Schmidt v. Matise

• Court: Texas Court of Appeals
• Writing for the Court: HOWELL
• Citation: Schmidt v. Matise, 747 S.W.2d 883 (Tex. App. 1988)
• Decision Date: 18 February 1988
• Docket Number: No. 05-86-01338-CV,05-86-01338-CV
• Parties: Marie SCHMIDT and SDM, Inc., Appellants, v. Hoyt R. MATISE, Kenneth S. Olschwanger, and the Hoyt R. Matise Company, Appellees.

Page 883

747 S.W.2d 883

Marie SCHMIDT and SDM, Inc., Appellants, v. Hoyt R. MATISE, Kenneth S. Olschwanger, and the Hoyt R Matise Company, Appellees.

No. 05-86-01338-CV.

Court of Appeals of Texas Dallas.

Feb. 18, 1988.

Rehearing Denied March 23, 1988.

R. Matthew Molash, Dallas, for appellants.

Michael Braden, Dallas, for appellees.

Before HOWELL, BAKER and LAGARDE, JJ.

HOWELL, Justice.

This is a suit over the division of a real estate brokerage fee. Marie Schmidt ("Salesperson" or "Agent") and SDM, Inc. ("Third Broker" or "B-3") appeal a summary judgment rendered in favor of appellees Hoyt R. Matise, Kenneth S. Olschwanger, and the Hoyt R. Matise Company (collectively "First Broker" or "B-1"). By its summary judgment, the trial court awarded the entirety of a $220,000 brokerage fee to B-1, denying the claim of Agent and B-3 for one-half thereof, amounting to $110,000. B-3 has presented five points of error on behalf of itself and Agent. We have concluded that the points fail to demonstrate reversible error and affirm the summary judgment.

This case had its beginning when the trial court appointed a receiver for the Arapaho Station Joint Venture, and thereafter authorized the receiver to sell the tract.

Agent was a licensed real estate sales agent who first rendered services after the receiver's June, 1985 appointment. On February 3, 1986, Agent first made contact with City Group, Inc., the eventual purchaser of Arapaho Station. On that date, Agent's sponsoring broker was Philip Watson ("Second Broker" or "B-2"), a licensed real estate broker who was asserting a co-ownership interest in the receivership property. B-1 objected to B-2 being named as broker in the sales contract whereupon Agent formed B-3 and caused B-3 to apply to the Texas Real Estate Commission for a broker's license. B-3 was licensed on February 7, 1986.

On the same day, the court-appointed receiver and City Group, Inc. executed a sales contract for Arapaho Station which named B-1 as principal broker and B-3 as cooperating broker, the contract providing for a fifty-fifty division of the commission. When the sale was closed, the commission was paid into the registry of the court. A dispute having arisen as to B-3's right to share therein, the commission dispute was severed into an independent action.

The legal issue raised by the pleadings and cross-motions for summary judgment evidence was whether the licensing requirements of the Real Estate License Act (RELA), Tex.Rev.Civ.Stat.Ann. art. 6573a (Vernon 1969 & Supp.1987), precluded B-3 from recovering half of the commission, the trial court ruling that B-3 was barred by the RELA and awarding the entirety to B-1.

In their first two points of error, Agent and B-3 argue that the RELA does not preclude recovery. We are asked to interpret section 20(a) of the RELA:

A person may not bring or maintain an action for the collection of compensation for the performance in this state of an act set forth in Section 2 of this Act without alleging and proving that the person performing the brokerage services was a duly licensed real estate broker or salesman at the time the alleged services were commenced.

RELA, § 20(a). Agent maintains that she was a licensed sales agent on February 3, 1986, the date when she commenced the services generating the commission and that she was at all times properly sponsored by a licensed broker, either B-2 or B-3. Agent and B-3 argue that they are therefore entitled under section 20(a) to bring an action to collect the contracted share of the commission.

