Opinion
No. 76-157
Decided May 19, 1977. Opinion modified and as modified petition for rehearing denied June 16, 1977. Certiorari granted September 6, 1977.
In action to recover broker's commission under oral open listing of real estate, recovery was denied, and broker appealed.
Reversed
1. BROKERS — Trial Court Findings — Substantial Variations — Buyer's Offer — Listing Agreement — Offer Rejected — Reasons of Price — Legal Conclusion — Denial of Recovery — Cannot Stand. Where, in action for broker's commission, the trial court determined that there were substantial variations between the listing agreement and proposed buyer's offer, and on that basis, denied the broker commission, but, where the trial court also found, on supporting evidence, that the offer was rejected not because of these alleged variations, but rather for reasons of price, those variations were insufficient to support the trial court's legal conclusion that the broker was not entitled to his commission; accordingly, since the trial court found that, except for the issue raised by these variations, the broker had demonstrated his right to a commission, the matter must be remanded for entry of judgment for plaintiff.
2. Owner of Property — May Refuse Sale — Any Reason — Remains Liable — Broker's Services — Procuring Buyer. Where a broker has obtained a purchaser for real property under a listing agreement, the owner may decline to convey or complete the sale, and he may so decline for the reason that he may get more by holding and raising his price or for any other reason; but this does not and should not relieve him from his liability to pay his broker for his services in procuring a person able, ready, and willing to purchase at the terms stated in the listing.
Appeal from the District Court of the City and County of Denver, Honorable Charles Goldberg, Judge.
Meer, Wolf Slatkin, P.C., Albert B. Wolf, Walter Slatkin, Irvin M. Kent, for plaintiff-appellant and cross-appellee.
Ireland, Stapleton, Pryor Holmes, P.C., Kenneth L. Starr, William C. Gorham, for defendant-appellee and cross-appellant.
The plaintiff, Jones-Healy Realty, Inc. sued to recover a brokerage commission of $242,184.80 from defendant, Colorado City Development Company, (Owner) alleging complete performance of its obligations contained in an oral, open and non-exclusive real estate listing agreement. The Owner contended that the broker did not satisfy certain conditions of the listing. The trial court held that, as a matter of law, the broker was not entitled to a commission. The court also held, however, that if its legal conclusion was erroneous, based upon the facts presented, "there would be no question but that plaintiff would be entitled to its commission . . . ." We disagree with the court's legal conclusion and therefore reverse, and, because there is ample evidence in the record to substantiate the court's factual conclusions, we remand for entry of judgment in favor of the broker.
The Owner is a wholly owned subsidiary of Great Western United Corporation (GWU). Great Western Cities, Inc., (Cities) is also a subsidiary of GWU.
In early 1973 GWU desired to dispose of certain assets, among which was an 11,000 acre property known as the 3-R Ranch, titled in defendant. Various employees of the corporations contacted real estate brokerage firms, including the plaintiff. This culminated in an oral agreement that if the broker sold the 3-R Ranch for $220 per acre it would be paid a 10% commission. In connection with the offering, a brochure was given the broker in which was stated, "There exists a Right of First Refusal Agreement dated December 16, 1971, between Great Western Cities and a former employee."
The broker contacted the Colorado City Water and Sanitation District. The District was interested in purchasing the property and negotiations ensued which culminated on May 22, 1973 in the District offering to pay $220 per acre for the property. The offer had certain terms and conditions that were neither contained in, nor prohibited by, the verbal listing. These were the requirements that the Owner furnish a survey and an abstract or a title insurance policy and that certain personal property and crops be included in the sales price. Furthermore, the offer was on a form which would make it specifically enforceable, and no mention was made of the outstanding right of first refusal. Significantly, notwithstanding these alleged variations, the Owner sent this letter to the holder of the right of first refusal:
"You are hereby notified pursuant to the Right of First Refusal Agreement dated December 16, 1971, between Colorado City Development Company and you that Colorado City Development Company intends to sell the entire 3-R Ranch upon the terms and conditions attached hereto as Exhibit A. The 90-day period during which you shall have the right to acquire the entire 3-R Ranch commences upon your receipt of this notice." (emphasis supplied)
Attached to the letter was a copy of the District's offer.
At a combined board of directors meeting of GWU and its subsidiaries, those present voted to accept the offer, subject to review of the transaction by an ad hoc executive committee. That committee, however, determined not to accept the offer, according to the evidence and the trial court's findings "because they felt the 3-R and its attendant water rights were worth far more than the $220 cash per acre." No reference was made to any of the alleged additional terms contained in the offer. We note the following memorandum of the Owner's vice president regarding the negotiations with the District:
"We have horsed them [the District] around a little bit. We offered the ranch for sale, they made an offer which we declined, then they came back and met our conditions and we have, again, changed the offering significantly." (emphasis supplied)
[1] As a legal conclusion, the trial court determined that there were substantial variations between the listing and the District's offer, and on that basis it denied the broker a commission. Whether any or all of the alleged variations are substantial is not the question. Here, as distinguished from the situation in Horton-Cavey Realty Co. v. Reese, 34 Colo. 323, 527 P.2d 914 (1974), the alleged variations were neither specifically prohibited nor necessarily beyond the terms of the listing. Nor were they considered by the Owner as diverging from the listing agreement. And, since the trial court found, on supporting evidence, that the offer was rejected not because of these alleged variations, but rather for reasons of price, these variations may not now be specified as a basis for rejection of the offer.
[2] Accordingly, since the trial court found that, except for the issue raised by these variations, the broker had demonstrated his right to a commission, see § 12-61-201, C.R.S. 1973, the matter must be remanded for entry of judgment for plaintiff. As was stated in Dickey v. Waggoner, 108 Colo. 197, 114 P.2d 1097 (1941):
" 'The owner may decline to convey or complete the sale. He may so decline for the reason that he may get more by holding and raising his price, or for any other reason; but this does not and should not relieve him from his liability to pay his broker for his services in procuring a person able, ready and willing to purchase at the terms given, the same as if he had completed the sale. . . .' "
The Owner's cross-appeal urging that the trial court should have found as a matter of fact that no commission was owing is without merit since there was ample evidence in the record to serve as the basis for the court's factual conclusions and they must be upheld. Broncucia v. McGee, 173 Colo. 22, 475 P.2d 336 (1970).
Judgment reversed and cause remanded with instructions to enter judgment for the broker for the amount of the commission together with interest to December 10, 1975, the date of the original judgment, and costs.
JUDGE PIERCE and JUDGE BERMAN concur.