Cumming v. Putnam Realty, Inc., CA 02-293.
| Decision Date | 18 December 2002 |
| Docket Number | No. CA 02-293.,CA 02-293. |
| Citation | 92 S.W.3d 698,80 Ark. App. 153 |
| Parties | Mike CUMMING, Mizan Rahman, and M & M Properties v. PUTNAM REALTY, INC. |
| Court | Arkansas Court of Appeals |
Eichenbaum, Liles & Heister, P.A., by: Christopher 0. Parker and Mitchell L. Berry, Little Rock, for appellants.
Wright, Lindsey & Jennings LLP, by: Justin T. Allen, Little Rock, for appellee.
This case arises from the trial court's grant of summary judgment to appellee, Putnam Realty, Inc., awarding it $28,317.50, plus prejudgment and postjudgment interest. It involves the construction of two contracts, a commission agreement between the parties and a lease agreement between appellants and Crown Communications. The dispute centers on the appropriate commission fee that appellants are obligated to pay appellee for negotiating the leasing arrangement between Crown Communications and appellants with respect to property owned by appellants. The property lease was for a 100-foot by 100-foot parcel of land to be used as a cellular-tower site. Appellants Mike Cumming and Mizan Rahman comprise the general partnership called M & M Properties, which is also an appellant in this case. James C. Hill, a licensed real estate agent for appellee, negotiated the deal between appellants and Crown Communications. Appellee and appellants both filed motions for summary judgment below. Appellee prevailed. Appellants raise two points of appeal: 1) "the trial court erred as a matter of law in its construction of the commission agreement," 2) "the court-awarded fee should be reversed if the substantive award is reversed and improperly includes fees generated before the litigation." Finding no error, we affirm the trial court's grant of summary judgment and award of fees.
Appellee's motion for summary judgment basically contended that appellants owed it a commission fee of $28,317.50. The asserted fee represented ten percent of the gross rentals during the initial term of the lease, which appellee contended was a period of twenty-five years. Appellee's motion for summary judgment was supported by three documents: 1) Jim Hill's affidavit, 2) the commission agreement between the parties, and 3) the lease agreement between Crown and appellants. Hill stated in his affidavit that he contacted appellants to determine if they were interested in leasing some of their property for a cellular tower. He stated that at the time he contacted them, he was aware that Crown Communications might be interested in such a lease and that he so informed appellants. He stated that appellants were interested and that they entered into a commission agreement with Putnam, providing that Putnam would act in their behalf to acquire Crown as a lessee. In exchange, appellants agreed to pay a commission for those services. The commission agreement was prepared by appellee and provides in pertinent part:
WHEREAS, Broker has presented to Lessor a proposed Lease Agreement pursuant to which the Lessor would lease to Crown Communications, as Lessee a site on the Property for the location of a freestanding cellular tower and related communications facility as more particularly set forth in the Lease Agreement attached hereto and made a part hereof as Exhibit "A" (the "Lease");
WHEREAS, Lessor has agreed to pay Broker a commission in consideration of Broker's efforts to obtain the Lease for the benefit of Lessor upon the terms and conditions set forth hereinafter;
NOW, THEREFORE, the parties hereto intending to be bound by these presents do hereby agree as follows:
Section 1. In consideration of the Broker's efforts to obtain the Lease and the benefits to inure thereunder to the Lessor, the Lessor hereby agrees to pay a commission to Broker equal to ten percent (10%) of the "Gross Rentals" due to Lessor pursuant to the terms of the Lease (the "Commission"). "Gross Rentals" for purposes hereof means the total of all rental payments and other consideration due to Lessor during the initial term of the Lease. The Commission shall be payable in full in cash or its equivalent on or before the date of execution of the Lease by the parties thereto, or at such date as shall be mutually agreeable to the parties hereto.
. . . .
Section 4. This Agreement shall constitute the entire agreement between the Lessor and the Broker with respect to the Commission and shall supersede any and all other prior agreements, whether written or oral, concerning the matters set forth hereinabove.
Jim Hill's affidavit stated in paragraph six that at the time the commission agreement was executed, he was in possession of a copy of Crown's standard lease agreement; that it was made available to appellants; and that it was attached as an exhibit to the agreement. He stated that he subsequently presented Crown with the option of leasing appellants' property and that they expressed the desire to do so. Hill stated that according to Crown's standard lease agreement, Crown is able to cancel a lease at any time by giving six months' notice. He testified that he attempted to negotiate a ten-year non-cancellation agreement with Crown, but was only able to secure a five-year non-cancellation agreement. He further testified that the twenty-five-year "Initial Term" contained in Crown's standard lease agreement was maintained in the final lease agreement between Crown and appellants. Finally, he explained that although the "Initial Term" of the lease between appellants and Crown had begun, appellants had failed to pay the commission that was due pursuant to the terms of the agreement.
The lease agreement that was executed between appellants and Crown contains the following pertinent provisions:
2. Lease Term. This Lease shall be for an initial term of twenty-five years, beginning on the date of Lessee's commencement of construction of the proposed wireless communications facility (the "Initial Term"). This Lease shall automatically be extended for three subsequent twenty-five year terms (the "Renewal Terms") unless Lessee terminates it pursuant to the provisions set forth herein. The Initial Term and any Renewal Terms shall be collectively referred to as the "Lease Term." Lessee shall pay to Lessor $700.00 upon the complete execution of this Lease. Lessee shall have six (6) months from the execution of this Lease to commence construction or obtain necessary zoning approvals and/or building permits. For an additional payment from Lessee to Lessor in the amount of $700.00, Lessor agrees to grant one (1) additional six (6) month period within which to commence construction or obtain necessary zoning approvals and/or building permits. Lessor will reasonably consider additional periods beyond the second six (6) month period in the event Lessee needs additional time to procure the necessary zoning approvals and/or building permits.
3. Rent. Upon commencement of the Initial Term, Lessee shall pay to Lessor $8,400.00 per year to be paid in equal monthly installments of $700.00 as rent for the Leased Premises (the "Rent"). After the first five years of the Initial Term, the Rent shall increase by fifteen percent over the Rent that was in effect during the previous five-year period. For every five-year period thereafter, the Rent shall be increased by fifteen percent over the previous five-year period.
4. Lessee's Right to Terminate. Except for Lessee's right to terminate this Lease arising from Lessor's breach of this Lease, once Lessee receives all Approvals and the wireless communications facility becomes operational, Lessee shall have no right to terminate this Lease during the first five (5) years of the Initial Term. Thereafter, Lessee shall have the unilateral right to terminate this Lease, at any time, by providing Lessor with six months prior written notice. Said termination shall be effective upon Lessee providing notice of termination to Lessor.
5. Effect of Termination by Lessee. Upon termination of this Lease by Lessee, this Lease shall become null and void and all of the parties shall have no further obligations except that any monies owed up to the date of termination shall be paid within thirty days of the termination date.
Appellants responded to appellee's motion for summary judgment...
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