Hilton Head Island Realty, Inc. v. Skull Creek Club, 0625
| Decision Date | 12 November 1985 |
| Docket Number | No. 0625,0625 |
| Citation | 339 S.E.2d 890,287 S.C. 530 |
| Court | South Carolina Court of Appeals |
| Parties | HILTON HEAD ISLAND REALTY, INC., Respondent, v. The SKULL CREEK CLUB and Resort Investment and Development Corporation, the general partner of the Skull Creek Club, a South Carolina limited partnership, Appellants. . Heard |
William L. Pope and Robert C. Kelly, of Robinson, McFadden, Moore, Pope, Williams, Taylor & Brailsford, for appellants.
G. Richardson Wieters and John W. Minor, Jr., of Hughes & Wieters, P.A., Hilton Head Island, for respondent.
This appeal arises out of a dispute concerning whether Hilton Head Island Realty, Inc., is entitled to a brokerage commission as a result of the sale of certain property on Hilton Head Island owned by The Skull Creek Club, a limited partnership, which conducted business through its general partner, Resort Investment and Development Corporation. In an action tried before a jury on theories of implied contract and unjust enrichment, Hilton Head Island Realty obtained a general verdict in the amount of $40,000. Skull Creek and Resort Investment appeal. The issues on appeal relate to the sufficiency of the evidence as to implied contract, a defense based on a South Carolina Real Estate Commission regulation, and the admissibility of certain evidence challenged as being irrelevant. We affirm.
Skull Creek contends the trial court erred in refusing to grant its motions for directed verdict and judgment notwithstanding the verdict. It claims the evidence raises no reasonable inference of an implied contract between the parties requiring Skull Creek to pay Hilton Head Island Realty a commission for procuring a purchaser of Skull Creek's property. We disagree.
In ruling on motions for directed verdict and judgment notwithstanding the verdict, a trial court must view the evidence and the inferences that reasonably can be drawn therefrom in the light most favorable to the party resisting the motions and must deny the motions if either the evidence yields more than one inference or its inferences are in doubt. Vacation Time of Hilton Head Island, Inc. v. Lighthouse Realty, Inc., 286 S.C. 261, 332 S.E.2d 781 (Ct.App.1985). If there is any evidence to sustain the factual findings implicit in the jury's verdict, the appellate court will affirm. Buzhardt v. Cromer, 272 S.C. 159, 249 S.E.2d 898 (1978); Vacation Time of Hilton Head Island, Inc. v. Lighthouse Realty, Inc., supra. We therefore examine the evidence in accordance with these principles realizing that Hilton Head Island Realty, and not Skull Creek, is entitled to all favorable inferences where the evidence is conflicting.
In May, 1981, Skull Creek purchased eleven acres of waterfront property on Hilton Head Island on which it had held options. During the next four months, Skull Creek simultaneously took steps to develop the property and entertained offers from others to purchase it.
About the time Skull Creek acquired the eleven acres, Jack Maloney, a vice-president of Resort Investment, expressed misgivings about Skull Creek developing the property to Pete Norris, a real estate agent employed by Hilton Head Island Realty. Maloney indicated to Norris that he would like him "to try to sell [the property] before [Skull Creek] actually went into the development of it."
Afterward and as a result of his conversation with Jack Maloney, Norris contacted several clients and generated some interest in the eleven-acre tract. Hilton Head Company, a subsidiary of Marathon Oil Company and the parent company of Hilton Head Island Realty, expressed interest in purchasing the property.
On June 10, 1981, Norris and David Strong, director of Hilton Head Island Realty's commercial division, attended a meeting at which Mike Mahon, consultant for Skull Creek and its assistant secretary, explained models and scale drawings of Skull Creek's plans for the development of the property.
Hilton Head Island Realty hosted a meeting three days later attended by, among others, Norris, Strong, Al Jones, president of Hilton Head Island Realty, Mike Maloney, president of Resort Investment, and William Bowen, Skull Creek's attorney. At this meeting, Mike Maloney further explained Skull Creek's plans for the eleven acres and discussed the possibility of selling it.
Sometime after the second meeting, Strong telephoned Mike Maloney in reference to the Skull Creek property. Strong advised him that Hilton Head Island Realty expected a ten percent commission from Skull Creek should either its parent company, Hilton Head Company, or any other party it represented purchase the property. Mike Maloney responded, "[O]kay, fine."
