Opinion
No. CA-0823.
December 9, 1983.
APPEAL FROM CIVIL DISTRICT COURT, PARISH OF ORLEANS, STATE OF LOUISIANA, HONORABLE RICHARD J. GARVEY, J.
David S. Cressy, New Orleans, for third party defendants-appellants.
Alan B. Tusa, New Orleans, for defendant-appellee.
Jonathan M. Lake, New Orleans, for plaintiff-appellee.
Before REDMANN, CIACCIO and WILLIAMS, JJ.
This case involves a dispute over a real estate listing commission. The trial court held that plaintiff Latter Blum, Inc. was entitled to a commission plus 25% attorney fees and all costs from defendant Brandon Nodier. The trial court also held that defendant was entitled to indemnification from third party defendants, Thomas T. Cloke and David S. Cressy.
Brandon Nodier received the property on 719 Esplanade Avenue in New Orleans as an inheritance in 1976 after his parents' death. He bought out his relatives' portions and obtained full ownership of the property in 1979. At some point, Thomas T. Cloke, a real estate agent, moved next door to the Nodier property. Cloke approached Nodier about purchasing the property and made several offers, all of which Nodier refused.
Nodier agreed to allow Robyn Halvorsen, a friend of many years who was a real estate agent for Latter Blum, to list his house for sale for $200,000.00. The listing contract provided, "Owner agrees to refer all prospects for the sale of said property to Agent and Agent shall conduct all negotiations for the sale of said property." A commission of 6% on the first $100,000.00 and 4% on the balance of the property was stipulated. The contract continued, "Owner further agrees to pay Agent the above stipulated commission on any sale of said property negotiated within three (3) months after the expiration or termination of this contract to any party to whom said property was submitted by Agent . . . during the period of this contract." The contract provided that Owner would pay attorney fees incurred for the collection of the commission at 25% of the amount thereof plus court costs and other costs and expenses incurred. Nodier signed the three month listing agreement on March 29, 1980.
On April 24, 1980, Thomas Cloke made an offer to purchase the house for $85,000. 00. Halvorsen showed the offer to Nodier, who rejected it as too low. Exhibit P-2 shows an offer to purchase made by Cloke, signed "rejected as per authority 4-30 Robyn Halvorsen." Between June 11, 1980 and October 12, 1980, six other offers to purchase Nodier's property were made to Latter Blum, all of which Nodier also rejected.
Nodier signed a document reducing the asking price of the property to $175,000.00 on May 6, 1980.
The listing agreement expired on June 29, 1980. On July 10, 1980, Halvorsen had Nodier sign a document reading, "This is your authority to extend your listing from (blank) to 8/10/80 on my property at above address for $175,000.00. All other terms of said listing agreement to remain in full force and effect." On September 22, 1980, Nodier signed an identical form, this time "to extend your listing from (blank) to 10/22/80."
On December 3, 1980, Nodier accepted Thomas Cloke's offer to purchase the property for $145,000.00. Nodier was given $7,500.00 in cash and a promissory note, signed by Cressy and Cloke, for $71,600. 00.
Because he was unable to collect on the note, Nodier brought suit against Cressy and Cloke, which resulted in a judgment in his favor and against Cressy and Cloke for $67,736.00, $6,926.00 interest, and $3,000.00 attorney fees, rendered September 23, 1982. This judgment has not been appealed.
Latter Blum, plaintiff in the main demand, filed suit on June 25, 1981, claiming a commission as provided for in the listing agreement for the December 3, 1980 sale of Nodier's property. Plaintiff prayed for $7,800.00 plus 25% attorney fees and all costs and expenses. Defendant denied that the contract had ever been completed, arguing that his intention to list the property was not a serious one, but just "a favor" granted his longtime friend, Halvorsen. Defendant admitted that he was shown an offer of $85,000.00 from Cloke, and that he rejected that offer, but defendant would not verify Exhibit P-2 as that offer. Instead, he repeatedly asserted that he had written with his own hand across the instrument right where the writing by Halvorsen was on Exhibit P-2. Defendant also refuted the validity of the extension agreements, asserting that even if the original listing agreement had been valid, it had long expired and the alleged extensions were without effect. Alternatively, defendant brought a third party claim against the purchasers of his property, Cressy and Cloke. He claimed that Cressy, an attorney, had examined the listing agreement and extensions and had assured Nodier that they were invalid and that he did not owe Latter Blum any commission. He further testified that Cressy had promised to provide legal assistance and Cloke, financial assistance, were any problems to develop with Latter Blum, over the commission. Nodier testified that Cloke and Cressy told him that the $7,500.00 cash he was receiving was the sum that would have gone to Halvorsen as commission, but that they were giving it to Nodier instead.
