Commerce Realty Advisors, Ltd. v. Zinke Invs. Ltd.
| Decision Date | 09 December 2014 |
| Docket Number | No. 1 CA-CV 13-0742,1 CA-CV 13-0742 |
| Parties | COMMERCE REALTY ADVISORS, LTD; AND CRA, LLC, Plaintiffs/Appellants, v. ZINKE INVESTMENTS LIMITED PARTNERSHIP, an Arizona limited partnership; and BERNARD L. ZINKE and GLORIA J. ZINKE, husband and wife, Defendants/Appellees. |
| Court | Arizona Court of Appeals |
NOTICE: NOT FOR PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Maricopa County
The Honorable Arthur T. Anderson, Judge
AFFIRMED IN PART; VACATED AND REMANDED IN PART
Roshka, DeWulf & Patten, PLC, Phoenix
By John E. DeWulf, Jennifer A. Stevens
Richard Q. Nye, LTD, Scottsdale
By Richard Q. Nye, Benjamin J. Branson
Presiding Judge Margaret H. Downie delivered the decision of the Court, in which Judge Andrew W. Gould and Judge Samuel A. Thumma joined.
¶1 After the sale of real property subject to an exclusive listing agreement between Zinke Investments Limited Partnership ("Zinke") and Commerce Realty Advisers, Ltd. ("Commerce"), Zinke refused to pay a commission to Commerce or its assignee, CRA, L.L.C. ("CRA") (collectively, "Appellants"). The superior court entered summary judgment against Appellants, dismissing their claims for breach of contract and breach of the implied covenant of good faith and fair dealing. For the following reasons, we affirm in part and vacate and remand in part.
¶2 Zinke owned approximately 410 acres of real property ("the Property") near the Town of Gilbert ("the Town"). Commerce and Zinke partner Bernard Zinke entered into an Exclusive Listing Agreement ("Listing Agreement") on November 4, 2003. Phillip DeAngelis, a licensed broker, signed the Listing Agreement on behalf of Commerce.
¶3 Under the Listing Agreement, Zinke employed Commerce "as its sole and exclusive agent for the term of this Agreement to negotiate the sale of the Property." The Listing Agreement provided for a 60-month listing period that would extend under the following circumstances:
If during the Listing Period, an option or right of first refusal to purchase the Property or any interest in the Property is granted by Client or an escrow is opened by Client or if negotiations involving the sale, transfer or conveyance of the Property to a prospective purchaser have been commenced by Client and are continuing, then the term of the Listing Period shall be extended with respect to such transaction(s) and negotiations for a period through the exercise or termination of the option or right of first refusal, the closing or termination of the escrow, or the termination or consummation of the negotiations.
If the Property were to sell "through a transaction commenced during the Listing Period," Commerce was entitled to receive a commission of 2.5% of the sales price, "whether the person or entity was procured by Broker or from any other source."
¶4 DeAngelis signed a letter resigning as Commerce's designated broker effective November 4, 2008, though Arizona Department of Real Estate ("ADRE") records list November 5, 2008 as DeAngelis' last day as Commerce's designated broker. Commerce signed an Assignment Agreement transferring its "rights, privileges, and interest" under the Listing Agreement to CRA, effective November 5, 2008. Zinke was not asked to consent to the assignment and did not consent to it.
¶5 For purposes of its motion for summary judgment, Zinke conceded it began sales negotiations with the Town during the Listing Agreement's 60-month term. Zinke and the Town closed a sale for a portion of the Property and associated rights of way on March 4, 2009. Zinke did not pay Appellants any commission.
¶6 Appellants sued Zinke, Bernard Zinke, and Gloria Zinke (collectively, "defendants") for breach of contract and breach of the implied covenant of good faith and fair dealing. Defendants moved for summary judgment, arguing: (1) Commerce's failure to employ a licensed broker at the time its claim arose precluded recovery; and (2) Commerce's assignment to CRA was invalid. The superior court granted the motion for summary judgment and awarded defendants costs and attorneys' fees. This timely appeal followed. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(A)(1).
