about various points. And ... it was decided the best thing to do would be to have him write a letter to me outlining what he would like to have confirmed, and that is the beginning of what became the [Letter]. 15 Q. Did he mention German law in Jacksonville, German law government? 16 A. He felt like the contract should be governed under German law and that's my interpretation of the sentence that refers to the purchase agreement, which is to be concluded, will be subject to German law. I saw nothing to our detriment in that. We fully intended to live up to the letter and spirit of that contract, and did. 17 J.A. at 928-29. Furthermore, the Tschiras' expert on German law, Dr. Thomas Verhoeven, testified that the Letter confirmed an oral agreement that the parties made previously. In the following testimony Dr. Verhoeven explains the significance of the Letter: 18 Q.... Under German law, does a letter such as the [Letter] have to be countersigned by the recipients, in this case the Tschiras, in order to be a contract? 19 A. First of all, as I mentioned at the beginning, there is no legal requirement under German law that something has to be done in writing as far as the conclusion of an agreement is concerned. If you look to the [Letter], it's a confirmation letter, so you would even not [sic] expect that it contain[ ] a counter signature because it reads as a confirmation of something which had been agreed upon by the parties orally. 20