Opinion
No. C7-03-94.
Filed July 22, 2003.
Appeal from the District Court, Hennepin County, File No. CT01014763.
Joseph W. Anthony, Mark D. Wisser, Anthony Ostlund Baer, P.A., (for appellant)
Keith S. Moheban, Leonard, Street Deinard, (for respondents)
Considered and decided by Anderson, Presiding Judge, Shumaker, Judge, and Halbrooks, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant Gary Rosenberg (Rosenberg) filed a complaint against respondents Heritage Renovations, LLC (Renovations) and Heritage Marketing, LLC (Marketing), alleging breach of contract, breach of listing agreement, unjust enrichment, and statutory violation under Minn. Stat. § 181.145 (2002) for respondents' alleged failure to pay commissions associated with a real-estate-development project. Respondents moved for summary judgment and, by order dated March 13, 2002, the district court dismissed Renovations as an unnecessary party. In that same order, the district court denied Marketing's motion, concluding that the parties' course of dealing indicated that there was a valid, terminable-at-will listing agreement that obligated Marketing to pay Rosenberg commissions promised under the agreement, but that the issue of the amount of any unpaid commissions required a factual determination.
After further discovery, Marketing renewed its motion for summary judgment and Rosenberg moved to amend his complaint and to compel discovery. By order dated November 18, 2002, the district court denied Rosenberg's motion to amend the complaint and granted Marketing's motion for summary judgment. Rosenberg appeals the March 13 and November 18, 2002 district court orders.
FACTS
Renovations owns certain real property that was to be developed over four phases into twelve residential buildings, with a total of approximately 350 individual condominium units. Dan Hunt and Arnie Gregory are real-estate developers who own 51% of Renovations. In 1996, Hunt and Gregory met with Rosenberg, who is a licensed real estate broker, and Timothy Burnham to discuss their plans to develop Renovations' property. The development project was eventually named Riverstation.
Under the same agreement, Marketing also contracted with Timothy Burnham, a broker, to provide sales and marketing services. However, Burnham later agreed to pull out of the deal. He no longer provides any services and is not involved in this action.
In 1997, Hunt and Gregory formed Marketing for the purpose of contracting with a licensed real estate agent to market and sell condominium units at Riverstation. In April 1997, Marketing signed an agreement with Rosenberg and his company, Shelter Consultants, to market and sell Riverstation units. The April 1997 agreement identifies Gregory, Hunt, and Burnham to be partners of a new corporation formed as the listing company for the Riverstation Project. The agreement specifically defines the "salesperson proposal" to apply to Rosenberg, and defines his sales duties and commission payment structure. This agreement was amended in July 1997 to reflect only a name change in the development from Heritage Place to Riverstation.
In a May 1997 agreement between Renovations and Marketing, Renovations authorized Marketing to provide Renovations with marketing and sales services. The agreement authorized Marketing to subcontract the marketing and sales services. Marketing was also granted the exclusive right to list and sell units in Riverstation for one year.
Rosenberg marketed and sold units from 1997 through 2000 for phases 1 and 2. In September 2000, Rosenberg also began to market and sell units in phase 3. On January 31, 2001, Hunt informed Rosenberg that there was going to be a "change." Rosenberg was effectively terminated on February 14, 2001, when Marketing sent Rosenberg a written notification terminating the April/July 1997 agreement. Rosenberg has received all of his commissions under the April/July 1997 payment structure for sales that closed before he was terminated.
DECISION
On appeal from summary judgment, this court must ask two questions: (1) whether there are any genuine issues of material fact in dispute; and (2) whether the trial court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). This court views the facts in the light most favorable to the party against whom judgment was granted, and accepts as true the facts as presented by the non-moving party. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). The mere "scintilla of evidence" that may support the non-moving party's position is not sufficient to deny to the moving party a grant of summary judgment. Bondy v. Allen, 635 N.W.2d 244, 248 (Minn.App. 2001) (citation omitted). The non-moving party must present enough evidence on which the jury could reasonably find in its favor. Id.
Joint Venture
Rosenberg first argues that the April/July 1997 agreement created a joint-venture agreement. Rosenberg did not argue this theory until he moved to amend the complaint one month before trial and eighteen months after he started this lawsuit. Rosenberg argues that paragraph 4 of the complaint, which states that "[Rosenberg] entered into an agreement with Defendants relative to the marketing and sale of the condominiums making up the Project," sets forth facts to establish that Renovations and Marketing breached not only a listing agreement but also a joint venture.
