CB Commercial Real Estate Group, Inc. v. Equity Partnerships Corp.

• Decision Date: 19 March 1996
• Docket Number: Nos. WD,s. WD
• Citation: 917 S.W.2d 641
• Parties: CB COMMERCIAL REAL ESTATE GROUP, INC., Appellant/Respondent, v. EQUITY PARTNERSHIPS CORPORATION, Penn National Partners, L.P., and P.N. Associates, L.P., Respondents/Appellants. 49888, WD 49933.
• Court: Missouri Court of Appeals

Page 641

917 S.W.2d 641

CB COMMERCIAL REAL ESTATE GROUP, INC., Appellant/Respondent, v. EQUITY PARTNERSHIPS CORPORATION, Penn National Partners, L.P., and P.N. Associates, L.P., Respondents/Appellants.

Nos. WD 49888, WD 49933.

Missouri Court of Appeals,

Western District.

March 19, 1996.

Appeal from the Circuit Court of Jackson County; Honorable David W. Shinn, Judge.

David A. Welte, Kansas City, for appellants.

Leonard Rose, Kansas City, for respondent.

Before LAURA DENVIR STITH, P.J., and LOWENSTEIN and HANNA, JJ.

HANNA, Judge.

CB Commercial Real Estate Group, Inc. (Coldwell Banker), filed a breach of contract suit against Equity Partnerships Corporation (Equity Partnerships), Penn National Partners, L.P., (Penn National), and P.N. Associates, L.P. The defendants counterclaimed, charging that the plaintiff breached its agreement. The case was tried to the court. Both sides have appealed.

The plaintiff is a commercial real estate company, which provides property management, leasing, and sales brokerage services. The defendants, while technically separate, are related entities whose primary business is the ownership of a commercial office building at 4370 West 109th Street, Overland Park, Kansas. P.N. Associates, L.P., a general partnership with Equity Partnerships and Penn National as partners, owns the property.

There were three agreements between the parties, all related to this property. Two of the agreements, both dated February 9, 1987, consisted of an Exclusive Leasing Listing Agreement (leasing agreement) and a Management Agreement (management agreement). The third agreement was an Exclusive Sales Listing Agreement (sales agreement), dated July 30, 1990. These agreements between Coldwell Banker and P.N. Associates designated Coldwell Banker as the exclusive leasing, sales, and managing agent for the property.

Counts I, II, and III of plaintiff's amended petition alleged a breach of contract. Coldwell Banker sought recovery of a leasing commission pursuant to the leasing agreement, which gave Coldwell Banker the exclusive right to negotiate a lease of the property for a period ending February 28, 1988. In June 1987, the United States of America (the U.S. Marine Corps) leased, from P.N. Associates, 11,500 square feet of the building for a five-year term, commencing August 1, 1987. Later, the leased area was increased to 14,685 square feet. The lease gave the lessee the right to terminate after the fourth year upon ninety days written notice. Therefore, the leasing commission was computed based upon the first four years of the lease, for a total of $43,314.41. The parties do not dispute this amount. The trial court found in favor of Coldwell Banker and awarded damages in the amount of $43,314.41, interest at the rate of 9% per annum from May 1, 1991 to May 4, 1994, in the amount of $12,197.94, and reasonable attorney fees of $22,000.

In Count IV, Coldwell Banker sought a declaration of the legal effect of an addendum to the sales agreement between Coldwell Banker and P.N. Associates, claiming that it did not operate to postpone the payment date of the Marine Corps lease commission (the subject matter of Counts I, II, and III) to the date of the sale of the property. The trial court declared that the addendum was not an accord and satisfaction of the lease agreement, did not operate to settle any dispute concerning excess costs of tenant improvements, and did not postpone the leasing commission payment date. However, the court held that it did operate to forgive payment of interest on the commission through May 1, 1991, the date the lawsuit was filed.

Count V was a breach of the sales agreement in which Coldwell Banker claimed that it was entitled to a sales commission of $165,000, ¹ interest, and attorney fees. Approximately 60 days after the sales agreement had been signed, P.N. Associates renegotiated its second mortgage on the property by extending the maturity date (payment of the principle) and reducing the interest rate. Coldwell Banker claims that the extension of the maturity date and the reduction of the interest rate of the defendant's second mortgage was a refinancing of the debt, which triggered a sales commission, pursuant to paragraph 2(f) of the sales agreement. The trial court found that the loan extension was not a refinancing and ruled in favor of the defendants.