¶7 Summary judgment is not warranted if there are material factual disputes or if the court must "choose among competing inferences," determine witnesses' credibility, or weigh the quality of the evidence. Taser Int'l, Inc. v. Ward, 224 Ariz. 389, 393, ¶ 12, 231 P.3d 921, 925 (App. 2010). This Court reviews a grant of summary judgment de novo. L.F. v. Donahue,186 Ariz. 409, 411, 923 P.2d 875, 877 (App. 1996). Likewise, we review de novo issues of contract and statutory interpretation. Pi'Ikea, LLC v. Williamson, 234 Ariz. 284, 285, ¶ 5, 321 P.3d 449, 450 (App. 2014).
¶8 A civil action brought to recover a real estate commission is subject to A.R.S. § 32-2152(A), which provides:
An action for the collection of compensation earned may be maintained in the courts of the state by any broker or salesperson. To commence the action the complaint shall allege that the plaintiff was a qualified licensed broker or salesperson at the time the claim arose. Prior to hearing the action the court shall require the plaintiff to prove the alleged qualifications.
(Emphasis added.). The parties disagree about when Appellants' claim "arose" within the meaning of § 32-2152(A). The superior court ruled the claim arose when the Property was sold to the Town, finding Appellants conflated the "at the time the claim arose" language of § 32-2152(A) with A.R.S. § 32-2155(B), which makes it unlawful to pay compensation to a real estate broker "who is not licensed at the time the service is rendered." We agree.
¶9 Addressing a claim for a real estate commission owed under an exclusive listing agreement, the Arizona Supreme Court stated:
When an owner gives one agent the exclusive right to sell within a specified time, he in effect contracts he will not within such time make a sale through another agent and if such be done, the owner has breached his exclusive agency contract. It is not always necessary to constitute a sale that a conveyance must be made or the title pass. The word sale has not a fixed and invariable meaning. It may be given a narrow or broad meaning depending upon the circumstances and what the parties reasonably intend.
Mattingly v. Bohn, 84 Ariz. 369, 371, 329 P.2d 1095, 1097 (1958) (emphasis added).
¶10 Mattingly makes clear that the parties' agreement is pivotal in resolving whether and when a commission is due under an exclusive listing agreement. See also J.D. Land Co. v. Killian, 158 Ariz. 210, 213, 762 P.2d 124, 127 (App. 1988) (). The Listing Agreement here is unambiguous. It states a commission is "due and payable at the closing, but only if the sale or exchange actually culminates in the transfer of an interest in the Real Property." (Emphasis added.). The parties' agreed-upon contractual language makes clear that Commerce has no claim to a commission unless and until there is a "transfer of an interest in the Real Property." As such, Appellants' claims did not arise until Zinke transferred its interest in the Property to the Town on March 4, 2009.
¶11 In urging a contrary conclusion, Appellants rely on Bersani v. Basset, 585 N.Y.S.2d 245, 246 (N.Y. App. Div. 1992), which stands for the unremarkable proposition that a real estate broker who renders "specific services, namely, bringing together the minds of the buyer and seller," is entitled to a commission when a sale later closes between those same parties, even though the broker's license has since expired. This holding is consistent with Arizona law. See, e.g., Barrett v. Duzan, 114 Ariz. 137, 140, 559 P.2d 693, 696 (App. 1976) (). Here, however, Appellants did not procure a buyer for the Property and have identified no services they rendered in connection with the Zinke-Town sale. Their commission claim does not arise from services they rendered but, instead, from the Listing Agreement's contractual terms regarding sales closing after November 5, 2008.2
¶12 Because Appellants' claims arose on March 4, 2009, Commerce may not maintain an action to recover a commission under the Listing Agreement because it did not have a designated broker at that time. See A.R.S. §§ 32-2125(A), -2152(A). The superior court properly entered summary judgment against Commerce. We next consider whether CRAmay maintain its claims to the commission based on the Assignment Agreement.3
¶13 For the first time on appeal, Zinke raises Commerce's licensing history as a basis for arguing the Assignment Agreement is invalid. "We do not consider arguments raised for the first time on appeal except under exceptional circumstances." In re MH 2008-002659, 224 Ariz. 25, 27, 226 P.3d 394, 396 (App. 2010). No exceptional circumstances exist here. We therefore confine our review to the argument Zinke advanced in its motion for summary judgment regarding the Assignment Agreement: that the assignment was "unlawful and void" because Zinke did not consent to it, as required by A.R.S. § 32-2151.02(B).
¶14 A.R.S. § 32-2151.02(B) states that a broker "shall not assign a real estate employment agreement to another broker without the express written consent of all parties to the agreement at the time of the assignment." If,...
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