Abex Corp. v. Vehling, 2-881A284

• Citation: 443 N.E.2d 1248
• Decision Date: 19 January 1983
• Docket Number: No. 2-881A284,2-881A284
• Parties: ABEX CORPORATION, Appellant (Third-Party Defendant Below), v. Robert VEHLING, Appellee and Cross-Appellant (Third-Party Plaintiff Below).
• Court: Court of Appeals of Indiana

Page 1248

443 N.E.2d 1248

ABEX CORPORATION, Appellant (Third-Party Defendant Below), v. Robert VEHLING, Appellee and Cross-Appellant (Third-Party

Plaintiff Below).

No. 2-881A284.

Court of Appeals of Indiana,

Second District.

Jan. 19, 1983.

Alan H. Lobley, Ice Miller Donadio & Ryan, Indianapolis, for appellant.

William D. Hall, Indianapolis, for appellee and cross-appellant.

SULLIVAN, Judge.

Claiming that third-party defendant Abex Corporation (hereinafter Abex) ¹ has failed to pay his broker's commission, third-party plaintiff, Robert Vehling (hereinafter Vehling), intervened in a suit originally brought by Abex, the seller, against defendant, R.B. Manufacturing, Inc., et al. (hereinafter R.B.), the buyer, for breach of a sale agreement. From the trial court's entry of summary judgment in favor of Vehling, Abex appeals. In his cross-appeal, Vehling challenges the trial court's nunc pro tunc order filed on March 27, 1981 which provided for post-judgment but not pre-judgment interest. Resolution of the case pivots around two issues:

1. Whether there were any genuine issues of material fact rendering summary judgment inappropriate; and

2. Assuming that Vehling is entitled to his broker's commission, whether the court erred in denying him pre-judgment interest.

We affirm the summary judgment, reverse the denial of pre-judgment interest, and remand for further proceedings to determine the time from which interest is to be computed.

It is a well-settled precept that summary judgment is permissible only where the pleadings, depositions, answers to interrogatories, admissions on file, together with any affidavits and testimony reveal that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Ind.Rules of Procedure, Trial Rule 56(C). Furthermore, in ascertaining whether there exists a genuine issue of material fact, the facts as represented by the opponent's affidavits must be accepted as true and any doubt must be resolved against the proponent of the summary judgment. Stapinski v. Walsh Const. Co., Inc. (1979) Ind., 395 N.E.2d 1251, 1253.

On June 17, 1977, Abex's predecessor, Stanray Corporation, filed suit against R.B. for breach of a written sale agreement entered into by Stanray and R.B. on December 20, 1976 in which R.B. agreed to purchase Stanray's machinery, equipment, tools, office furniture, inventories and the realty in which these items were located for a total price of $1,500,000. Under the terms of this agreement, the sale of the personalty was to be consummated upon R.B.'s delivery of a promissory note for one million dollars, secured by a security agreement signed by R.B.'s principal shareholders. Both the promissory note and the security agreement were executed and delivered on the day that the contract was created. R.B. also agreed to purchase the realty for $500,000, an amount to be paid in cash at the closing which was to have taken place on April 29, 1977. A default judgment for breach of contract was subsequently entered against R.B. on December 29, 1978, and damages in the amount of $832,561.23 with interest thereon was assessed.

In his petition to intervene filed on July 6, 1977 and his third-party complaint of July 21, 1977, Vehling initially claimed that he was entitled to a broker's commission of 10% of the total purchase price which included both the personalty and the realty, under the terms set forth in a Stanray inter-office memorandum dated December 23, 1976, and written by Stanray's attorney, G.R. Canty, Jr. ² The pertinent language of this memorandum states:

"Mr. Vehling has further been advised that our obligations for the payment to him of the 10% commission by reason of the sale will not arise until the entire $1,500,000.00 will have been paid to Stanray. At the same time, we are providing him with draws against such sum, initially in the amount of $5,000.00 and, thereafter, on the first of each month, commencing with January and ending with April, at a rate of $1,500 a month. Mr. Vehling is also negotiating the settlement of our real estate commissions with McClain Matthews Realtors; he has also been requested to notify such realtors of the sale (i.e. to withdraw the plant from the market)." Record at 332.

