Hal Taylor Associates v. Unionamerica, Inc.

• Decision Date: 14 December 1982
• Docket Number: No. 17359,17359
• Parties: HAL TAYLOR ASSOCIATES, a Utah corporation, Plaintiff and Appellant, v. UNIONAMERICA, INC., a corporation, aka Westmor; Ramshire, Inc., a corporation; William R. Stevenson; Park City Reservations, a corporation, dba Skyline Realty; Harry F. Reed; and Gary Cole, Defendants and Respondents.
• Court: Utah Supreme Court

Page 743

657 P.2d 743

HAL TAYLOR ASSOCIATES, a Utah corporation, Plaintiff and Appellant, v. UNIONAMERICA, INC., a corporation, aka Westmor; Ramshire Inc., a corporation; William R. Stevenson; Park City Reservations, a corporation, dba Skyline Realty; Harry F Reed; and Gary Cole, Defendants and Respondents.

No. 17359.

Supreme Court of Utah.

Dec. 14, 1982.

Kent B. Linebaugh, Salt Lake City, for plaintiff and appellant.

James A. Boevers, F.S. Prince, Jr., Stephen G. Crockett, Salt Lake City, for defendants and respondents.

DURHAM, Justice:

This case is an appeal by the plaintiff/appellant from a judgment by the Third District Court for Summit County following a trial to the court. The district court awarded to the plaintiff, Hal Taylor Associates (HTA), a real estate listing broker's commission of 6% on the sale of defendant Unionamerica's real property at the price of $1.6 million, and awarded 60% of that commission to defendant Park City Reservations (PCR) as the selling brokers in the transaction.

In 1977, HTA and Unionamerica settled a previous dispute with a Settlement Agreement dated February 17, 1977. This agreement specified that for the following five years, Unionamerica would enter into "exclusive listing agreements" with HTA for the sale of its Summit County properties, that HTA would perform the "usual real estate broker activities," and that HTA would receive a commission of 6%. The agreement then stated that: "Taylor will further agree to a fee-splitting arrangement giving 60% to the selling broker and 40% to the listing broker." The Agreement was signed by William R. Stevenson for Unionamerica and by Hal Taylor for HTA. Within hours, Unionamerica and HTA entered into a listing agreement for a 10.5 acre piece of property known as the "Village Land" in Park City. This form agreement made HTA the listing broker but did not mention the 6 0/40 split provided for in the Settlement Agreement. At that time, such a splitting of the broker's commission was the usual practice in Park City when the property was sold by a broker other than the listing broker. The Settlement Agreement was silent as to whether Unionamerica was obligated to refer all "walk-ins"--prospective buyers who voluntarily approach the owner--to HTA. In a pretrial order, the court specifically found that there was no express or implied agreement regarding "walk-ins" in the Settlement Agreement.

On October 3, 1977, Mr. and Mrs. Jack Davis traveled from California to Park City to see the Village property. They had heard of the property from one of Unionamerica's officers in California. Arrangements had been made through Unionamerica for Stevenson, a Unionamerica agent, to meet the Davises in Park City. Stevenson called HTA, but Taylor was out of town. Stevenson then called PCR and arranged to have its representatives meet with him and the Davises. The initial meeting and viewing of the property took place on October 4, 1977. On October 8, 1977, PCR notified HTA that they had shown the Village property to a prospective buyer without mentioning to HTA that the prospective buyer had been referred by Unionamerica. A week later, after the Davises had orally expressed a desire to buy the property, PCR asked for and received from Taylor an oral confirmation of the 6 0/40 split in the event of a sale.

On October 17, 1977, the PCR representatives went to California where they negotiated an Earnest Money Agreement which was signed by the buyer and Unionamerica on the same day. On October 19, 1977, this agreement was delivered to Taylor who then asked how PCR had found the buyer. The PCR representative told Taylor that Davis had been contacted while skiing in Park City. Taylor subsequently learned, however, that the Davises had been referred to PCR by Unionamerica. On October 24, 1977, Taylor notified PCR and Unionamerica that he felt HTA was entitled to the entire 6% commission because Unionamerica should have referred the buyer to HTA.

Later in the day on October 24, 1977, the parties and Mr. Davis met in the offices of Unionamerica's attorneys to sign a real estate agreement for the sale of the property. Paragraph 13 of the agreement provided:

13. Broker's Commission. The parties hereto agree that at the time of initial closing of this transaction, the entire broker's commission ... shall be due and payable by Seller, said commission being in the amount of $96,000. The parties determined that $57,600 of this commission shall be payable to [PCR], the selling broker, and $38,400 of this commission shall be payable to Hal Taylor & Associates, the listing broker. Should any dispute arise between the brokers, the entire commission shall be retained by an escrow agent in an interest bearing account until settlement or resolution of the matter by the brokers.

