2015 WI 65
SUPREME COURT OF WISCONSIN
CASE NO.: 2013AP1532
COMPLETE TITLE: Ash Park, LLC,
Plaintiff-Respondent-Petitioner,
v.
Alexander & Bishop, Ltd.,
Defendant,
Re/Max Select, LLC,
Intervening-Defendant-Appellant,
Ash Investors, LLC,
Intervenor.
REVIEW OF A DECISION OF THE COURT OF APPEALS
(Reported at 356 Wis. 2d 249, 853 N.W.2d 618)
(Ct. App. 2014 – Published)
PDC No. 2014 WI App 87
OPINION FILED: July 7, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: March 4, 2015
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Brown
JUDGE: William M. Atkinson
JUSTICES:
CONCURRED: ROGGENSACK, C. J. concurs (Opinion filed).
DISSENTED:
NOT PARTICIPATING: PROSSER, J. did not participate.
ATTORNEYS:
For the plaintiff-respondent-petitioner, briefs were filed
by George Burnett and the Law Firm of Conway, Olejniczak &
Jerry, S.C., Green Bay, and oral argument by George Burnett.
For the intervening-defendant-appellant, briefs were filed
by Michael O. Marquette and Marquette Law-Attorneys, S.C., Green
Bay, and oral argument by Michael O. Marquette.
For the intervenor, there was a brief by Bridget M. Hubing
and Reinhart Boerner Van Deuren, S.C., Waukesha, and oral
argument by J. Bushnell Nielsen.
An amicus curiae brief was filed by Debra P. Conrad for the
Wisconsin Realtors Association, Madison.
2
2015 WI 65
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2013AP1532
(L.C. No. 2007CV2832)
STATE OF WISCONSIN : IN SUPREME COURT
Ash Park, LLC,
Plaintiff-Respondent-Petitioner,
v.
Alexander & Bishop, Ltd.,
FILED
Defendant, JUL 7, 2015
Re/Max Select, LLC, Diane M. Fremgen
Clerk of Supreme Court
Intervening-Defendant-Appellant,
Ash Investors, LLC,
Intervenor.
REVIEW of a decision of the Court of Appeals. Affirmed.
¶1 SHIRLEY S. ABRAHAMSON, J. This is a review of a
published decision of the court of appeals.1 The sole question
presented is whether Ash Park, LLC (the seller of a parcel of
vacant land) is liable to pay a broker's commission to Re/Max
Select, LLC (the broker for the land).
1
Ash Park, LLC v. Alexander & Bishop, Ltd., 2014 WI App 87,
356 Wis. 2d 249, 853 N.W.2d 618.
No. 2013AP1532
¶2 The one-party listing contract between Ash Park and
Re/Max provides in relevant part that Ash Park shall pay a
broker's commission to Re/Max if Ash Park enters into an
"enforceable contract" for the sale of the land. Ash Park
entered into a contract for the sale of the land with Alexander
& Bishop, Ltd. Whether Re/Max is entitled to a broker's
commission turns on whether the purchase contract between Ash
Park and Alexander & Bishop constitutes an "enforceable
contract" within the meaning of the listing contract between Ash
Park and Re/Max, even though Alexander & Bishop breached and the
sale of the land was never consummated.
¶3 The Circuit Court for Brown County, William M.
Atkinson, Judge, granted summary judgment to Ash Park, declaring
that Ash Park owed no broker's commission to Re/Max. The
circuit court ordered Re/Max's broker lien discharged from the
property.
¶4 The court of appeals reversed the circuit court's
summary judgment and remanded the cause to the circuit court
with instructions to determine and award Re/Max its broker's
commission, prejudgment interest, costs, and reasonable
attorney's fees. The court of appeals further instructed the
circuit court to determine whether Re/Max's broker lien should
be reinstated.
¶5 This court granted review of the sole issue presented
by Ash Park in its petition for review:
Is a vacant land offer to purchase an "enforceable
contract" so as to require a seller to pay three
2
No. 2013AP1532
hundred seventy-eight thousand dollars ($378,000) in
commission under a real estate listing contract when
the seller obtained a judicial order for specific
performance, but the buyer (who the realtor found)
lacked the funds to purchase and could not be
compelled to honor that order?
¶6 We did not grant review of the issue of whether
Re/Max's broker lien should be reinstated.2
¶7 We now affirm the decision of the court of appeals.
We conclude that the purchase contract between Ash Park and
Alexander & Bishop constitutes an "enforceable contract" within
the meaning of the listing contract between Ash Park and Re/Max.
Re/Max is therefore entitled to a broker's commission from Ash
Park even though Alexander & Bishop breached the purchase
contract and the sale was never consummated.
I
¶8 The facts are undisputed for purposes of this review.
¶9 Ash Park wished to sell a parcel of vacant land
located in the Village of Ashwaubenon in Brown County,
Wisconsin.
¶10 On March 12, 2007, Ash Park and Re/Max entered into a
one-party listing contract. Ash Park and Re/Max used a standard
form contract (titled "WB-3 VACANT LAND LISTING CONTRACT")
approved by the Wisconsin Department of Regulation and
Licensing.
2
Because this court did not grant review of the broker lien
issue, the court of appeals' decision on that issue still
stands. Whether the broker lien should be reinstated must be
determined by the circuit court on remand.
3
No. 2013AP1532
¶11 The listing contract provided that the list price
would be $6.2 million and that the listing would be for
Alexander & Bishop only. It further provided that Re/Max would
be entitled to a broker's commission equal to six percent of the
purchase price if, during the term of the listing, Ash Park
"sells or accepts an offer which creates an enforceable contract
for the sale of all or any part of the Property."
¶12 During the term of the listing, Alexander & Bishop
offered to purchase Ash Park's land for $6.3 million ($100,000
more than the list price). Ash Park accepted the offer.
¶13 Alexander & Bishop's offer to purchase Ash Park's land
did not include a financing contingency. It did, however,
include a lease contingency. The lease contingency provided
that the "Offer is contingent upon the Buyer negotiating a lease
[o]r leases for the subject property with terms and conditions
acceptable to the Buyer . . . within [120] days of [the
seller's] acceptance" of the offer. The lease contingency
further provided that if Alexander & Bishop were "unable to
negotiate a lease or leases," Alexander & Bishop could terminate
the offer.
¶14 Because Alexander & Bishop was unable to negotiate an
acceptable lease within the specified timeframe, it exercised
its right to terminate the offer.
¶15 Later on, however, Ash Park and Alexander & Bishop
signed an agreement to reinstate the offer.
¶16 Alexander & Bishop did not exercise its right to
terminate the reinstated offer. Alexander & Bishop's offer to
4
No. 2013AP1532
purchase Ash Park's land ripened into a binding purchase
contract on September 20, 2007.