Equity Partnerships and Penn National, in their capacity as general partners of P.N. Associates, filed a counterclaim against Coldwell Banker for breach of contract, claiming that Coldwell Banker failed to oversee tenant improvements on the Marine Corp space. The trial court held in favor of Coldwell Banker on the defendants' counterclaim.

A number of points are raised, which will be addressed in the order set out in the briefs. First, the defendants, in their cross-appeal, maintain that Coldwell Banker's Third Amended Petition failed to state a cause of action in that the trial court lacked subject matter jurisdiction because the petition did not allege that Coldwell Banker was a licensed real estate broker. Because this point goes to all of the counts in Coldwell Banker's Third Amended Petition, we will address it first. Next, Coldwell Banker argues that the trial court's ruling on Count V: 1) was against the weight of the evidence; 2) erroneously applied Missouri law regarding the construction of unambiguous contracts; and 3) alternatively, erroneously applied Missouri law regarding the construction of ambiguous terms in the 1990 Sales Agreement.

REAL ESTATE LICENSE--ALLEGATION AND PROOF

The defendants claim that because Coldwell Banker did not allege in its Third Amended Petition that it was a licensed real estate broker, the petition failed to state a cause of action. Therefore, the defendants argue, the court lacked subject matter jurisdiction to hear and adjudicate any of Coldwell Banker's claims.

Section 339.160, RSMo 1994, provides that a plaintiff cannot bring an action in the capacity of a real estate broker or salesman in this state for the recovery of compensation for services rendered without alleging and proving that it was a licensed real estate broker or salesman at the time when the cause of action arose. See Dolan v. Ramacciotti, 462 S.W.2d 812, 816 (Mo. banc 1970). Coldwell Banker acknowledges that it did not allege that it was a licensed broker. This deficiency was not raised in the trial court. The defendants raise the issue here for the first time, maintaining that the absence of an allegation that it was a licensed real estate broker leaves the pleading jurisdictionally deficient. A failure to plead these facts, by statute and case law, leaves the petition fatally defective in that the plaintiff has failed to establish subject matter jurisdiction. § 339.160, RSMo 1994; Sandbothe v. Williams, 552 S.W.2d 251, 255 (Mo.App.1977).

The defendants did not object to the deficiency in the petition, file a motion challenging the matter, or object to any of the testimony by Coldwell Banker's witnesses, who testified extensively concerning Coldwell Banker's commercial real estate activities, the commission disputes, and the three agreements entered into by the parties. The defendants have cited a number of cases, which hold that the statute mandates that the allegation be pleaded. We observe that in each case cited the parties raised the issue early in the pleading stage of the proceedings and the plaintiff had the opportunity to correct the deficiency. In each case the plaintiff either refused to plead that he or she was a licensed real estate salesperson or broker or admitted that he or she was not. Here, the defendants waited until the appeal was brought to first raise the issue.

The Third Amended Petition alleged that the plaintiff, CB Commercial Real Estate Group, Inc. is qualified to do business in Missouri, and that the parties entered into various real estate contracts for the sale and lease of defendant's real estate. Attached to the petition were the real estate sales and leasing contracts.

There was testimony that Coldwell Banker was a commercial real estate service provider firm and that it provided asset management, property management, leasing, sales, brokerage, consultation, appraisal, and financing services. The evidence also showed that Coldwell Banker maintained an office in Kansas City, Missouri, and in other locations. Acting as a real estate broker, Coldwell Banker engaged in the real estate business on various commercial properties with the defendants in Missouri, Kansas, and Arizona on numerous occasions. There were letters from Coldwell Banker to the defendant about the disputed commission, which identified Coldwell Banker as the "procuring broker." The defendants acknowledged and accepted the letters' contents. Further, the defendants acknowledged, on more than one occasion, that they owed a real estate commission to Coldwell Banker.

The pleadings and the evidence not only proved that Coldwell Banker fell within the definition of a real estate broker, § 339.010.1(2)-(4), and was acting within this state in the capacity of a real estate broker, but also proved that it was a licensed real estate broker. We hold that § 339.160 was satisfied by the evidence and that the evidence resulted in an amendment of the pleadings to conform to the evidence. Mo.R.Civ.P. 55.33(b); Murray v. Ray, 862 S.W.2d 931, 934 (Mo.App.1993). Coldwell Banker proved that it was a licensed real estate broker and had standing to bring its lawsuit.

COUNT V--REFINANCING

Coldwell Banker raises three points on appeal concerning the trial court's decision on Count V. Specifically, Coldwell Banker contends that the trial court's judgment as to this count was against the weight of the evidence and erroneously applied the law regarding the construction of unambiguous contracts. In the alternative, Coldwell Banker contends in its third point that the court erroneously applied the law concerning the...