Opinion
Nos. 3D19-49 3D19-135
01-29-2020
ESSLINGER-WOOTEN-MAXWELL, INC., Appellant/Cross-Appellee, v. LONES FAMILY LIMITED PARTNERSHIP, et al., Appellees/Cross-Appellants.
Ross & Girten, Lauri Waldman Ross and Theresa L. Girten ; DeMahy Labrador Drake & Cabeza, Pete L. DeMahy and Jose I. Rojas, for appellant/cross-appellee. Law Office of Henry Marinello, P.A., and Henry E. Marinello ; Hunter & Lynch, P.A., and Christopher J. Lynch ; Law Offices of Victor K. Rones, P.A., and Victor K. Rones, for appellees/cross-appellants.
Ross & Girten, Lauri Waldman Ross and Theresa L. Girten ; DeMahy Labrador Drake & Cabeza, Pete L. DeMahy and Jose I. Rojas, for appellant/cross-appellee.
Law Office of Henry Marinello, P.A., and Henry E. Marinello ; Hunter & Lynch, P.A., and Christopher J. Lynch ; Law Offices of Victor K. Rones, P.A., and Victor K. Rones, for appellees/cross-appellants.
Before LOGUE, SCALES and GORDO, JJ.
GORDO, J.
Esslinger-Wooten-Maxwell, Inc. (EWM) appeals the final summary judgment in favor of the Lones Family Limited Partnership in this suit for recovery of a brokerage commission. On appeal, we review whether the procuring cause doctrine may be inferentially incorporated into the written exclusive listing agreement between the Lones Family and EWM to allow EWM to recover commission on a sale six years after the expiration of the listing agreement. Based on the record before us, we conclude that the procuring cause doctrine does not apply as a matter of law or equity. We affirm the trial court's grant of summary judgment.
FACTS & PROCEDURAL HISTORY
On January 27, 2010, the Lones Family entered into a "Commercial Exclusive Right of Sale Listing Agreement" with EWM regarding the sale of its Pinewood Acres property, which included a school, a residence and approximately nine acres of land. The listing agreement expressly gave EWM the exclusive right to sell or lease the property within twelve months in exchange for 6% commission. The agreement also contained express protection provisions providing that EWM would be entitled to receive 6% commission if the property was sold or leased within twelve months after termination of the agreement to any buyer to whom the property was submitted for sale during the continuance of the agreement.
Paragraph 3.B. of the listing agreement provided:
Said commission is to be paid to Broker whether the purchaser is found by Owner, by Broker or by any other broker or person at the price and upon the terms set forth above or at any other price or terms acceptable to Owner, or if Owner agrees to sell the Property within twelve (12) months next after termination of the Agreement to a purchaser to whom Broker, Owner or any other cooperation broker submitted the Property for sale during the continuance of this Agreement.
Paragraph 3.D. provided:
If within a period of twelve (12) months following the termination of the Agreement, Owner shall lease the property to a party obtained by Owner, Broker or any other person during the term of the Agreement, it is agreed that Owner shall pay a leasing commission to Broker based upon Broker's leasing commission rates set forth in Paragraph 16 hereof. If during the term of the said lease, or within two (2) years after the termination, the Lessee or any person or any entity affiliated with Lessee shall buy the Property from Owner, the sales commission herein agreed to shall be deemed as earned by and shall be due and payable to Broker.
EWM introduced the Lones Family to prospective buyers, Fernando and Ignacio Zulueta, during the contract period; however, the parties never entered into an agreement for sale or lease of the property.
In February 2012, after the expiration of the listing agreement and protection period, the Lones Family entered into a listing agreement with World Business Brokers, Inc. (WBB). WBB re-introduced the Lones Family to the Zuluetas in August 2012, but ultimately, negotiations fell through. The undisputed record evidence is that the Zuluetas never leased or purchased the property.
In June 2013, the Lones Family entered into a lease agreement with Somerset Academy, Inc. The Lones Family paid WBB 7.5% commission on the lease. Later, in May 2017, the Lones Family and Somerset closed on an "As Is" Contract for Sale and Purchase of the property. The Lones Family paid WBB 7.5% commission for the sale.
EWM sued the Lones Family for breach of the listing agreement seeking commission on the lease and eventual sale of the property to Somerset. EWM alleged it was the procuring cause of the sale arguing that the Zuluetas and Somerset were the same buyers. Thus, EWM claimed it was entitled to commission under the procuring cause doctrine because it initially introduced the Lones Family to the Zuluetas during the period of their listing agreement and was intentionally excluded from negotiations.