¶17 On October 9, 2007, Alexander & Bishop informed Ash
Park that the party with whom it had been negotiating a lease
was not interested in immediately leasing the property.
Accordingly, Ash Park and Alexander & Bishop discussed potential
modifications to the purchase contract. Their negotiations were
unsuccessful.
¶18 The closing of the sale, which had been scheduled for
December 14, 2007, did not take place. Alexander & Bishop
failed to purchase the property.
¶19 Shortly after the date that had been set for closing,
Ash Park sued Alexander & Bishop, seeking specific performance
of the purchase contract. Ash Park prevailed in the circuit
court, in the court of appeals,3 and in this court.4
¶20 Despite the specific performance judgment against it,
Alexander & Bishop failed to pay for or acquire the property.
¶21 In December 2010, after protracted litigation and
after Alexander & Bishop had threatened bankruptcy, Ash Park and
Alexander & Bishop agreed to settle their dispute. Alexander &
Bishop paid Ash Park $1.5 million. This sum was equivalent to
Ash Park's holding costs, that is, the interest and other
3
Ash Park, LLC v. Alexander & Bishop, Ltd., 2009 WI App 71,
317 Wis. 2d 772, 767 N.W.2d 614.
4
Ash Park, LLC v. Alexander & Bishop, Ltd., 2010 WI 44, 324
Wis. 2d 703, 783 N.W.2d 294.
5
No. 2013AP1532
charges Ash Park had paid while it unsuccessfully sought to
compel Alexander & Bishop to purchase the property.5
¶22 On January 12, 2011, prior to final adjudication of
the lawsuit between Ash Park and Alexander & Bishop, Re/Max
filed a motion to intervene.
¶23 Re/Max argued that Ash Park had entered into an
"enforceable contract for the sale of all or any part of the
Property" and thus that under the listing contract, Re/Max had
earned a six-percent broker's commission. Re/Max sought to
claim its commission, along with prejudgment interests, costs,
and attorney fees. Re/Max also sought to enforce a broker lien
it had recorded on the property.
¶24 Ash Park asserted various affirmative defenses and
moved for summary judgment. Re/Max opposed Ash Park's motion
for summary judgment and filed its own motion for summary
judgment.
¶25 The circuit court granted Ash Park's motion for
summary judgment and ordered Re/Max's broker lien discharged
from the property. The circuit court concluded that the
purchase contract between Ash Park and Alexander & Bishop does
not constitute an "enforceable contract" within the meaning of
5
Ash Park did not share any portion of this settlement with
Re/Max, and Re/Max does not assert that it is entitled to any
portion of this settlement. Re/Max acknowledges that the
listing contract grants Re/Max the right to six percent of the
purchase price. Explicitly excluded from the purchase price are
"holding costs." As explained above, the settlement paid by
Alexander & Bishop amounts to holding costs.
6
No. 2013AP1532
the listing contract between Ash Park and Re/Max. Accordingly,
the circuit court determined that Re/Max had not earned a
broker's commission.
¶26 The circuit court explained its reasoning as follows:
This contract is not enforceable. Now, perhaps we
don't do a good enough job of defining "enforceable."
Maybe we should have a phrase called "enforceable in
law," and maybe that would make sense because I found
it was enforceable in law, that the case could proceed
through the court system, but it clearly wasn't
enforceable in fact. If it was enforceable in fact,
Alexander & Bishop would [have bought the land] and
the realtor would have his commission. Everybody
would end up happy. . . .
. . . .
The reality of it is the realtor brought to these
sellers a buyer who couldn't afford to buy the
property. . . . [H]e couldn't get financing for it, he
didn't have enough money in a bank account, he didn't
have a deep enough pocket to go to, he couldn't do it.
In the end this contract was not enforceable in fact
and that's why the contract between these parties
required it actually be enforceable in fact.
¶27 After the circuit court issued its decision, Ash Park
sold the land to Ash Investors, LLC.6
¶28 The court of appeals reversed the circuit court's
summary judgment, holding that the purchase contract between Ash
Park and Alexander & Bishop constitutes an "enforceable
6
Ash Investors, the company that purchased Ash Park's land
after Ash Park settled its dispute with Alexander & Bishop,
filed a motion to intervene (or, in the alternative, to file a
non-party brief) in this court. The court granted Ash
Investors' motion to intervene, permitting Ash Investors to file
a brief in this court but only on the issue the court had
accepted for review.
7
No. 2013AP1532
contract" within the meaning of the listing contract between Ash
Park and Re/Max. The court of appeals reasoned as follows:
We conclude the term "enforceable contract" is plain
and unambiguous. Given the dictionary definition of
"enforce" and the principle that an "enforceable
contract" is one that provides a remedy for a breach,
it is clear that an "enforceable contract" is one
where an individual can compel observance of the
contract by seeking a remedy for a breach. In this
case, the contract between Ash Park and Alexander &
Bishop was enforceable——the contract recognized Ash
Park's rights under the contract and provided various
remedies for Ash Park based on Alexander & Bishop's
breach.7
¶29 The court of appeals cited the "law of the case"
doctrine as an additional rationale for its conclusion that the
purchase contract between Ash Park and Alexander & Bishop is
enforceable. According to the court of appeals, this court's
prior decision that specific performance was a permissible
remedy for Alexander & Bishop's breach of the purchase contract
settled the issue of the contract's enforceability. The court
of appeals explained its reasoning as follows:
[W]e conclude the law of the case doctrine applies to
prevent Ash Park from arguing the contract it had with
Alexander & Bishop was unenforceable. "The law of the
case doctrine is a 'longstanding rule that a decision
on a legal issue by an appellate court establishes the
law of the case, which must be followed in all
subsequent proceedings in the trial court or on later
appeal.'" . . . .
. . .
7
Ash Park, 356 Wis. 2d 249, ¶15.
8
No. 2013AP1532
[T]he specific performance remedy Ash Park sought and
received for Alexander & Bishop's breach in this case
was available only if the parties had an enforceable
contract. Based on the specific performance judgment
Ash Park sought and received in this case, Ash Park
cannot now argue its contract with Alexander & Bishop
was unenforceable.8
¶30 We granted Ash Park's petition for review of the court
of appeals' decision, limiting our review to the question of
whether the purchase contract between Ash Park and Alexander &
Bishop constitutes an "enforceable contract" under the listing
contract between Ash Park and Re/Max, such that Re/Max is
entitled to a broker's commission.
II
¶31 This court reviews summary judgment decisions
independently, applying the same standards and methods as the
circuit court.9 Summary judgment is appropriate when there is no
genuine issue of material fact and the moving party is entitled
to judgment as a matter of law.10
¶32 In the instant case, the parties do not dispute the
facts. Rather, the parties dispute whether as a matter of law
Re/Max is entitled to a broker's commission. This issue turns
on whether the purchase contract between Ash Park and Alexander
8
Id., ¶¶19-20 (citations omitted).
