Machan Hampshire Properties, Inc. v. Western Real Estate & Development Co.
| Decision Date | 10 August 1989 |
| Docket Number | K-E,No. 880229-CA,880229-CA |
| Citation | 779 P.2d 230 |
| Court | Utah Court of Appeals |
| Parties | MACHAN HAMPSHIRE PROPERTIES, INC., a Utah corporation, Plaintiff and Appellant, v. WESTERN REAL ESTATE & DEVELOPMENT COMPANY, a Utah corporation; Western Mortgage and Loan Corporation, a Utah corporation;Enterprises, a Utah general partnership; Birtcher Investments, a California general partnership; Birtcher American Properties, a California association; and CapitalCorp Financial, Inc., a California corporation, Defendants and Respondents. |
Michael N. Emery, Salt Lake City, for plaintiff and appellant.
Dan S. Bushnell, David M. Wahlquist and Merrill F. Nelson, Salt Lake City, for defendants and respondents.
Before BILLINGS, JACKSON, and ORME, JJ.
Machan Hampshire Properties, Inc. ("Machan"), a real estate brokerage, appeals from a summary judgment dismissing its contract claim against defendants Western Real Estate & Development Company ("Western Development"), Western Mortgage and Loan Corporation ("Western Mortgage"), and K-E Enterprises 1 for a real estate sales commission. The lower court ruled that Machan's claim was barred by the statute of frauds codified in Utah Code Ann. § 25-5-4(5) (1989). 2 We affirm.
In reviewing a summary judgment, we consider the evidence in the light most favorable to the losing party and affirm only where it appears there is no genuine dispute as to any material issue of fact, or where, even according to the facts as contended by the losing party, the moving party is entitled to judgment as a matter of law. D & L Supply v. Saurini, 775 P.2d 420, 421 (1989) (quoting Themy v. Seagull Enters., Inc., 595 P.2d 526, 528-29 (Utah 1979)). In deciding whether the trial court properly granted judgment as a matter of law, we give no deference to the trial court's view of the law, but review it for correctness. Ron Case Roofing & Asphalt Paving, Inc. v. Blomquist, 773 P.2d 1382, 1385 (Utah 1989); Madsen v. Borthick, 769 P.2d 245, 247 (Utah 1988).
Western Mortgage and K-E Enterprises owned 16.6 acres of land in Roy, Utah, on which they developed the IOmega Light Industrial Park. In January 1985, Robert Polcha, a licensed real estate agent working for appellant Machan, took an airplane trip around the Salt Lake Valley with representatives from Birtcher Investments, pointing out properties available for purchase, not including IOmega Park. That same month, after being notified by a commercial loan officer at Western Mortgage that IOmega Park was for sale, Daum Corporation, a California real estate brokerage firm, contacted Richard Slavin, executive vice president of CapitalCorp Financial, Inc. ("CapCorp"), and solicited a written offer to purchase the industrial park, which was forwarded to the property owners on January 30. On February 5, 1985, the owners countered with a modified offer that was accepted by CapCorp three days later. Paragraph 9 of the purchase agreement provided for the property owners to pay a commission of 3% of the sales price to Daum Corporation. Closing was set for mid-April and later postponed until mid-July. Slavin immediately began discussions with the chief executive officer and the executive vice president of acquisitions of Birtcher Investments, with which CapCorp had a longstanding business relationship, about a possible joint venture in the purchase of IOmega Park.
Sometime in January or February, Polcha phoned Kelly Goddard, president of Western Development, 3 and inquired about properties being marketed by that company.
During the phone conversation, Goddard mentioned that IOmega Park was for sale. He also told Polcha it was Western Development's practice to keep a log of clients registered in letters from each broker, filing them by broker. 4 Polcha told Goddard on the telephone that he would register his clients in that manner, and Goddard agreed to let him do so. 5
Following the phone call, Goddard sent Polcha a letter dated February 21, 1985, stating:
Re: IOmega Park
Roy, Utah
Dear Bob:
Enclosed, please find the information you requested on the above captioned project.
As I indicated to you on the phone, we have accepted another offer, and should you have success in obtaining a buyer, be sure they understand it would be a backup-offer.
If there are any questions you may have on the information, please contact me.
Very truly yours,
/s/
Kelly Goddard
President
Polcha then sent Goddard the following letter, dated February 26, 1985:
RE: REGISTRATION OF CLIENT FOR PROPERTY KNOWN AS IOMEGA PARK/ROY, UTAH
Dear Mr. Goddard:
Machan Hampshire Properties, Inc./Robert F. Polcha represents the following clients in connection with the proposed purchase of the subject properties. The purpose of this letter is to register the clients with you and to set forth our understanding that in the event a transaction is consummated between yourself and these clients, you agree to pay a commission to Machan Hampshire Properties, Inc./Robert F. Polcha. Said commission shall be four percent (4%) on IOmega Industrial Park.