Whether a joint venture exists is generally a question of fact. Grain Dealers Mut. Ins. Co. v. Cady, 318 N.W.2d 247, 250 (Minn. 1982). The party asserting joint venture must prove that fact. Sowada v. Motzko, 256 Minn. 395, 398, 98 N.W.2d 182, 185 (1959). However, in some circumstances, whether a joint venture exists may be determined as a matter of law on undisputed facts. Hansen v. St. Paul Metro Treatment Center, Inc., 609 N.W.2d 625 (Minn.App. 2000).
In general, a joint venture is created when two or more persons agree to combine their money, property, time, or skill in a business operation and share in the profits of the enterprise in some fixed proportion. Tate v. Ballard, 243 Minn. 353, 356-57, 68 N.W.2d 261, 264 (1954). Four elements must exist before a joint venture is created: (1) contribution by each party (of money, property, time, or skill); (2) joint proprietorship and mutual control over the venture; (3) an agreement for sharing the venture's profits, but not necessarily the losses; and (4) an express or implied contract. Westphal v. Anderson, 347 N.W.2d 85, 87 (Minn.App. 1984).
Nothing in the record before us creates a genuine issue of material fact as to whether the April/July 1997 agreement between Rosenberg and Marketing created a joint venture. Throughout the relationship, nobody claimed that there was a joint-venture agreement until it became advantageous to do so. Although it is undisputed that Rosenberg contracted to provide his time and expertise, nothing in the agreement indicates that the parties intended to share mutual control over the development project or to share in its profits. Nor does the record contain facts that show a sharing of control and profits. The agreement specifically states that Rosenberg was to be a sales person; he would be paid a monthly draw, an advance each time a unit's purchase agreement was approved, and commission on each sale. The plain language in the agreement does not show expressly or inferentially that the parties created a joint venture. Thus, as a matter of law, no joint venture existed.
Listing Agreement
Rosenberg also argues that the district court erred in determining that the April/July 1997 agreement constituted a listing agreement that was terminable at will. He argues that the agreement contains questions of fact as to whether it covered all four phases of the project and whether he was entitled to commissions after his termination. Renovations, on the other hand, challenges the district court's determination that the agreement was a valid listing agreement, noting that it does not comply with statutory requirements for listing agreements.
To recover a commission for sale of a home, a real-estate broker must show that a valid listing agreement existed at the time of sale. Lynn Beechler Realty Co. v. Warnygora, 396 N.W.2d 717, 719 (Minn.App. 1986). The burden is on the realtor to know these rules and prove substantial compliance. Realty House, Inc. v. Grimm, 460 N.W.2d 917, 920 (Minn.App. 1990). To be valid under Minnesota law, a listing agreement must be in writing and must contain certain provisions, including a definite expiration date, a description of the real property, the list price, the broker's compensation or commission, and information regarding an override clause. Minn. Stat. § 82.195, subd. 2 (2002).
The district court, in its first summary judgment order, concluded that the "course of dealing between the parties indicates that a valid contract exists." The district court relied on this court's decision in Raddatz v. Northland Dev. Co., Inc, 352 N.W.2d 474 (Minn.App. 1984), review denied (Minn. Oct. 11, 1984). In Raddatz, we held that in the absence of a written listing agreement as required under Minn. Stat. § 82.33 (1978), the commission schedule, when combined with an established history of transactions, is sufficient to satisfy the statutory requirement that there be a written listing agreement. Raddatz, 352 N.W.2d at 477-78. But we also noted that the recently promulgated Minnesota Rules, Chap. 2800.3800 (1982), defined what a listing agreement must contain, and we did not address the question of whether the commission schedule satisfied the new regulations. Raddatz, 352 N.W.2d at 478.
Around the same time that the Raddatz decision was released, this court interpreted the new rule and held that for a listing agreement to be valid it must be in writing and in substantial compliance with Minn. R. 2800.3800, subp. 2. See R.M. Parranto Co., Inc. v. Bernick, 354 N.W.2d 600, 603 (Minn.App. 1984). The rule has since been repealed and replaced with a statute. See 1993 Minn. Laws, c. 309, § 7. And the current statute expands the listing agreement requirements. See Minn. Stat. § 82.195, subd. 2. (2002) Thus, if an agreement substantially complies with the current statute and the parties have established an extensive course of conduct, we can ascertain the existence of a valid listing agreement.