Halvorsen testified that at no time did she doubt the seriousness of Nodier's intention to list the property and that she would not have wasted her time on the property if she had not perceived the listing as serious. She further testified on cross examination that she could not recall whether the listing agreement gave her authority to reject an offer in the name of the seller, but that it was "a very common practice" and she was "sure that ninety-five percent of all agents in New Orleans do that." She explained that she wanted to get the response back to Cloke quickly because of the impending expiration date on the contract.
Neither Cloke nor Cressy, both of whom were present in the courtroom, chose to testify on their behalf.
The trial court rendered judgment in favor of plaintiff, granting him $3,900.00 as a half share of the commission, plus attorney fees, costs and expenses. The court also rendered judgment in favor of defendant third-party plaintiff, ordering third-party defendants to fully indemnify him for the judgment due plaintiff in the main demand.
Latter Blum was entitled to only one-half of the commission, the other one-half belonging to Thomas T. Cloke, Inc.
On appeal, third-party defendants assert that the trial court erred in: (1) holding the listing agreement was a valid contract; (2) not considering that the words of the contract indicated it had expired; (3) not considering the extension agreements invalid; (4) maintaining Latter Blum was the procuring cause of the sale; (5) holding that the April 29, 1980 Cloke offer was ever transmitted to Nodier; (6) holding that there was a promise to indemnify Nodier against any claim of Latter Blum; and (7) allowing third-party defendants' failure to testify to create a presumption of detrimental testimony in light of the lack of evidence presented in the case.
Appellants argue in their appeal brief that the original listing was invalid because Nodier, who had only one-half year of high school education, had not known what he was signing and, as he testified, lacked the serious intent required for a valid contract.
Halvorsen testified that she took Nodier seriously when he signed the initial listing agreement on March 29, 1980. Approximately five weeks later Nodier signed a document reducing the property's asking price $25,000.00 to $175,000.00. Nodier considered and rejected six offers presented to him by Halvorsen over a six month period during which he signed two extension agreements. The trial court apparently concluded that this was neither the behavior of a man acting in jest, nor that of a man too ignorant to understand what he was doing. We must agree.
Appellants point out that regardless of the validity of the initial agreement, it contained an expiration date of June 29, 1980. They contend that the alleged extension agreements were so vague they could not contain an expression of the parties' intent sufficient to perfect a contract. Appellants assert that even assuming arguendo that the extensions were valid agreements, they did not extend the original agreement's life because they had already expired and had become a nonentity. The extensions were distinct and independent listing contracts. Appellants conclude, therefore, that only the initial listing agreement, the agreement in effect when Halvorsen received the Cloke offer, can be considered in determining whether a commission is due. Since the sale of the Nodier property was effected December 3, 1980, over 30 days after the June 29, 1980 expiration date of the initial listing agreement, appellants argue that no commission was due.
The listing agreement Nodier signed stated that all terms from the original listing agreement were to continue in full force and effect. The extension was an incorporation of the terms of the first agreement rather than a new, distinct contract. Halvorsen continued to solicit offers in reliance upon the extension and Nodier continued to consider those offers. It is clear from Nodier's testimony that he believed himself to be under the commission obligation during final negotiations with Cloke and Cressy and that he was very concerned about receiving adequate financial and legal protection from the realtor's claim.
The hiatus between the original contract's expiration and the drawing up of the extension contract cannot be used to avoid giving legal effect to Nodier's and his realtor's intent so as to benefit appellants. Legal agreements have the effect of law upon the parties and none but the parties can abrogate or modify them. Courts are bound to give legal effect to all such contracts according to the true intent of the parties. La.Civ. Code art. 1945; Louisiana Nat'l Listing Corp. v. A.D.F. Serv., Inc., 377 So.2d 92 (La. 1979).
