No. 91-478
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
JOE KRAFT d/b/a HOLIDAY REALTY,
Plaintiff and Appellant,
-vs-
INEZ F. HODSON, individually, and as
Personal Representative of the Estate of
Charles G. Hodson. ELKRIDGE LIVESTOCK CO..
a Montana corp., and HODSON RANCH COMPANY;
a co-partnership, CLERK OF S ~ p r ; . i c i ~
C;TM'rE ob-~ J . D ~ ~ - A ~ A
Defendants and Respondents.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Joel G. Roth, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Douglas C Allen, Attorney at Law, Great Falls,
.
Montana
A. Clifford Edwards & David R. Paoli, Edwards &
Paoli, Billings, Montana
For Respondent:
Keith Strong, Dorsey & Whitney, Great Falls, Montana
Submitted on Briefs: August 13, 1992
~ecided: September 1 1 9 9 2
,
Filed:
Justice R. C. McDonough delivered the Opinion of the Court.
This is an appeal from an order of the District Court of the
Eighth ~udicial~istrict,
Cascade County, dismissingthe plaintiff-
appellant Joe Kraftls d/b/a Holiday Realty (Kraft) complaint
.
against the defendants-respondents Inez F. Hodson, et al. (Hodson)
We affirm.
The disposing issue is:
Did the District Court err in dismissing Kraft's complaint
with prejudice on Hodson's motion to dismiss for failure to state
a claim?
The complaint alleges Hodson, on behalf of herself and the
other respondents, entered into a real estate listing agreement
with Kraft, a real estate agent, to sell the Hodson Ranch,
machinery and livestock. Such agreement was incorporated into the
complaint. Under the agreement, if Kraft negotiated a sale he was
to receive a commission of three percent of the gross sales price.
This agreement was to expire on July 1, 1987. The agreement
excluded sales to Chase Hibbard and Thomas E. Lane, among others
with whom Hodson had previously negotiated. Hodson maintained the
option to sell the ranch herself to parties other than those
procured by Kraft.
Kraft alleges he was thereafter contacted by Chase Hibbard who
reexpressed considerable interest in buying a portion of the ranch.
Kraft asked Hodson what she wanted him to do. Kraft alleges he was
specifically requested and authorized to carry on negotiations for
Hodson. This alleged authorization and request was oral, not
written.
Kraft also alleges that Hodson authorized him to negotiate
with Tom Lane (Lane) for the sale of the property. This
authorization was also oral. Kraft alleges he negotiated with
Lane. However, Kraft was later informed by Hodson that Lane drove
up to her place and bought the ranch. Kraft alleges that Hodson's
attorney called and obtained from him the details and terms of the
sale to Lane, and assured Kraft he would get his fee. The
negotiations and sale of the ranch to Lane occurred subsequent to
the termination date of the listing agreement.
The basis of Kraft's complaint is as follows:
1. Hodson orally modified the agreement to pay Kraft a
commission even if she sold the property.
2. Hodson orally modified the agreement to pay Kraft a
commission even if the property was sold to Tom Lane.
3. Hodson orally modified the agreement to pay Kraft a
commission after the listing expired.
A court, in reviewing a motion to dismiss under Rule 12(b),
M.R.Civ.P., must assume all allegations of the complaint are true.
Contway v. Camp (1989), 236 Mont. 169, 768 P.2d 1377. The
resolution of whether the complaint states a claim is a matter of
law. Our review of a district court's ruling of law is plenary
and we determine if the district court's determination as to the
law is correct. See Steer Inc., v. Dept. of Revenue (1990), 245
Mont. 470, 803 P.2d 601.
A real estate listing agreement is within and covered by the
statute of frauds. Section 28-2-903(1)(e), MCA, provides:
The following agreements are invalid unlessthe same
or some note or memorandum thereof is in writing and
subscribed by the party to be charged or his agent; ..
(e) an agreement authorizing or employing an agent
or broker to purchase or sell real estate for
compensation or a commission.
Such statute applies here. See Carnell v. Watson, 176 Mont. 344,
578 P.2d 308. The District Court in considering the issue held as
follows:
In Carnell, supra 176 Mont. at 348 the Montana Supreme
Court disposed completely of Plaintifffsargument. The
Court held as a matter of public policy that oral consent
does not validate material alterations of written listing
.
agreement[ s j The Carnell court also held as a matter of
law and public policy that a real estate broker must
deliver a copy of any modified agreement in writing to
the seller or forfeit his right to a commission. Ibid. at
349-50. None exists here.
Kraftqs alleged oral modifications above stated are invalid. There
is no allegation or proof of a note or memorandum signed by Hodson.
Kraft also contends the oral modifications were fully executed
and therefore are governed by § 28-2-1602, MCA, which provides as
follows:
A contract in writing may be altered by a contract
in writing or by an executed oral agreement and not
otherwise.
XraEt states his performance complied with this statute and
the oral modification is fully executed. Kraft is in error for we
have consistently held that executed oral agreements mean full
execution by both sides. See Hart v. Billings Public Stockyards
(2971), 157 Mont. 345, 486 P.2d 120. Hodson had not paid him his
alleged commission. The consideration from her to him has not been
executed.
Kraft also asserts that allowing Hodson to rely on the statute
of frauds perpetuates a fraud against Kraft. It amounts to
"gaining an unconscionable advantage inflict[ing] an unjust and
unconscionable loss upon the plaintiff."
The District Court considered this assertion and disposed of
it as follows:
The purpose of section 13-606 [now 28-2-903 (1)(e)1 is to
prevent fraud by disallowing parol evidence of an
agreement to pay a real estate commission, and requiring
instead written proof of such agreement signed by the
party to be charged thereunder. To permit parol proof of
the existence of such agreement and proof of complete
execution thereof by proof of sale, is to circumvent the
positive requirements of the statute of frauds and render
it a nullity.
We conclude the motion to dismiss was properly granted.
Affinned.
@&-
September 1, 1992
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
Douglas C. Allen
Attorney at Law
P.O. Box 2886
Great Falls, MT 59403
A. Clifford Edwards and David R. Paoli
Edwards & Paoli
P.O. Box 20039
Billings, MT 59104-0039
Keith Strong
Dorsey & Whitney
P.O. Box 1566
Great Falls, MT 59403
ED SMITH
CLERK OF THE SUPREME COURT
BY:
Depu
bfk
STATE OF MONTANA