B & R REALTY, INC. v. Carroll, No. A00A0165.

• Court: United States Court of Appeals (Georgia)
• Writing for the Court: MILLER.
• Citation: 245 Ga. App. 44,537 S.E.2d 183
• Parties: B & R REALTY, INC. et al. v. CARROLL et al.
• Decision Date: 12 July 2000
• Docket Number: No. A00A0165.

537 S.E.2d 183
245 Ga. App. 44

B & R REALTY, INC. et al.
v.
CARROLL et al

No. A00A0165.

Court of Appeals of Georgia.

July 12, 2000.

537 S.E.2d 185

English, Tunkle & Smith, Richard D. Tunkle, Clayton, for appellants

Malcolm S. Campbell, Sean A. Black, Taccoa, for appellees.

537 S.E.2d 184

MILLER, Judge

The primary issues on appeal are (1) whether an express listing contract precludes a common law "procuring cause" claim for a commission on a sale of real estate, (2) whether a sale outside the extended term of the listing agreement precludes a claim for conspiracy to deprive commission, and (3) whether an express contract precludes a quantum meruit claim. We answer each question in the affirmative and therefore affirm.

On February 8, 1996, Donald and Sharon Carroll listed their real estate with Shield Realty¹ for 325,000 and promised to pay Shield Realty a ten percent commission, to be split with any broker representing the purchaser, if within the term of the agreement (1) Shield Realty procured a person ready, willing, and able to purchase the property at the listed price, or (2) the Carrolls entered into an enforceable contract to sell the property. The term was six months, expiring on August 8, 1996. The commission was also due if within 90 days of August 8 (i.e., by November 6, 1996) the Carrolls sold the property to anyone to whom the property was submitted during the six-month term of the agreement.

In April 1996, Michael and Cheryl Balchuck, acting through their broker Norton Mountain Properties, offered to buy the property for 275,000. Through Shield Realty the Carrolls countered with an offer to accept 323,000. Feeling the price was too high, the Balchucks did not counter further, and negotiations ceased. In late November 1996, after both the listing agreement and the 90-day period had expired, the Balchucks contacted the Carrolls directly about the property and without the involvement of any brokers purchased the property on December 27, 1996, for 300,000.

Shield Realty and Norton Properties sued the Carrolls and the [245 Ga. App. 45] Balchucks for a 30,000 broker's commission, asserting three theories of recovery: (1) quantum meruit, (2) conspiracy to deprive commission (with derivative claims for punitive damages and attorney fees), and (3) as the procuring cause they were entitled under common law to the commission. The trial court granted summary judgment to the Carrolls (sellers),² which Shield Realty and Norton Properties appeal.

1. Important at the outset is the observation that Shield Realty and Norton Properties, the two plaintiff/brokers, did not sue for breach of contract. Under the plain terms of the listing agreement, no commission is due. During the six-month term of the contract Shield Realty did not procure a purchaser willing to buy the property for 325,000, nor did the Carrolls enter into an enforceable agreement to sell the property.³

537 S.E.2d 186

The Carrolls did not sell within 90 days of the contract's termination to the Balchucks (to whom the property was submitted during the six-month term). Because "[t]he express provision for liability within the time limited implies its exclusion thereafter," the Carrolls are not liable under their listing agreement for a commission on the sale outside the 90-day extension period.⁴

2. The brokers assert that as the procuring cause of the sale, they are entitled (apparently under the common law as embodied in OCGA § 10-6-32) to a commission on the transaction. We will address this doctrine first as it applies to Shield Realty, then as to Norton Properties.

(a) Shield Realty. Where an express contract governs the conditions under which a commission is to be paid, O'Brien's Irish Pub v. Gerlew Holdings⁵ explains that the common law "procuring cause" doctrine does not apply:

[T]he cases dealing with entitlement to commission by proving that the agent was the "procuring cause" of the sale generally apply in the absence of an exclusive contract to sell. The plaintiff and the defendant having entered into an express contract creating the relationship of exclusive sales agency, the provisions of OCGA § 10-6-32 are not applicable. This Code section embodies the implied obligation of a [245 Ga. App. 46] property owner to pay a commission to his broker when there has been a simple listing of the property with the broker, and is not applicable when the obligation to pay a commission has been expressly agreed upon; in such cases the terms of the express agreement control.⁶

"Each contract by which one employs another to sell real estate must be construed according to its particular stipulations."⁷ If the landowner sells the property after the listing agreement has expired, and after any post-termination periods during which sales to certain persons are subject to the commission, no commission is generally due.⁸ Because OCGA § 10-6-32 does not override the terms of the listing agreement, no commission is due here.

Moreover, even if OCGA § 10-6-32 did control, it provides that the broker's commission is earned only "when, during the agency, he finds a purchaser [who is] ready, able, and willing to buy and who actually offers to buy on the terms stipulated by the owner."⁹ The evidence is undisputed that the Balchucks were not willing to buy the property at the stipulated price of 325,000 and did not offer to do so and that, more than three months after the Carrolls' listing agreement had expired and the agency with Shield Realty had ended, they purchased it for substantially less. The statutory conditions are not met.

(b) Norton Properties. Under the Norton Properties/Balchuck arrangement, the seller would pay any commission. Norton Properties was also aware that the Carrolls' listing agreement with Shield Realty contemplated that any commission the Carrolls paid to Shield Realty would be shared with any broker acting on behalf of the buyer. But again, those terms authorizing a commission to Shield Realty were not met, and so Norton Properties' derivative claim fails.

537 S.E.2d 187

Significantly, Norton Properties had no separate arrangement nor agency with the Carrolls but had its own arrangement with the Balchucks, on whose exclusive behalf it acted. "Of course, it is fundamental that some arrangement or agency would have to exist between the parties...