9
Roehl Transport, Inc. v. Liberty Mut. Ins. Co., 2010 WI
49, ¶25, 325 Wis. 2d 56, 784 N.W.2d 542.
10
Wis. Stat. § 802.08(2) (2011-12). All subsequent
references to the Wisconsin Statutes are to the 2011-12 version
unless otherwise indicated.
9
No. 2013AP1532
& Bishop constitutes an "enforceable contract" within the
meaning of the listing contract between Ash Park and Re/Max.
The interpretation of a contract presents a question of law that
this court decides independently of the circuit court and court
of appeals but benefiting from their analyses.11
III
¶33 To decide whether Re/Max is entitled to a broker's
commission under the listing contract between Ash Park and
Re/Max, we must interpret the phrase "enforceable contract" in
the listing contract. Thus, we begin by reviewing the
principles of contract interpretation that govern our analysis.
We then apply those interpretive principles to the phrase
"enforceable contract" in the listing contract. We conclude
that the purchase contract between Ash Park and Alexander &
Bishop constitutes an "enforceable contract" within the meaning
of the listing contract. Ash Park's arguments to the contrary
are not convincing.
A
¶34 The court's goal in interpreting a contract is to give
effect to the parties' intentions.12 However, "subjective intent
11
Tufail v. Midwest Hospitality, LLC, 2013 WI 62, ¶22, 348
Wis. 2d 631, 833 N.W.2d 586; Ehlinger v. Hauser, 2010 WI 54,
¶47, 325 Wis. 2d 287, 785 N.W.2d 328.
12
Seitzinger v. Cmty. Health Network, 2004 WI 28, ¶22, 270
Wis. 2d 1, 676 N.W.2d 426.
10
No. 2013AP1532
is not the be-all and end-all."13 The language of the contract
controls the court's interpretation.14
¶35 When the terms of a contract are clear and
unambiguous, we construe the contract's language according to
its literal meaning.15 "We presume the parties' intent is
evidenced by the words they choose, if those words are
unambiguous."16
¶36 When the terms of a contract are ambiguous, however,
evidence extrinsic to the contract itself may be used to
determine the parties' intent, and any remaining ambiguities
will be construed against the drafter.17 "A contract provision
is ambiguous if it is fairly susceptible of more than one
construction."18
¶37 Contract language is construed according to its plain
or ordinary meaning,19 consistent with "what a reasonable person
13
Kernz v. J.L. French Corp., 2003 WI App 140, ¶9, 266
Wis. 2d 124, 667 N.W.2d 751.
14
Seitzinger, 270 Wis. 2d 1, ¶22.
15
Maryland Arms Ltd. P'ship v. Connell, 2010 WI 64, ¶23,
326 Wis. 2d 300, 786 N.W.2d 15 (quoting Gorton v. Hostak, Henzl
& Bichler, S.C., 217 Wis. 2d 493, 506, 577 N.W.2d 617 (1998)).
16
Kernz, 266 Wis. 2d 124, ¶9.
17
Maryland Arms, 326 Wis. 2d 300, ¶23.
18
Mgm't Computer Servs., Inc. v. Hawkins, Ash, Baptie &
Co., 206 Wis. 2d 158, 177, 557 N.W.2d 67 (1996).
19
Huml v. Vlazny, 2006 WI 87, ¶52, 293 Wis. 2d 169, 716
N.W.2d 807.
11
No. 2013AP1532
would understand the words to mean under the circumstances."20
Language in a business contract is construed in the manner in
which it would be understood "by persons in the business to
which the contract relates."21 Interpretations that give
reasonable meaning to each provision in the contract are
preferred over interpretations that render a portion of the
contract superfluous.22
¶38 Ultimately, the court's role "is not to make
contracts or reform them but to determine what the parties
contracted to do."23 "It is not the function of the court to
relieve a party to a freely negotiated contract of the burdens
20
Seitzinger, 270 Wis. 2d 1, ¶22.
21
Columbia Propane, L.P. v. Wis. Gas Co., 2003 WI 38, ¶12,
261 Wis. 2d 70, 661 N.W.2d 776.
22
Sonday v. Dave Kohel Agency, Inc., 2006 WI 92, ¶21, 293
Wis. 2d 458, 718 N.W.2d 631.
23
Marion v. Orson's Camera Centers, Inc., 29 Wis. 2d 339,
345, 138 N.W.2d 733 (1966) (quoting Wis. Marine & Fire Ins. Co.
Bank v. Wilkin, 95 Wis. 111, 115, 69 N.W. 354 (1896)).
See also 11 Richard A. Lord, Williston on Contracts § 32:2
(4th ed. 2002) ("Courts often recite that they cannot make a new
contract for the parties, but can only enforce the contract to
which the parties themselves have agreed, and if the contract
contains unambiguous language, the parties are bound by its
plain meaning.").
12
No. 2013AP1532
of a provision which becomes more onerous than had originally
been anticipated."24
¶39 We now apply these interpretive principles to the
contract language at issue.
B
¶40 The section of the listing contract between Ash Park
and Re/Max that discusses the seller's obligation to pay a
broker's commission contains five clauses that delineate the
circumstances under which Ash Park shall pay Re/Max a
commission. It provides the following alternative conditions
under which a commission shall be earned:
COMMSSION: Seller shall pay Broker's commission, which
shall be earned if, during the term of this Listing:
1) Seller sells or accepts an offer which creates an
enforceable contract for the sale of all or any part
of the Property;
2) Seller grants an option to purchase all or any part
of the Property which is subsequently exercised;
3) Seller exchanges or enters into a binding exchange
agreement on all or any part of the Property;
4) A transaction occurs which causes an effective
change in ownership or control of all or any part of
the Property; or
24
25 Lord, supra note 23, § 1:1. See also E. Allan
Farnsworth, 2 Farnsworth on Contracts § 5.1, at 1 (3rd ed. 2004)
("[F]reedom of contract rests on the premise that it is in the
public interest to accord individuals broad powers to order
their affairs through legally enforceable agreements. In
general, therefore, parties are free to make such agreements as
they wish, and courts will enforce them without passing on their
substance.").
13
No. 2013AP1532
5) A purchaser is procured for the Property by Broker,
by Seller, or by any other person, at the price and on
substantially the same terms set forth in this Listing
and in the standard provisions of the current WB-13
VACANT LAND OFFER TO PURCHASE, even if Seller does not
accept this purchaser's offer. . . .
(Emphasis added.)
¶41 The listing contract goes on to define "procured" for
purposes of the fifth clause set forth above:
A purchaser is procured when a valid and binding
contract of sale is entered into between the Seller
and the purchaser or when a ready, willing and able
purchaser submits a written offer at the price and on
substantially the terms specified in this listing.
(Emphasis added).
¶42 The listing contact does not define the phrase
"enforceable contract," which appears in the first clause, and
the parties dispute its meaning.
