Loyola Federal Sav. Bank v. Hill

• Decision Date: 01 September 1996
• Docket Number: No. 863,863
• Citation: 689 A.2d 1268,114 Md.App. 289
• Parties: LOYOLA FEDERAL SAVINGS BANK v. Marilee Ann HILL. ,
• Court: Court of Special Appeals of Maryland

Page 289

114 Md.App. 289

689 A.2d 1268

LOYOLA FEDERAL SAVINGS BANK v. Marilee Ann HILL.

No. 863, Sept.Term, 1996.

Court of Special Appeals of Maryland.

Feb. 28, 1997.

Anthony L. Meagher (David Clarke, Jr. and Piper & Marbury, L.L.P., on the brief), Baltimore, for Appellant.

Robert E. Sharkey (Lewis A. Kann and Gordon, Feinblatt, Rothman, Hoffberger & Hollander, L.L.C., on the brief), Baltimore, for Appellee.

Argued before MURPHY, C.J., and CATHELL, J., and MICHAEL E. LONEY, Judge, Specially Assigned.

CATHELL, Judge.

Loyola Federal Savings Bank (Loyola), appellant/cross-appellee, appeals from a judgment by the Circuit Court for Baltimore City (Alpert, J., presiding) that Marilee Ann Hill, appellee/cross-appellant, was the procuring cause of purchase by Richmond American Homes of Maryland, Inc. (Richmond American) of real property owned by Loyola and that Hill was entitled to a commission. Appellant Loyola presents three questions:

1. Did the plaintiff fail to prove that she was the procuring cause of the sale of the property?

2. Did the plaintiff fail to prove a customary commission of ten percent?

3. Did the trial court err in awarding the plaintiff prejudgment interest?

Cross-appellant Hill presents three additional questions:

[4.] Did the court err in not awarding judgment to Hill for a commission on the entire 66 lots covered by the purchase agreement?

[5.] Did the court err or did it abuse its discretion in awarding prejudgment interest?

[6.] Did the court err in not awarding prejudgment interest on the entire purchase price from the date the contract of sale was entered into?

The Facts

We include here only those facts that we perceive support the trial judge's decision and that apparently were accepted by him. In the present case, Loyola was attempting to find buyers for sixty-six parcels of property on which it was about to foreclose. There was evidence that an official of Loyola spoke with appellee for a second time shortly before the foreclosure sale and told her that Loyola had not been able to find a purchaser. Ultimately, Loyola acquired the property through foreclosure. There was evidence that appellee informed the Loyola official with whom she was dealing that she expected a brokerage agreement that would cover any persons who she produced as potential buyers. Loyola faxed information about the property to appellee. Appellee then prepared a summary and a list of potential buyers for the property and began contacting these potential buyers. She produced one potential buyer, Pulte Homes, but it did not purchase the property. During her discussions with Loyola about Pulte Homes, appellee twice brought up the matter of her commission in order to arrive at an agreed upon commission in the event she procured a buyer, and she proposed a certain commission rate. Loyola, however, never agreed to that specific rate or any other specific rate.

Eventually, appellee contacted Richmond American concerning the property. She furnished it with the information about the property that she had received from appellant. Richmond American had no prior knowledge of the property's availability. It first received this information from appellee. Appellee then, as an apparent intermediary, faxed Richmond American's financial information to Loyola. The president of Richmond American requested that appellee set up a meeting with Loyola because he wanted to make an offer for the property.

A meeting among Loyola, Richmond American, and appellee was set up for April 13, 1992. During that meeting, the history of the property, matters relating to costs, Loyola's request for a cash sale, and site work were discussed. All of the parties then toured the subject site. At the conclusion, Richmond American renewed its expression of interest in the property and informed Loyola that it would be making an offer. After this meeting, appellee again presented to Loyola a "commission agreement." Loyola again refused to accept the agreement.

Richmond American contacted appellee informing her that it was preparing an offer and asked her to whom it should be sent. She told Richmond American to send it directly to Loyola and faxed Loyola informing it that the offer was en route. Appellee again attempted to get Loyola to agree to a specific commission agreement. Again, Loyola refused. Richmond American's first offer was proffered two days after the April 13, 1992, meeting.