As the district court concluded, the parties' course of conduct over many sales transactions indicates that they acted as if they had a valid listing contract. We need not determine whether the agreement substantially complies with the statute because, even if we assume that the listing agreement was valid, we conclude that it was terminable at will. Because no definite duration exists, the district court correctly concluded that the agreement was terminable at will. See Lapadat v. Clapp-Thomssen Co., 397 N.W.2d 606 609 (Minn.App. 1986) (stating that lack of term provision in contract creates an at-will agreement). And there is no question of material fact regarding Rosenberg's commission payments before Marketing terminated the agreement because Rosenberg testified at his deposition that he was paid all of his commissions on sales that closed before Marketing terminated the agreement.
Recovery of commissions for sales that occur after termination of the listing agreement requires that the real-estate agent include in the listing agreement an override clause and, after expiration or termination of the agreement, that the real-estate agent provide the seller with a protective list. See Realty House, 460 N.W.2d at 920 (holding "realtor who fails to deliver a protective list after the expiration of a listing agreement may not enforce an override clause to recover a commission on a subsequent sale of the property"). A protective list is defined as
[a] written list of names and addresses of prospective purchasers with whom a [real-estate agent] has negotiated the sale or rental of the property or to whom a [real estate sales person] has exhibited the property prior to the expiration of the listing agreement.
Burnett Realty, Inc. v. Monson, 479 N.W.2d 432, 433 (Minn.App. 1992) (quotation, citation, and emphasis omitted). And this court has stated that "[a] party to an agreement terminable at will is not entitled to payment of commissions after the employment is terminated." Lapadat, 397 N.W.2d at 609 (citation omitted).
Even assuming the agreement was valid, the agreement contained no override clause and Rosenberg did not produce a protective list within 72 hours of termination. Therefore, Rosenberg could not recover for any unpaid commissions that he otherwise might have been entitled to after Marketing terminated the agreement. Accordingly, we conclude that the district court properly awarded summary judgment in favor of Marketing.
Agency
Under Minnesota law, Rosenberg was required to obtain a listing agreement or some other signed written authorization "from the owner of real property or from another person authorized to offer the property for sale." Minn. Stat. § 82.195, subd. 1 (2002). Based on this statute, Rosenberg also argues that the district court erred in dismissing claims against Renovations and not allowing him to amend his complaint because material fact issues exist as to whether Marketing acted as Renovations' agent when Marketing signed the April/July 1997 agreement with Rosenberg.
We need not determine whether an agency was established, because, notwithstanding the relationship between Marketing and Renovations, Rosenberg has no valid contract claims against Renovations, just as he has no valid contract claims against Marketing.
Miscellaneous
1. Supporting affidavits
Rosenberg argues that the district court erred in granting summary judgment because Marketing failed to comply with the rules of civil procedure when it failed to supply the court with copies of all papers referred to in Hunt's affidavit in support of summary judgment.
When a party submits an affidavit supporting summary judgment and refers to separate documents outside of the affidavit, Minn.R.Civ.P. 56.05 requires that party to attach sworn or certified copies of those documents. In this case, the agreement referred to in the affidavit was in the record after it was submitted with Marketing's reply brief in its initial motion for summary judgment. On this matter, the district court did not err.
2. Additional Discovery
Rosenberg also argues that the court abused its discretion by not addressing his request for a continuance to conduct discovery. A continuance is appropriate if the party seeking additional discovery (1) has been diligent in obtaining or seeking discovery prior to the rule 56.06 motion, and (2) has a good-faith belief that material facts will be uncovered and is not merely engaged in a "fishing expedition." Rice v. Perl, 320 N.W.2d 407, 412 (Minn. 1982). The court, in its discretion, may deny summary judgment or grant a continuance to permit discovery. See id. (stating that trial court has great discretion to establish a case's procedural calendar).
The district court did not address Rosenberg's motion to compel discovery, but instead granted summary judgment to Marketing and denied Rosenberg's motion to amend the complaint and motion to receive unpaid commissions under the statute after his termination.
In this case, the complaint was served in April 2001. Respondents' first summary judgment motion was in the October 2001 and the court heard the motion in February 2002. The record indicates that Marketing's second summary judgment motion occurred after both sides engaged in extensive discovery requests, including numerous depositions and exchange of documents. On the record before us, we find no abuse of discretion.