Young v. Adams
| Decision Date | 12 July 2005 |
| Docket Number | No. 53A05-0502-CV-60.,53A05-0502-CV-60. |
| Parties | Suzanne YOUNG, Appellant-Defendant, v. Mark ADAMS, Appellee-Plaintiff. |
| Court | Indiana Supreme Court |
Karen C. Horseman, Indianapolis, for Appellant.
Michael L. Carmin, Andrews Harrell Mann Carmin & Parker, P.C., Bloomington, for Appellee.
Suzanne Young appeals the trial court's entry of judgment in favor of her half brother, Mark Adams, on his complaint against her for breach of contract. We reverse.
Young raises six issues, however, we address the dispostive issue of whether an oral agreement for a commission upon finding a purchaser of real estate is barred by the writing requirement of Indiana Code Section 32-21-1-10.
Young owned fifty acres of land in Bloomington that she decided to sell. She contacted a real estate broker and offered him a $75,000 commission if he found a purchaser for the property. When Young discussed this with Adams, whose real estate broker's license had previously expired, they allegedly agreed that she would pay him $50,000 if he found a purchaser for the property. The parties' alleged agreement was never reduced to writing.
At one point, Young suggested that if Adams saw the owner of the neighboring property, Kenneth Blackwell, he should see if Blackwell was interested in purchasing the property from Young. Young explained that Blackwell had previously indicated he was interested in buying the property. Shortly thereafter, Adams saw Blackwell at the gym where their sons played basketball together. Adams told Blackwell that Young wanted to sell the property and offered to show Blackwell the house located on the property. Blackwell was in fact interested, and Adams showed Blackwell around the house.
Blackwell and Young eventually entered into an agreement in which Blackwell would purchase the property for $2,800,000 contingent on the approval of a zoning change. The zoning change was not granted and the contract expired. Blackwell then found additional investors and eventually purchased the property from Young for $2,600,000.
Adams requested that Young pay him the $50,000 commission. Young refused, asserting that they never agreed to such. Adams eventually filed a complaint for breach of contract. Young answered, alleging that Adams was not entitled to the commission because the statute of frauds barred his claim, Adams was acting as an unlicensed real estate broker, no contract was formed, and Adams did not "find" Blackwell. Young filed a motion for summary judgment, which the trial court denied.
On September 13, 2004, the trial court held a bench trial. After the parties submitted post-trial briefs, the trial court entered judgment in favor of Adams. The trial court's order provided:
Adams does not have a real estate broker's license. He previously had a broker's license but it lapsed and was not renewed. The parties agree that Adams may not maintain an action to recover a real estate commission because he does not have a real estate broker's license as required by Indiana Code 25-34.1-6-2
Adams maintains that he is entitled to recover $50,000 from Young, notwithstanding Indiana Code Section 25-34.1-6-2, because he acted as a mere finder, and did not provide the activities of a broker. First Federal Sav. Bank of Indiana v. Galvin, (1993) Ind.App., 616 N.E.2d 1048, transfer denied. Young denies that she agreed to pay a fee to Adams. Young denies that Adams did act as a finder, because Young already knew Blackwell and knew Blackwell might be interested in her property. Young asserts that Indiana Code 32-21-1-10 (formerly Indiana Code 32-2-2-1) requires a written contract. Since there is no written contract between Adams and Young, Young argues that her motion for Involuntary Dismissal, made at the close of Plaintiff's evidence should be granted.
* * * * *
This Court concludes that the since [sic] the writing in the Galvin case was very minimal, and was not signed by the party being charged with the payment of the fee, that the absence of a written agreement in this case is not dispositive. The evidence clearly establishes that Young agreed to pay Adams $50,000.00 if Adams found a buyer for Young's property. Young reiterated the agreement in front of at least two witnesses. Adams fully performed his part of the agreement, so the fact that the agreement was not in writing does not prevent its enforcement.
The Court concludes that Adams did "find" a buyer for Young, even though Young knew Blackwell before Adams brought Blackwell to Young's house in the early summer of 2002. Young could have called Blackwell herself and asked him if he wanted to buy the house and land, but the fact is that she did not.
