Follman Properties Co. v. John Henry Foster Co. of St. Louis, Inc.
| Decision Date | 25 January 1994 |
| Docket Number | No. 64032,64032 |
| Citation | 872 S.W.2d 499 |
| Parties | FOLLMAN PROPERTIES COMPANY, Plaintiff/Respondent, v. JOHN HENRY FOSTER COMPANY OF ST. LOUIS, INC., et al., Defendants/Appellants. |
| Court | Missouri Court of Appeals |
Peter T. Sadowski, Henry F. Luepke, St. Louis, for defendants-appellants.
Darold E. Crotzer, Jr., Clayton, for plaintiff-respondent.
Plaintiff brought suit against defendant 1 for the balance of its commission due under an exclusive agency agreement between them. Defendant counterclaimed for breach of contract, fraud, slander of title, and breach of fiduciary duty.
On cross motions for summary judgment, the trial court granted plaintiff judgment on: (1) plaintiff's petition for commission due, and (2) the breach of contract count of defendant's counterclaim. The trial court designated its rulings as a final judgment and determined that there was no just reason for delay. Defendant appeals; we affirm.
Defendant raises three points on appeal. It alleges the trial court erred in: (1) finding the agreement was not ambiguous as to who was to pay plaintiff's fee, (2) failing to find that the sale contract modified the agency agreement, and (3) failing to find that plaintiff was estopped from claiming an additional fee.
We review the record in the light most favorable to defendant, according it the benefit of all reasonable inferences from the record. It discloses the following. Defendant hired plaintiff as its agent in an attempt to locate a property for its business. On February 22, 1990, plaintiff sent a letter to defendant stating the terms of the agency. The letter provided, in part:
In the event we are successful in assisting you to acquire land and existing improvements, our fee will be six percent (6%) of the gross sales price; if land only, our fee will be ten percent (10%) of the gross sales price; ....
Defendant inserted an asterisk next to this paragraph and at the bottom of the page. Next to the asterisk at the bottom, he inserted and initialed the statement, "It is my understanding that in most cases the seller pays this fee." On June 5, 1990, defendant signed the brokerage letter and returned it to plaintiff.
In May 1991, plaintiff prepared and submitted a sale contract to defendant for certain improved property. This property was listed with another broker, the property seller's agent. Defendant and seller signed the sale contract about May 3, 1991. The sale contract provided that seller pay a six percent brokerage fee on the total sale price. This amount was to be divided between the two brokers; 55% to the seller's listing agent, and 45% to plaintiff. Pursuant to the sale contract, seller paid a total commission of $115,200. Of this amount, seller paid $63,360 to its listing agent and $51,840 to plaintiff.
Plaintiff claims defendant owes the balance of its commission under the exclusive agency agreement. It claims $63,360 based upon 6% of the total sale price of $1,920,000 ($115,200) less $51,840 paid by the seller under the sale contract.
In its first point, defendant alleges the trial court erred in finding that the exclusive agency agreement was not ambiguous as to who was to pay plaintiff's fee. It contends the trial court did not properly consider president's handwritten insertion. Further, it contends the exclusive agency agreement did not expressly state who was to pay plaintiff's fee.
The exclusive agency agreement was the only written agreement between the parties. It provided that in the event plaintiff was successful in assisting defendant in acquiring property, "our fee will be six percent ..., [and] our fee shall be a lien on the property for which we acted as your agent."
The arrangement for payment of the commission is expressed in passive terms. A similar situation arose in Douros Realty & Construction Co. v. Kelley Properties, Inc., 799 S.W.2d 179 (Mo.App.E.D.1990). There, we rejected the argument that the agreement did not specify who was to pay the commission. We pointed out that there were only two parties to the agreement. Similarly, there are only two parties to the agreement here. Defendant obligated itself to pay plaintiff's fee under this agreement.
The clause, "It is my understanding that in most cases the seller pays this fee," does not nullify the obligation defendant assumed to pay plaintiff when it signed the exclusive agency agreement. Nor does that clause make the agreement ambiguous. Whether a contract is ambiguous is a question of law. Young Dental Mfg. Co. v. Engineered Products, Inc., 838 S.W.2d 154, 155 (Mo.App.E.D.1992). Further, "A contract is ambiguous only if its terms are susceptible of more than one meaning so that reasonable [people] may fairly and honestly differ in their construction of the terms." Union Center Redev. Corp. v. Leslie, 733 S.W.2d 6, 9 (Mo.App.E.D.1987).
Here, the exclusive agency agreement is not ambiguous. Defendant clearly agreed to pay plaintiff a six percent fee for its services. The fact that defendant understood that "in most cases the seller pays this fee" does not diminish defendant's sole obligation to pay plaintiff.
If the parties had intended that defendant would not pay plaintiff's fee: (1) the agreement would have so stated, or (2) the agreement could have provided that plaintiff must look to seller or someone else for its fee. However, the agreement did neither. The handwritten notation did not limit or modify defendant's obligation to pay plaintiff's fee. See J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261, 266 (Mo.banc 1973).
Defendant principally relies on Laiben v. Department of Revenue, 572 S.W.2d 173 (Mo.banc 1978) and N.B. Harty General Contractors, Inc. v. West Plains Bridge & Grading Co., Inc., 598 S.W.2d 194 (Mo.App.S.D.1980) in support of its argument that the exclusive agency agreement is ambiguous. They are readily distinguishable.
Laiben involves the interpretations of a real estate lease. The question was whether the lease provided for an initial term of six or eighteen months. Paragraph three stated the initial term was "for a period of 6 months, beginning Jan. 1st 1973 and ending June 30, 1973." However, paragraph four stated the premises were demised "for the yearly term beginning July 1st, 1973 and ending June 30th, 1974." Laiben, 572 S.W.2d at 174.
In Laiben, the lease terms were obviously in direct conflict. However, this is not the case here. By signing the exclusive agency agreement, defendant clearly obligated itself to pay the six percent fee. The handwritten notation does not diminish defendant's obligation.
In Harty, an excavation contract was examined. There, on the face of the contract, was an ambiguity. The printed contract set forth a price for "Class C Excavation." Next to "Class C Excavation," defendant's president inserted in his handwriting: "(Drilling)." The contract between the parties made no other reference to "Class C Excavation."
The contract in Harty was uncertain as to how payment was to be determined. Evidence of the circumstances surrounding the agreement was admitted to give meaning to the terms Class C Excavation and drilling. Here, no such evidence is necessary because the exclusive agency agreement placed the duty to pay plaintiff's fee on defendant. Point denied.
For its second point, defendant alleges the trial court erred in failing to find that the terms of the sale contract did not modify the exclusive agency agreement. Defendant contends the sale contract "evidences a modification" of the agreement to the effect that seller, not defendant, shall pay plaintiff's entire fee.
In support of this contention, defendant points to two...
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Smith v. Taylor-Morley, Inc., TAYLOR-MORLE
...the record. ITT, 854 S.W.2d at 376. The issue of whether a contract is ambiguous is a question of law. Follman Properties Co. v. John Henry Foster Co., 872 S.W.2d 499, 501 (Mo.App.1994). To determine whether a contract is ambiguous, this Court considers the whole document and, absent any de......