William S. Deckelbaum Co. v. Equitable Life Assur. Soc. of U.S.

• Decision Date: 20 April 1981
• Docket Number: No. 1-880A213,1-880A213
• Citation: 419 N.E.2d 228
• Parties: WILLIAM S. DECKELBAUM COMPANY, Plaintiff-Appellant, v. The EQUITABLE LIFE ASSURANCE SOCIETY OF the UNITED STATES, and Mutual Hospital Insurance, Inc., d/b/a Blue Cross of Indiana, Defendants-Appellees.
• Court: Indiana Appellate Court

Page 228

419 N.E.2d 228

WILLIAM S. DECKELBAUM COMPANY, Plaintiff-Appellant, v. The EQUITABLE LIFE ASSURANCE SOCIETY OF the UNITED STATES and Mutual Hospital Insurance, Inc., d/b/a Blue Cross of Indiana, Defendants-Appellees.

No. 1-880A213.

Court of Appeals of Indiana, First District.

April 20, 1981.

Seymour M. Bagal, Charles E. Barker, Indianapolis, Lineback & Lewis, Greenfield, for plaintiff-appellant.

Charles M. Wells, Edward O. DeLaney and Stephen W. Lee, Barnes, Hickam, Pantzer & Boyde, Indianapolis, C. Thomas Cone, Williams, Cone & Billings, Greenfield, for defendants-appellees.

RATLIFF, Judge.

STATEMENT OF CASE

The William S. Deckelbaum Company (Deckelbaum) appeals from the trial court's judgment dismissing its complaint for failure to state a claim upon which relief could be granted. We affirm.

FACTS

Taking as true all allegations in Deckelbaum's complaint and resolving all inferences therefrom in its favor, we are confronted with the following facts. The Equitable Life Assurance Society of the United States (Equitable) owned certain real estate, commonly known as the J.C. Penney Building, situated on Monument Circle in downtown Indianapolis. In September 1977 Equitable indicated to Deckelbaum, a commercial and industrial real estate company, its desire to sell the Penney Building, and Deckelbaum initiated negotiations with Blue Cross. Deckelbaum informed Equitable of Blue Cross's interest in the building and was authorized by Equitable to offer the Penney Building to Blue Cross for three million dollars. Deckelbaum was to receive six per cent, or one hundred eighty thousand dollars, as a commission. No written contract for the payment of a real estate commission was entered into by the parties.

In October 1977 Deckelbaum arranged and accompanied Equitable and Blue Cross on an inspection of the building. In November 1977 Deckelbaum delivered construction plans and specifications from Equitable to Blue Cross and obtained from Equitable and delivered to Blue Cross operating expenditures for the building for the past ten years. Deckelbaum also estimated costs for the erection of four additional stories to the existing structure and conducted further on site inspection with the parties in November 1977. Deckelbaum provided further services for the benefit of and at the request of both Equitable and Blue Cross through December 1977 and January 1978. In February 1978 at the request of Equitable Deckelbaum obtained Blue Cross's assurance of continued interest in the building and its promise to contact Deckelbaum in late April. Deckelbaum so informed Equitable.

On April 20, 1978, Blue Cross submitted a written offer to purchase the building for three million dollars through F.C. Tucker Company, Inc., as its alleged realtor. Before accepting the offer Equitable requested and received from Tucker a promise to indemnify Equitable "against any loss or expense by reason of any claims by any other brokers arising out of this transaction." (Record at 25.) On May 12, 1978, Equitable accepted Blue Cross's offer and the transaction was closed on July 5, 1978. Equitable thereafter paid Tucker one hundred fifty thousand dollars.

Deckelbaum instituted the instant action for compensatory and punitive damages alleging that Equitable, Blue Cross, and Tucker conspired to and did defraud Deckelbaum by entering into a contract with

Tucker despite the fact that Deckelbaum had been authorized to conduct the sale. Deckelbaum dismissed without prejudice its claim for relief against Tucker. The trial court sustained Equitable's and Blue Cross's motions to dismiss and entered a judgment of dismissal after Deckelbaum failed to plead over within the time provided by Ind. Rules of Procedure, Trial Rule 12.

ISSUE

Did the trial court erroneously dismiss Deckelbaum's claim pursuant to T.R. 12(B)(6)?