After this point, Loyola and Richmond American continued purchase negotiations, and Richmond American informed appellee as to the status of the negotiations. These subsequent negotiations took place over a three-month period. Ultimately, Loyola and Richmond American agreed to terms. ¹ Near the end of the negotiation period, appellee again contacted Loyola's representative about the commission agreement she had submitted. She was informed that they had not "gotten around to it." Because the agreement she had proffered was her "rock bottom" offer and because by this time she was concerned that Loyola was trying to avoid paying her a commission, she withdrew her specific commission offer. At the time she withdrew the offer, it had not been accepted by Loyola. After Loyola received her letter withdrawing her specific commission offer, it offered appellee a $15,000 finder's fee that she rejected. Appellee later was informed by Richmond American that the parties had entered into a purchase agreement and the agreement's terms. Ultimately, Loyola received $981,000 from Richmond American for some of the lots and, because of an escape clause, could not force Richmond American to purchase any others. Richmond American had, however, deposited $150,000 towards the lots' purchase that was forfeited to Loyola pursuant to their agreement. Loyola received a total of $1,131,000 in respect to the transaction. We shall first address Loyola's questions.

Procuring Cause

Korzendorfer Realty, Inc. v. Bufalo, 264 Md. 293, 286 A.2d 142 (1972), was a case involving a salesman's action against Korzendorfer Realty, Inc. (Korzendorfer), the broker for whom the salesmen worked, for a portion of the commissions the broker received on a sale to a buyer procured by the salesman. The Court noted initially that the broker asserted that the salesman was not the procuring cause of the sale. The Court then discussed the law relative to the broker-seller relationship as applicable to the salesman-broker-buyer relationship. It stated:

We had occasion to consider the rule of the Maryland cases in Ricker v. Abrams, 263 Md. 509 (1971). While the broker has the burden of proving that he was the procuring cause, Steele v. Seth, 211 Md. 323, 328 (1956), the fact that the negotiations are concluded by others does not necessarily deprive the broker of his right to commissions, Ricker v. Abrams, supra, nor does it matter whether the broker's services are slight or extensive, whether he showed the property, or whether he participated in the execution of the contract if his efforts were the proximate cause of interesting the purchaser, and of the purchaser's ultimate agreement to buy, Cowal v. Marletta, 216 Md. 222, 228 (1958).

Bufalo was an employee of Korzendorfer Realty when Mr. Holland telephoned him, inquiring about the property. Bufalo acquainted Holland with the property, discussed it with him on two occasions, gave him such materials as were available, and then took Mr. Holland to Mr. Korzendorfer when discussions commenced regarding price. As was said in Sanders v. Devereux, 231 Md. 224, 231 (1963):

"In order for a broker to establish that he is the procuring cause of a sale of real estate, in the absence of a specific contract, the evidence must show or permit the inference that the sale was accomplished as the result of his action in discovering the purchaser, acquainting him with the property and referring him to the seller for further negotiations." [citing cases.]

264 Md. at 299-300, 286 A.2d 142.

In Hampton Park Corp. v. T.D. Burgess Co., 270 Md. 269, 281, 311 A.2d 35 (1973), a case also involving whether a broker was the procuring cause of a sale, the Court first discussed several cases and emphasized certain language contained in its prior case of Cowal v. Marletta, 216 Md. 222, 139 A.2d 712 (1958):

"The question of whether a broker's efforts are the procuring cause of a sale is not to be determined by whether his services are slight or extensive but rather on the basis of whether the efforts he did make were in fact the proximate cause of interesting the purchaser, and his ultimate agreement to buy...." 216 Md. at 228 (emphasis added).

In Bearman v. Roland Park [Realty] Co., 218 Md. 515 (1959), we went on to say:

"... One satisfies the legal test as a procurer of the purchaser if the testimony permits the inference that the sale was accomplished as a result of his action in discovering the purchaser, acquainting him with the property and referring him to the seller for further negotiations. (citations omitted)." 218 Md. at 518-19, 147 A.2d 697 (emphasis added).

The Court concluded:

In our consideration of this case, we have not been unmindful of the application of Rule 886 which provides:

"When an action has been tried by the lower court without a jury, this Court will review the case upon both the law and the evidence, but the judgment of the lower court will not be set aside on the evidence unless clearly erroneous and due regard will be given to the opportunity of the lower court to judge the credibility of the witnesses."

Hampton Park, 270 Md. at 284-85. The Hampton Park Court, in holding that no commission was there due, noted that "[t]he meaningless reference to the location of the subject property in the Drake Sheahan study is much too tenuous a link to establish the broker as the 'primary, proximate and procuring cause of the sale' made through Godfrey." Id. at 285, 311 A.2d 35.

The facts in Hampton Park, when contrasted with the facts in the case sub judice,...