The extension agreements were drawn up between Nodier and Halvorsen of Latter Blum because they intended them to be valid. The expiration date of the final extension was October 22, 1980. That contract adopted the terms of the original contract, promising the agent the commission "on any sale of said property negotiated within three (3) months after the expiration or termination of this contract to any party to whom said property was submitted by agent . . . during the period of this contract" (emphasis added). Appellants' injection of the theory of procuring cause is unnecessary. A simple reading of the words of the contract demonstrates that the commission was due. There was a sale of the property. The sale occurred within three months of October 22, 1980. The sale was to a party, Cloke, from whom Halvorsen received an offer during the months that the listing agreement was in effect. Appellants argue that the April 29 Cloke offer had never been submitted by Halvorsen to Nodier, but Nodier himself admitted in testimony that he had received and rejected the offer. The trial court apparently concluded Nodier had received the offer and did not consider Nodier's uncertainty about the exhibit presented as the offer to be significant. We cannot disagree.
Appellants assert that the trial court erred in holding that a promise had been made to indemnify Nodier against any claim by Latter Blum. Nodier's one-half year of high school education contrasted sharply with the knowledge of the attorney and real estate agent with whom he negotiated the sale of his property. Plaintiff's testimony demonstrated his ignorance and his reliance on the greater knowledge of appellants and on the promises they made to him.
The existence of the promise to indemnify Nodier was a factual issue decided by the trial court in plaintiff's favor. The resolution of such a question of fact lies particularly within the realm of the trial judge, who has the opportunity to evaluate the credibility of the witnesses and the weight of the evidence. The appellate court cannot disturb the trial judge's factual determinations unless a finding of manifest error is reached. Arceneaux v. Domingue, 365 So.2d 1330 (La. 1978); Canter v. Koehring Co., 283 So.2d 716 (La. 1973). We can make no such finding here.
Finally, appellants assert that the trial court erred in allowing their failure to testify to create a presumption of detrimental testimony in light of the lack of evidence presented in the case. The trial judge weighed the circumstances and evidence presented in the case to reach its finding of fact. There is no indication that the judge relied upon such a presumption in order to reach his judgment. This assignment of error is based on mere speculation and is therefore dismissed.
For the foregoing reasons, the judgment of the trial court is AFFIRMED.
AFFIRMED.
REDMANN, C.J., dissenting.
Thomas Cloke, himself a real estate broker, moved next door to Brandon Nodier, and, in Nodier's words, "ever since he moved next door . . . every time he seen my face" Cloke attempted to buy Nodier's property, "way before" Nodier listed the property with plaintiff broker (who sues for a commission on Nodier's sale to Cloke).
Nodier listed the property with plaintiff on March 29, 1980 for three months or until June 29. On April 24, Cloke made an offer on a "Thomas T. Cloke Inc." form to buy the property. Listing agent Robyn Halvorsen "believed" she spoke with Cloke only twice: once "when the offer came in and I think we had one subsequent to that" — presumably to tell Cloke that the offer was rejected April 30.
The listing agreement expired on June 29 without the property having been sold.
Eleven days later, on July 10, Nodier alone signed a form provided by plaintiff purporting to "extend your listing from ______ to 8/10/80 . . . ."
Forty-three days after the end of that period, on September 22, Nodier signed another of those forms to "extend your listing from ______ to 10/22/80 . . . ." That document's term also expired, on October 22, without a sale.
On December 3, Nodier sold the property to Cloke.
The agent sued Nodier for a commission, arguing that those two "extension" documents bound Nodier to pay plaintiff a commission, in the words of the original listing agreement, "on any sale of said property negotiated within three months after the expiration or termination of this contract to any party to whom said property was submitted by Agent . . . during the period of this contract. . ."
