Gergen v. Bartzat, 78-1048

Decision Date27 May 1980
Docket NumberNo. 78-1048,78-1048
Citation46 Or.App. 347,611 P.2d 352
PartiesFerris GERGEN and Patricia Gergen, Respondents-Cross-Appellants, v. Albert M. BARTZAT, aka Bartzat Leasing Co., Inc., Appellant. ; CA 15331.
CourtOregon Court of Appeals

Steve P. Chez, Eugene, argued the cause and filed the briefs for appellant.

E. Scott Lawlor, Eugene, argued the cause for respondents-cross-appellants. With him on the briefs was McCoy & Lawlor, Eugene.

Before RICHARDSON, P. J., THORNTON and BUTTLER, JJ., and HOWELL, J. pro tem.

BUTTLER, Judge.

Defendant appeals from a judgment in favor of plaintiffs in an action for money had and received after plaintiffs' demurrer to defendant's affirmative defense and counterclaim was sustained by the trial court. Plaintiffs cross-appeal, contending that the striking of their claim for punitive damages was error.

Because the only issue raised by defendant's appeal arises on demurrer, we only know what is set forth in the pleadings, which are not very informative. The parties agree, however, that the issue is whether, on its face, the contract, entered into in 1971, relied upon by defendant in his affirmative defense and counterclaim is a brokerage contract. 1 By virtue of that contract, defendant alleged he did not owe plaintiffs any money and that they owed him money. The trial court concluded that it was a brokerage contract and, because defendant had not alleged that he was a licensed real estate broker, the contract was void. Accordingly, plaintiff's demurrer was sustained.

The relevant statutes in effect at the time of the transaction 2 prohibited any person from engaging in the business of a real estate broker unless licensed to do so. Former ORS 696.020. That term was defined in former ORS 696.010:

" * * *

"(8) 'Real estate broker' means any person who, for another and for compensation or with the intention or in the expectation or upon the promise of receiving or collecting compensation:

"(a) Sells, exchanges, purchases, rents or leases real estate.

" * * *

"(9) 'Real estate broker' also means any person employed by or on behalf of the owner of real estate at a stated salary or upon a commission or upon a salary and commission basis or other compensation to sell, exchange or offer for sale such real estate, or any part thereof, and who shall sell or exchange, or offer or attempt or agree to negotiate the sale or exchange of any lot or parcel of real estate.

Contracts for compensation made in contravention of the laws governing real estate brokers are void. Hunter v. Cunning, 176 Or. 250, 154 P.2d 562, 157 P.2d 510 (1944); Jolma v. Steinbock, 40 Or.App. 657, 596 P.2d 980, rev. den. 287 Or. 409 (1979). Therefore, if the contract at issue is a brokerage contract it is void because defendant was not licensed as a broker or salesman.

Defendant argues that he had an interest in the property and, therefore, he was not acting "for another" in handling the property. Devereaux v. Cockerline, 179 Or. 229, 170 P.2d 727 (1946), distinguished between a brokerage contract and a partnership agreement in which the acting party has an interest in the property. The court there, relying on Flower v. Barnekoff, 20 Or. 132, 25 P. 370, 11 LRA 149 (1890), determined that an agreement to share losses as well as profits was essential to create a partnership. The court also pointed out that if the only consideration for the agreement was the rendition of services, the arrangement is not a partnership.

The contract here provides that plaintiffs agree to sell their house to defendant and that defendant, in turn, agreed to assume the mortgage on the house, and to be liable for any taxes or liens on the property. Defendant further agreed to put the house on the market 180 days from the date of the agreement to sell at "a reasonable market price," and to divide equally with plaintiff any profits over and above the mortgage as of the date of the agreement. Expenses were to be shared equally by the parties; the division of profits was to be made only "after all commissions, interest, pro-rated taxes, insurance, maintenance, etc., have been paid and deducted." It is apparent that the expenses could have exceeded the "profit" made on the sale of the house, in which case defendant would share in the losses of the venture.

Not only is the foregoing true, but the agreement does not provide that defendant will sell the house, but only that he would put it on the market; any commission paid was to be deducted before the profit was determined. It appears that the agreement contemplated that someone other than defendant would perform the services of a broker in connection with the sale. Therefore, from the face of the agreement we cannot say that it was a brokerage agreement in violation of ORS 696.020. 3 Plaintiffs' demurrer to defendant's counterclaim should have been overruled.

On cross-appeal plaintiffs contend that their claim for punitive damages should not have been stricken by the trial court. We find no error. Although the Supreme Court has held that punitive damages may be recovered in an action for money had and received, Adams v. Crater Well Drilling, Inc., 276 Or. 789, 556 P.2d 679 (1976), here there is not a sufficient allegation to warrant recovery of punitive damages. There is no allegation of malice or fraud on...

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1 cases
  • Davis v. Tyee Industries, Inc.
    • United States
    • Oregon Court of Appeals
    • 5 Octubre 1982
    ...An allegation of willful, wanton and malicious conduct is sufficient to support a claim for punitive damages. See Gergen v. Bartzat, 46 Or.App. 347, 352, 611 P.2d 352 (1980). Defendants contend that this case should be decided under Washington law, which does not allow punitive damages in a......

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