On September 21, 1980, Vehling filed a second amended third-party complaint in which his basis for recovery was the separate written contract between Abex and R.B. The amount sought was limited to 10% of the $1,000,000.00 for the sale of the personal property. In this complaint, Vehling stated that he had already received $9,500.00 from Abex as an advance on his commission, leaving a balance of $90,500.00. In its answer, Abex denied, on three grounds, any liability to Vehling for broker's fees:

1. That any purported agreement for the payment of a commission was illegal and therefore unenforceable in that Vehling did not possess a valid real estate broker's license as required by I.C.1971, 25-34-1-8, at any time during the relevant transactions;

2. That any agreement for commission is void because it was not in writing and therefore violated the Statute of Frauds; and

3. That even if an enforceable broker's contract existed, it was not supported by adequate consideration in that Vehling failed to produce a buyer ready, willing and financially able to purchase the assets that defendants (R.B.) had agreed to buy.

As part of its answer, Abex counter-claimed to recover the $9,500 which it had advanced to Vehling. According to Abex:

"On or about December 23, 1976, Stanray Corporation entered into an arrangement with Robert Vehling, pursuant to the terms of which Vehling agreed that he was to be compensated in the amount of ten percent (10%) of the gross receipts occasioned and received in cash by virtue of the sale of property to the above-named Defendants. Further, he agreed that his entitlement to such commission, and Stanray Corporation's obligation to pay it, would accrue only in the event of receipt of the purchase price from the Defendants, in cash." Record at 622.

On November 5, 1980, Vehling filed a motion for summary judgment. Abex also filed its motion for summary judgment on December 15, 1980. On March 5, 1981, the court denied third-party defendant Abex's motion but entered summary judgment for third-party plaintiff Vehling in the amount of $90,500, with interest at the rate of eight percent (8%) per annum as provided by law, from December 20, 1976. However, in its nunc pro tunc order of March 27, 1981, the court modified its judgment so that the interest on the $90,500 was to be computed from March 5, 1981, the date on which summary judgment had been entered.

In its motion to correct errors, Abex admits that "there was an oral contract to pay Vehling ten percent of the sale price of the personal property sold by Abex Corporation's predecessor, Stanray Corporation." However, Abex maintains "that there is a genuine issue of material fact as to what was the oral agreement with respect to when and if such payment was to be due." Record at 666 (emphasis supplied). According to Abex, Vehling's commission "was due and payable when Stanray received the cash proceeds from the sale of the realty and personal property." Record at 666 (emphasis supplied). Under a separate subheading, Abex also argues that summary judgment was improper in that "there was an issue of fact as to the legality of the agreement." Abex contends that "[i]f, as alleged in his original complaint and as his testimony was in his deposition, his agreement was for the sale of the real and personal property, the agreement was not enforceable because Vehling was not a licensed realtor." Appellant's brief at 22-23. This argument is premised on I.C. 25-34-1-8 (Burns Code Ed.1971) which states in pertinent part that:

"it shall be unlawful for any person, firm, partnership, association, or corporation to act as a real estate broker or real estate salesman without first having procured a license issued by Indiana real estate commission and to have kept the same unrevoked after issuance."

I.

We first address the sub-issue concerning the legality of the brokerage agreement ³ between Vehling and Abex.

Appellant's reasoning, as we discern it, is that because there is evidence of record indicating that Vehling's contract with Abex may have been to receive a broker's commission of 10% of the total purchase price which encompassed both the realty and the personalty, not having been a licensed real estate broker during the relevant negotiations, Vehling is statutorily prohibited from recovering any commission.

Appellant's argument is untenable for several reasons. First, Abex itself states in its motion to correct errors that the oral contract was to pay Vehling a 10% commission of the sale price of the personal property. Furthermore, attached to appellant's own motion for summary judgment was George Canty, Jr.'s affidavit in which he declares that:

"Robert Vehling was instructed, and did agree, that his entitlement to a commission or fee as a consequence of the sale of the Remco-Indianapolis Division properties to R.B. would not accrue and be payable until such time, and only at such time, as Stanray Corporation might receive cash proceeds of such sale in the amount ($1,500,000) specified in a certain agreement of sale executed December 20, 1976, by and between Stanray Corporation and R.B., less any real estate commissions payable to Stanray Corporation's realtors. Record at 633 (emphasis supplied).

Additional indication of the terms of the brokerage agreement is gleaned from the written sale contract between Abex and R.B. drafted by Abex's attorney, Canty, which includes this provision:

"Stanray admits that it has entered into brokerage arrangements with McClain-Matthews, realtors, of Indianapolis, Indiana, in respect of the sale of the Realty, and with Mr. Robert W. Vehling in respect of the sale of the Assets, and that it will satisfy or...