Foxfield Realty, Inc. v. Kubala

• Decision Date: 09 April 1997
• Docket Number: No. 2-96-0836,2-96-0836
• Citation: 678 N.E.2d 1060,223 Ill.Dec. 52,287 Ill.App.3d 519
• Parties: , 223 Ill.Dec. 52 FOXFIELD REALTY, INC., Plaintiff-Appellant, v. Theodore KUBALA et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 1060

678 N.E.2d 1060

287 Ill.App.3d 519, 223 Ill.Dec. 52

FOXFIELD REALTY, INC., Plaintiff-Appellant, v. Theodore KUBALA et al., Defendants-Appellees.

No. 2-96-0836.

Appellate Court of Illinois Second District.

April 9, 1997.

Stephen Sullivan, Batavia, for Foxfield Realty, Inc.

Walter H. Hamilton Jr., Geneva, for Barbara E. Kubala and Theodore Kubala.

Presiding Justice GEIGER delivered the opinion of the court:

The plaintiff, Foxfield Realty, Inc., a real estate broker, appeals from the circuit court's order of May 6, 1996, dismissing with prejudice (see 735 ILCS 5/2-615 (West 1994)) the plaintiff's unverified complaint seeking the award of a real estate sales commission allegedly owed by the defendants, Theodore and Barbara E. Kubala, pursuant to an exclusive right-to-sell agreement. Following the denial of its motion to reconsider, the plaintiff timely appeals. We affirm.

The plaintiff contends that the court's dismissal of the cause of action and the denial of the motion to reconsider were erroneous where the plaintiff's exclusive right-to-sell agreement with the defendants (sellers) provided that the seller agreed to pay the listing broker a commission of 6% of the full selling price, including encumbrances, "if any sale or exchange is made by [the] BROKER, by the SELLER or by anyone else" during the exclusive listing period.

Initially, we note that there is no report of proceedings for the hearing at which the order of dismissal was entered, but there is one for the hearing on the motion to reconsider. The complaint alleged that the defendants were the owners of real property located in St. Charles, Illinois. On July 14, 1994, the plaintiff and the defendants entered into a written listing agreement. The defendants signed the agreement as "SELLER." The defendants appointed the plaintiff as their agent with the exclusive right to sell the property at the list price of $237,500 or such lesser amount as the sellers agreed to accept. The agreement was made in consideration for, among other things, the plaintiff's efforts to procure a purchaser for the property.

Under the agreement, the sellers had the usual obligations to provide a current survey and a title policy as evidence of merchantable title and to refer all inquiries made to the seller to the listing broker. The commission was due for covered transactions during the exclusive period or if it were sold or exchanged within 60 days after the termination of the agreement (unless the property were listed with another broker) to any "PURCHASER" to whom it was offered or shown during the term of the agreement. The exclusive period was from August 5, 1994, through February 5, 1995.

The complaint alleged that the plaintiff advertised the property and showed it to prospective purchasers. It stated that the plaintiff learned that Barbara conveyed her interest in the property to Theodore by (quitclaim) deed, dated December 20, 1994, in exchange for consideration in the form of property and an allocation of debt as the result of a marital settlement agreement and pursuant to a judgment of dissolution of the defendants' marriage. The plaintiff therefore concluded that the defendants became obligated to pay a 6% commission on the $237,500 list price.

Theodore moved to dismiss the complaint for the failure to state a cause of action. The motion stated that Theodore and Barbara owned the property as joint tenants at the time of the agreement and that on December 6, 1994, the court entered an agreed order dividing the property in accordance with a prior order presumably entered in the dissolution proceeding. The December 6 order appears to be in response to Theodore's motion to compel the enforcement of a prior judgment and orders, inter alia, Theodore to pay Barbara $103,000 in satisfaction of certain credit card debts, the purchase of three life insurance policies, Barbara's interest in the marital property, and an award of $33,265 due according to the prior judgment.

Appended to Theodore's motion was a copy of a quitclaim deed dated December 20, 1994, and signed by Barbara; also appended were copies of two checks dated December 19, 1994, totalling $103,000 and a receipt signed by Barbara. Theodore asserted that the transaction was a division of marital assets pursuant to a court order and not a "sale." Citing a Colorado case, Cooley Investment Co. v. Jones, 780 P.2d 29 (Colo.App.1989), because of the lack of Illinois precedent, Theodore also argued that there was merely a change in the form of ownership and not a transfer to another entity; thus, there was no sale and no right of the plaintiff to a commission. Barbara filed a separate motion to dismiss also arguing that there was no sale entitling the plaintiff to a commission.

