## Facts

- Turner Holdings, Inc. (THI), an investment banking firm, and Howard Miller Clock Company (HMCC), a Michigan manufacturer, entered a written agreement dated August 31, 1981.
- THI agreed to locate acquisition candidates for HMCC and advise HMCC on completing transactions.
- The agreement contained a two-year post-termination “tail” clause obligating HMCC to pay “success fees” for any company that had been “under consideration” during the contract term.
- The contract later terminated.
- Within two years after termination, HMCC acquired Hekman Furniture Company.
- THI claimed Hekman had been “under consideration” during the contract term and sought a $177,000 success fee plus $968.44 in expenses.
- HMCC denied liability, arguing (1) the claim was barred by Michigan’s real estate broker licensing statute and (2) Hekman was not “under consideration” under the contract.
- The case, based on diversity jurisdiction, was tried to the court, which issued findings and conclusions under Federal Rule of Civil Procedure 52(a).

## Issues

1. Whether Michigan’s Real Estate Brokers Act barred THI’s suit to recover a success fee on the theory THI acted as an unlicensed real estate broker.
2. Whether, under the contract’s tail clause, Hekman Furniture Company had been “under consideration” during the contract term, triggering a post-termination success-fee obligation.

## Decision

- The court held the Michigan Real Estate Brokers Act did not bar THI’s claim because THI’s services related to corporate acquisitions, not brokering interests in real estate within the statute’s scope.
- The court interpreted “under consideration” to require more than mere awareness or a preliminary mention; it required meaningful, active consideration during the contract term.
- The court found Hekman was not “under consideration” during the contract term as required by the agreement.
- Judgment was entered for HMCC; THI was not entitled to the claimed success fee related to the Hekman acquisition.

## Legal Principles

- Under Michigan law, an investment banker or finder working on corporate acquisitions is not necessarily a “real estate broker” subject to broker-licensing bars on fee recovery, even if target companies own real property.
- In construing a post-termination “tail” provision for success fees tied to entities “under consideration,” a court may require proof of definite, active pursuit or substantial evaluation during the contract term rather than a vague or incidental reference.
- Contract interpretation under Michigan law favors readings that avoid imposing indefinite, open-ended fee liability absent clear language and supporting evidence.

## Conclusion

The court ruled that the broker-licensing statute did not preclude the action, but THI failed to prove the later-acquired company fell within the agreement’s tail clause; therefore, HMCC owed no success fee for the acquisition.


Turner Holdings, Inc. v. Howard Miller Clock Co., 657 F. Supp. 1370 (W.D. Mich. 1987)