NRT Mid-Atlantic, Inc. v. Innovative Properties

• Decision Date: 06 May 2002
• Docket Number: No. 951,951
• Citation: 144 Md. App. 263,797 A.2d 824
• Parties: NRT MID-ATLANTIC, INC., et al. t/a O'Connor, Piper & Flynn/Era, v. INNOVATIVE PROPERTIES, INC.
• Court: Court of Special Appeals of Maryland

797 A.2d 824

144 Md. App. 263

NRT MID-ATLANTIC, INC., et al. t/a O'Connor, Piper & Flynn/Era, v. INNOVATIVE PROPERTIES, INC.

No. 951, Sept. Term, 2001.

Court of Special Appeals of Maryland.

May 6, 2002.

Gerard G. Magrogan (Monshower, Miller & Magrogan, LLP, on brief) Columbia, for appellant.

Steven R. Migdal (Christopher D. Buck, Buck, Migdal & Myers, Chtd., on brief) Annapolis, for appellee.

Argued before KENNEY, DEBORAH S. EYLER, MARVIN H. SMITH, (Ret'd, Specially Assigned), JJ.

DEBORAH S. EYLER, J.

The Circuit Court for Anne Arundel County denied a motion to stay and petition to compel arbitration filed by NRT Mid-Atlantic, Inc. t/a O'Connor, Piper & Flynn/ERA ("OPF"), one of the appellants, in a suit brought against it and against Robert M. Beall and Margaret K. Beall, the other appellants, by Innovative Properties, Inc. ("Innovative"), the appellee. OPF noted this interlocutory appeal, presenting two questions for review, which we have combined and rephrased as follows:

Did the circuit court err in concluding that the claims asserted by Innovative were not within the scope of the parties' arbitration agreement, and denying the motion to stay and petition to compel arbitration on that basis?

For the following reasons, we shall vacate the order of the circuit court.

FACTS AND PROCEEDINGS

Our recitation of the alleged facts is based on the amended complaint filed by Innovative and undisputed facts presented to the circuit court in the motion to stay and petition to compel arbitration.¹ OPF and Innovative are real estate brokerage companies. On September 29, 2000, OPF entered into an "Exclusive Right To Sell Listing Contract" ("Listing Contract") with the owner of certain commercial property located outside the City of Annapolis, in Anne Arundel County ("the Property").

The Listing Contract authorized OPF to market and sell the Property and provided that, upon the satisfaction of certain conditions, the owner would pay OPF a commission of 4% of the sales price for marketing and negotiating and an additional 4% of the sales price for selling services. The Listing Contract authorized OPF to cooperate with other real estate brokers, either as subagents of OPF or as buyer's agents, and provided that OPF "shall pay" to any subagent or buyer's agent "who has earned and is entitled to share in the fee" the one-half of the 8% commission denoted for "selling services." The Listing Contract also authorized OPF to use the Multiple Listing Service ("MLS") to advertise the Property.

OPF placed the Property on the MLS on October 10, 2000. The MLS listing described the Property and gave the name of the OPF listing agent and of James Hoffman, an OPF agent with information about, and access to, the Property. In addition, the MLS listing stated, "Sub Comp 4" and "Buy Comp 4," meaning that subagents and buyer's agents were being offered a 4% sales commission to bring the buyer to the Property, i.e., to be the procuring cause of the sale of the Property.

On October 23, 2000, Richard Neville, a Maryland real estate agent associated with Innovative, contacted Hoffman, at OPF, about the Property. Hoffman provided Neville with written materials about the Property. Neville organized the materials, distilled the financial information from them, and put them in a form to distribute to prospective purchasers.

A week later, on October 30, 2000, Neville had a conversation with Robert M. Beall, Jr., the son of appellants Robert M. Beall, Sr., and Margaret Beall. Beall, Jr. was representing his parents in their search for new office space for their company, Ledo Pizza System, Inc. ("Ledo"). In that conversation, Neville told Beall, Jr. that the Property was for sale, and agreed to furnish him with information about it. On November 2, 2000, Neville sent written information about the Property to Beall, Jr., by facsimile.

The next day, November 3, Neville received a telephone call from Beall, Sr., who said he personally would be making the decisions for Ledo's about purchasing property for office space. Beall, Sr. advised Neville that he had read the materials Neville had faxed to Beall, Jr., and was very interested in the Property. Beall, Sr. explained, however, that he was leaving the next day for Florida and would be away for about two weeks. He said that upon his return he would call Neville for the purpose of submitting an offer to purchase the Property.