The Supreme Court of Texas has consistently held that the Legislature's enactment of the RELA was a valid exercise of the State's police power to regulate a private business which affects the public interest. The statute's purpose is to eliminate or reduce the fraud that might be inflicted on the public by unqualified or unscrupulous persons engaging in the real estate sales and brokerage business. Hall v. Hard, 160 Tex. 565, 571, 335 S.W.2d 584, 589 (1960); Gregory v. Roedenbeck, 141 Tex. 543, 547, 174 S.W.2d 585, 586-87 (1943). The RELA makes it unlawful for a person to act as a real estate broker or salesperson without first obtaining a license from the Real Estate Commission. RELA §§ 1(b), 19(a), 20(a) (Vernon Supp.1987). Texas courts have consistently required strict compliance with the RELA. Henry S. Miller Co. v. Treo Enterprises, 585 S.W.2d 674, 676 (Tex.1979); Raybourn v. Lewis, 567 S.W.2d 908, 911 (Tex.Civ.App.--San Antonio 1978, writ ref'd n.r.e.). When an entity whose name appears in a real estate sales contract as broker seeks to recover the commission in its own name, then the entity must establish that it, as opposed to its agents, officers, or employees, was a licensed broker at the time the alleged services were commenced. Henry S. Miller Co., 585 S.W.2d at 678; Coastal Plains Development Corp. v. Micrea, Inc., 572 S.W.2d 285, 288-89 (Tex.1978).

Not having been licensed on February 3, 1986, when Agent's services commenced, B-3 cannot itself maintain an action for the commission. Nor can it claim a share of the commission by virtue of Agent's having been licensed as a real estate salesperson on that date. See Henry S. Miller Co., 585 S.W.2d at 678; Coastal Plains, 572 S.W.2d at 288-89. Moreover, Agent cannot maintain the action in her own behalf for two reasons. First, B-3 and not Agent was named in the sales contract as co-operating broker. Agent has no legally cognizable interest in the commission. See, e.g., Gehl Brothers Manufacturing Co. v. Price's Producers, Inc., 319 S.W.2d 955, 958 (Tex.Civ.App.--El Paso 1958, no writ). Second, the RELA specifically prohibits a real estate salesperson from accepting compensation for a real estate transaction from any person other than that person's sponsoring broker. RELA § 1(d) (Vernon Supp.1987). Because Agent's rights are no more than derivative of B-3's rights, Agent cannot maintain an action for a share of the commission under section 20(a) of the RELA.

Agent and B-3 attempt to distinguish Henry S. Miller Co. and Coastal Plains by a showing that on February 3, 1986, when Agent first began negotiating for the sale of the receivership property, her sponsoring broker was B-2, who was at that time a licensed broker. She then cites the following quote from Henry S. Miller Co.:

[T]he statute permits an assignee, successor or legal representative of a broker to maintain suit for a previously earned commission by showing that the broker who performed the service and earned the commission was licensed, even though the person bringing the suit is not licensed.

Henry S. Miller Co. v. Treo Enterprises, 573 S.W.2d 553, 555 (Tex.Civ.App.--Texarkana 1978), aff'd, 585 S.W.2d 674 (Tex.1979) (emphasis supplied). However, we find no evidence that B-2 ever transferred or assigned any interest in the commission to Agent or B-3. Henry S. Miller Co. is inapplicable. We overrule the first two points of error.

By point three, B-3 argues that the sales transaction was exempt from the RELA because it was conducted under court supervision and was executed pursuant to a court order. Section 3 of the RELA provides:

The provisions of this Act shall not apply to any of the following persons and transactions, and each ... of the following persons and transactions are hereby exempted from the provisions of this Act, to wit:

* * *

* * *

(e) a person acting under a court order ...

Without expressing an opinion on the merits of this contention, we hold that Tex.R.Civ.P. 166-A(c) and City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671 (Tex.1979) preclude consideration of this point of error. As was stated in Clear Creek:

[T]he non-movant may not urge on appeal as reason for reversal of the summary judgment any and every new ground that he can think of.... With the exception of an attack on the legal sufficiency of the grounds expressly raised by the movant in his motion for summary judgment, the non-movant must expressly present to the trial court any reasons seeking to avoid movant's entitlement.

City of Houston v. Clear Creek Basin Authority, 589 S.W.2d at 678.

B-3 contends that all facts from which the trial court could...