This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).




Cobb and Associates,



Gray, Plant, Mooty, Mooty, and Bennett,


Filed April 14, 1998

Reversed and Remanded

Amundson, Judge

Hennepin County District Court

File No. 97-9273

Thomas Tinkham, Aaron Mysliwiec, Dorsey & Whitney, L.L.P., Pillsbury Center South, 220 South Sixth Street, Minneapolis, MN 55402 (for appellant)

Michael R. Cunningham, Gray, Plant, Mooty, Mooty & Bennett, P.A., 3400 City Center, 33 South Sixth Street, Minneapolis, MN 55402 (for respondent)

Considered and decided by Amundson, Presiding Judge, Lansing, Judge, and Harten, Judge.



Appellant argues that the district court erred by denying its motion to compel arbitration because there was an arbitration clause in an engagement letter sent from appellant to respondent. Respondent denies that a contract exists between it and appellant. We reverse and remand.


Respondent Gray, Plant, Mooty, Mooty & Bennett, P.A. (Gray Plant) represented Chittranjan Thakkar, DCT Systems, Inc., and Niloy, Inc., in a claim the parties made against Intelligent Electronics, Inc. During the representation, appellant Cobb & Associates, Inc. (Cobb) was retained to conduct expert consulting services to Thakkar, DCT, and Niloy. Cobb asserts that Gray Plant contacted Cobb for services, and that Arthur Cobb interviewed with Michael Cunningham of Gray Plant. Gray Plant contends that neither Gray Plant nor Cunningham were responsible for the initial contact with or the retention of Cobb in the Intelligent Electronics matter. Rather, Cunningham asserts that Thakkar's assistant, Walter Maurer, set up arrangements with Cobb.

On June 17, 1993, Cobb sent to Cunningham at Gray Plant a letter "to confirm the terms of our engagement to assist representation of plaintiffs in the above action." The letter contains a clause which states: "All disputes arising from this engagement letter or our assistance will be resolved under binding arbitration in Minneapolis, Minnesota through the American Arbitration Association." The letter had a line for Cunningham's signature, but was unsigned.

Cobb episodically billed Gray Plant for professional fees and expenses. These statements were forwarded to the client, and Thakkar made payments. No payments were made after March 23, 1995. The work was completed by May 30, 1995. On June 9, 1995, Cobb sent an invoice to Gray Plant for $54,956. When this amount was not remitted, Cobb moved the district court to compel arbitration. The district court denied the motion. This appeal followed.


I. Existence of a Contract

The existence of a contract is primarily a question of fact to be determined by the district court. Herron v. Green Tree Acceptance, Inc., 411 N.W.2d 192, 195 (Minn. App. 1987), review denied (Minn. Sept. 30, 1987). This court will not reverse findings of fact unless clearly erroneous. Minn. R. Civ. P. 52.01.

Cobb argues that the engagement letter, coupled with performance, and Gray Plant's lack of contrary communication, created a contract. In addition, Gray Plant was billed for professional fees and expenses, and Cobb had been paid for work periodically before March 23, 1995. Cobb asserts that Cunningham assured him that Gray Plant was responsible for payment of invoices.

Gray Plant contends that it never signed the engagement letter, and asserts that the contracting relationship, if any, existed between Gray Plant's clients and Cobb. Gray Plant contends that it was never used as a "go between" in the billing process, and that all payments to Cobb were made directly by Thakkar. The evidence, however, suggests otherwise. Cobb's statements were addressed to, and received by, Gray Plant. That Thakkar paid the balances does not negate the fact that the billing was conducted through Gray Plant.

The district held that it could not compel arbitration based on a clause in the engagement letter because it found no contract existing between Cobb and Gray Plant. The district court explained:

At this juncture the Court cannot make such a determination * * * The fact finder in that event must hear the testimony, observe the witnesses, and determine the credibility of each.

In actuality, of course, the district court was making a factual finding by determining that no contract existed, and the evidence does not support this finding. The parties' conduct demonstrates that an implied contract existed. A contract implied in fact may be found based on "the interpretation of a person's acts and other conduct * * *." Arthur Linton Corbin, Corbin on Contracts, § 561 (West Pub. Co. 1960). The mutual assent required to form a contract

may be based on objective manifestations whereby one party by his words or by his conduct, or by both, leads the other party reasonably to assume that he assents to and accepts the terms of the other's offer.

Holt v. Swenson, 252 Minn. 510, 516, 90 N.W.2d 724, 728 (1958). The parties' conduct reasonably led Cobb to reasonably assume that a contractual relationship existed with Gray Plant: Cobb continued to do work for the action involving Thakkar et al., and Gray Plant continued to receive statements from Cobb and arranged for payment. That implied contract was controlled by the written terms of the engagement letter.

We conclude that the district erroneously found that no contract existed between Cobb and Gray Plant.

II. Arbitration

Because a contract existed between Cobb and Gray Plant, the terms of which the engagement letter outlined, it follows that the parties agreed to arbitrate all disputes, as stated in the letter. Therefore, we must conclude that the district court improperly denied the motion to compel arbitration. See Amdahl v. Green Giant Co., 497 N.W.2d 319, 322 (Minn. App. 1993) ("If the court determines that an agreement to arbitrate a dispute exists, the court must order arbitration.").

Reversed and remanded.