¶43 Our interpretation of the phrase "enforceable
contract" begins, as it must, with the ordinary meaning of the
phrase.
¶44 In everyday language, "enforceable" means capable of
being enforced. A contract is "enforceable" if it can be
enforced.
¶45 A party seeks to "enforce" a contract by going to
court to obtain a remedy for the contract's breach. A court
"enforces" a contract by issuing a judgment that grants a remedy
14
No. 2013AP1532
for the contract's breach.25 Consequently, a reasonable person
would consider a contract "enforceable" so long as a party to
the contract can go to court and obtain a remedy for the
contract's breach.
¶46 This ordinary interpretation of the phrase
"enforceable contract" comports with the phrase's legal meaning.
"Enforceable contracts are those for which the law recognizes
the parties' rights and protects those rights by providing a
remedy for breach, usually either some measure of damages or
specific performance."26 Calamari and Perillo on Contracts
explains that a contract is said to be enforceable "[w]hen a
promisee is entitled to either a money judgment, an injunction
or specific performance because of a breach [by the promisor]."27
¶47 The converse is also true: "Unenforceable contracts
are those that, because of some valid defense . . . , lack the
remedy of specific performance or damages in the event of
25
"In most contract cases, what is sought is enforcement of
a contract. Enforcement usually takes the form of an award of a
sum of money due under the contract or as damages. . . . A
court may also enforce a promise by ordering that it be
specifically performed or, in the alternative, by enjoining its
non-performance." Restatement (Second) of Contracts § 345, cmt.
b (1981). See also 1 E. Allan Farnsworth, Farnsworth on
Contracts § 1.1, at 4 (3d ed. 2004) (explaining that a contract
is "a promise, or a set of promises, that the law will
enforce").
26
1 Michael B. Apfeld et al., Contract Law in Wisconsin
§ 1.22 (4th ed. 2013).
27
Joseph M. Perillo, Calamari and Perillo on Contracts
§ 1:8(b) (7th ed. 2014).
15
No. 2013AP1532
breach . . . ."28 Put more simply, "[a]n unenforceable contract
is one for the breach of which neither the remedy of damages nor
the remedy of specific performance is available . . . ."29
¶48 Nothing in the record reveals that the phrase
"enforceable contract" has a meaning in the real estate business
that is different from its ordinary and legal meaning.
¶49 As we explained previously, Alexander & Bishop failed
to purchase Ash Park's land as it had contracted to do, and Ash
Park sought the remedy of specific performance for Alexander &
Bishop's breach. The circuit court issued a specific
performance judgment against Alexander & Bishop that was upheld
by the court of appeals30 and by this court.31
¶50 Because Ash Park was indisputably able to compel
observance of the purchase contract it entered into with
Alexander & Bishop by seeking a remedy (namely specific
performance) for a breach, the purchase contract falls within
the ordinary and legal meaning of the phrase "enforceable
contract." Indeed, in upholding the specific performance
28
1 Apfeld et al., supra note 26, § 1.22.
29
25 Lord, supra note 23, § 1:21. See also Perillo, supra
note 27, § 1:8(b) ("Unenforceable contracts are those which have
some legal consequences but which may not be enforced in an
action for damages or specific performance in the face of
certain defenses . . . ." (Emphasis added.)).
30
Ash Park, LLC v. Alexander & Bishop, Ltd., 2009 WI App
71, 317 Wis. 2d 772, 767 N.W.2d 614.
31
Ash Park, LLC v. Alexander & Bishop, Ltd., 2010 WI 44,
324 Wis. 2d 703, 783 N.W.2d 294.
16
No. 2013AP1532
judgment against Alexander & Bishop, this court made clear that
the purchase contract between Ash Park and Alexander & Bishop is
enforceable.32
¶51 In the instant case, Ash Park asks the court to
interpret the phrase "enforceable contract" in a manner
inconsistent with the phrase's ordinary and legal meaning and
inconsistent with this court's previous decision to enforce the
purchase contract between Ash Park and Alexander & Bishop. We
decline to accept this invitation.
¶52 We conclude that the purchase contract between Ash
Park and Alexander & Bishop constitutes an "enforceable
contract" within the meaning of the listing contract between Ash
Park and Re/Max. It has already been enforced.
C
¶53 Ash Park sets forth two primary counterarguments: (1)
because Alexander & Bishop was not compelled to satisfy the
specific performance judgment against it, the purchase contract
is, as a matter of fact, not enforceable; and (2) requiring Ash
Park to pay a broker's commission when the sale to Alexander &
Bishop was never consummated would be contrary to public policy.
32
In upholding the specific performance judgment against
Alexander & Bishop, this court distinguished Henrikson v.
Henrikson, 143 Wis. 314, 127 N.W. 962 (1910), in which "there
was no valid and enforceable contract to transfer land." Ash
Park, 324 Wis. 2d 703, ¶44. The court explained that Henrikson
was not controlling in the Ash Park case because Henrikson "does
not address the remedies available to a seller when the buyer
breaches an enforceable contract for the sale of land." Id.,
¶44.
17
No. 2013AP1532
¶54 We address these counterarguments in turn.
(1)
¶55 First, Ash Park contends that the court system's
inability to successfully compel Alexander & Bishop's
performance means the purchase contract between Ash Park and
Alexander & Bishop is not enforceable. Ash Park grounds this
argument on an unconvincing interpretation of the phrase
"enforceable contract" and on a comparison of the first and
fifth clauses of the listing contract's commission section.
¶56 Relying on the reasoning of the circuit court, Ash
Park argues that the phrase "enforceable contract" in the
listing contract is ambiguous.
¶57 According to Ash Park, one meaning of "enforceable
contract" is a contract enforceable "in fact." Under this
interpretation of the phrase, a contract is enforceable only if
a breaching party can be forced to perform.
¶58 Another meaning of "enforceable contract," says Ash
Park, is a contract enforceable "in law." Under this
interpretation of the phrase, a contract is enforceable if a
remedy is available for a breach.
¶59 Ash Park contends that the former interpretation
(under which a contract is "enforceable" only if it is
enforceable "in fact") is the better one. Ash Park reminds the
court that ambiguities in a contract are construed against the
drafter (here, Re/Max).
¶60 Ash Park also contends that its preferred
interpretation comports with the expectations of a reasonable
18
No. 2013AP1532
seller. In Ash Park's view, a reasonable seller who signs a
listing contract never intends to incur an obligation to pay a
broker's commission when the listed property is not actually
sold, that is, when the seller does not receive the purchase
price from a buyer. A seller who enters into a listing contract
does not intend to be in debt for a commission when no transfer
of the property has taken place.
¶61 Next, Ash Park asserts that construing the phrase
"enforceable contract" to mean a contract that is enforceable
"in law" would render the fifth clause of the commission section
of the listing contract superfluous.
