Red Carpet Real Estate of Aloha, Inc. v. Huygens

• Decision Date: 31 December 1974
• Parties: RED CARPET REAL ESTATE OF ALOHA, INC., an Oregon Corporation, Respondent, v. James T. HUYGENS, Appellant.
• Court: Oregon Supreme Court

Page 46

530 P.2d 46

270 Or. 860

RED CARPET REAL ESTATE OF ALOHA, INC., an Oregon

Corporation, Respondent, v. James T. HUYGENS, Appellant.

Supreme Court of Oregon, In Banc.

Argued and Submitted Dec. 4, 1974.

Decided Dec. 31, 1974.

Derryck H. Dittman, Tigard, argued the cause for appellant. With him on the brief were Anderson, Dittman & Anderson, Tigard.

Stuart O. Kendall, Lake Oswego, argued the cause for respondent. With him on the brief were Kendall & Gerstein, Lake Oswego.

Before O'CONNELL, C.J., and McALLISTER, HOLMAN, TONGUE, HOWELL, BRYSON and SLOPER, JJ.

SLOPER, Justice (Pro Tem.).

This is an action at law brought by plaintiff, Red Carpet Real Estate of Aloha, for a commission allegedly earned pursuant to an earnest money agreement. The earnest money agreement was executed by Fredric B. Andrianoff and Barbara L. Andrianoff, husband and wife, as purchasers, and defendant as seller. Defendant admitted the execution of the earnest money agreement and for an affirmative answer and defense alleged that through no fault of defendant the sale was never closed and no commission was earned by plaintiff. Plaintiff filed a reply denying defendant's affirmative defense. The case was tried to the court without a jury and defendant appeals from the judgment in favor of plaintiff.

Defendant's sole assignment of error is that the trial court erred in holding as a matter of law that plaintiff had earned a commission when it produced a buyer and procured a conditional agreement to buy, even though that condition was never fulfilled and the buyer refused to proceed. The defendant contends that there was no substantial evidence that the failure of consummation of the contract resulted from any act of seller or refusal of the seller to complete the sale.

Mr. Kenneth A. Coe, a real estate broker and president of the plaintiff corporation, along with others, developed a subdivision in Washington County known as Augusta Meadows. Lot 8 of Augusta Meadows was sold by Mr. Coe to defendant who at all times relevant was a building contractor engaged in the construction and sale of residential homes. Defendant, through plaintiff, in turn, sold Lot 8 and a house to be built thereon, for the sum of $19,200, to Barbara L. Scutero, at that time a single woman, and who later became Mrs. Fredric B. Andrianoff. On March 31, 1972, Barbara Scutero executed the earnest money agreement wherein she agreed to purchase a home to be built on Lot 8 by defendant. The agreement of March 31, 1972, was subject to the condition that the buyer 'apply for and obtain an F. H. A sec 235 loan.' Section 235 loan was for low or limited income persons. After some difficulty, a commitment for an FHA insured 235 loan was obtained and construction of the home was started in the early fall of 1972. The house was to be completed in early December 1972 and although it was not completed, the buyer went into possession in December.

Barbara Scutero and Fredric B. Andrianoff were married on December 15, 1972, and additional work was done on the home while the Andrianoffs were on a honeymoon. The house was substantially completed by late December 1972, but had not had a final FHA inspection and approval. One effect of the marriage of the Andrianoffs was to make the former Barbara Scutero ineligible for the FHA 235 loan.

A new earnest money contract was prepared conditioned on the buyers, the Andrianoffs, obtaining a suitable FHA loan. This earest money agreement was executed by the Andrianoffs on January 17, 1973, and by defendant on January 26, 1973. It superseded the prior sale agreement and is the basis for this action. Pursuant to the new earnest money agreement, the buyers applied for a new loan as husband and wife and the application was approved and a commitment from the lending agency obtained on February 16, 1973. The earnest money contract also provided that possession by the buyers was to commence 'upon closing,' although, in fact, at the time of the execution of the agreement the buyers were and had been for a substantial period of time already in possession. The earnest money was also subject to the following 'special condition':

'Drain tile installation, foundation drain, & FHA grading to be completed on or before April 1, 1973 after which, if not completed, this contract is null & void.'

The drain tile installation, foundation drain and grading were not completed by seller by April 1, 1973, and on the basis of the afore-quoted cause, the Andrianoffs, by registered letter, advised defendant that the earnest money agreement was null and void and vacated the premises. Defendant contended that ...