An appeal from the dismissal of a complaint for the failure to state a cause of action preserves for review only the question of the legal sufficiency of the complaint. Payne v. Mill Race Inn, 152 Ill.App.3d 269, 273, 105 Ill.Dec. 324, 504 N.E.2d 193 (1987). In considering a motion to dismiss, all well-pleaded facts are taken as true along with all reasonable inferences favorable to the nonmoving party. Payne, 152 Ill.App.3d at 273, 105 Ill.Dec. 324, 504 N.E.2d 193. However, a motion to dismiss does not admit conclusions of law or of fact that are not supported by allegations of specific facts which form the basis for such conclusions. Payne, 152 Ill.App.3d at 273, 105 Ill.Dec. 324, 504 N.E.2d 193. Exhibits attached to the pleadings are considered part of the pleadings, and allegations in the pleadings that conflict with facts disclosed in the exhibits are not admitted as true; rather, the exhibits control. Evers v. Edward Hospital Ass'n, 247 Ill.App.3d 717, 724, 187 Ill.Dec. 490, 617 N.E.2d 1211 (1993). The granting of a motion to dismiss a complaint is within the discretion of the trial court. Evers, 247 Ill.App.3d at 724, 187 Ill.Dec. 490, 617 N.E.2d 1211.

A claim should not be dismissed on the pleadings unless it clearly appears that no set of facts can be proved under the pleadings which will entitle a party to recover. F.H. Prince & Co. v. Towers Financial Corp., 275 Ill.App.3d 792, 797, 211 Ill.Dec. 950, 656 N.E.2d 142 (1995). Whether a complaint states a cause of action based on the interpretation of a contract may be the subject of a motion to dismiss where the question presented is a matter of law. See, e.g., Evers, 247 Ill.App.3d 717, 187 Ill.Dec. 490, 617 N.E.2d 1211; Chicago Investment Corp. v. Dolins, 93 Ill.App.3d 971, 974, 49 Ill.Dec. 415, 418 N.E.2d 59 (1981); see also Camp v. Hollis, 332 Ill.App. 60, 74 N.E.2d 31 (1947).

The trial judge, who was the same in both the dissolution proceeding and the contract action, was in a position to take judicial notice of the facts in the dissolution proceeding. We do not have the benefit of a complete record from either proceeding. At the hearing on the motion to reconsider, the trial judge noted that both owners of the property signed the listing agreement. He concluded that a cause of action was not properly pleaded as no commission was triggered under the agreement where one signatory merely transferred her interest to the other. We agree with this result.

The question presented is whether the trial court properly construed the exclusive sales agreement to mean that Barbara's quitclaim of her interest in the property, pursuant to a judgment in the marriage dissolution proceeding which ordered a division of the defendants' assets, did not obligate the defendants to pay a commission to the plaintiff. The facts are essentially undisputed. Since the real dispute centers on the interpretation of the contract, the legal effect and interpretation of the contract are questions of law. See Kennedy, Ryan, Monigal & Associates, Inc. v. Watkins, 242 Ill.App.3d 289, 295, 182 Ill.Dec. 391, 609 N.E.2d 925 (1993).

In an exclusive sales agreement (as opposed to an exclusive agency agreement), the broker may become entitled to a commission if the property is sold by anyone during the life of the agreement. Kennedy, 242 Ill.App.3d at 294, 182 Ill.Dec. 391, 609 N.E.2d 925. However, in determining whether there was a sale that triggered a commission, the court must ascertain the intent of the parties as evidenced in the contract as a whole, and not merely by reference to particular words or isolated phrases. Kennedy, 242 Ill.App.3d at 295, 182 Ill.Dec. 391, 609 N.E.2d 925. In determining the parties' intent, the court simply looks to the contract as ultimately executed; when the contract terms are clear and unambiguous, they must be given their ordinary and natural meaning and no parol evidence may be considered to vary the meaning of the terms; whether an ambiguity exists is itself a question of law for the court. Hammel v. Ruby, 139 Ill.App.3d 241, 247, 93 Ill.Dec. 742, 487 N.E.2d 409 (1985).

Although the term "sale" has no fixed or invariable meaning, it is to be interpreted in accordance with the manifest intention of the parties. Felbinger & Co. v. Traiforos, 76 Ill.App.3d 725, 732, 31 Ill.Dec. 906, 394 N.E.2d 1283 (1979). We find that the language of the contract is not ambiguous and must be given its ordinary and natural meaning within the context of the contract. See Hammel, 139 Ill.App.3d at 247, 93 Ill.Dec. 742, 487 N.E.2d 409. The plaintiff maintained in the trial court that the contract is unambiguous, but nevertheless urges that its construction of the term "sale" controls. It is not what...