GC Timmis & Co. v. Guardian Alarm Co., Docket No. 210998.

• Decision Date: 31 October 2001
• Docket Number: Docket No. 210998.
• Citation: 247 Mich. App. 247,635 N.W.2d 370
• Parties: G.C. TIMMIS & COMPANY, Plaintiff-Appellee, v. GUARDIAN ALARM COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

635 N.W.2d 370

247 Mich. App. 247

G.C. TIMMIS & COMPANY, Plaintiff-Appellee, v. GUARDIAN ALARM COMPANY, Defendant-Appellant.

Docket No. 210998.

Court of Appeals of Michigan.

Submitted May 1, 2000, at Detroit.

Decided August 24, 2001, at 9:05 a.m.

Released for Publication October 31, 2001.

David B. Timmis, Birmingham, for the plaintiff.

Seyburn, Kahn, Ginn, Bess, Deitch and Serlin, P.C. (by Barry M. Rosenbaum and Henry M. Nirenberg) and Robert M. Craig, Southfield, for the defendant.

Before MICHAEL J. KELLY, P.J., and WHITE and WILDER, JJ.

WILDER, J.

Defendant Guardian Alarm Company appeals by leave granted from a trial court order denying its motion for summary disposition brought under MCR 2.116(C)(7), (8), and (10). We reverse and remand.

I. Facts and Procedural History

Plaintiff G.C. Timmis & Company is a registered investment advisor with the Securities and Exchange Commission and a broker-dealer member of the National Association of Securities Dealers. Defendant Guardian Alarm Company is a Michigan corporation that sells home and commercial security systems. By letter dated October 25, 1995, plaintiff's managing director, Gerald C. Timmis, introduced himself to defendant's chief executive officer, Milton Pierce, and indicated that plaintiff was an investment bank specializing in mergers and acquisitions and capital raising. Timmis requested to meet with Pierce to discuss defendant's lagging growth rate for the home security industry and to offer plaintiff's services. Timmis and Pierce subsequently met on two different occasions in the fall of 1995 and discussed the services plaintiff could provide, including assisting defendant in acquiring other security companies or their assets. According to plaintiff, in December 1995, the parties reached an oral agreement specifying that plaintiff would receive a success fee for any target company plaintiff contacted on behalf of defendant that was eventually acquired by defendant within two years of the date of termination of the agreement. Defendant denies the existence of any compensation agreement with plaintiff.

After Timmis' meetings with Pierce, Timmis contacted one of plaintiff's clients, the Rao Corporation, which owns MetroCell Security, to discuss the purchase of MetroCell by defendant. Timmis met with the principal of the Rao Corporation, Duane Rao, on a few occasions to discuss the possibility of the sale. Although defendant and MetroCell discussed the possible sale, they were initially unable to agree on a purchase price for the company. However, after further negotiations, on July 3, 1996, defendant purchased MetroCell's assets (security monitoring agreements) for $1.4 million. On February 26, 1997, plaintiff, through its attorney, demanded that defendant pay a success fee for services rendered in accordance with the alleged oral agreement. Defendant refused to pay and on August 5, 1997, plaintiff filed the instant lawsuit.

In its complaint, plaintiff alleged that it entered into an oral agreement with defendant on December 12, 1995, for "the provision of banking services" and that, pursuant to the oral agreement, defendant agreed to pay plaintiff a fee upon defendant's successful purchase of security monitoring agreements from MetroCell. Plaintiff further alleged that defendant engaged in "clandestine and underhanded" negotiations with MetroCell that resulted in defendant's purchase of MetroCell's assets for $1.4 million without notifying plaintiff. Plaintiff asserted claims of breach of contract, fraudulent misrepresentation, and promissory estoppel against defendant, seeking a $70,000 contractual fee for its efforts that resulted in defendant's purchase of the security monitoring agreements from MetroCell. In a first amended complaint, plaintiff also requested "actual damages, exemplary damages and/or treble damages."

Defendant moved for summary disposition pursuant to MCR 2.116(C)(7), (8), and (10), arguing that because plaintiff was not licensed to negotiate the purchase of a business or business opportunity as required by Michigan's real estate brokers licensing act, M.C.L. § 339.2501 et seq., it was therefore precluded from maintaining an action for compensation under the alleged oral agreement with defendant. Plaintiff responded that it was not required to be licensed under the act because it was seeking compensation for investment banking services, not for assisting defendant in negotiating the purchase of a business.