¶62 The fifth clause of the commission section of the
listing contract entitles Re/Max to a commission if Ash Park
enters a "valid and binding contract" for the sale of the land.
According to Ash Park, if the court interprets "enforceable
contract" to mean a contract enforceable "in law," then no
difference exists between the phrases "valid and binding
contract" and "enforceable contract." To give meaning to both
the first and fifth clauses of the commission section of the
listing contract, Ash Park asserts that the court should
interpret the phrase "enforceable contract" to mean a contract
enforceable "in fact."
¶63 We decline to adopt Ash Park's proffered
interpretation of the phrase "enforceable contract."
¶64 Ash Park's argument that the phrase "enforceable
contract" is ambiguous confuses the issue of enforceability of a
contract with the concept of satisfaction of a judgment. The
19
No. 2013AP1532
enforceability of a contract turns on whether there is a remedy
available for a breach, not on whether a judgment issued in
response to a breach is satisfied.
¶65 There is no distinction in the law or in ordinary
language between the enforceability of a contract "in law" and
"in fact." Nor does the listing contract draw such a
distinction: The listing contract states that Ash Park shall
pay Re/Max a broker's commission if Ash Park enters into an
enforceable contract for the sale of the land, not an
enforceable in fact contract for the sale of the land.
¶66 We will not read words into the contract that the
parties opted not to include. Rather, we apply contractual
language as it is written. This court's role, after all, is
"not to make [the] contract[] . . . but to determine what the
parties contracted to do."33
¶67 Further, despite Ash Park's protestations,
interpreting the phrase "enforceable contract" to mean a
contract enforceable "in law" does not render the fifth clause
of the commission section of the listing contract mere
surplusage.
¶68 The phrases "valid and binding" and "enforceable" have
been interpreted in varied and sometimes overlapping ways in
33
Tufail, 348 Wis. 2d 631, ¶29.
20
No. 2013AP1532
contract law.34 Nevertheless, the phrases are not synonymous in
the legal literature.
¶69 As one commentator has explained, a contract is "valid
and binding" if "all of the elements of contract formation have
been satisfied and there are no fundamental defenses to the
enforcement of the contract, such as the statute of frauds."35
Because the phrase "'valid and binding' relates to contract
formation, [] 'enforceable' must mean something else. Most
lawyers believe that the term 'enforceable' implies the
existence of a remedy for breach, such as an action at law for
damages."36
¶70 In sum, our interpretation of the phrase "enforceable
contract" within the listing contract——the issue raised in the
petition for review——comports with the phrase's ordinary and
legal meaning and does not render the "valid and binding"
portion of the listing contract superfluous. We therefore
reject Ash Park's alternative interpretation of the contractual
language and conclude that the failure of Ash Park and the
courts to successfully compel Alexander & Bishop's performance
34
"Some authorities distinguish among the concepts of
legal, valid, binding, and enforceable." Gregory G. Gosfield, A
Primer in Real Estate Options, 35 Real Prop. Prob. & Tr. J. 129,
137 n.10 (2000) (discussing the differences between these
words).
35
Laurence G. Preble, The Remedies Opinion Revisited: A
Primer for Real Estate Lawyers, 33 Real Prop. Prob. & Tr. J. 63,
68 (1998).
36
Id., 70-71.
21
No. 2013AP1532
does not mean the purchase contract between Ash Park and
Alexander & Bishop was not enforceable.
(2)
¶71 Ash Park's second primary counterargument to the
determination of the court of appeals and this court that Re/Max
is entitled to a commission is that requiring Ash Park to pay a
commission when the sale to Alexander & Bishop was never
consummated would be contrary to public policy. There are two
components to this argument.
¶72 First, Ash Park urges the court to recognize the
practical consequences of requiring it to pay Re/Max's
commission in the instant case. Ash Park did not profit from
the purchase contract it entered into with Alexander & Bishop
despite its attempts to enforce that contract,37 and Ash Park
will now pay $378,000 out of pocket to Re/Max as a commission.
Had Ash Park declined to enforce the purchase contract, it would
have retained a portion of the earnest money and would not be
paying $378,000 out of pocket.38
37
Ash Park did not earn a profit by settling with Alexander
& Bishop. As previously explained, the $1.5 million settlement
Alexander & Bishop paid to Ash Park reflected Ash Park's costs
for maintaining the property during the time the purchase
contract was being litigated.
38
The earnest money provision of the listing contract
provides that if the sale "fails to close and the earnest money
is disbursed to Seller, then . . . the earnest money shall be
paid first to reimburse Broker for cash advances . . . and one
half of the balance, but not in excess of the agreed commission,
shall be paid to Broker as Broker's full commission . . . ."
22
No. 2013AP1532
¶73 Thus, Ash Park contends that "[t]he natural
consequence of this decision is that innocent sellers face a
Hobson's choice: try to enforce the contract as the law allows
or abdicate these legal rights lest the realtor claim hundreds
of thousands of dollars in commission."
¶74 Second, Ash Park contends that this court's
interpretation of the phrase "enforceable contract" defies the
purpose of the listing contract, which is to effectuate a sale
of the property by employing a broker to locate a buyer.39 Ash
Park states: "Suddenly the realtor is no longer the servant of
the seller; the seller becomes the servant of the realtor.
Nothing in this contract discloses such a counterintuitive
understanding."
¶75 Ash Park's frustration is understandable. Ash Park
has done its best to effectuate the sale of its land to
Alexander & Bishop. Ash Park agrees that had Alexander & Bishop
paid for the property (as it was required by law to do), then
Re/Max would be entitled to a broker's commission. But
Alexander & Bishop did not pay, and Ash Park did not receive the
benefit of its purchase contract. If Ash Park is required to
pay a commission to Re/Max under these circumstances, what will
it be paying for? In Ash Park's view, Re/Max procured "a buyer
39
Harvey L. Temkin et al., Commercial Real Estate
Transactions in Wisconsin, § 2.3 (2010) (explaining that under a
listing contract, "a seller hires a broker to find a buyer").
23
No. 2013AP1532
unable to perform" and thus "supplie[d] nothing of
value . . . ."
¶76 The result in the instant case does seem harsh to Ash
Park. But the result would be harsh to Re/Max were we to hold
in Ash Park's favor.
¶77 Re/Max did what it agreed to do under the listing
contract. Upon Re/Max's listing the property, Alexander &
Bishop made an offer for more than the listing price and Ash
Park accepted that offer, creating an enforceable contract for
the sale of the property. Because an enforceable contract for
the sale of the property was created, Re/Max earned a commission
under the listing contract. Declining to order Ash Park to pay
Re/Max its commission is not only contrary to the contract
language; it is also unfair to Re/Max, which expended efforts to
locate a buyer.
