Stauffacher v. Portside Properties, Inc.

• Decision Date: 25 April 1989
• Docket Number: No. 88-1663,88-1663
• Citation: 441 N.W.2d 328,150 Wis.2d 242
• Parties: Margaret S. STAUFFACHER, Plaintiff-Respondent, v. PORTSIDE PROPERTIES, INC., Defendant-Appellant.
• Court: Wisconsin Court of Appeals

Page 328

441 N.W.2d 328

150 Wis.2d 242

Margaret S. STAUFFACHER, Plaintiff-Respondent, v. PORTSIDE PROPERTIES, INC., Defendant-Appellant.

No. 88-1663.

Court of Appeals of Wisconsin.

Submitted on Briefs Jan. 6, 1989.

Opinion Released April 25, 1989.

Opinion Filed April 25, 1989.

Randall J. Nesbitt of Pinkert, Smith, Weir, Jinkins & Nesbitt, Sturgeon Bay, on briefs, for defendant-appellant.

Chester C. Stauffacher, Sturgeon Bay, on brief, for plaintiff-respondent.

Before CANE, P.J., and LaROCQUE and SUNDBY, JJ.

CANE, Presiding Judge.

Portside Properties, Inc. (Portside), appeals a summary judgment finding it liable to Margaret S. Stauffacher for a $3,116.97 real estate listing commission earned from a sale of certain property. Portside argues that under the terms of the employment agreement, Stauffacher is not entitled to the listing commission because Stauffacher terminated her employment with Portside before an offer to purchase was accepted and a sale occurred. Portside asserts that no listing commission accrued during Stauffacher's association with Portside. Because we conclude that the contract is ambiguous, we reverse and remand this matter to the trial court for further proceedings.

On October 3, 1986, Stauffacher executed an Independent Contractor Agreement with Portside. Stauffacher's duties as an independent contractor included the solicitation of property listings. Stauffacher was paid commissions for listings and sales in accordance with Portside's established commission schedule, which provided that the lister and seller each would receive 27- 1/2% of the agency's commission. The agreement specifically provided:

You will be compensated on a commission basis directly related to your sales and listing activity in accordance with the attached commission schedule.... Your share of commissions collected will be held in your name and paid to you in accordance with the commission schedule.

The contract could also be terminated at any time by either party upon written notice to the other party. Upon such termination the contract provided:

Such termination will not divest you of any rights in commissions accrued during your association but such commissions are subject to reasonable charges and setoffs. (Emphasis supplied).

Apparently this termination clause is standard language used in Wisconsin and other states for agreements between real estate agents and their agency.

Stauffacher obtained a listing contract for property owned by the Zinngrabes. The listing contract ran from December 5, 1986, to December 5, 1987. Portside's commission for the sale of the property was listed at 7%, due and payable upon the property's sale. The property's listing agent and selling agent were each entitled to 27- 1/2% of Portside's commission. Stauffacher's job with Portside ended on March 7, 1987. Subsequently, on August 23, 1987, a purchaser entered into a contract agreeing to purchase the property. On October 9, 1987, the property sold, and Portside received a real estate commission of $14,350.

Portside argues that because the property's sale occurred after Stauffacher's employment with Portside was terminated, Stauffacher's "commission" accrued after her termination, thereby not entitling her to the commission. On the other hand, Stauffacher argues that she is entitled to the listing agent's share of the commission even though the property's sale occurred after her employment with Portside terminated. She asserts that under the terms of the Independent Contractor Agreement, her "right" to a listing commission accrued when she obtained the listing contract during her association with Portside.

At a hearing on a motion for judgment upon the pleadings, the trial court agreed with Stauffacher's assertion. It reasoned that the use of the term "accrued" in the Independent Contractor Agreement was unambiguous and that Stauffacher's right to a listing commission accrued when she executed the listing contract with the seller. Portside appeals this decision.

The question of whether an ambiguity exists in an agreement is a question of law that we review independently of the trial court. Spencer v. Spencer, 140 Wis.2d 447, 450, 410 N.W.2d 629, 630 (Ct.App.1987). If the contract is susceptible to more than one reasonable interpretation, it is ambiguous. Bartel v. Carey, 127 Wis.2d 310, 314, 379 N.W.2d 864, 866 (Ct.App.1985). Terms used in contracts are to be given their plain or ordinary meaning. McNamee v. APS Ins. Agency, Inc., 112 Wis.2d 329, 333, 332 N.W.2d 828, 830 (Ct.App.1983).

The term "accrued" is unambiguous. The plain meaning of "accrued" means to come into existence as an enforceable claim. See Webster's Third New International Dictionary 13 (Unabr.1976). Accrued is also defined as due and payable or vested. Accrued has been defined almost universally to mean obtaining a vested right.

However, it is unclear from the agreement whether the term accrued refers to "rights" to a commission or "commission." If accrued refers to commission, i.e., accrued commission, then the listing commission does not accrue until a contract for sale is executed during the listing contract's term. Consequently, the commission accrues when a buyer is procured who is ready, willing, and able to purchase the property upon the terms specified in the listing contract. See Mansfield v. Smith, 88 Wis.2d 575, 585-86, 277 N.W.2d 740, 745 (1979).

A Texas appeals court adopted this interpretation in Reyna v. Gonzalez, 630 S.W.2d 439 (Tx.1982). The Reynas, after obtaining thirteen listing contracts, terminated their employment before five of the thirteen properties sold. The court held that the Reynas were not entitled to their listing commissions in part because the commissions had not accrued prior to their termination. ¹ The employment contract provided:

Upon termination of this agreement, any listings still in effect on unsold property, shall remain the sole property of the broker. Salesman's right to commissions or divisions thereof, which accrued prior to the termination of this contract shall be divested by the termination hereof.

Id. at 440.

The court reasoned that the contract was not ambiguous and that the Reynas' rights to the commissions, as expressly provided by the employment contract, were divested by their termination of the contract. Id. at 441. Consequently, this interpretation holds that a listing commission does not accrue until a contract for sale is executed during the listing contract's term.

On the other hand, if accrued refers to Stauffacher's "right" to a commission, i.e., accrued right to a commission, then the accrual takes place when the listing contract is obtained, provided a sale occurs during the listing contract's terms. For example, in Oehlrich v. Gateway Realty, 209 Neb. 417, 308 N.W.2d 327 (Neb.1981), a real estate agent obtained a listing contract but died before the property sold. The employment contract provided:

This contract and the association created hereby, may be terminated by either party hereto at any time upon notice given to the other; but the rights of the parties to any commission which accrued prior to such notice shall not be divested by such termination. (Emphasis supplied).

Id. at 330.

The Nebraska court held that Oehlrich's rights to a commission accrued prior to his death because on obtaining the listing, "such rights arose, became vested, and...