Zink v. Maple Inv. and Development Corp.

• Decision Date: 02 August 1993
• Docket Number: No. 2-92-0798,2-92-0798
• Citation: 617 N.E.2d 1269,247 Ill.App.3d 1032,187 Ill.Dec. 548
• Parties: , 187 Ill.Dec. 548 David E. ZINK, Plaintiff-Appellant, v. MAPLE INVESTMENT AND DEVELOPMENT CORPORATION, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 1269

617 N.E.2d 1269

247 Ill.App.3d 1032, 187 Ill.Dec. 548

David E. ZINK, Plaintiff-Appellant, v. MAPLE INVESTMENT AND DEVELOPMENT CORPORATION, Defendant-Appellee.

No. 2-92-0798.

Appellate Court of Illinois Second District.

Aug. 2, 1993.

Robert R. Verchota, David Drenk, Donovan & Roberts, P.C., Wheaton, for David E. Zink.

James G. Bauer, Bauer & Hotte, P.C., Elmhurst, Douglas Drenk, Douglas Drenk & Associates, P.C., Wheaton, for Maple Inv. & Development Corp.

Justice McLAREN delivered the opinion of the court:

Plaintiff, David E. Zink, filed suit against defendant, Maple Investment and Development Corporation, to recover commissions allegedly due and owing pursuant to a real estate contract. Plaintiff appeals from an order entering judgment in favor of defendant. For the following reasons, we reverse and remand.

Defendant was a real estate development company and licensed real estate broker. Plaintiff worked as an independent real estate broker and project manager for defendant from 1975 until July 15, 1990. Plaintiff's business relationship with defendant was governed by an agreement which provided that the "usual and customary commissions" would be charged for services performed by plaintiff. The agreement further stated as follows:

"When the Salesman [Zink] shall perform any service hereunder, whereby a commission is earned, said commission shall, when collected, be divided between the Broker and Salesman in accordance with office rules and regulations.

The division and distribtuion [sic ] of the earned commission as set out in office rules and regulations which may be paid to or collected by said Broker, shall take place as soon as practicable after collection of such commissions from the party or parties for whom the services may have been performed."

In April 1988, James Bell, president of defendant corporation and 40% beneficial owner of a parcel of unimproved real estate located in Woodridge, Illinois, executed a listing agreement giving defendant corporation the exclusive right to sell or offer the property for sale. Although plaintiff did not sign the agreement, he is designated as the sales representative on this particular parcel of property. Commissions were contemplated in the agreement as follows:

"This exclusive right to sell shall continue, as irrevocable, for the period of 180 days from and after the date hereof. If any sale or exchange is made by you or by myself, or by anyone else during the time period herein fixed or any continuance thereof, or is sold within 180 days after the termination of this agreement to anyone with whom you have had negotiations, I hereby agree to pay you the commission on the full sale price as per reverse side hereof. A commission shall be deemed to have been earned at such time as a sales contract or exchange contract is executed and all contingencies are met, or an option has been exercised involving the subject property. Said commission shall be paid at the time of closing or settlement. If there is a default of the contract of sale involving the subject property, then the commission shall be paid following the default. The real estate herein is unimproved property for purposes of the applicable commission schedule on the reverse side. You shall have the privilege of purchasing this property during said period and any continuance thereof, if you so desire, and you may deduct the agreed commission from the purchase price."

The reverse side of the agreement provided for commission on unimproved property at a rate of "10% up to $100,000 plus 7% on the next $100,000, plus 5% on the selling price over $200,000" with a minimum commission of $1,000. According to the agreement, commissions were due and payable by defendant to the salesman on consummation of the sale.

In July 1988, a grant of option was executed by the trustee, as seller, giving James P. Avgeris a 60-day option to purchase the property for $2,286,170.37. The option contract allowed Avgeris to extend the option for six additional 30-day periods. If the option was exercised, the option deposits would be applied to the purchase price. Each of the extensions provided for was exercised by Avgeris and the option deposits were paid to the seller.

