Taylor v. Weingart

No. 8 4 - 2 6 9 IN THE SUPREME COURT OF THE STATE OF P'IONTANA 1984 RONALD TAYLOR, d . / h / a TAYLOR & ASSOCIATES REAL ESTATE , Plaintiff and Respondent, ALEX WEINGART, JR., Individuall-y and as Personal Representative of the Estate of RITA WEINGART and NORMA J. WEINGART, Defendant and Appellant. APPEAL FROM: District Court of the Tenth Judicial District, In and for the County of Petroleum, The Honorable Peter L. Rapkoch, Judge presiding. COUNSEL OF RECORD: For Appellant: Robert L. Johnson, Lewistown, Montana For Respondent: Alexander & Baucus, Great Falls, Montana Submitted on Briefs: Nov. 20, 1 9 8 4 Decided: December 2 8 , 1984 Clerk Mr. Justice John C. Sheehy delivered the Opinion of the Court. Alex Weingart, Jr. , individual.1~ and as personal repre- sentative of the estate of Rita Weingart, and Norma Weingart, hereinafter Weingart, appeal. from an order of the District Court of the Tenth Judicj..al.District in Petroleum County . . Rms\d granting summary judgment to R e b e r t Taylor who sued to en- force a real estate brokerage commission contract. Since we find no material issues of fact in dispute and the District Court's rulinq correct as a matter of law, we affirm. Sometime prior to December 17, 1981, Ron Taylor, a licensed real estate broker contacted Alex Weingart and inquired whether Weingart would be interested in selling the ranch. Weingart expressed interest in selling the ranch and orally agreed to pay Taylor a commission if the ranch were sold. Taylor procured a potential buyer, C. b7. Taylor Part- nership, for the ranch. The partnership consisted of Charles R. Taylor, Ronald Taylor's brother, and several other investors. On December 17, 1-981, Ronald Taylor, Weingart and C. W. Taylor Partnership entered into an aqreement entitled Receipt and Agreement to Buy and Sell. A1.I of the parties to the agreement signed the document. The agreement recited a purchase price of $1,750,000 payable as follows: $50,000 earnest money received on December 17, 1981, S160,OOO on closing, $210,000 on or before May 21, 1982, a note bearing interest at 9% tendered on or before May 21, 1982 and due on January 15, 1983 for a total downpayment of $525,000. The balance was to be paid in installments over the next 25 years. Just a.bove Weingart's signature at the bottom of the form on which the contract is written appears the following "For valuable consideration I/we agree to sel.1 and. convey to the purchaser the above described proper- ty on the terms and conditions hereinabove-stated and agree to pay the above named agent a commission Euntincr t o five ~ercent of the above mentioned L - - - - sellinq price for services rendered - - transac- in the tion. - - event - -a forfeiture - - deposit In the of of the - above provided, - - deposit shall be paid as the said or retained by - agent - - extent o f - the to the - the upon commission with residue - - seller. to the said agent to pay out of the cash proceeds of the sale t.he expense of furnishing evidence of title, of recording fees and revenue stamps, if any, as welT as any encumherances on said premises payable by me atlor before the clos- ing. Ilwe acknowledge the receipt of a copy of this Receipt and Agreement hearing my signature and that of the purchaser named above. " (Emphasis a.dded.) Charles Tavl-or tendered a check drawn on the account of A C. W. Xt-aA Taylor Limited Partnership to broker &.be& - Taylor before the Weingarts signed the agreement. Weinga.rt acknowl- edged the payment. On December 30, 1981 Wei..ngartand C. W. Taylor Partner- ship executed a formal Land Sale Contract. The document, which was drafted by Weingart's attorney, consisted of eight-type written pages spelling out in detail the rights and duties of the parties. The terms of payment were exactly the same as agreed upon in the Receipt and Agreement. The I,and Sale Contact contained a d.efault provision which gave the seller, Weingart, the right to declare the balance of the payments due if the buyer defaulted on a payment a.nd to strict foreclosure if that balance was not paid. The buyer paid the $160,000 due on December 30, 1981 when the Land Sale Contract was executed. Broker Taylor retained $43,750 of the $50,000 check entrusted to him. This sum represented one-half of $87,500, the commission on the purchase price of $1,750,000. After paying the agreed expenses, he remitted the balance to Weingart . C. W. Taylor Partnership was unable to make its $21.0,000 payment on May 21, 1982. FJeingart then caused a notice of default to be issued and after the curative period set forth in the Land! Sal-es Contract lapsed, Weingart reacquired the property from C. W. Taylor Partnership by quit claim deed. Broker Taylor instituted this suit on June 7, 1983 seeking to recover $43,750, the balance of his commission due. 0 p i 11 , 1984, after a period of discovery and a hearing, the District Court granted plaintiff Taylor's motion for summary judgment and awarded hjrn $43,750 plus statutory interest. Defendant Weingart appeals. It is a generally accepted 1-aw that a real estate broker is entitled to commissions when he has in pursuance of his employment and within the time specified in his contract procured a purchaser able, ready, and willing to purchase the seller's property on the terms specified in the employment contract. The broker's ability to recover commissions is premised on the broker's ability to accomplish what he under-- took to do in the contract of employment. The broker is not entitled to compensation for unsuccessful efforts under his contract irrespective of how great his efforts or how merito- rious his services. See Rosco v. Bara !1943), 114 Mont. 246, 135 P . 