Although EWM submitted evidence that the Zuluetas incorporated and served on the board of directors of Somerset Academy, it is undisputed that the Zuluetas were no longer on the board as of 2005 and did not own the corporation.
"A broker, to be considered the ‘procuring cause’ of a sale, must have brought the purchaser and seller together and effected a sale through continuous negotiations inaugurated by him unless the seller and buyer intentionally exclude the broker and thereby vitiate the need for continuous negotiations. " Venturvest Realty Corp. v. A.K.S.I.P. Corp., 793 So. 2d 1054, 1056 (Fla. 3d DCA 2001) (quoting Sheldon Greene & Assoc., Inc. v. Rosinda Invs., N.V., 475 So. 2d 925, 927 (Fla. 3d DCA 1985) ). "To be the procuring cause the broker must show that he called the potential purchaser's attention to the property and it was through his efforts the sale was consummated." Nat'l Airlines, Inc. v. Oscar E. Dooly Assocs., Inc., 160 So. 2d 53, 54–55 (Fla. 3d DCA 1964).
On November 14, 2018, the trial court granted summary judgment in favor of the Lones Family finding the procuring cause doctrine did not apply because the parties entered into a special contract with a specific protection period within which EWM was entitled to receive commission after termination of the agreement. Further, the trial court found EWM was not entitled to a commission under the express terms of the contract because it was undisputed that the property was neither sold nor leased during the listing agreement period or the protection period. Finally, the court found that even if the procuring cause doctrine applied, there was no genuine issue of material fact regarding whether EWM procured the ultimate buyer—Somerset—or was intentionally excluded from negotiations.
The court entered final summary judgment against EWM and dismissed the Lones Family's counterclaim for breach of fiduciary duty against EWM, the Lones Family's third-party complaint for indemnity against WBB, and WBB's third-party complaint for indemnification and declaratory relief.
EWM appeals the final summary judgment.
The issues raised by the Lones Family and WBB in the consolidated cross-appeals are rendered moot by our opinion.
STANDARD OF REVIEW
"Summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law. Thus, our standard of review is de novo." Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130–31 (Fla. 2000) (internal citation omitted).
"Where the determination of the issues of a lawsuit depends upon the construction of a written instrument and the legal effect to be drawn therefrom, the question at issue is essentially one of law only and determinable by entry of summary judgment." Cox v. CSX Intermodal, Inc., 732 So. 2d 1092, 1096 (Fla. 1st DCA 1999) (quoting Angell v. Don Jones Ins. Agency, 620 So. 2d 1012, 1014 (Fla. 2d DCA 1993) ).
LEGAL ANALYSIS
EWM argues that Florida caselaw does not support the trial court's finding that the EWM listing agreement was a special contract. Challenging the trial court's definition of a special contract as one containing "peculiar provisions," EWM claims there is nothing special or different about the specified protection period as such provisions are commonly found in exclusive listing agreements.
"A ‘special contract’ has been defined as one with ‘peculiar provisions or stipulations not found in the ordinary contract relating to the same subject matter. These provisions are such as, if omitted from the ordinary contract, the law will never supply.’ " WPB, Ltd. v. Supran, 720 So. 2d 1091, 1092 (Fla. 4th DCA 1998) (quoting 17 C.J.S. Contracts § 10 (1963) ).
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In determining whether the listing agreement at issue is in fact a special contract, we begin our analysis with the complete definition of this term. Black's Law Dictionary defines "special contract" as follows: "1. See contract under seal . 2. A contract with peculiar provisions that are not ordinarily found in contracts relating to the same subject matter. 3. See express contract ." Black's Law Dictionary 373 (9th ed. 2009). An "express contract," in turn, is defined as "[a] contract whose terms the parties have explicitly set out. — Also termed special contract . Cf. implied contract ." Black's Law Dictionary 369 (9th ed. 2009).
According to Black's Law Dictionary, a special contract is not limited solely to contracts containing peculiar provisions. In fact, Florida cases have expounded this definition, clarifying that "[a] special contract is always an express contract, ‘one whose provisions are expressed and not dependent on implication.’ " Della Ratta v. Della Ratta, 927 So. 2d 1055, 1058 n.1 (Fla. 4th DCA 2006) (quoting WPB, Ltd. v. Supran, 720 So. 2d 1091, 1092 (Fla. 4th DCA 1998) ).
