Sullivan v. Hopkins, 24239.

• Citation: 435 F.2d 1128
• Decision Date: 15 December 1970
• Docket Number: No. 24239.,24239.
• Parties: C. Gardner SULLIVAN, II, Appellee, v. Mrs. John R. HOPKINS, Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

435 F.2d 1128 (1970)

C. Gardner SULLIVAN, II, Appellee, v. Mrs. John R. HOPKINS, Appellant.

No. 24239.

United States Court of Appeals, Ninth Circuit.

December 15, 1970.

Clarence S. Hunt, Albert H. Ebright, of Ball, Hunt, Hart & Brown, Long Beach, Cal., for appellant.

Ronald H. Bonaparte, John A. Joannes, Los Angeles, Cal., for appellee.

Before BROWNING, CARTER and KILKENNY, Circuit Judges.

KILKENNY, Circuit Judge:

Appellant and her co-defendant, Arthur Stegall, were defendants in an action on contract prosecuted by appellee against them in the district court. Stegall settled prior to trial. In a non-jury diversity case, the judge awarded a judgment against appellant for $55,000.00, plus interest. We affirm.

OUTLINE OF FACTS

Although the claim is stated in three alternate counts, we need concern ourselves only with the common count for services rendered.

We believe that the following is a fair statement of the appellant's case. Appellee, Sullivan, is an IBM operator and a musician. In 1965, he learned that Irma Kellogg was interested in selling her Santa Barbara County ranch. As a result of a conference, she orally agreed to pay him a commission of 5% of the purchase price if he produced a buyer. To work out the details of the transaction, she referred him to her attorney, Mr. Crawford. The latter, when contacted by appellee, restated Mrs. Kellogg's agreement to pay appellee a 5% commission upon producing a buyer. Crawford and Kellogg, although the subject was never discussed, assumed that the appellee was a real estate broker. In the conversation there was no mention of purchase price or terms of sale.

Appellee then contacted a friend, an attorney in Denver, Colorado, and advised him of the availability of the ranch. The attorney interested two of his clients in the ranch, the former defendant Stegall and the appellant, Hopkins. The attorney, Stegall and appellant then visited the ranch where the appellee introduced them to Kellogg and Crawford. Appellee did not participate in the negotiations, but he did give some assistance, from time to time, as the negotiations proceeded. After the introduction, appellee did not accompany the buyers on the inspection tour of the ranch. He remained with Mrs. Kellogg and entertained her by playing the piano and in conversation. At one time, he reported to the buyers some information which they had requested regarding a prior sale of part of the ranch. At one time, he expressed the view that the proposed offer might be so low that it would end the negotiations. Occasionally, the Denver attorney and Stegall asked that appellee collect certain information from sources readily available to the public. He complied with these requests. On one occasion, he permitted the parties to use his office to prepare papers. On numerous occasions, he discussed the progress of the negotiations with the buyers and generally tried to be helpful.

During the negotiations, the appellee's "commission" was mentioned on a number of occasions and all parties were fully aware of the agreement on the part of the seller. On one occasion, the Denver attorney discussed with appellee the legal obstacles to collecting a real estate commission in the state of California, but ended the conversation by assuring the appellee that Stegall and appellant would see that he was protected. On another occasion, the buyers proposed to the appellee that he take an interest in the property for his commission.

Ultimately, the parties agreed upon a purchase price of $1,800,000.00. During the course of drafting the closing documents, the buyers proposed that they would pay appellee's commission if Mrs. Kellogg would reduce the purchase price to $1,700,000.00. Mrs. Kellogg was persuaded that this arrangement would have favorable tax consequences and the proposal was accepted. On February 21, 1966, a written agreement was entered into between Kellogg, as seller, and Stegall and the appellant as purchasers of the ranch. As part of the written agreement, Stegall and appellant agreed to pay to appellee the commission of 5% of the $1,700,000.00 purchase price that Kellogg was originally obligated to pay.

Subsequently, Stegall and the appellant refused to pay the commission. After appellee instituted this action, Stegall settled with the appellee for $30,000.00. The complaint was then amended and the action thereafter proceeded solely against the appellant.

ISSUES

We summarize the issues as follows:

(1) Was there evidence to support the finding of the trial court that the agreement to pay a commission was predicated upon a promise to pay a finder's fee, rather than a real estate broker's commission?

(2) Are the court's findings in conflict with the pleadings?

(3) Did the trial court err in awarding a judgment of $55,000.00 and interest, rather than a judgment of $42,500.00 and interest?

(1) The principal thrust of the appellant's argument is that to permit a recovery in this case would violate California's public policy against allowing unlicensed persons to act as real estate brokers. She argues that appellee's services in connection with the sale of the property fall within the purview of the California Bus. & Prof.Code, § 10136,¹ and that appellee, not being a licensed broker, cannot recover.

Appellee, on the other hand, argues that he was acting as a finder and that his status was within the California rule which allows compensation to one not licensed as a real estate broker, for finding and introducing a person interested in purchasing real property. Palmer v. Wahler, 133 Cal.App.2d 705, 285 P.2d 8 (1955).

Although appellant makes an exceptionally persuasive argument in support of her contention that appellee was a real estate broker, rather than a finder, we believe that the record is such that the trial judge could have decided the issue either way. He resolved it in favor of the appellee. Beyond question, there is substantial evidence in support of his position.

After an examination of the entire record, we believe the trial judge hit the nail on the head when he said in his written opinion:

"Essentially, * * *, the transaction was one in which the plaintiff was simply obligated to bring the buyer and seller together in order to earn his fee. This he did. The negotiations were carried on by Mr. Crawford, Mrs. Kellogg\'s attorney, on the one hand and Mr. Stegall, an experienced and astute real estate investor, and Mr. Reardon, acting for his client, Mrs. Hopkins, on the other. Neither side needed, expected, or relied upon plaintiff\'s further participation. What plaintiff did in addition to bringing the buyer and seller together was out of a spirit of helpfulness and not with the expectation or purpose of additional reward. These activities, if they affected the transaction at all, were purely incidental." (Record, page 273).

Subsequent to the filing of the opinion, the judge signed formal findings the appellant filed a request for additional findings. The appellee filed objections to the seventeen requests. After a supplemental hearing, the judge took the requests and the objections under submission and thereafter approved and conclusions. Some time thereafter, certain of the requests and denied others. The record demonstrates beyond successful contradiction that the court below painstakingly considered this issue, including the testimony pro and con, and then concluded that the weight of the evidence was in favor of appellant.

The trial court's finding and conclusion that the status of appellee was that of a finder,...