¶78 By asking the court to disregard the contract language
to achieve what it views as a fairer result, Ash Park in effect
asks us to relieve "a party to a freely negotiated contract of
the burdens of a provision which becomes more onerous than had
originally been anticipated."40 As we explained previously, this
is not the court's role.41
40
25 Lord, supra note 23, § 1:1.
41
The court's role "is not to make contracts or reform them
but [rather] to determine what the parties contracted to do."
Marion v. Orson's Camera Ctrs., Inc., 29 Wis. 2d 339, 345, 138
N.W.2d 733 (1966) (quoting Wis. Marine & Fire Ins. Co. Bank v.
Wilkin, 95 Wis. 111, 115, 69 N.W. 354 (1897)).
24
No. 2013AP1532
¶79 Ash Park also overlooks the fact that it had the power
to condition Re/Max's right to receive a commission upon
consummation of the sale.
¶80 Ash Park and Re/Max used the listing contract prepared
and approved by Wisconsin's Real Estate Examining Board (REEB).42
REEB-approved listing contracts can be modified; their terms are
not set in stone. Existing provisions can be changed or deleted
and additional provisions can be appended.43
¶81 Ash Park could have negotiated with Re/Max to modify
the terms of the commission section of the listing contract by
conditioning Re/Max's right to a commission on consummation of
the sale. Indeed, one commentator has advised: "To avoid
incurring a commission without a closing, the seller's lawyer
should consider modifying the language in [the listing contract]
so that the commission is not earned until the conveyance of the
property actually closes and title passes."44
¶82 This court cannot disregard contract terms that Ash
Park belatedly decides are unacceptable.
¶83 Finally, Wisconsin case law demonstrates that a
broker's commission is not ordinarily contingent upon the sale's
consummation.
42
Wis. Admin. Code § REEB 16.03 (May 2014) ("Approved
forms").
43
Wis. Admin. Code § REEB 16.06 (May 2014) ("How to use
prepared forms").
44
See Temkin et al., supra note 39, § 2.20.
25
No. 2013AP1532
¶84 This court has previously declared that a broker is
entitled to a commission if the broker identifies a buyer and
the buyer and seller enter into an enforceable contract for the
sale of the property, even if the sale fails to close.45
¶85 In Wauwatosa Realty Co. v. Paar, 274 Wis. 7, 79
N.W.2d 125 (1956), a buyer procured by the broker entered into a
purchase contract with the seller. The buyer refused to
purchase the property. The listing contract did not condition
payment of the broker's commission on final consummation of the
transaction. Accordingly, the Wauwatosa Realty court stated
that the broker was entitled to its commission despite the
buyer's default: "[T]he broker's right to his commission is not
defeated by a subsequent default on the [buyer's] part unless
45
Scott C. Minter & Debra Peterson Conrad, Wisconsin Real
Estate Law 5-19 (2014); John L. Horwich et al., Real Estate
Transactions System § 1.8c (5th ed. 2011). See also Winston v.
Minkin, 63 Wis. 2d 46, 51, 216 N.W.2d 38 (1974); Wauwatosa
Realty Co. v. Paar, 274 Wis. 7, 14-15, 79 N.W.2d 125 (1956);
McDermott v. Mahoney, 115 N.W. 32, 36-37 (1908).
See Minter & Conrad, supra, at 5-17.
The listing contract can provide that the broker will not
earn a commission unless the sale closes. See, e.g., Mansfield
v. Smith, 88 Wis. 2d 575, 586-89, 277 N.W.2d 740 (1979) (general
rule that seller owes broker commission if seller enters
contract with buyer, even if buyer later defaults, was not
applicable per a liquidated damages clause); Walter Kassuba,
Inc. v. Bauch, 38 Wis. 2d 648, 158 N.W.2d 387 (1968) (listing
contract provided for payment of a broker's commission if the
property "is sold," which in the circuit court's view meant the
sale had to be completed; this court remanded the cause to the
circuit court to determine what the parties intended the words
"is sold" to mean in the case at hand).
26
No. 2013AP1532
[the seller's] promise to the broker is expressed to be
conditioned upon such actual performance by the [buyer]. . . ."46
¶86 The court reached a similar conclusion in Kruger v.
Wesner, 274 Wis. 40, 44, 79 N.W.2d 354 (1956). In Kruger, the
contract between the seller and the broker provided that the
broker would procure a buyer. The broker procured a buyer, and
the buyer and seller entered into a purchase contract. The
buyer breached the purchase contract. Because the sale was not
consummated, the seller refused to pay the broker's commission.
¶87 The Kruger court, like the Wauwatosa Realty court,
determined that the broker was entitled to a commission
notwithstanding the buyer's breach. The Kruger court explained:
The courts are practically unanimous in holding that a
broker employed to sell [] lands earns his commission,
unless the contract [between the broker and seller]
contains a stipulation to the contrary, when a [buyer]
and the [seller] enter into a valid and binding
contract for the sale . . . of [the] lands.47
46
Wauwatosa Realty Co. v. Paar, 274 Wis. 7, 13-15, 15-16,
79 N.W.2d 125 (1956) (quoting Restatement (First) of Agency
§ 445 (1933)).
47
Kruger v. Wesner, 274 Wis. 40, 44, 79 N.W.2d 354 (1956).
Kruger followed the reasoning of the Oregon Supreme Court in
Oregon Home Builders v. Montgomery Investment Co., 184 P. 487,
492 (1919), which held as follows:
[T]he literally overwhelming weight of authority is
that, unless the [seller] and broker have stipulated
to the contrary, the broker has fully earned his
commission when the [buyer] and [seller] enter into a
valid and binding contract for the sale or exchange of
lands, and the broker's right to recover a commission
is not, in the absence of bad faith upon his part,
defeated or even affected by the fact that it
(continued)
27
No. 2013AP1532
¶88 Subsequent cases have repeated the rule set forth in
Wauwatosa Realty and Kruger.48
¶89 With this precedent in mind, a commentator has written
that it is settled law in Wisconsin "that if the buyer's valid
written offer is accepted so as to constitute an enforceable
contract, then the owner must pay [the] commission even if the
buyer later defaults."49
¶90 The result in the instant case comports with
precedent.
¶91 In sum, Ash Park's counterarguments do not persuade us
to depart from the ordinary and legal meaning of the phrase
"enforceable contract" in the listing contract between Ash Park
and Re/Max. Under the listing contract, a contract is
"enforceable" if a remedy is available for a breach. Thus, to
determine whether the purchase contract between Ash Park and
Alexander & Bishop is an "enforceable contract," we need
determine only whether a remedy is available for a breach.
subsequently develops that the [buyer] is unable to
complete his contract to buy on account of financial
inability or is unable to complete the contract to
exchange on account of inability to transfer a
merchantable title.
