Harkinson v. Trammell Crow Co. No. 60

• Decision Date: 25 August 1995
• Docket Number: No. 05-93-01504-CV,05-93-01504-CV
• Citation: 915 S.W.2d 28
• Parties: William Jefferson HARKINSON, et al., Appellants, v. TRAMMELL CROW COMPANY NO. 60, et al., Appellees.
• Court: Texas Court of Appeals

Page 28

915 S.W.2d 28

William Jefferson HARKINSON, et al., Appellants, v. TRAMMELL CROW COMPANY NO. 60, et al., Appellees.

No. 05-93-01504-CV.

Court of Appeals of Texas Dallas.

Aug. 25, 1995.

William Pannill, Pannill Moser & Barnes, L.L.P., Houston, Roy L. Barnes, Pannill Moser & Barnes, L.L.P., Houston, for appellants.

Edward P. Perrin, Jr., Crouch & Hallett, L.L.P., Dallas, Kim M. Meaders, Crouch & Hallett, L.L.P., Dallas, Dale McCollough, Trustee HPC Laboratories, Dallas, Dan E. Patterson, R. Best Associates, Inc., Dallas, Douglas C. Kittelson, Cooper, Glasgow, Kupchynsky & Kittelson, L.L.P., Dallas, for appellees.

Before KINKEADE, MORRIS and WHITHAM ¹, JJ.

OPINION

MORRIS, Justice.

This is a summary judgment case. We decide whether various tort and contract causes of action brought by a licensed real estate broker are barred by the Texas Real Estate License Act because the broker did not have a written commission agreement. We conclude that not all of the broker's causes of action are barred.

Asserting four points of error, William Jefferson Harkinson and Jeff Harkinson Investments, Inc. ("Harkinson") appeal the summary judgment rendered in favor of Trammell Crow Company No. 60, Petula Associates, Ltd., Trammell Crow Dallas Industrial, Inc., Richard Strader, Thomas A. Leiser, Principal Mutual Life Insurance Company, and Douglas D. Achtemeier (the "Crow Defendants") and Hunt Products Company, Inc., Patterson/McLaine Group, Inc., and Dan E. Patterson (the "Hunt Defendants"). Harkinson challenges the summary judgment because it is based upon the trial court's conclusion that all of Harkinson's causes of action are barred by section 20(b) of the Texas Real Estate License Act (RELA). For the reasons stated below, we conclude section 20(b) does not bar Harkinson's claims for tortious interference or conspiracy to interfere. But we also conclude section 20(b) does bar Harkinson's claims for fraud, breach of a written agency agreement, and breach of an agreement to "share" a commission. We further conclude that section 20(b) does not permit Harkinson to enforce an oral commission agreement even though he pleaded the doctrine of promissory estoppel. Accordingly, we affirm the trial court's judgment in part and reverse it in part.

FACTUAL BACKGROUND

The summary judgment evidence presented to the trial court revealed the parties were involved in a sizeable real estate transaction. ² More particularly, in the spring of 1991, Harkinson, a licensed real estate broker, entered into a written exclusive agency agreement with the Hunt Defendants. ³ Specifically, the agreement contemplated Harkinson would negotiate for lease space for Hunt Products Company. Hunt Products agreed to refer directly to Harkinson all inquiries or offers it received. Harkinson in turn agreed to look solely to the prospective landlord for his compensation and further agreed there would be no direct charge to Hunt Products for his services.

In September 1991, Harkinson initiated negotiations for lease space with the Crow Defendants on behalf of the Hunt Defendants. Richard Strader, a lawyer, was the leasing agent for a building on LaReunion Parkway in Dallas managed by Trammell Crow Dallas Industrial. In the process of negotiating with Strader, Harkinson gave Strader a copy of his exclusive agency agreement. Harkinson stated, both in his deposition and by affidavit, that Strader told him an outside broker who brought a tenant to the LaReunion building would receive a four and one-half percent commission and the building management company would receive a two and one-quarter percent commission. Harkinson further said that he agreed to accept a four and one-half percent commission and, as a result, Strader sent him a form commission agreement. The form agreement was entitled "Commission Agreement Between Owner and Jeff Harkinson." "Owner" was defined as Trammel Crow Company No. 60 and Petula Associates, Ltd.