It is theoretically difficult to conceive of "extending" a period that has already passed. See, in the different context of extension of appellate return day, Louisiana Power L. Co. v. Lasseigne, 255 La. 579, 232 So.2d 278, 281 (1970): "That which no longer exists, that which has terminated, cannot be extended." It may be theoretically more acceptable to consider those "extensions" as new listing contracts, embodying the terms of the original contract. (In that case, however, they would not support plaintiff's claim for a commission on the Cloke purchase because, if the property was ever "submitted" to Cloke by the agent, it was not during either of the periods of those "extensions.")
But, pretermitting that question, this writer would hold that the agent never "submitted" the property to Cloke and is therefore not entitled to recover as if on a sale to a "party to whom said property was submitted by Agent. . . ."
The agent has, it must be conceded, a difficult job in phrasing its contract to afford reasonable protection in sales subsequent to expiration of a listing agreement to a buyer it has introduced to the property and interested in it, that is, in circumstances where the broker ought in fairness to be paid a commission. The doctrine of "procuring cause" helps the agent, but procuring cause is often hard to prove. Contractual provisions such as that at issue may solve the proof problem of procuring cause, but they bring their own problems. The bedrock issue in the interpretation of such clauses remains one of fairness.
An agent may be able fairly to argue that a person who learned of the property through the agent's advertising, "open house," or other effort is a person to whom the property was "submitted," even if that person did not make an offer during the life of the listing contract. Yet the proof problems are grave, and the agent cannot be granted a commission on a post-listing agreement sale to a stranger on the basis that the agent "submitted" the property to the whole world by public newspaper advertising.
One may suppose that the contract language was changed to "submitted" from "quoted" because of this court's Coppage v. Camelo, 330 So.2d 695 (La.App. 4 Cir. 1976), in which we concluded that late-sold property had not been "quoted" to an adjacent owner who, like ours, had often tried to buy the property long before the listing agreement. Although we said that "'quoted' means at least that the price be stated" to the prospect, id. at 696, one may also doubt whether the property there was "submitted" so as to justify a commission. The neighbor there testified he repelled the agents when they came to see him, telling them
"`you don't need to talk to me, about the land next door, I know all about it and I know who owns it and . . . I said, listen, let me tell you right now there is no way I am going to buy it through a real estate [sic], I said, if I am going to buy it, you take your best shot and try to sell it, if I lose it it is okay.'" Id. at 696.
Our case is not that strong, but the basic similarity is that a next-door neighbor, who had long tried to buy the property, ultimately buys it after the expiration of a listing agreement but (plaintiff argues) within its post-listing period of limited entitlement to commission.
Also similar to our case is Harkey v. Gahagan, 338 So.2d 133 (La.App. 2 Cir. 1976), where the late sale was to a person who had attempted to buy the property (with an adjacent house) prior to the listing agreement, and whom the agent had telephoned during the listing (because the owner told the agent of the prior offer), only to be told that person was not interested because the price was too high. Harkey contains extensive quotations from other Louisiana cases and from cases in other jurisdictions to support the analysis that clauses affording commission on a post-listing-agreement sale require "some minimal causal relationship," id. at 136, and intend to apply to sales to a prospect in whom the agent, "by his activities, had created some minimal interest which contributed to the eventual sale," id. at 137. (Harkey's facts differ from ours in that the listing was of 11 acres, the sale of that plus 2 acres with a house, and for the same price the buyer had earlier offered.)
This writer would conclude that our agent did not "submit" the property to Cloke, either in the literal sense of introducing Cloke to it and offering it to Cloke, or in the analogous causal relationship sense of pursuing Cloke as a prospect already interested in it. The agent did nothing except transmit the offer that Cloke himself prepared. The agent made no further effort to effect the sale that might be considered as "submitting" the property to Cloke so as to oblige Nodier to pay a commission.
The judgment on the third-party demand of Nodier against Cloke and Cressy should be reversed because, notwithstanding that they are bound to indemnify Nodier, Nodier is not liable. Moreover, because they can only indemnify Nodier by either paying the judgment against him on the main demand or having it reversed, they are entitled to have the latter relief also, even though Nodier did not appeal; Robertson v. Perry, 370 So.2d 596 (La.App. 4 Cir. 1979), appl. not considered, 372 So.2d 1048; see also Emmons v. Agricultural Ins. Co., 245 La. 411, 158 So.2d 594 (1963).