48
See, e.g., Mansfield v. Smith, 88 Wis. 2d 575, 585-87,
277 N.W.2d 740 (1979); Winston v. Minkin, 63 Wis. 2d 46, 52, 216
N.W.2d 38 (1974). See also Hercules v. Robedeaux, Inc., 110
Wis. 2d 369, 374-76, 329 N.W.2d 240 (Ct. App. 1982).
49
Minter & Conrad, supra note 45, at 5-19.
28
No. 2013AP1532
¶92 A remedy is indisputably available for a breach of the
purchase contract between Ash Park and Alexander & Bishop.
Indeed, Ash Park has already obtained the remedy of specific
performance for Alexander & Bishop's breach.
¶93 In response to the sole issue presented for our
review, we therefore conclude that the purchase contract between
Ash Park and Alexander & Bishop constitutes an "enforceable
contract" within the meaning of the listing contract between Ash
Park and Re/Max. Re/Max is entitled to a broker's commission
from Ash Park even though Alexander & Bishop breached the
purchase contract and the sale was never consummated.
¶94 Accordingly, we affirm the decision of the court of
appeals. The cause is remanded to the circuit court for entry
of summary judgment in favor of Re/Max; for a determination and
award of Re/Max's prejudgment interest, costs, and attorney's
fees; and for a determination of whether Re/Max's broker lien
should be reinstated.
By the Court.—The decision of the court of appeals is
affirmed.
¶95 DAVID T. PROSSER, J., did not participate.
29
No. 2013AP1532.pdr
¶96 PATIENCE DRAKE ROGGENSACK, C.J. (concurring). The
majority opinion sets the question upon which Re/Max Select,
LLC's entitlement to a broker's commission turns as: "whether
the purchase contract between Ash Park and Alexander & Bishop
constitutes an 'enforceable contract' within the meaning of the
listing contract."1 I would phrase the question to be decided as
follows: whether the listing contract between Re/Max and Ash
Park, LLC, two sophisticated business entities, demonstrates
that they agreed that closing on a sale of the listed property
was not required before the right to a realtor's commission
arose. I answer that question, "yes." However, because I have
grave concerns about the majority opinion being erroneously
employed to shift the burden to investigate the financial
ability of a proposed purchaser from the broker to an
unsophisticated seller, I write in concurrence to the majority
opinion.
I. BACKGROUND
¶97 The majority opinion fully sets out the facts that
underlie the dispute before us. Therefore, I will not repeat
them.
II. DISCUSSION
A. Standard of Review
¶98 This review centers on interpreting and applying a
single party listing contract for the sale of vacant land.
Interpretation of a written contract is a question of law that
1
Majority op., ¶32.
1
No. 2013AP1532.pdr
we review independently of the court of appeals and the circuit
court while benefitting from their discussions. Anthony
Gagliano & Co. v. Openfirst, LLC, 2014 WI 65, ¶32, 355 Wis. 2d
258, 850 N.W.2d 845.
B. Listing Contract Principles
¶99 There are two lines of cases that run on somewhat
parallel, but different, tracks when the right to a commission
is alleged to arise out of a real estate listing contract. One
line of cases conditions the right to a commission on the broker
procuring a purchaser who is "ready, willing, and able to
purchase upon the terms specified by the owner in the brokerage
contract." Grinde v. Chipman, 175 Wis. 376, 377, 185 N.W. 288
(1921). "Able" includes the purchaser's "financial ability to
proceed." Peter M. Chalik & Assocs. v. Hermes, 56 Wis. 2d 151,
160, 201 N.W.2d 514 (1972). We have reasoned that:
Generally speaking, a purchaser is financially
ready and able to buy: (1) If he has the needed cash
in hand, or (2) if he is personally possessed of
assets——which in part may consist of the property to
be purchased——and a credit rating which enable him
with reasonable certainty to command the requisite
funds at the required time, or (3) if he has
definitely arranged to raise the necessary money——or
as much thereof as he is unable to supply personally——
by obtaining a binding commitment for a loan to him
for that purpose by a financially able third party,
irrespective of whether such loan be secured in part
by the property to be purchased.
Id. at 162 (internal quotation marks and citation omitted).
¶100 Therefore, not just any purchaser who signs an offer
to purchase on terms acceptable to the seller will fulfill the
criteria necessary for a broker to earn a commission. Stated
2
No. 2013AP1532.pdr
otherwise, when a purchaser is unable to perform financially,
the seller has a defense to payment of a commission. Id. at
162-63.
¶101 The other line of cases is cited in the majority
opinion. Those cases generally conclude that the right to a
commission turns on whether the realtor provided a party who
entered into a binding contract to purchase the real estate.
For example, in Wauwatosa Realty Co. v. Paar, 274 Wis. 7, 79
N.W.2d 125 (1956), we upheld the right to a commission for the
broker even though the sale of the real estate never closed. We
reasoned that:
The right of a broker to compensation accrues on
completion of negotiations and on a meeting of the
minds of the principal and the customer procured by
the broker; but, unless provided otherwise in the
contract of employment, it is not dependent on the
final consummation of the transaction or the
performance of the agreement entered into between the
principal and the customer.
Id. at 14-15.
¶102 The above quote from Wauwatosa Realty is interesting
because we began our discussion in Wauwatosa Realty by saying
that, "[t]he question involved on this appeal is whether the
plaintiff real-estate broker procured a purchaser ready,
willing, and able to purchase the defendants' real estate
pursuant to the terms of its listing contract so as to entitle
the plaintiff to a broker's commission." Id. at 10. However,
we never assessed whether the purchaser had the financial
ability to complete the purchase contract.
3
No. 2013AP1532.pdr
¶103 In Kruger v. Wesner, 274 Wis. 40, 79 N.W.2d 354
(1956), where no sale occurred, we concluded that the realtor
was due a commission, and we opined that:
It may be generally stated that when a real-
estate broker procures a purchaser who is accepted by
the owner, and a valid contract is drawn up between
them, the commission for finding such purchaser is
earned, although the purchaser later defaults for no
known reason . . .; or because the purchaser
deliberately refuses to consummate the contract . . .;
or because of financial inability of purchaser to
comply with the contract.
Id. at 44 (emphasis added).
¶104 The emphasized part of the above quote is a
significant departure from the line of cases that requires a
purchaser to be financially "able" to complete the sale before a
commission is due the broker. See, e.g., Chalik, 56 Wis. 2d at
163. Yet, in Kruger, we gave no indication that we were intent
on changing prior law. Rather, Kruger appears to be an
extension of Wauwatosa Realty upon which Kruger says that it
relies.2 Kruger, 274 Wis. at 44.
