Atkinson v. Prudential Property Co., Inc.
| Decision Date | 20 December 1994 |
| Docket Number | No. 94-1738,GRAYBOW-DANIELS,94-1738 |
| Citation | 43 F.3d 367 |
| Parties | Robert C. ATKINSON, an individual; Robert C. Atkinson, Inc., a Minnesota Corporation, Plaintiffs-Appellants v. PRUDENTIAL PROPERTY COMPANY, INC., an Illinois Corporation; Defendant-Third Party-Plaintiff-AppelleeCOMPANY, a Minnesota Corporation, Defendant-Appellee, v. WESTBURNE SUPPLY, INC., a Delaware Corporation; United Westburne, Inc., a Canadian Corporation, Third Party Defendants. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Richard I. Diamond, Minneapolis, MN, argued, for appellant.
Eric Ingvaldson, Minneapolis, MN, argued (Robert Bennett appeared on the brief), for appellee Prudential.
Janel LaBoda, Minneapolis, MN, argued (Robert Share appeared on the brief), for appellee Graybow-Daniels.
Before BEAM, Circuit Judge, CAMPBELL, Senior Circuit Judge, * and MORRIS S. ARNOLD, Circuit Judge.
Plaintiff Robert Atkinson appeals from the district court's order denying his motion to vacate judgment under Fed.R.Civ.P. 60(b). In a prior proceeding, the district court entered summary judgment against Atkinson. Atkinson did not appeal. Nearly one year later, Atkinson moved to vacate that judgment on the basis of newly-discovered evidence and on the basis of alleged misconduct by defendants during discovery. The district court denied the motion. We affirm.
This case involves a dispute over a real estate commission. Plaintiff Atkinson is a licensed real estate broker and president and sole shareholder of plaintiff Robert C. Atkinson, Inc. Defendant Prudential Insurance Company is the owner of an office building located at 2400 Xenium Lane North in Plymouth, Minnesota. Defendant Graybow-Daniels Company, an unincorporated division of Westburne Supply Inc., leased office space in the building at 2400 Xenium Lane in 1991. Prior to 1989, Graybow-Daniels was an independent corporation headed by Marvin Graybow. In the fall of 1989, Westburne acquired both Graybow-Daniels and Graybow Aire, Inc., a corporation headed by Marvin Graybow's son, Steven Graybow.
Shortly after the acquisition, Westburne decided to consolidate the facilities of the different companies. Accordingly, Marvin Graybow spoke with Michael Rosen, a commercial real estate broker, about representing Graybow-Daniels in its search for space to lease. In May of 1990, Marvin Graybow signed an agreement granting Rosen the exclusive right to seek and to secure office space for Graybow-Daniels.
At approximately the same time and apparently unbeknownst to Marvin Graybow, Steven Graybow contacted Atkinson about securing office space to lease. Steven Graybow subsequently met with Atkinson. Atkinson alleges that at this meeting, Steven Graybow asked Atkinson to represent Graybow-Daniels in its search for office space. Graybow-Daniels denies that this request was made. In early 1990, Atkinson began to investigate and gather information on various possible sites for Graybow-Daniels to lease, including the building at 2400 Xenium Lane. Atkinson toured the space at 2400 Xenium Lane and spoke with representatives of Welsh Companies, Inc., Prudential's agent in charge of listing and maintaining the building.
On July 24, 1990, Steven Graybow signed a one-page "Client Representation Agreement", which read:
To Whom it May Concern:
This letter confirms the appointment of Robert C. Atkinson of Robert C. Atkinson, Inc. as exclusive representative for Graybow-Danials [sic] Co. for Opus Corporation, Steven Hoyt Company and any other approved developers project.
We authorize Robert C. Atkinson to represent us in discussions with these Development Companies.
Robert C. Atkinson is authorized to negotiate on our behalf for these projects but shall make no commitment without our prior written approval. We in no way authorize Robert C. Atkinson to incur any expenses on our behalf in his efforts. Also, we expect Robert C. Atkinson, Inc. to be compensated by the owner/developer.
Sincerely,
/s/ Steven Graybow
Graybow-Danials [sic] Co.
Two days later, Steven Graybow signed another agreement which was identical to the first, except that it expressly included the building at 2400 Xenium Lane among the sites to be handled by Atkinson.
