Greenlee v. Rainbow Auction/Realty Co.

• Decision Date: 30 May 1996
• Docket Number: No. 95-1463,95-1463
• Citation: 553 N.W.2d 257,202 Wis.2d 653
• Parties: Wayne A. GREENLEE, Plaintiff-Appellant, d v. RAINBOW AUCTION/REALTY CO., INC., Defendant-Respondent. FARMERS & MERCHANTS BANK, Defendant-Third Party Plaintiff-Respondent, v. Jon SCHUSTER, Third Party Defendant.
• Court: Wisconsin Court of Appeals

Page 257

553 N.W.2d 257

202 Wis.2d 653

Wayne A. GREENLEE, Plaintiff-Appellant, ^d v. RAINBOW AUCTION/REALTY CO., INC., Defendant-Respondent.

FARMERS & MERCHANTS BANK, Defendant-Third Party Plaintiff-Respondent, v. Jon SCHUSTER, Third Party Defendant.

No. 95-1463.

Court of Appeals of Wisconsin.

Submitted on Briefs April 12, 1996.

Opinion Released May 30, 1996.

Opinion Filed May 30, 1996.

For the plaintiff-appellant the cause was submitted on the briefs of Matthew A. Biegert of Doar, Drill & Skow, S.C. of New Richmond.

For the defendant-respondent the cause was submitted on the brief of William P. Skemp of William Skemp Law Firm, S.C. of La Crosse.

For the defendant-third party plaintiff-respondent the cause was submitted on the brief of William T. Curran of Curran, Hollenbeck & Orton, S.C. of Mauston.

Before EICH, C.J., and SUNDBY and VERGERONT, JJ.

VERGERONT, Judge.

This appeal involves the interpretation of § 452.20, STATS., which prohibits a person from bringing or maintaining an action to collect a commission for acting as a broker without alleging and proving that he or she is a duly licensed broker. ¹ Wayne Greenlee sued Rainbow Auction/Realty Company, Inc. and Farmers & Merchants Bank (Farmers) seeking to recover a commission under a contract relating to the sale of a defunct truck stop in Oakdale, Wisconsin. After the jury returned a verdict for $100,000 in Greenlee's favor, the trial court granted Farmers' motion for judgment notwithstanding

the verdict. The court concluded that Greenlee was acting as a broker and, because of § 452.20, could not maintain an action for a commission. We reach the same conclusion and affirm.

BACKGROUND

The subject property is known as Stockmen's East, a defunct truck stop. Farmers & Merchants Bank acquired the property through a foreclosure. When Greenlee learned that Farmers had acquired Stockmen's East, he contacted one of Farmers' bank officers, Dave Myer. Greenlee had owned and operated truck stops in the Midwest but was not a licensed real estate broker. Greenlee learned from Myer that the bank was looking for a purchase price of $600,000 for Stockmen's East. Greenlee's first conversation with Myer was in May 1992. Greenlee's initial idea was that he and a partner would lease the property from Farmers with an option to purchase. They would then get the business started up again and sell it at a profit as a going concern, without holding onto the property for too long. Greenlee wanted to structure the deal this way because he knew that he could not get a commission for selling real estate without a license. Greenlee began contacting potential buyers, and eventually contacted the Ho-Chunk Nation as a potential buyer. He quoted a purchase price of $825,000 to the potential buyers. At some point Greenlee's plans changed. When he first met with Ho-Chunk Nation representatives on September 30, 1992, he did not say that he intended to buy the property himself and resell it as a going concern; instead, he said the property could be purchased for $825,000.

Greenlee explained to the Ho-Chunk representatives the advantages of the property's location and that it would make a good location for a casino. They expressed interest and kept calling Greenlee to visit them. Greenlee kept in touch with them. When the representatives asked to see the property, Myer gave Greenlee the keys to the property and Greenlee showed it on two occasions.

Sometime in the latter part of September, or perhaps after the September 30 meeting, Greenlee told Myer he had a potential buyer for the property, but would not divulge the name unless there was a written agreement to compensate him. Myer told Greenlee that the bank had entered into a commercial listing contract with Rainbow Auction/Realty Company, Inc., with Jon Schuster as the real estate broker with the exclusive right to sell the property. Myer told Greenlee that he would have to deal with Schuster. ²

Schuster and Greenlee met. Greenlee told Schuster he wanted $100,000 out of the sale of the property. When Schuster learned that Greenlee was not a licensed broker, Schuster told Greenlee that he could not pay him. After further discussion, Schuster drafted the contract that he, Greenlee and Farmers eventually signed. It was Schuster's idea that it would be lawful to divide the assets into real and personal property and pay Greenlee a commission on the personal property.

