Taylor v. Weingart ( 1984 )

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 consid-
e 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.
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We c o n c u r :
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Chief J u s t i c e