Lane v. Smith
| Decision Date | 16 November 1992 |
| Docket Number | No. 91-496,91-496 |
| Parties | James LANE, Deanna Lane, d/b/a Realty West, Lane Associates, Plaintiffs and Respondents, v. H.W. SMITH, Jr., and Elizabeth A. Smith and Edward C. Kibler and Dianna M. Kibler, Defendants and Appellants. |
| Court | Montana Supreme Court |
R.J. "Jim" Sewell, Jr., Smith Law Firm, Helena, for defendants and appellants.
Douglas Buxbaum, Poore, Roth & Robinson, Butte, for plaintiffs and respondents.
This is an appeal from a judgment by the Third Judicial District Court, Powell County, granting plaintiffs' motion for partial summary judgment and denying defendants' motion for summary judgment. We affirm.
The issues on appeal are:
1. Was summary judgment appropriate where a realtor's commission was claimed?
2. Did the District Court err in granting summary judgment to plaintiffs?
3. Did the District Court err in awarding attorney's fees to plaintiffs?
H.W. Smith, Jr. and Elizabeth Smith (Smiths) owned the Avon Family Cafe in Avon, Montana. The Smiths wished to sell this property and listed it with brokers James Lane and Deanna Lane (Lanes) who are realtors with Realty West, Lane and Associates. The Listing Agreement was signed on June 20, 1986 and was to expire on June 20, 1987 with a 90-day grace period in which the terms were to be effective. Subsequently, the Lanes advertised the property and Edward C. and Diana M. Kibler (Kiblers) answered the ad. The Lanes showed the property to the Kiblers and although interested, the Kiblers could not afford a downpayment on the property.
The Kiblers were, however, interested in a Lease-Purchase Agreement which was agreed to within the time parameters of the Listing Agreement on September 5, 1986, after negotiations with the Smiths. The Lease-Purchase Agreement, drawn up by the Lanes' attorney and containing a provision that the Lanes receive a commission if the option was exercised, was effective for two years ending October 1, 1988. A provision in the Lease-Purchase Agreement also provided for a partial commission payment of $1,000. Such partial payment was made. The agreement provided the terms under which the option could be exercised, and provided for 90 days' notice to the lessors when the lessees decided to exercise the option to buy.
The Smiths approached the Kiblers on July 3, 1988, before the Lease-Purchase Agreement expired, and wanted to know if the Kiblers intended to exercise their option. Subsequently, negotiations between the Smiths and Kiblers ensued and a title commitment on the property was issued on September 28, 1988, two days before the Lease-Purchase Agreement expired. The closing transaction took place on October 7, 1988, seven days after the expiration date specified in the agreement.
The Smiths refused to pay the remaining portion of the broker's fee. The Lanes initiated this action on October 28, 1988. The parties filed cross motions for summary judgment. The court held a hearing on May 17, 1991 and granted summary judgment to the Lanes on June 3, 1991. The Smiths appeal the summary judgment entered against them.
Was summary judgment appropriate where a realtor's commission was claimed?
The Smiths argue on appeal that the District Court should not have considered summary judgment at all because summary judgment is inappropriate where determination of a realtor's commission is at issue. The Smiths did not argue this to the District Court. We will not address this issue because it was not raised at the District Court level. See Weaver v. Law Firm of Graybill, Ostrem, Warner & Crotty (1990), 246 Mont. 175, 803 P.2d 1089.
Did the District Court err in granting summary judgment to plaintiffs?
Our standard of review on appeal from a grant of summary judgment is a two-pronged determination: we consider whether there are genuine issues of material fact and whether the movant is entitled to judgment as a matter of law. Payne Realty & Housing v. First Security Bank of Livingston (1991), 247 Mont. 374, 807 P.2d 177. To be successful, the movant for summary judgment must show clearly what the truth is. Berens v. Wilson (1990), 246 Mont. 269, 806 P.2d 14. Once this is done, it is incumbent on the non-moving party to come forward with substantial evidence demonstrating there are genuine issues of material fact which preclude summary judgment. Cecil v. Cardinal Drilling Co. (1990), 244 Mont. 405, 797 P.2d 232.
The District Court determined that the Lanes performed their obligation under the Listing Agreement by procuring a buyer to whom the property was sold or conveyed on terms acceptable to the Smiths. The court found no genuine issues of material fact. We agree.
The undisputed material facts contained in the contracts involved are: the Smiths are the sellers who executed an exclusive one-year Listing Agreement with the Lanes as their brokers on June 20, 1986, containing the following pertinent provisions:
In the event that [Lanes], or any other brokers cooperating with you, shall find a buyer ready and willing to enter into a deal for said price and terms, or such other terms and price as I may accept, or that during your employment you supply me the name of or place me in contact with a buyer to or through whom at any time within 90 days after termination of said employment I may sell or convey said property, I hereby agree to pay you in cash for your services a commission equal in amount to six percent of the above stated selling price.
The purchasers were the Kiblers who leased the property first and finally exercised an option to buy the property. The Lease-Purchase Agreement in which the option is contained was executed on September 5, 1986, within the time parameters of the Listing Agreement, and it contained a provision that the Lanes immediately receive a partial commission plus the remainder when the purchasers exercised their option.
The title commitment was issued on September 28, 1988, two days before the Lease-Purchase Agreement expired and the transaction was closed on October 7, 1988, seven days after the expiration date of the Lease-Purchase Agreement. The terms of the final sale varied somewhat from the Lease-Purchase Agreement. The Smiths refused to pay the remainder of the commission.
On appeal, the Smiths argue that genuine issues of material fact preclude summary judgment. We note that argument was not presented at the District Court level. Smiths argue that there is a question of fact as to the source from which the commission was to be paid. We conclude that the determination of that question is not required in this case. We have reviewed the record and conclude there are no genuine issues of material fact concerning the contract issues which are presented by this case.
The District Court further determined that the Lanes were entitled to summary judgment as a matter of law. The court concluded that the Lanes had performed under their Listing Agreement because they procured a buyer for the property on terms which were acceptable to the seller. Further, the court concluded that the date of the sale must relate back to the time the original option to purchase was given, which, in this case, was within the time frame of the Listing Agreement. The court also concluded that the 90-day notice provision in the Lease-Purchase Agreement was inserted for lessors' benefit and since the lessor negotiated the sale, they had notice despite the lack of a formal 90-day notice. The court concluded finally that because the Smiths refused to pay the Lanes the remainder of their commission, the Smiths had breached the Listing Agreement.
Appellants contend that the Listing Agreement is an exclusive Listing Agreement and, therefore, 'procuring cause' is an inappropriate test to use in determining whether a commission is due. Appellants cite Flinders v. Gilbert (1963), 141 Mont. 442, 378 P.2d 385, for this proposition. The listing agreement in Flinders was a non-exclusive listing agreement where determination of the 'procuring cause' among many brokers was a necessary determination. Respondents argue, and we agree, that Flinders does not hold that 'procuring cause' is only appropriate to non-exclusive listing agreements.
The procuring cause doctrine permits a broker to show that his or her part of the contract was performed and that the principal reaped a benefit from the efforts. D. Burke, Jr., The Law of Real Estate Brokers, Sec. 3.4 (1992). The doctrine is not confined to consideration of non-exclusive listing agreements; it applies in all situations unless the parties agree otherwise in the listing contract. Id.
Here, the contract contains no such prohibitive provision. The District Court determined that because the brokers had performed their contractual...
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