The next day, on July 27, 1990, Steven Graybow learned that Marvin Graybow had already entered into an exclusive representation agreement with Michael Rosen. Steven Graybow immediately notified Atkinson that Graybow-Daniels had already granted another broker the exclusive right to represent Graybow-Daniels in its search for new office space. Atkinson subsequently met with Rosen to discuss the possibility of splitting commissions. After Rosen refused to split any commissions, Atkinson sent a letter to Graybow-Daniels indicating that he expected a commission should Graybow-Daniels subsequently lease any of the properties, including the building at 2400 Xenium Lane, that Atkinson had investigated on Graybow-Daniels' behalf. Atkinson also sent to Welsh a "Lease Registration Agreement," in which Atkinson asserted his right to a commission, should the space at 2400 Xenium Lane be leased to Graybow-Daniels. Neither Welsh or Prudential signed the agreement.
About a year later and after investigating a number of different alternatives, Graybow-Daniels eventually leased the space at 2400 Xenium Lane in September of 1991. Rosen represented Graybow-Daniels during the execution of the lease and received a commission of $338,000.
Atkinson subsequently brought suit in February of 1992 against Graybow-Daniels, asserting that he was entitled to a commission, and against Prudential, claiming unjust enrichment and quantum meruit. After discovery, the district court granted defendants' motion for summary judgment in April of 1993. The district court held that under Minn.Stat. Sec. 82.33, subd. 2, all claims by brokers seeking payment arising out of a real estate transaction must be supported by a suitable written agreement. At the time of the decision, that provision stated:
No person required by this chapter to be licensed shall bring or maintain any action in the courts for any commission, fee or other compensation with respect to the purchase, sale, lease or other disposition or conveyance of real property, or with respect to the negotiation or attempt to negotiate any sale, lease or other disposition or conveyance of real property unless there is a written agreement with the person bringing or maintaining the action.
Minn.Stat. Sec. 82.33, subd. 2 (1986). The district court pointed out that regulations promulgated by the Minnesota Commissioner of Securities and Real Estate set forth requirements that the written agreement required by Minn.Stat. Sec. 82.33 must meet. These included, among other things, a definite expiration date, a description of the real property involved, the amount of any compensation or commission or the basis for computing the commission, and a clear statement explaining the conditions that will entitle the broker to a commission. Minn.R. 2805.1200, subp. 2 (1991); see also, 1993 Minn.Laws ch. 309, Sec. 7 () (codified at Minn.Stat. Sec. 82.195). 1 The written agreement must also indicate that the broker has the authority to act on behalf of the other party, Rueben v. Gibbs, 297 Minn. 321, 210 N.W.2d 857, 858 (1973), and that the other party intends to be bound, R.M. Parranto Co. v. Bernick, 354 N.W.2d 600, 603-04 (Minn.Ct.App.1984). Unless the broker has a written agreement that substantially complies with these requirements, the broker cannot maintain an action based upon a claim 2 for a commission. Id.
The district court held that no sufficient written agreement existed in this case, either between Atkinson and Prudential or between Atkinson and Graybow-Daniels. The court held that the two letters signed by Steven Graybow dated July 24, 1990 and July 26, 1990 did not substantially comply with the requirements set forth by the regulations. Although the July 26 letter indicated that Atkinson had authority to act on Graybow-Daniels' behalf and described the real property involved, it did not include an expiration date or any information regarding compensation. The district court also found that the letter did not evince any intent by Prudential to be bound to pay a commission. Indeed, Prudential was not even a party to the agreement. Accordingly, the court concluded that Minn.Stat. Sec. 82.33 barred Atkinson from bringing a claim for a commission against Graybow-Daniels and a claim for unjust enrichment against Prudential. Atkinson did not appeal.
Nearly a year later, in March of 1994, Atkinson filed a motion to vacate summary judgment under Fed.R.Civ.P. 60(b). Atkinson alleged that he had recently discovered in his own files a letter that he had received from Welsh, dated August 1, 1990. Atkinson alleged that he discovered this letter by accident, while going through one of his own files containing information unrelated to this case. The letter stated:
Dear Bob:
Enclosed, please find blueprints for the former Target facility at 2400 Xenium Lane, Plymouth, Minnesota.
Rental rates are $6.00/$3.25 and taxes are $1.03 per square foot this year, 1990. The warehouse is 24' clear.
Bob, the leasing commission is 7%, 6%, 5%, 4%, 3% of each years Base Rent through five years. This is a full commission to the agent procuring a lease for the building. In the event of a lease beyond 5 years we need to discuss the commission for that period.
Sincerely,
/s/ Jeffrey P. Minea
Welsh Companies, Inc.
Atkinson argued that this letter was sufficient to satisfy the requirements of Minn.Stat. Sec. 82.33. Citing this newly discovered evidence, Atkinson moved to vacate the earlier judgment.
The district court denied Atkinson's motion without holding a hearing. Its order read: "The Court, after...
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