Following a hearing, the trial court denied defendant's motion, holding that defendant did not present any documentary evidence or expert testimony to establish that plaintiff engaged in the type of work contemplated by the real estate brokers licensing act. The trial court further noted that even if defendant had presented the requisite evidence, plaintiff presented documentary evidence (an affidavit and company brochure suggesting that plaintiff's conduct was that of an investment banker) creating a factual dispute regarding whether its conduct was covered by the act sufficient to defeat summary disposition.

Thereafter, plaintiff filed a second amended complaint alleging that (1) the contractual fee, payable upon the purchase of a target company, was to be no less than $100,000, (2) pursuant to the oral agreement, the "success fee" was payable upon the purchase of a target company, and (3) pursuant to the oral agreement plaintiff was entitled to the "success fee," even if the agreement terminated, as long as the transaction was consummated within two years of the date of termination and there was a prior contact with the seller.

Defendant filed an application for leave to appeal the trial court's denial of its motion for summary disposition, and this Court granted leave "limited to the issues raised in the application." G C Timmis & Co v. Guardian Alarm Co, unpublished order of the Court of Appeals, entered September 28, 1998 (Docket No. 210998).

II. Standard of Review

This Court reviews de novo a trial court's decision on a motion for summary disposition. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998); Graham v. Ford, 237 Mich.App. 670, 672, 604 N.W.2d 713 (1999). A motion for summary disposition under MCR 2.116(C)(10)¹ tests whether there is factual support for a claim. In deciding the motion, this Court must consider the pleadings, affidavits, depositions, admissions, and any other documentary evidence in a light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists that would preclude judgment for the moving party as a matter of law. Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 (1999).

In addition, statutory interpretation is a question of law subject to review de novo. Amburgey v. Sauder, 238 Mich. App. 228, 231, 605 N.W.2d 84 (1999). The primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature. Lane v. KinderCare Learning Centers, Inc., 231 Mich.App. 689, 695, 588 N.W.2d 715 (1998). The first criterion in determining intent is the specific language of the statute. Id. Judicial construction is neither necessary nor appropriate where the plain and ordinary meaning of the statutory language is clear. Id.

III. Analysis

We are required in this appeal to interpret Michigan's real estate brokers licensing act to determine whether plaintiff's conduct fell within the scope of the act. As will be discussed, we conclude that plaintiff's activities constituted "negotiat[ions] [for] the purchase or sale or exchange of a business" as contemplated by the act and that, therefore, it was required to procure a real estate brokers license in order to collect fees for its service. Because plaintiff was not licensed in accordance with the statute at the time it engaged in negotiations on behalf of defendant, plaintiff's claim must fail as a matter of law and summary disposition in favor of defendant is appropriate. Accordingly, we reverse the trial court's ruling denying summary disposition and remand to the trial court for further proceedings.

The real estate brokers licensing act provides in pertinent part:

A person engaged in the business of, or acting in the capacity of, a person required to be licensed under this article, shall not maintain an action in a court of this state for the collection of compensation for the performance of an act or contract for which a license is required by this article without alleging and proving that the person was licensed under this article at the time of the performance of the act or contract. [MCL 339.2512a.]

The act defines "real estate broker" as

an individual, sole proprietorship, partnership, association, corporation, common law trust, or a combination of those entities who with intent to collect or receive a fee, compensation, or valuable consideration, sells or offers for sale, buys or offers to buy, provides or offers to provide market analyses, lists or offers or attempts to list, or negotiates the purchase or sale or exchange or mortgage of real estate, or negotiates for the construction of a building on real estate; who leases or offers or rents or offers for rent real estate or the improvements on the real estate for others, as a whole or partial vocation; who engages in property management as a whole or partial vocation; who sells or offers for sale, buys or offers to buy, leases or offers to lease, or negotiates the purchase or sale or exchange of a business, business opportunity, or the goodwill of an existing business for others; or who, as owner or otherwise, engages in the sale of real estate as a principal vocation. [MCL 339.2501(d).]

Under the plain language of the statute, a person meeting the statutory definition of "real estate broker" may not maintain an action to recover a brokerage fee unless it is alleged and proved that such individual is licensed. MCL 339.2512a; Krause v. Boraks, 341...