DISCUSSION AND DECISION

The standard of review applicable to a trial court's ruling on a motion to dismiss under T.R. 12(B)(6) is well established. Motions to dismiss are not favored by the law. Sacks v. AFNB, (1972) 258 Ind. 189, 279 N.E.2d 807. Trial courts should consider as true all the allegations of the complaint, Morris v. City of Evansville, (1979) Ind.App., 390 N.E.2d 184, and should view the motion in a light most favorable to the non-moving party, resolving all inferences in his favor. Cheathem v. City of Evansville, (1972) 151 Ind.App. 181, 278 N.E.2d 602, cert. denied 410 U.S. 966, 93 S.Ct. 1442, 35 L.Ed.2d 700. A complaint should not be dismissed unless it appears that the claimant would not be entitled to recover under any set of facts represented by his pleadings. State v. Rankin, (1973) 260 Ind. 228, 294 N.E.2d 604.

Equitable ¹ argues that the trial court correctly determined that Deckelbaum's claim was merely an attempt to recover a commission on the sale of real estate and that such claim was barred by the writing requirement of IC 32-2-2-1. Deckelbaum contends that IC 32-2-2-1 does not apply because its claim for relief is premised on the theory of tortious interference with a pre-contractual business relationship which does not depend upon the existence of a contract per se. Deckelbaum cites the cases of Fort Wayne Cleaners and Dryers Ass'n., Inc. v. Price, (1956) 127 Ind.App. 13, 137 N.E.2d 738, for the proposition that Indiana permits a cause of action for tortious interference with a business relationship, and of Leonard Duckworth, Inc. v. Michael L. Field and Co., (5th Cir. 1975) 516 F.2d 952, for the position that such a tort may be actionable in a situation involving a real estate sales commission.

Many states permit recovery of a real estate sales commission upon proof of an agreement, either oral or written. Since 1901 Indiana, however, has precluded recovery of such commissions when the agreement is not in writing. Frash v. Eisenhower, (1978) Ind.App., 376 N.E.2d 1201. Currently, IC 32-2-2-1 (Burns Code Ed., Repl.1980) provides that

"No contract for the payment of any sum of money or thing of value, as and for a commission or reward for the finding or procuring by one (1) person of a purchase for the real estate of another, shall be valid unless the same shall be in writing, signed by the owner of such real estate or his legally appointed and duly qualified representative: Provided, That any general reference to such real estate sufficient to identify the same shall be deemed to be a sufficient description thereof. (Acts 1901, ch. 67, § 1, p. 104; 1913, ch. 219, § 1, p. 638.)"

The intent of the Indiana legislature in enacting this statute was described by this court in Doney v. Laughlin, (1911) 50 Ind.App. 38, 44, 94 N.E. 1027, 1028-9, trans. denied (1912):

The object of the legislature in enacting the statute requiring real estate commission contracts to be in writing was in general, the same as that which led to the enactment of our statute of frauds, viz., to avoid frauds and perjuries, and the later is especially for the protection of those selling real estate through agents, to avoid conflict as to who, if any one, is entitled to the commission, and definitely to fix the amount to be paid. In enacting the statute, the legislature plainly provides that a contract for a real estate commission is invalid, or incapable of legal enforcement, unless in writing signed by the person obligated or his authorized agent."

See also, Day v. West, (1978) Ind.App., 373 N.E.2d 935; Gerardot v. Emenhiser, (1977) 173 Ind.App. 353, 363 N.E.2d 1072.

Doney involved a situation in which a written contract was entered into between the parties after the sale of the real estate had been consummated. This court held that the time at which the contract was entered into was not important so long as the contract was written and not oral. The court analyzed the purpose and effect of the statute and held that, even though a good cause of action might exist where services were rendered, benefits accepted, and thus an expectancy of compensation arose, said cause would not be enforceable because of the statute. Likewise, our supreme court held in the same year that a broker who had no written contract to procure a purchaser for real estate could not recover either for his expenditure of time and money in procuring a purchaser or even when his complaint sounded in tort, rather than in contract, for fraud and deceit. Fullenwider v. Goben, (1911), 176 Ind. 312, 95 N.E. 1010. The supreme court reasoned that

"(i)f parties...