¶105 In Winston v. Minkin, 63 Wis. 2d 46, 216 N.W.2d 38
(1974), we set out the dispositive issue as, "[w]hether the
plaintiff procured a buyer ready, willing and able to purchase
upon the terms specified by the owner in the listing contract or
acceptable to him." Id. at 49. However, once again,
notwithstanding our statement of the issue, we reasoned that
2
I note that Justice Steinle wrote both the opinion in
Wauwatosa Realty Co. v. Paar, 274 Wis. 7, 79 N.W.2d 125 (1956)
and the opinion in Kruger v. Wesner, 274 Wis. 40, 79 N.W.2d 354
(1956).
4
No. 2013AP1532.pdr
"when a real estate broker procures a purchaser and a valid and
enforceable contract is entered into between them the commission
for procuring a purchaser is earned, even though the purchaser
may later default." Id. at 51. Accordingly, we followed the
change noted above in Kruger, even though we continued to give
lip service to the "ready, willing and able" language of the
earlier cases. Stated otherwise, Winston continued to shift the
responsibility to investigate the financial ability of the
proposed purchaser from the broker to the seller.
¶106 Why did we make this change? It appears that in
Kruger, we concluded that the seller had a "reasonable
opportunity to investigate" the purchaser's financial ability to
proceed, and if the seller needed additional assurances of the
purchaser being "able" to close on the sale, it was the seller's
obligation to obtain whatever assurances he needed before
entering into a binding contract with him. See Kruger, 274 Wis.
at 45.
¶107 Imposing the responsibility to investigate the
financial ability of a proposed purchaser onto a sophisticated
seller may have been a sufficient reason for this shift of
responsibility from the broker to the seller. However, I have
grave doubts that this shift in responsibility is fair to the
unsophisticated seller of real estate, who signs a standard form
listing contract believing he or she will pay any commission due
under the listing contract from the proceeds of a sale that the
broker facilitates.
5
No. 2013AP1532.pdr
C. Re/Max–Ash Park Listing Contract
¶108 Re/Max's claim comes from the listing contract that
Ash Park signed. In regard to Re/Max's right to a commission,
the listing contract provides in relevant part:
COMMISSION: Seller shall pay Broker's commission,
which shall be earned if, during the term of this
Listing:
1) Seller sells or accepts an offer which creates an
enforceable contract for the sale of all or any part
of the Property;
. . . .
5) A purchaser is procured for the Property by Broker,
by Seller, or by any other person, at the price and on
substantially the same terms set forth in this Listing
and in the standard provisions of the current WB-13
VACANT LAND OFFER TO PURCHASE, even if Seller does not
accept this purchaser's offer.
. . . .
PROCURE: A purchaser is procured when a valid and
binding contract of sale is entered into between the
Seller and the purchaser or when a ready, willing and
able purchaser submits a written offer at the price
and on substantially the terms specified in this
Listing. A purchaser is ready, willing and able when
the purchaser submitting the written offer has the
ability to complete the purchaser's obligations under
the written offer.
(emphasis added).
¶109 Re/Max asserts that pursuant to the listing contract,
the Ash Park—Alexander & Bishop contract is an enforceable
contract entitling it to a commission under conditions 1 and 5
above, and that it has "procured" a purchaser because Ash Park
and Alexander & Bishop entered into a binding contract for the
purchase of the listed real estate. The listing contract's
6
No. 2013AP1532.pdr
definition of "procuring," which includes providing a purchaser
who is "ready, willing and able" to complete the sale is an
alternative to, not an addition to, entering into an enforceable
contract. Therefore, under the listing contract, the right to a
commission ripens when an enforceable contract is entered into,
even if the purchaser is financially unable to complete the
purchase. In sum, the listing contract sets a condition for
earning a commission as follows: whether Ash Park and Alexander
& Bishop entered into an enforceable contract.
¶110 By our decision affirming an order of specific
performance of the Ash Park-Alexander & Bishop sales contract,
we previously concluded that their contract is an enforceable
contract. Ash Park, LLC v. Alexander & Bishop, Ltd., 2010 WI
44, ¶96, 324 Wis. 2d 703, 783 N.W.2d 294. Accordingly, I have
no trouble concluding that the same contract remains
"enforceable" when we are interpreting the listing contract.
However, I have concerns about having the enforceability of the
purchase contract be the end of our discussion.
¶111 Those concerns arise here because of the circuit
court's finding that Alexander & Bishop was financially unable
7
No. 2013AP1532.pdr
to perform,3 and because of representations that Ash Park settled
its lawsuit against Alexander & Bishop because of Alexander &
Bishop's insolvency.4 However, of greater concern to me is the
unsophisticated seller of real estate who may not understand the
import of the provisions of the WB-13 listing contract as it
affects his or her obligation to pay a real estate commission.
¶112 Here, Ash Park is a sophisticated business entity,
represented by able counsel, with the ability and knowledge
needed to investigate the financial wherewithal of Alexander &
Bishop or to request modification of a listing contract to
require closing on a sale before the right to a commission
arises. That weighs in favor of affirming the court of appeals.
3
"The reality of it is the realtor brought to these
sellers a buyer who couldn't afford to buy the
property. And in the end it was the buyer's inability
to be able to buy the property, he couldn't get
financing for it, he didn't have enough money in a
bank account, he didn't have a deep enough pocket to
go to, he couldn't do it."
Transcript of Motion Hearing at 14, Ash Park, LLC v. Alexander &
Bishop, Ltd., No. 07CV2832 (Brown Cnty. Cir. Ct., June 13,
2011).
4
Alexander & Bishop represented: "Ash Park and its
principal is aware that Alexander & Bishop has no liquid assets
in which to specifically perform——that is why it accepted the
settlement agreement which called for a $1.2 million dollar
payment to be made by the way of a loan. [] It also received
numerous letters from Banks demonstrating that they would not be
willing to loan money to Alexander & Bishop to buy the
property."
Brief in Opposition of Motions for Contempt and Appointment of a
Receiver and in Support of Motion to Enforce Settlement
Agreement at 6-7, Ash Park, LLC v. Alexander & Bishop, Ltd., No.
07CV2832 (Brown Cnty. Cir. Ct., Feb. 14, 2011).
8
No. 2013AP1532.pdr
¶113 However, because I have concerns for the residential
homeowner who lists his or her property using a standard form
listing contract, without the aid of an attorney, and is unaware
that he or she may be incurring an obligation to pay a
commission when no sale occurs, I write in concurrence to draw
attention to the potential hardship our decision is capable of
producing if it is erroneously applied in a different context to
an unsophisticated seller of real estate.
III. CONCLUSION
¶114 Because the question to be decided occurs in the
context of a listing contract between two sophisticated business
entities, Re/Max and Ash Park, I conclude that the listing
contract demonstrates that they agreed that closing on a sale of
the listed property was not required before the right to a
realtor's commission arose. However, I have grave concerns
about the majority opinion being erroneously employed to shift
the burden to investigate the financial ability of a proposed
purchaser from the broker to an unsophisticated seller.
Therefore, I write in concurrence to the majority opinion.
9
No. 2013AP1532.pdr
1