The contract provided in relevant part:

As per our conversation at the Holiday Inn Monday afternoon it is my understanding that we have come to an agreement that if you [Greenlee] provide a buyer for the property in Oakdale, Wi. [sic] known as Jermoos that your buyer would make an offer of no less than $800,000 and it is your belief that his offer will be in the range of $825,000, that these terms of fees and monies received by yourself, F & M Bank and Rainbow Auction Realty Co. would be as such.

A. The equipment and goodwill name would be sold for $200,000 of which you will receive 1/2 of such money.

B. The Real Estate will be sold by Rainbow Auction Realty Co. at a fee of 7% that amount will be either $600,000 or $625,000. The balance which would be assuming it would be sold at $825,000 It was mentioned by yourself, Mr. Greenlee, that your client may be selling bonds to secure monies to purchase and develop said property in Oakdale. It would be my recommendation on behalf of the F & M Bank to ask for a closing date of January 1993. I feel this is a reasonable amount of time. Failure to close by that time frame should your buyer be unable to secure their financing would result in forfeiture of their Earnest Money. With the monies going to the F & M Bank and Rainbow Auction Realty Co. as liquidated damages and for removing the property from the market.

would leave the F & M Bank a sum of $658,000.

We discussed the fact that you will be showing the property on Friday October 9. Mr. Myers advised you that a key is available for you to view the property and if after viewing it you would like to meet and start the necessary paperwork we can go from there.

After the contract was fully executed on October 21, 1992, Greenlee disclosed the name of the Ho-Chunk Nation and set up a meeting between Schuster and representatives of the Nation. The meeting took place on October 30, 1992. Greenlee was present at the meeting and introduced Schuster to the Nation representatives but did not otherwise participate in the meeting. After that meeting, Greenlee had no further involvement in the negotiations or sale of the property. In November 1992, the Nation delivered a purchase agreement to Farmers for the sum of $725,000. Rainbow and Farmers negotiated an agreement with the Nation that resulted in a March 1993 closing. A substantial sum was held in escrow pending pollution cleanup.

Greenlee filed suit when Rainbow and Farmers refused to pay him his commission under the contract. Rainbow and Farmers both raised in their answers an affirmative defense based on § 452.20, STATS. However, Rainbow's summary judgment motion did not refer to this defense, but instead was based on the defense that Greenlee did not perform as required under the contract. ³ The court denied the motion, concluding that there was a triable issue as to whether Farmers and Rainbow breached their duty of good faith in their dealings with Greenlee after the October 30 meeting between Schuster and the Nation, thereby preventing Greenlee from performing. The trial testimony focused on whether Greenlee performed as required under the contract, and if he did not, why he did not. ⁴

The verdict form submitted to the jury contained two questions: (1) did Rainbow and/or Farmers breach their contract with Greenlee? and (2) what sum of money will fairly and reasonably compensate Greenlee (if the jury answered "yes" to the first question)? The jury answered the first question "yes" and awarded damages of $100,000.

Although the verdict did not contain any questions concerning § 452.20, STATS., there was an instruction on the statute. The instruction stated that Greenlee was not a licensed real estate broker, partially paraphrased the text of § 452.20, and stated that damages could not be awarded to Greenlee relating to any sale of real estate and that the only issue on damages before the jury was damages suffered by Greenlee relating to the sale of personal property.

Farmers and Rainbow brought a number of post-verdict motions. One of Farmers' motions was for judgment notwithstanding the verdict on the ground, among others, that the contract was unenforceable because Greenlee, though not licensed as a broker, engaged in the sale of real estate. The trial court granted judgment notwithstanding the verdict on this ground and dismissed the complaint. ⁵

STANDARD OF REVIEW

We must first decide the proper standard for reviewing the trial court's decision, which depends on the nature of the decision. Greenlee argues that although Farmers labeled the pertinent motion a motion for judgment notwithstanding the verdict, and although the trial court treated it as such, that is incorrect. According to Greenlee, because the jury was instructed on § 452.20, STATS., the motion is really a motion to change the answer to the first question in the verdict on the grounds of insufficiency of the evidence to support that answer. The trial court erred in doing so, Greenlee contends, because there was credible evidence to support the jury's answer.

A motion for judgment notwithstanding the verdict concedes that the findings of the verdict are true but contends that the moving party should have judgment for reasons evident in the record other than those decided by the jury. Section 805.14(5)(b), STATS. In contrast, a motion to change an answer in the verdict challenges the sufficiency of the evidence to sustain the answer. Section 805.14(5)(c). A motion challenging the sufficiency of the evidence may not be granted unless the court...