Foster and Gridley v. Winner

• Decision Date: 02 August 1999
• Docket Number: No. 98-489.,98-489.
• Citation: 740 A.2d 1283
• Parties: FOSTER AND GRIDLEY, d/b/a Remax Champlain Valley Properties and MCM Group, Inc. v. Irene H. WINNER.
• Court: Vermont Supreme Court

740 A.2d 1283

FOSTER AND GRIDLEY, d/b/a Remax Champlain Valley Properties and MCM Group, Inc. v. Irene H. WINNER.

No. 98-489.

Supreme Court of Vermont.

August 2, 1999.

Present AMESTOY, C.J., and DOOLEY, MORSE, JOHNSON and SKOGLUND.

ENTRY ORDER

Defendant Irene Winner appeals adverse summary judgment decisions in a suit by plaintiff brokers to recover real estate commissions. Defendant contends the Addison Superior Court erred in: (1) granting plaintiff MCM Group, Inc.'s (Century 21) motion for summary judgment on Century 21's claim for breach of contract and attorney's fees and, (2) granting both Century 21 and Foster and Gridley Inc.'s (Remax) motion for summary judgment on defendant's fiduciary breach and tortious interference counterclaims. We affirm.

This matter arises out of a 1997 real estate transaction. In September 1996, defendant entered into an "Exclusive Right to Market Property" agreement (listing agreement) with Century 21. The listing agreement concerned real property in Cornwall and provided that Century 21 was to receive the exclusive right to act as defendant's real estate agent for the listing, marketing and sale of the property for a one year term. The listing price for the property was $250,000, and Century 21's commission under the agreement was six percent if, during the term of the agreement, "the Property is sold or Owner enters into an agreement for the sale of the Property and all closing contingencies to be performed by purchaser under such agreement are satisfied in accordance with the terms thereof." In February 1997, Brian and Theresa Marohnic (the buyers), through their agent Remax, offered to purchase the Cornwall property for $255,000, $5,000 above the asking price. Defendant accepted the offer and on March 1, 1997, entered into a purchase and sale contract with the buyers. The contract included an addendum indicating that the transaction was to be financed by the seller and was "subject to a seller's credit check of the buyer." In March and April 1997, in response to defendant's request for credit information, Remax provided defendant with buyers' 1994, 1995 and 1996 federal income tax returns, a statement of the buyers' available cash, and a statement of the buyers' income, expenses and assets. Another addendum was executed by defendant on April 29 to confirm that the purchase and sale agreement included a commercial property, as well as a residential property. The buyers executed the addendum on May 9, the day of the closing. Although the sale closed, defendant did not pay a commission to Century 21.

Century 21 and Remax brought suit against defendant for breach of contract and quantum meruit. Defendant counterclaimed against both plaintiffs for breach of fiduciary duty and tortious interference with a contract. Thereafter, Century 21 and Remax filed motions for summary judgment on their breach of contract claims and on defendant's counterclaims. Defendant filed a motion to dismiss Remax's complaint and a motion for summary judgment of Remax's claim for attorney's fees. Defendant appeals the summary judgment decisions decided against her. She does not appeal the denial of her motion to dismiss Remax's claim for quantum meruit, and we do not address it.

Century 21's motion for summary judgment

We examine first defendant's appeal of the court's decision granting Century 21 summary judgment on its claim for breach of contract and attorney's fees and on defendant's counterclaims. Defendant argues that Century 21 is not entitled to the commission because the sale was not consummated on the terms in the original purchase and sale agreement, but rather, required the intervention of her son and her attorney to ensure the inclusion of two addenda to address alternative financing arrangements and the sale of the commercial property. Defendant contends Century 21 failed to effectively structure the purchase and sale agreement and to inform defendant of critical financial information.

Summary judgment should be granted where, giving the nonmoving party the benefit of all reasonable doubts and inferences, there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. See, e.g., Baldwin v. Upper Valley Servs., Inc., 162 Vt. 51, 55, 644 A.2d 316, 318 (1994). Here, two critical facts are undisputed. First, in September 1996, defendant entered into the listing agreement with Century 21. The listing agreement provided that Century 21 would have the exclusive right to market defendant's property for one year and if the property sold due to Century 21's efforts, it would receive a six percent commission. Second, on May 9, 1997, the property sold. Defendant argues, however, that the fact the property sold does not, as a matter of law, establish that Century 21 procured the sale. To be deemed the procuring cause of a real estate transaction, there must be a binding purchase and sale agreement between buyer and seller and the broker must "`dominate the transaction and amount to something more than an incidental or contributing influence.'" Kelly v. Beaudoin, 131 Vt. 27, 32, 298 A.2d 831, 834 (1972) (quoting M.E. Walbridge Agency, Inc. v. Rutland Hosp., 123 Vt. 149, 154-55, 186 A.2d 179, 183 (1962)).

The purchase and sale agreement on which defendant and the buyers closed states that "[s]eller and purchaser agree that [Century 21] as listed agency of Seller and Remax ... brought about this sale" and defendant's statement of disputed facts fails to generate any genuine issue on that point. That defendant's son consulted with defendant's lawyer to prepare addenda addressing financing and the inclusion of the commercial property does not diminish the fact that Century 21 was defendant's exclusive sales agent and that, through its representation, buyers and defendant came together to negotiate on the sale and purchase of defendant's property.

Moreover, despite defendant's awareness of the buyers' financial status prior to the closing, defendant agreed to make alternative financing arrangements so that the transaction could occur. Defendant's participation in and agreement to arranging alternative financing does not generate an issue of material fact on the question of Century 21's responsibility for procuring a ready, willing and able buyer to purchase the property. Although defendant's willingness to finance the sale clearly sustained negotiations between defendant and buyers, that flexibility in structuring the transaction was not the procuring cause of the sale. Century 21 brought to defendant a buyer who, when the standard bank financing was no longer an option, was ready, able and willing to arrange financing with defendant in order to consummate the transaction. Defendant could have terminated her dealings with the buyers at any point prior to the closing but did not. The uncontroverted evidence indicates that Century 21 was the procuring cause of the transaction and that, in refusing to pay Century 21 a six percent commission, defendant breached the listing agreement contract. See Myers v. Ambassador Ins. Co., 146 Vt. 552, 557, 508 A.2d 689, 692 (1986) (when uncontroverted evidence leads to one conclusion, typically factual issues become questions of law).

Nor do defendant's counterclaims survive Century 21's motion for summary judgment. Defendant alleged Century 21 breached its fiduciary duty by failing to disclose to defendant that the buyers had been denied financing and by failing to ensure a closing on the commercial property as well as the residence. A broker's obligations as a fiduciary include the duty to "disclose all matters that are material to, and might affect, the principal's actions." Quechee Lakes Rental Corp. v. Boggess, 158 Vt. 258, 262, 608 A.2d 39,...