2d 364. Jn contrast, the broker may receive a commis- sion disproportionate to his efforts on a particular sale. It is generally necessary to refer to the specific terms of a particular employment contract in order to determine whether or not the brokers duties have been performed. Diehl and Associates, Inc. v. Houtchens (1977), 173 Mont. 372, 377, 567 P.2d 930, 934; Ehly v . Cady (Mont. 1 9 8 4 ) , - P.2d - r , 41 St. Rep. 1611, 1623. The 1 - i s t 1 n g agreement i n t h i s c a s e was made p a r t of t h e X e c e i p t and Agreement C o n t r a c t . The agreement complied w i t h s e c t i o n 28-2-903(1) ( e ) , MCA, r e q u i r i n g t h a t such c o n t r a c t s be e v i d e n c e d by a w r i t i n g . There i s no q u e s t i o n t h a t t h e p a r -t i e s a g r e e d t o t h i s b r o k e r a g e commission c o n t r a c t . Appellant c o n t e n d s t h a t t h e language c o n t a i n e d i n t h i s l i s t i n g a g r e e -ment requires that a sa-le t a k e place before a brokerage commission i s e a r n e d . W e agree. This Court r e c e n t l y conside r e d t h i s v e r y same language i n Ehly v . Cady ( ~ o n t .1 9 8 4 ) , - P.2d -, 41 St.Rep. 1611, 1624. W stated that the e language from t h e b u y / s e l l agreement assumes t h a t t h e r e a l estate commission would be e a r n e d when t h e s a l e was made. A p p e l l a n t now c o n t e n d s t h a t no s a l - e was e f f e c t e d s o no commission was e a r n e d . Appellant argues t h a t C. W. Taylor P a r t n e r s h i p l a c k e d t h e l e g a l c a p a c i t y t o c o n t r a c t and t h a t a s a l e c a n n o t be complete u n t i l t h e e n t i r e purchase p r i c e i s paid. W f i n d t h a t C . W. e T a y l o r P a r t n e r s h i p and C h a r l e s T a y l o r possessed the legal capacity to contract. Neither were crippled by infancy, insanity or other legal disability. Weingart a c c e p t e d C. W. Taylor P a r t n e r s h i p a s a purchaser. A p p e l l a n t s had t h e o p p o r t u n i t y t o i n v e s t i g a t e t h e p a r t n e r s h i p and i f t h e y had d i s c o v e r e d t h e p a r t n e r s h i p t o be unsound t h e y could have r e f u s e d t o perform. Broker T a y l o r would n o t have been e n t i t l e d t o a commission b e c a u s e a s a l e was n o t e f f e c t e d and t h e s e l l e r had r i g h t f u l l y r e f u s e l l t o perform. Such i s not t h e case here. Appellants entered i n t o a binding s a l e s contract. The deal was closed a.nd t h e parties agreed to all the terms contained in the agreement. The appellants accepted a total of $210,000 toward the purchase price. In this case a sale was effected on December 30, 1981. Furthermore appellants declared a default and forec1.osed on the property under the terms of the sales contract. Appellants retained $210,000 under the authority of the Land. Sales Contract. For the appel-lants to argue now that there was no final sale for the purpose of avoiding the payment of Taylor Is commission while capitalizing on the default of the buyer is incongruent. Appellants further contend that the commission earned by Taylor, if any, was limited to the amount of the earnest money received. Appellants misread the agreement which provides: "In the event of forefeiture of the deposit as provided the said. deposit shall be paid or retained the agent - - extent - - agreed upon to the of the comm~sion with residue to the seller." This language is intended to protect the broker by authoriz- ins him to take his entire commission out of the deposit before remitting any portion to the seller. The clause can only be construed to place a cap on the broker's commission if the deposit may the only amount given by the buyer before default and such amount is less than the brokerage commis- sion. This is not the case here. The appellants realized a total of $210,000 which exceeded the brokerage commission by $122,500. The terms of the listing agreement offer no relief to the seller under these circumstances. Appellants contend that a material issue of fact exists concerning their contention at the hearing on respondent's motion for summary judgment that Ronald Taylor waived the balance of his brokerage fee. Appel-lant asserts that Taylor orally agreed to waive the fee in return for the opportunity to rel-ist appellant's property after they regained title and possession foll.owing the default of C. W. Taylor Partnership. The evidence is clear that this agreement was not reduced to writing or signed by the parties. The contract was never performed. Section 28-2-903(l) (e), MCA, requires that a broker's contract to sell land be evidenced by a writing and section 28-2-1602, MCA, requires that modification of a written agreement be in writing or by an executed oral agree- ment. Appellants' contention must fail as a matter of law and summary judgment on this issue is appropriate. Finally, appellants contend that Ronald Taylor breached a fiduciary duty owed to them. The record does not sustain this contention. The mere fact that Ronald Taylor and Charles Taylor are brothers does not automatical.ly prove a breach of fiduciary duty. The sellers were apprised of all the relevant details concerning the transaction and were represented by counsel throughout. We discussed the fiduci- ary duty owed to a seller by a real estate broker in Nardi v. Smalley (Mont. 1982), 643 P.2d 228, 39 St.Rep. 606 and First Trust Co. v. McKenna (Mont. 1980), 614 P.2d 1027, 37 St.Rep. 1026. These cases stand for the proposition that the fidiuciary duty is breached if (1) a seller is foiled or deceived by the contract or does not understand the contract or (2) full disclosure of al.1 pertinent facts is not made by the broker. This is not the case here. Furthermore, there has been no showing that Weingart suffered any damage by breach of a fiduciary duty. Weingart received a fair contract price for the property. It appears that Peingart not only did not suffer monetary harm from this transaction but derived a profit from it. See - u , supra. E Affirmed. \ ' \ +k," 0 ,j\k,k4:,w, , - Justicd I We c o n c u r : 3 ~ d,WdWQa? 4 Chief J u s t i c e