Harkinson did not sign the commission agreement as sent. Instead, Harkinson revised the form to reflect what he claimed to be the oral agreement reached with Strader. The named parties to the agreement, however, remained the same. Harkinson signed the revised agreement and returned it to Strader. Harkinson stated he asked Strader on several occasions when the completely signed commission agreement would be returned to him. According to Harkinson, on each occasion Strader expressly told him there was no problem with the revised agreement and his supervisor, Thomas Leiser, would sign it and return it to him as soon as possible. Harkinson continued to work on the lease negotiations, conferring with Hunt Products, and submitting to Strader a written lease proposal.

In late October, Dan Patterson, president of Hunt Products, contacted Jim Massey, a former Trammell Crow broker. According to Patterson, he called Massey to explore with him whether Massey thought a reduction in the commission associated with the proposed lease would result in a reduced rental rate. Following his conversation with Patterson, Massey called Leiser at Trammell Crow Dallas Industrial to determine whether Hunt Products could obtain a lower rental rate for the proposed space if Harkinson's commission were less.

Strader said Leiser suggested that he call Patterson directly to discuss Harkinson's commission. He did so. Strader said that Patterson asked him whether a lower commission would result in a lower rental rate for Hunt Products. Strader answered, "Yes." Patterson also asked if the Crow Defendants had signed a commission agreement with Harkinson, and Strader replied they had not. In the conversation, Strader suggested to Patterson that he thought a $30,000 commission to Harkinson would be fair based on his estimate of the time Harkinson spent on the lease negotiations. A proposed lease agreement was drafted with a lower rental rate. The lower rental rate was based, in part, on savings associated with a reduced commission to Harkinson. According to Harkinson, he was unaware of the discussions leading up to the new proposal.

In early November, Harkinson received the new proposal. The accompanying letter signed by Strader stated the reduced rent resulted from lower construction costs and "other savings." Shortly after receiving the new proposal, Harkinson learned the "other savings" included a $30,000 commission to him instead of a commission calculated on four and one-half percent of the value of the lease. When Harkinson confronted the Hunt and Crow Defendants about the reduced commission, he was told bluntly that he should accept the lower amount because the Hunt Defendants intended to lease the building and the $30,000 was a take-it-or-leave-it proposition.

Later in November, Leiser sent Harkinson a written offer for a $30,000 commission. The letter stated the Crow Defendants had been advised by their attorneys that Harkinson was not entitled to any commission on the Hunt lease under the Texas Real Estate License Act. The letter further stated that if the $30,000 was unacceptable, the Crow Defendants would not continue their lease negotiations with Harkinson.

A few days later, Hunt Products signed a ten-year lease for the LaReunion building agreeing to pay over the term of the lease $7,700,000 in rent. Trammell Crow Dallas Industrial collected a six percent commission of $462,000. Strader personally received $103,950 as his part of this commission. The $30,000 offered to Harkinson represented less than ten percent of the amount he would have received if a four and one-half percent commission based upon the final lease had been paid to him.

Harkinson refused to accept the $30,000 commission. He filed suit alleging the following causes of action: breach of an oral commission agreement; fraud; tortious interference with his exclusive agency agreement; breach of his exclusive agency agreement; tortious interference with his oral agreement for a four and one-half percent commission; tortious interference with prospective business relations; fraud in a real estate transaction; civil conspiracy; and breach of the duty of good faith and fair dealing. Harkinson further sought a declaratory judgment that he had an enforceable commission agreement. The Crow Defendants filed a motion for summary judgment asserting that all causes of action filed against them were barred by section 20(b) of RELA or, in the alternative, that all causes of action asserted failed as a matter of law because the claims had no basis in fact. The Hunt Defendants moved for summary judgment solely on the ground that Harkinson's causes of action against them were barred by section 20(b) of RELA. The trial court signed a final summary judgment that Harkinson's claims against all defendants were barred as a matter of law. This appeal ensued.

DISCUSSION

In reviewing a trial court's summary judgment, we apply well known standards. See Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). The trial court granted summary judgment only on the asserted ground that Harkinson's claims were barred under section 20(b) of the Texas Real Estate License Act. Therefore, we review the summary judgment to determine whether the trial court erred in rendering summary judgment on that specific ground. See State Farm Fire & Casualty Co. v. S.S., 858 S.W.2d 374, 380 (Tex.1993).

In his first point of error, Harkinson contends the trial court erred in dismissing his causes of action for tortious interference and conspiracy because section 20(b) of RELA does not bar these claims. Both the Crow Defendants and the Hunt Defendants respond that section 20(b) bars all actions for the recovery of real estate commissions, including those sounding in tort, unless there is a signed agreement by the party to be charged. Section 20(b) states:

An action may not be brought in a court in this state for the recovery of a commission for the sale or purchase of real estate unless the promise or agreement on...