/s/
In a letter dated the next day to Andrew Trachman, a vice president at Birtcher, Polcha first presented IOmega Park as a property available for a back-up purchase offer and enclosed a packet of information about the property. He sent Trachman additional information about the property two months later.
During March, Polcha sent three more letters to Goddard, with wording identical to that in his February 26 letter, "registering" three additional clients. On April 12, 1985, Polcha sent another letter to Goddard, similar to that of February 26, but referring to a "proposed lease" of the subject property and naming Birtcher American Properties, Inc. and Equitable Life Real Estate as Machan's clients. Polcha sent another client registration letter to Goddard in late April and another in mid-July, both referring to a proposed sale of IOmega Park.
Conversations between Birtcher and CapCorp officials concerning a possible joint venture in, or direct purchase by Birtcher of CapCorp's rights as purchaser under, the February purchase agreement were held in June. Sometime in July 1985, Goddard phoned Polcha and indicated that the On August 7, 1985, Polcha sent the following letter to Goddard:
sale of IOmega Park to CapCorp had fallen through and that the property was back on the market, suggesting he contact his clients and see if they still had any interest in the property. Polcha conveyed the information in a telephone call to Trachman, who said he would get back to him about it, but did not.
RE: REGISTRATION OF CLIENT FOR PROPERTIES KNOWN AS IOMEGA LIGHT INDUSTRIAL PARK
Dear Mr. Goddard:
Machan Hampshire Properties, Ltd./Robert F. Polcha represents the following client in connection with the proposed purchase of the above mentioned properties:
THE ESTATE OF JAMES CAMPBELL
The purpose of this letter is to register this client with you and to set forth our understanding that in the event a sale is consummated between yourself and this client, you agree to pay a commission to Machan Hampshire Properties, Ltd./Robert F. Polcha, based on 5% of the gross selling price, paid at closing.
The preceding confirms, in full, our understanding as presented to us by you. If, for any reason, you do not agree, we will delay presenting the subject property for five (5) days from date hereon so you may respond. Thereafter, the above mentioned terms will apply.
Very truly yours,
MACHAN HAMPSHIRE PROPERTIES, LTD.
Robert F. Polcha, Director
Acquisitions and Investments
Goddard responded to the Campbell Estate letter on August 9, 1985:
Re: Registration of Client
IOmega Park
James Campbell
Dear Bob:
In response to your letter, we only have agreed to pay a 4% commission on the above park.[ 6 All other terms of your letter are acceptable.
Very truly yours,
/s/
Kelly Goddard
President
On September 6, 1985, Goddard responded to Machan's prior registration letters with the following letter:
Re: IOmega Park Roy Utah
Dear Bob:
I have been receiving your letters of registration of clients. Though most are acceptable the following were contacted prior to receipt of your letters.
1. DeAuza Corporation
2. August Financial
3. Birtcher Properties/Cap Corp
Therefore we cannot recognize the above. Should you have any questions please contact me.
Very truly yours,
Kelly Goddard
On September 27, the owners of IOmega Park and Birtcher Investments entered into an agreement for the latter's purchase of the property for $7,425,000. Twelve days later, Birtcher signed a "contract for services" with First CapitalCorp, Inc., promising to pay it $500,000 as a "finder's fee" for Birtcher's purchase of IOmega Park. 7 Western refused to pay Machan a 4% commission on the sale to Birtcher, and Machan commenced this lawsuit.
In the first cause of action, which was against Western Development, Western Mortgage, and K-E Enterprises for breach of contract, Machan alleged that it and Western Development had an agreement that "in the event a transaction between Birtcher and defendant Western [Development] or its principals was consummated regarding IOmega park, [Machan] would be paid a 4% commission."
The first four of the letters reprinted above, which Machan alleged set forth the agreement, were attached to the complaint. Respondents presented the fifth letter to the court in support of their motion for summary judgment. After considering the parties' cross-motions for summary judgment on Machan's first cause of action, the trial court ruled that the contract claim was barred by the statute of frauds in section 25-5-4(5). In its appeal, Machan reasserts that the statute's requirement of "some note or memorandum" of the parties' agreement is satisfied by the correspondence, quoted above, between Goddard and Polcha before Goddard's September 6 letter.
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