Apparently, there was heated discussion of this provision which resulted in conflicting testimony at trial. The defendants asserted that on behalf of HTA, Taylor orally agreed to paragraph 13; Taylor claimed that he agreed only to the sale of the property but that he specifically disagreed with paragraph 13. The trial court made no finding with regard to the existence of an agreement. In any event, Taylor left the meeting without signing the agreement.

At the time of the "initial closing" in May of 1978, Unionamerica placed the entire $96,000 commission in an interest bearing escrow account. Taylor and HTA filed suit on June 15, 1978. Until the defendants filed their answers, none of the parties ever contended that HTA was not entitled to at least 40% of the commission.

At trial, the plaintiffs argued that the Settlement Agreement between Unionamerica and HTA was orally modified so that Unionamerica was obligated to refer "walk-ins" to HTA; that regardless of any modification, Unionamerica had a fiduciary or good faith duty to do so; that PCR breached a duty to HTA by its concealment of Unionamerica's referral; that the defendants conspired in order to harm HTA; that for lack of capacity, PCR could not counterclaim for 60% of the commission because PCR had failed to file an assumed name certificate authorizing PCR to do business as Skyline Realty, under which name PCR had acted; and that Unionamerica had breached its agreements with HTA and acted unreasonably and in bad faith when it held the entire commission in escrow.

In its Findings of Fact and Conclusions of Law, the trial court found: that the Settlement and Listing Agreements between Unionamerica and HTA were not orally modified, nor did they contain any express or implied provision requiring Unionamerica to refer "walk-ins" to HTA; that there was no factual basis for finding any conspiracy, breach of a duty to act in good faith, breach of fiduciary duty, or any other tort against any party; that by waiting until almost the close of trial, HTA waived the defense of lack of capacity against PCR's counterclaim for 60% of the commission; and that Unionamerica acted reasonably by placing the entire commission in escrow. The judgment awarded the entire 6% commission to HTA, awarded 60% of that commission to PCR from HTA, and awarded no attorney's fees to any party.

The plaintiff and appellant, HTA, raises four points on appeal. First, HTA claims that the trial court erred in awarding a selling broker's commission to PCR because (a) there was insufficient evidence to establish that PCR was the "procuring cause" of the sale and (b) PCR's lack of capacity should have barred its claim. Second, even if PCR was entitled to 60% of the commission from HTA, HTA claims that it was entitled to compensatory damages from Unionamerica in an amount equal to that awarded to PCR because (a) Unionamerica breached a fiduciary duty to HTA, and (b) there was an implied agreement that Unionamerica would refer "walk-ins" to HTA. Third, HTA asserts that the trial court erred in failing to award punitive damages to HTA from each defendant. Finally, HTA contends that the trial court erred in failing to award to HTA attorney's fees against Unionamerica. We address these issues in the above order.

In its Findings of Fact, the trial court found that the defendant, PCR, "fully performed the obligations required of a selling broker under the fee splitting agreement ...." and therefore, PCR was entitled to 60% of the commission. It is HTA's contention that the property was actually sold to the buyer by the owners, Unionamerica, and that PCR did not perform acts sufficient to become the "procuring cause" of the sale. HTA quotes from Frederick May & Co. v. Dunn, 13 Utah 2d 40, 368 P.2d 266 (1962), which discusses the factors involved in "procuring cause." This Court said:

However, the extent to which the broker's efforts must induce the sale depends on the terms used in the contract and the understanding and intention of the parties in making such agreement and the facts and circumstances of the case.

Id. at 43, 368 P.2d at 269 (emphasis added). HTA places great emphasis on the necessity for the initial contact with the buyer, but it is clear from Frederick May & Co. v. Dunn, and other cases cited by PCR, that no single act will constitute procuring cause under all circumstances. In this case, the trial court heard the evidence regarding PCR's functions as a broker and found that PCR performed all the obligations of a selling broker. It is well established that this Court will presume findings of fact to be correct and will not overturn them so long as they are supported by substantial evidence in the record. See, e.g., Piacitelli v. Southern Utah State College, Utah, 636 P.2d 1063 (1981). The Court must view the evidence and all inferences that might reasonably be made from the evidence in a light most favorable to the judgment entered. See Id.; Nielsen v. Chin-Hsien Wang, Utah, 613 P.2d 512 (1980). The trial court heard ample evidence to support its finding: the record shows that PCR traveled to California, negotiated and drafted an earnest money...