Showcase Realty, Inc. v. Whittaker

• Citation: 559 F.2d 1165
• Decision Date: 26 August 1977
• Docket Number: No. 76-1665,76-1665
• Parties: SHOWCASE REALTY, INC., a corporation, Dan Patch Realty, Westco Realty, Inc., a corporation, Pacific National Bank of Washington, a corporation, Washington Federal Savings & Loan Association, a corporation, Robinson Realty & Insurance, Claimant and Third-Party Plaintiffs, Appellants, v. M. K. WHITTAKER and Ann S. Whittaker, his wife, and the marital community composed thereof, and J. W. Oldenburg and Josephine Oldenburg, his wife, and the marital community composed thereof, Third-Party Defendants, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1165

559 F.2d 1165

SHOWCASE REALTY, INC., a corporation, Dan Patch Realty,

Westco Realty, Inc., a corporation, Pacific National Bank of

Washington, a corporation, Washington Federal Savings & Loan

Association, a corporation, Robinson Realty & Insurance, Claimant and Third-Party Plaintiffs, Appellants, v. M. K. WHITTAKER and Ann S. Whittaker, his wife, and the

marital community composed thereof, and J. W. Oldenburg and

Josephine Oldenburg, his wife, and the marital community

composed thereof, Third-Party Defendants, Appellees.

No. 76-1665.

United States Court of Appeals,

Ninth Circuit.

Aug. 26, 1977.

David G. Shenton, Case, Pruzan, Kovarik & Shulkin, Seattle, Wash., argued, for third-party plaintiffs, claimant and appellants.

Douglas W. McQuaid, Charles E. Silveg, Aiken, St. Louis & Silveg, Seattle, Wash., argued, for third-party defendants, appellees.

Appeal from the United States District Court for the Western District of Washington.

Before BARNES and TRASK, Circuit Judges, and BURNS, ^* District Judge.

BARNES, Senior Circuit Judge:

The purchaser (Professional Manivest, Inc.) of two apartment complexes in Snohomish County, Washington, filed a complaint for interpleader (based upon diversity of citizenship of claimants), when faced with conflicting requests for payment. The claimants were the real estate brokers (appellants Showcase Realty, Inc., Westco Realty, Inc., and Robinson Realty & Insurance) who asserted that they were entitled to commission from the equity payments pursuant to the terms of two written contracts (the initial "Earnest Money Agreement" with Messrs. and Mrs. Whittaker and Oldenburg, and a subsequent letter-agreement regarding commissions with the sellers' corporation, W. O. Corporation ¹), and the Pacific National Bank of Washington ("the Bank"), to whom the sellers had pledged and assigned any and all interest in the contract rights.

The brokers filed a third party complaint seeking to establish that the sellers were also personally liable for the commissions. In the Earnest Money Agreement signed by the sellers and dated October 12, 1970, there was standardized language to the effect that the sellers agreed to pay the brokers a commission. (Clerk's Record ("C.R.") at 102). In the blank wherein the amount of commission was to be filled in, one of the sellers (Whittaker) placed the words "PER LETTER." A subsequent letter-agreement, dated November 10, 1970, contained the amount and manner of payment of the commissions but was only signed by W. O. Corporation through Messrs. Whittaker and Oldenburg in their capacities as officers of the corporation. In Mr. Whittaker's affidavit, he states that the sellers were asked to sign an agreement to personally bind themselves to the payment of the commission, but the sellers unequivocally refused to do so. (C.R. at 100-103). In the affidavit of Glenn Moormeier, one of the realtors, it is stated that Whittaker suggested that the sellers would sign the agreement as W & O Associates, the partnership of Messrs. Whittaker and Oldenburg. However, allegedly due to a mistake by personnel in Moormeier's office, the document was prepared by Moormeier's secretary for signature as W. O. Corporation. (C.R. at 119). No such named corporation exists.

It was established that prior to the sale of the properties, Messrs. Whittaker and Oldenburg had pledged their interests in any and all contract rights to the Bank as security for their various debts. (C.R. at 73 and 84).

Prior to trial, the brokers and the Bank settled their claims. The brokers received $25,000 (the amount of the commission was $120,000), and the interpleader action was dismissed. (C.R. at 141). The sellers moved for summary judgment of the remaining third party complaint on the grounds that, as the Washington Statute of Frauds requires that a contract for payment of real estate commissions be signed by the party to be charged therewith, the lack of signatures by the sellers in their individual capacities in the letter-agreement automatically precluded the possibility of an enforceable contract against them. (C.R. at 105-110). The district court agreed, finding that the Earnest Money Agreement taken with the letter-agreement satisfied the statute of frauds only as to the corporation and not as to the individual third party defendants, the sellers. The brokers appeal the grant of the summary judgment. We affirm.

The appellants raise two questions herein:

1. Does the Washington Statute of Frauds bar their claim for commission, and

2. Is the Statute of Frauds applicable to this case?

I

The claim against the sellers, individually, is precluded by the Washington Statute of Frauds.

Section 19.36.010(5) of the Washington Revised Code provides that:

"In the following cases, specified in this section, any agreement, contract and promise shall be void, unless such agreement, contract or promise, or some note or memorandum thereof, be in writing, and signed by the party to be charged therewith, or by some person thereunto by him lawfully authorized, that is to say:

(5) An agreement authorizing or employing an agent or broker to sell or purchase real estate for compensation or a commission."

From the clear language of the statute, for the sellers to be individually liable there must be a written contract to that effect which is signed by them. The Earnest Money Agreement, by itself, is not sufficient as it does not include the amount of the commission to be paid, a fatal contractual flaw under the Washington Statute of Frauds. Black v. Milliken, 143 Wash. 204, 255 P. 101 (1927); Houtchens Co. v. Nichols, 81 Wash. 238, 142 P. 674 (1914); Cushing v. Monarch, 75 Wash. 678, 135 P. 660 (1913). While reference can...