Madsen v. Fisk
| Decision Date | 31 January 1967 |
| Docket Number | CA-CIV |
| Citation | 423 P.2d 141,5 Ariz.App. 65 |
| Parties | Russell J. MADSEN and Marjorie G. Madsen, husband and wife, appellants, v. Merlin FISK, dba Fisk Realty, Appellee. 1280. |
| Court | Arizona Court of Appeals |
Johnson, Shelley, Roberts & Riggs, by J. LaMar Shelley, Mesa, for appellants.
Stevenson, Warden & Smith, by Robert W. Warden, Flagstaff, for appellee.
The issue before us relates to the decision of the trial court sustaining the real estate broker's motion for summary judgment granting a commission.
Merlin Fisk is a duly licensed real estate broker. He was the successful plaintiff in the trial court. Russell J. Madsen and Marjorie G. Madsen, his wife, owned a motel in Flagstaff at the time in question. They were the unsuccessful defendants in the trial court and will hereinafter be referred to as 'Madsen'. Douglas O. Fox and Dorothy I. Fox, his wife, owned some apartment properties in Phoenix. They will hereinafter be referred to as 'Fox'. Fox was the prospective buyer of the motel. There are many facts and circumstances set forth in the record which, in our opinion, need not be set forth in this decision.
Fisk and Madsen first became acquainted in late 1963. Madsen was interested in buying and selling properties and in exchanging properties. Prior to the transaction in question, Fisk, in his capacity as a broker, represented Madsen in several real estate transactions. In February 1964, Madsen acquired the motel utilizing Fisk's services. Madsen then listed the motel with Fisk. This listing is not in issue and is not the writing upon which Fisk bases his claim for compensation.
Through Fisk, Fox became interested in acquiring the motel. Fisk contrived a complex contract to be entered into between Madsen and Fox. After Fisk conferred separately with Madsen and Fox, Fisk contacted an attorney for Madsen who drafted an 'agreement for sale of real property'. Madsen was therein set forth as the seller and Fox as the buyer. At that time there were mortgage liens of record against the motel. Under the agreement Fox was to secure a new mortgage on the motel for not to exceed $148,000 contingent upon an appraisal of at least $185,000 by a qualified A.S.A. appraiser. The mortgage money was to be used to pay off the motel's liens and to enable Fox to make a cash down payment. The unpaid balance of the purchase price would be represented by second paper payable to Madsen.
For the purpose of enabling Fox to negotiate for the mortgage, and pursuant to the agreement for sale, Madsen deeded the motel to Fox who was placed in possession under certain agreed conditions. The agreement allowed Fox 60 days to complete his financing and provided that if the same were not completed, a Fox deed, placed in escrow, would be delivered to Madsen who would then return to possession. Fox in turn deeded the apartment properties to Madsen who was entitled to possession under the agreement. In the event that Fox was unable to complete the purchase, Madsen was privileged to retain the apartment properties. The foregoing agreement was modified by two supplements not material to this opinion.
Madsen did not meet Fox prior to the time that Fox signed the agreement for sale. After the agreement for sale and the first supplement were prepared, and prior to the time that Fox signed the documents, Fisk prepared and presented the Broker's agreement in question to Madsen. There was some conversation between Madsen and Fisk prior to the time that Madsen signed this document. The signed broker's agreement is as follows:
'EXCHANGE COMMISSION AGREEMENT
The undersigned are the owners of the following described property:
SKYLINE MOTEL, 1526 East Santa Fe, Flagstaff, Arizona
It is hereby agreed that in the event of Merlin Fisk, Fisk Realty, 2912 East Thomas Rd., Phoenix, Arizona, consumating an exchange of the above property on any terms agreed upon, that the undersigned will pay them a fee for their services in the amount of Eleven Thousand One Hundred 00/100 Dollars ($11,100.00).
Dated this 26th day of August, 1964.
RUSSELL J. MADSEN
MARJORIE G. MADSEN'
After Fox and Madsen signed the agreement for sale an escrow was established with a title company in Flagstaff. The escrow instructions were signed by Fox and Madsen. These instructions contained the following indicating that the borker's commission obligation rested with Madsen.
'Licensed Broker's commission
in the amount of $11,100.00 X
to Fisk Realty, 2912 E. Thomas '
Fox went into possession and the deed from Madsen to Fox was recorded. Almost immediately thereafter a $45,000 judgment against Fox was recorded, the judgment creditor not being a party to the transaction in question. Fox was not able to complete the mortgage arrangements even though an appraisal in the amount contemplated was potentially available. There were other areas of the agreement for sale relative to the Fox management of the motel and the maintenance thereof which were not observed. Madsen eventually recovered possession of the motel, the Fox deed back was recorded and Madsen incurred expenditures in his efforts to restore the motel to the position it occupied prior to the agreement for sale.
Fisk sued Madsen for his claimed $11,100 commission. The depositions of Fisk and Madsen were taken as adverse parties on cross-examination. Both parties moved for summary judgment. The trial court had for its consideration the exchange commission agreement, the agreement for sale of real property, the two supplements to the agreement for sale, the escrow instructions, Fisk affidavit. The Fisk affidavit referred to the several documents which had been executed and concluded,
'* * * that said instructions accurately represent the final agreement of the parties to the transaction, to the effect that there was a firm contract when the Second Supplement to Agreement was executed and affiant had earned the commission provided in the Exchange Commission Agreement.'
The guiding principles relative to motions for summary judgment are found in Rule 56, Rules of Civil Procedure, 16 A.R.S. Arizona's Rule 56 is similar to Rule 56 of the Federal Rules of Civil Procedure. Rule 56, insofar as it has a direct bearing on the problem now before this Court, was amended effective 1 June 1963. The amended sections of the Rule, in part, are as follows:
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