The Court concludes that Adams did not perform the activities of a broker, or participate in negotiating the transaction, so Adam's action for the finder's fee is not prohibited by Indiana Code 25-34.1-6-2.
Appellant's App. pp. 48-49. Young now appeals.
Young argues that the trial court improperly entered judgment in favor of Adams. When reviewing a ruling where the trial court entered findings of fact and conclusions thereon, we first determine whether the evidence supports the findings and then whether the findings support the judgment. Goodwine v. Goodwine, 819 N.E.2d 824, 828 (Ind.Ct.App.2004). "In deference to the trial court's proximity to the issues, we disturb the judgment only where there is no evidence supporting the findings or the findings fail to support the judgment." Id. We do not reweigh the evidence, and consider only the evidence favorable to the trial court's judgment. Id. Young must establish that the trial court's findings are clearly erroneous, which occurs when a review of the record leaves us firmly convinced that a mistake has been made. See id."We do not defer to conclusions of law, however, and evaluate them de novo." Id.
One question Young raises is whether the trial court properly concluded that the statute of frauds does not bar Adams's claim. "Whether a writing satisfies the statute of frauds is a question of law for the court." Coca-Cola Co. v. Babyback's Intern., Inc., 806 N.E.2d 37, 42 (Ind.Ct.App.2004), trans. denied. Accordingly, our review of this question is de novo. See Goodwine, 819 N.E.2d at 828.
Indiana Code Section 32-21-1-10 provides:
A contract for the payment of any sum of money or thing of value, as a commission or reward for the finding or procuring by one (1) person of a purchaser for the real estate of another, is not valid unless the contract is in writing and signed by the owner of the real estate or the owner's legally appointed and duly qualified representative....
"The statute is to protect owners against fraud; it is not to be used by owners to perpetrate a fraud on the one seeking a commission." First Federal Sav. Bank of Indiana v. Galvin, 616 N.E.2d 1048, 1055 (Ind.Ct.App.1993), trans. denied. These contracts are required to be in writing and signed by the owner "so that there may be no doubt of the existence of the contract, or dispute as to its provisions." Price v. Walker, 43 Ind.App. 519, 523, 88 N.E. 78, 79 (1909). "In an action for commissions against the owner of real estate sold, a substantial compliance with the terms of the statute will be required." Id.
The trial court's conclusion is based on Galvin, in which Galvin's long time friend and president of a bank agreed to pay him a 7% commission if he found a purchaser for a strip mall obtained by the bank in a foreclosure action. Id. at 1050. Galvin eventually found a purchaser but the bank offered only a 5% commission. Id. On appeal, we addressed whether certain writings were sufficient to satisfy Indiana Code Section 32-21-1-10.2 Id. at 1055.
The first writing was a letter from Galvin to the bank's legal counsel indicating that the president of the bank had agreed to pay Galvin a 7% commission. Id. at 1051. The bank did not contradict this representation. Id. The other writing consisted of minutes from a bank committee meeting which stated, ' Id. at 1055-56. Because it was undisputed that the bank had agreed to pay Galvin a commission, we concluded the crux of the disagreement was not whether a contract existed but whether the amount of the commission was contingent on a certain purchase price. Id. at 1056.
We held that where the bank clearly agreed to pay Galvin a commission and Galvin performed his part of the bargain, Indiana Code Section 32-21-1-10 did not prevent the enforcement of the agreement against the bank. Id. We further held that the amount of the commission was a question of fact for a jury. Id.; see also Wehry v. Daniels, 784 N.E.2d 532, 536 (Ind.Ct.App.2003) ().
Here, the trial court determined that because the writings in Galvin were "very minimal" and not signed by the bank, "the absence of a written agreement in this case is not dispositive." Appellant's App. p. 49. We disagree. Although the writings in Galvin were not lengthy, they were evidence of the agreement between Galvin and the bank. Here, there is no such written evidence that an agreement exists.3 Also, the second writing in Galvin consisted of minutes from a bank committee meeting. Even if such is not considered "signed" by owner of the real estate as the trial court concluded, the signature requirements were not at issue on appeal and it was undisputed that the bank acknowledged the agreement during the committee meeting. Here, however, no written evidence was produced in which Young acknowledged an agreement to pay Adams a...
To continue reading
Request your trial