Based on this definition, we approve of the trial court's conclusion that the EWM listing agreement was a special contract. This exclusive right of sale contract was for an express period of twelve months and contained a twelve-month protection provision to commence upon expiration of the listing period. EWM contends there is no evidence that the parties intended to supersede the procuring cause doctrine by writing a twelve-month protection period into their agreement. Yet, by its terms, the agreement explicitly limited EWM's right to recover commission for any sale or lease of the property for a specified period.
Florida law dictates that "[i]n the absence of a special contract, a broker is entitled to a commission when that person is the procuring cause of a sale." Allenby & Assocs., Inc. v. Crown St. Vincent Ltd., 8 So. 3d 1211, 1212 (Fla. 4th DCA 2009) (citing Siegel v. Landquest, Inc., 761 So. 2d 415, 416–17 (Fla. 5th DCA 2000) ). It follows that, where an express contract (such as the EWM listing agreement) limits the protection period, the procuring cause doctrine cannot be inferentially incorporated to supersede the formalized intent of the parties to the written agreement. See Wood/Fay Realty Grp., Inc. v. New Aquarius Corp., 842 So. 2d 914, 917 (Fla. 3d DCA 2003) ("Courts may not interfere with the freedom of contract or substitute their judgment for that of the parties thereto and rewrite a contract in order to relieve one of the parties from the apparent hardship of an improvident bargain." (quoting Lane, Gelety, Woolsey & Centrone, P.A., Inc. v. Woolsey, 377 So. 2d 743, 745 (Fla. 4th DCA 1979) )). This is especially so in the present case where the parties included in their agreement a specific provision requiring that any modifications to the agreement would have to be made in writing. That provision clearly evidences the parties' negotiation and intent not to implicitly import the procuring cause doctrine into their agreement without it first being reduced to writing. We are, therefore, unpersuaded by EWM's argument that we are bound by Venturvest to apply the procuring cause doctrine given that this case involves a special contract and Venturvest involved an oral brokerage contract. See Venturvest Realty Corp. v. A.K.S.I.P. Corp., 793 So. 2d 1054 (Fla. 3d DCA 2001).
EWM further urges this Court to disregard the express terms of the listing agreement, arguing that the procuring cause doctrine is inferentially incorporated into every exclusive real estate listing agreement. While we acknowledge that the procuring cause doctrine has been recognized as an exception to the general rule that the terms of the contract control, this exception operates in equity, not law. See, e.g., Monrose, Inc. v. Baldridge, 423 So. 2d 467 (Fla. 2d DCA 1982) (where the broker alleged that the seller "perpetrated a subterfuge" and deliberately delayed consummating the deal to avoid paying the broker's commission). The equitable principles behind the procuring cause doctrine have been explained as follows:
[Exclusive right to sale] contracts are frequently for short durations and require considerable commitment of time and effort by brokers. Common sense dictates that the intent of most parties to such contracts is to inferentially incorporate the [procuring cause] doctrine into the contract; otherwise, a seller would have little motivation to close the sale prior to the expiration of the contract.
Sanson v. Dutcher, Higginbotham & Bass, Inc., 401 So. 2d 913, 915 (Fla. 4th DCA 1981).
The present case is distinguishable in that the EWM listing agreement was for a substantial twelve-month period, rather than a short duration. The agreement also contained an extended protection period. At the point the parties negotiated and contracted for a twelve-month protection period, the agreement memorialized the parties' intent to limit recovery of commission for that definite period. Moreover, it is undisputed that EWM never introduced the Lones Family to the ultimate buyer, Somerset. The negotiations between the Lones Family and Somerset did not occur until a full year after the protection period had lapsed and the Lones Family had entered into a new listing agreement with WBB. Based on the record before us, we decline to apply this equitable doctrine to a sale that was effectuated six years after the expiration of the protection period, where there is no evidence of a deliberate delay, where there was an intervening broker, and where the ultimate buyer was a completely different entity.
CONCLUSION
Because the EWM listing agreement was a special contract and there remained no genuine issues of material fact that would entitle EWM to recover a commission for the sale of the property to Somerset, we conclude the trial court properly granted summary judgment. Accordingly, we affirm.
Affirmed.