An agreement to extend the option was executed July 26, 1988, granting Avgeris three additional 30-day extensions for $10,000 each. The final extension period had an expiration date of June 22, 1989. In June 1989, the trustee, as seller, and Avgeris, purchaser, executed a real estate sales contract for the property at a purchase price of $2,435,463. Closing was scheduled for December 15, 1989. Nevertheless, in September 1989, Avgeris and the trustee executed an addendum to the real estate sales contract. The addendum extended the closing date to April 2, 1990, and required Avgeris to deposit $105,000 with the seller. The seller would retain $15,000 per month commencing in September 1989 until the closing occurred. Avgeris was able to cancel the contract provided he gave 60 days' notice. In the event that Avgeris cancelled the contract, the seller would retain the extension deposit at the rate of $15,000 per month.

Avgeris paid each extension deposit through April 2, 1990. The sellers received approximately $189,000 in escrow, option, and extension deposits. However, Avgeris' option expired and no closing on the contract occurred on or before April 2, 1990.

On April 5, 1990, a second listing agreement on the property was executed by Bell as agent of the beneficial owners of the property. This agreement was approved and accepted by plaintiff as sales representative of defendant. Plaintiff continued his association with defendant until its office closed on July 15, 1990. At this time, plaintiff inquired about his commission in Avgeris' defaulted contract. Defendant refused to pay plaintiff any commission. Plaintiff filed suit against defendant to collect $70,809.23 in commission resulting from the defaulted option contract. Following a bench trial, the court entered judgment in defendant's favor, and plaintiff appealed.

At issue is whether defendant owes a commission to plaintiff pursuant to the contract for sale between the trustee as seller and Avgeris. Although Avgeris did not purchase the property and there was no closing on the contract, plaintiff asserts that he is entitled to his commission.

A reviewing court will not reverse a judgment following a bench trial unless it is against the manifest weight of the evidence, meaning that the opposite conclusion is clearly evident. (Swanson v. Village of Lake in the Hills (1992), 233 Ill.App.3d 58, 64, 174 Ill.Dec. 233, 598 N.E.2d 430.) A judgment is against the manifest weight of the evidence when the appellant presents evidence that is so strong and convincing that it completely overcomes the evidence and presumptions existing in the appellee's favor. FDL Foods, Inc. v. Kokesch Trucking, Inc. (1992), 233 Ill.App.3d 245, 252, 174 Ill.Dec. 474, 599 N.E.2d 20.

In this case, the listing agreement stated that the commission "shall be deemed to have been earned at such time as a sales contract * * * is executed and all contingencies are met, or an option has been exercised involving the subject property." (Emphasis added.) Plaintiff contends that his commission was earned pursuant to this language when Avgeris and the seller executed a contract for sale on the subject property. Defendant responds by asserting that plaintiff's right to a commission is not governed by the listing agreement, as plaintiff was not a party, but by his employment agreement with defendant. According to defendant, the "usual and customary commissions" were distributed to a salesman "in accordance with office rules and regulations" and "as soon as practicable after collection of such commissions from the party or parties for whom the services may have been performed." Since there was no closing on the contract or exercise of the option, defendant contends that plaintiff was not entitled to collect a commission.

Avgeris and the seller executed a contract for sale on the subject property in June 1989. It was not an option contract and specifically stated that Avgeris was entitled to credit option deposits previously paid against the purchase price. Defendant presented evidence that on August 16, 1989, a meeting took place between Bell, Avgeris and plaintiff. Avgeris apparently believed he was under an option contract. Notwithstanding the real estate sales contract, the parties executed an addendum to the real estate contract on September 12, 1989, which extended the closing date, required Avgeris to make a deposit of $105,000, and allowed Avgeris to cancel the contract by providing 60 days' notice. According to defendant, the addendum transformed the sales contract back into an option contract. Since Avgeris did not exercise the option, defendant contends that plaintiff is not entitled to a commission.

Plaintiff's right to recover his commission from defendant is governed by his employment agreement with defendant. (See Wilmette Real Estate & Management Co. v. Luvisi (1988), 172 Ill.App.3d 232, 236, 122 Ill.Dec. 218, 526 N.E.2d 477.) The agreement provides that the salesman's commission would be paid "as soon as practicable after collection of such commissions from the party or parties for whom the services may have been performed." It does not specifically state when the commission is earned. Therefore, the settled rule governing a broker's right to receive a commission applies.

If a real estate broker produces a purchaser, within the time limit of his authority, who is ready, willing and able to purchase the property on the terms...