Several weeks passed and Neville did not hear from Beall, Sr. (or Jr.). On November 27, 2000, Neville called Beall, Sr. who said he had lost Neville's telephone number and so he had called the OPF listing agent on the Property directly and had made an offer on it. The offer had not yet been accepted.

Immediately thereafter, Neville sent a facsimile to Hoffman stating that he had introduced the Bealls to the Property, and asking OPF to acknowledge that he was a cooperating broker; he also left a telephone message to the same effect. OPF did not respond to either the facsimile or the telephone message. For the next two weeks, Neville made several more telephone calls to OPF communicating the same information, but none were returned.

On December 11, 2000, Neville contacted Beall, Sr., and was told that the Bealls already had signed a contract to purchase the Property, subject to a thirty day feasibility study period.

On January 22, 2001, the Bealls purchased the Property. OPF received the entire 8% commission on the sale, which allegedly came to $64,000.

According to Innovative, it introduced the buyers (the Bealls) to the Property through Neville and was the procuring cause of the sale. Therefore, it was a cooperating broker that was entitled to receive a 4% sales commission on the Property, that is, $32,000. Innovative made numerous demands upon OPF for payment of that sum, but the demands were refused.

In its amended complaint, Innovative asserted three causes of action. In Count I, it sought recovery for "Unjust Enrichment." It alleged that OPF knew that it had introduced the Bealls to the Property and therefore was a cooperating broker that was entitled to a 4% sales commission; nevertheless, OPF retained the full commission for itself, thereby unjustly enriching itself in the amount of $32,000. Innovative sought to recover that sum from OPF.

In Count II, Innovative sought recovery for "Interference With Business Relations." It alleged that OPF and the Bealls knew that Innovative had introduced the Bealls to the Property and had given them important information about the Property, and further knew that Innovative expected to receive the 4% sales commission owed to a cooperating broker. Nevertheless, and for the purpose of depriving Innovative of its share of the commission, they excluded Innovative from the transaction. This conduct amounted to an intentional interference with Innovative's economic rights, without justifiable cause or right. Innovative alleged that it had suffered actual damages of $32,000, and sought that sum from OPF and the Bealls, jointly and severally.

Finally, in Count III, Innovative sought recovery for "Conspiracy." It alleged that OPF and the Bealls had conspired to exclude it from the transaction for the purpose of depriving it of its 4% commission as a cooperating broker, and as a result, it was damaged in the amount of $32,000. It sought to recover that sum from OPF and the Bealls, jointly and severally.

OPF filed a motion to stay and petition to compel arbitration, pursuant to Md. Code (Supp.1998, Repl.2001) sections 3-207 and 3-209 of the Courts and Judicial Proceedings Article ("CJ"). It alleged that Innovative and OPF, through their brokers of record, belong to the Anne Arundel County Association of REALTORS® ("Association"); and the By-Laws of that organization require members to abide by the Code of Ethics and Arbitration Manual ("Manual") of the National Association of REALTORS®.² The Code imposes a duty on members to submit certain disputes between them to binding arbitration. OPF further alleged that the dispute between the parties falls within the scope of that binding arbitration agreement. Finally, OPF asserted that Innovative was refusing to submit the dispute to arbitration, as it was required to do. OPF asked the circuit court to stay the case and compel Innovative to submit to binding arbitration. Innovative did not contest that the parties's membership in the Association constituted an agreement to submit certain disputes between them to binding arbitration. It opposed the motion to stay and petition to compel arbitration, however, on the ground that its claims did not fall within the scope of the parties' arbitration agreement.

The court held a hearing and took the matter under advisement. On June 18, 2001, it issued an order denying the motion to stay and petition to compel arbitration. It ruled that Innovative's claims were not subject to arbitration because the parties' arbitration agreement required arbitration of "contractual disputes," and Innovative's claims were causes of action in tort, not contractual disputes.

OPF noted an appeal from the order denying its motion to stay and petition to compel arbitration.

We will include additional relevant facts in our discussion of the question presented.

DISCUSSION

(i)

Because this appeal is taken from an interlocutory order, we must address whether we have jurisdiction over it.

CJ section 12-301 provides that a party may appeal to this Court from a "final judgment." A final judgment is "a judgment, decree, sentence, order, determination, decision, or other action by a court, including an orphans' court, from which an appeal, application for leave to appeal, or petition for certiorari may be taken." CJ § 12-101(f); Cant v. Bartlett, 292 Md. 611, 614, 440 A.2d 388 (1982).

It is well established that "the underlying policy of the final judgment rule is that piecemeal appeals are disfavored." Cant v. Bartlett, supra, 292 Md. at 614, 440 A.2d 388. As we...