Strong's telephone call to Mike Maloney, however, was followed on June 26, 1981, by a letter to Strong from William Smoot, Bowen's law partner. Smoot's letter, addressed to Strong at Hilton Head Company, informed him that Mike Maloney was willing to negotiate "with the Company" over the sale of the property and that the relationship "between himself and the Company remain[ed] on a principal to principal basis." The letter also advised Strong that Mike Maloney did not want the property "shopped to other potential purchasers."
Strong showed Smoot's letter to Norris. Norris in turn discussed the letter with Mahon. Mike Maloney had earlier suggested Norris discuss all matters concerning the sale of the property, other than legal matters, with Mahon because the latter, a resident of South Carolina, unlike Mike Maloney, a resident of Washington, D.C., was more accessible to Norris. Mahon told Norris to keep the information about the availability of the property "in closer confidence and [to] go ahead and deal with the people [Norris] had already made contact with." He admonished Norris, however, "to register those people."
Norris subsequently registered five clients with Skull Creek. He registered four on July 25, 1981, including Atlantic Development Corporation, and one on August 11, 1981.
Jack Maloney, in the meanwhile, provided Norris with plats, site plans, and models relating to Skull Creek's proposed development of the eleven-acre tract. Norris used these items when presenting the property to prospective purchasers.
One week after Norris first registered clients of Hilton Head Island Realty with Skull Creek, Mike Maloney wrote to Smoot and to two of his other attorneys advising them of several "prospective purchasers" of the eleven-acre tract. His letter mentioned, among others, "the Marathon Group," represented by its subsidiary Hilton Head Island Realty, and Atlantic Development Corporation.
In his letter, Mike Maloney recognized that Hilton Head Island Realty was "looking at the Property ... for both the account of its parent and that of other clients," one of them being Atlantic Development Corporation. He stated that his only information regarding Atlantic Development Corporation came from Norris' registration letter and that he anticipated contacting Norris soon to learn more about its interest.
The client registered by Hilton Head Island Realty on August 11, 1981, Robert M. Hancock of Raintree Investments, first learned about the availability of the Skull Creek property in June from Ron Harley, another Hilton Head Island Realty agent.
Hancock made several trips to Hilton Head Island in late July and early August to view the Skull Creek property. On one of his visits, he met Norris and discussed several aspects of the property with him.
On the same day Norris registered Hancock as a client, he hand-delivered a letter from Hancock to Smoot. The letter contained an offer from Hancock to buy Skull Creek's property.
When Norris delivered Hancock's letter, Smoot remarked, "I suppose that you would certainly want a commission on the sale of the land." Norris agreed.
Smoot then asked Norris how much he thought Skull Creek should pay. Norris replied, "[T]he standard is ten percent for commercial."
Harley thereafter met with Smoot and Mahon to discuss Hancock's offer. At this meeting, they indicated to Harley that Skull Creek was not interested in paying a "substantial" commission to Hilton Head Island Realty because Skull Creek was negotiating with other prospects itself.
After some discussion, Skull Creek allowed Hilton Head Island Realty to formulate a counteroffer. The counteroffer included an amount added to the sum Skull Creek wanted for its property. The added amount represented Hilton Head Island Realty's commission.
Harley then transmitted a counteroffer to Hancock. The counteroffer embraced an added amount for a commission.
Negotiating sessions between Hancock and Skull Creek representatives soon commenced. One session, which Strong attended, involved a discussion concerning the payment of a commission to Hilton Head Island Realty. Hancock offered to pay the latter a three percent commission. At one point during the negotiations, Skull Creek offered to pay a two percent commission.
At the closing, Hancock paid Hilton Head Island Realty a commission equal to three percent of the purchase price of the property it acquired from Skull Creek. Skull Creek never paid Hilton Head Island Realty anything despite its demands for a commission.
To establish the right to recover a commission from a principal for services rendered in procuring a purchaser of property, the broker must establish that a contract for the payment of a commission existed between himself and the principal at the time the services were performed. 12 C.J.S. Brokers § 118 at 334-38 (1980). The contract can be either express or implied. 12 Am.Jur.2d Brokers § 158 at 896 (1964); 12 C.J.S. Brokers § 119 at 339 (1980). But before an implied contract can arise, the principal must either do or say something tending to prove he accepted the broker as his agent in the matter and the principal must either know or have reason to believe that the services were rendered on his behalf and to...
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