NO. 92-272
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
JOSHUA SAYEGUSA,
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Dorothy McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Randy A. Rogers, Pro Se, Helena, Montana
For Respondent:
Joshua Sayegusa, Pro Se, Helena, Montana
submitted on Briefs: October 29, 1 9 9 2
Decided: February 3, 1993
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Defendant and appellant Randy Rogers (seller), appeals from an
adverse decision of the District Court of the First ~udicial
District, Lewis and Clark County. Plaintiff and respondent Joshua
Sayegusa, a licensed real estate broker (broker), brought suit
seeking to recover a real estate broker's commission. The District
Court granted summary judgment in favor of the broker, concluding
that seller was obligated to pay the commission, even though the
proposed sale did not go through. Seller appeals. We affirm.
The only issue before the Court is whether the District Court
erred in granting broker's motion for summary judgment.
On March 29, 1991, seller entered into an exclusive listing
contract with broker to sell Big Sky Toppers and its inventory and
equipment. Broker found two potential buyers of seller's business.
In April 1991, the potential buyers offered $80,000 for the
business, which included certain items of inventory and equipment.
The offer of $80,000 was in response to seller's asking price. On
April 20, 1991, the buyers signed an agreement to sell and purchase
the business. Seller counteroffered on April 22, 1992, with
respect to certain terms of the agreement, and this counteroffer
was accepted by the buyers on the same day.
The agreement included a closing date of May 15, 1991.
Closing did not occur on May 15, 1991. Several days later, the
buyers expressed concern that the inventory was less than what had
been stated in the purchase and sale contract. Both parties agreed
that the inventory was less and that a reduction in the price was
appropriate. The parties could not agree on an appropriate
reduction and the transaction never closed. Broker brought this
action alleging that he was entitled to his commission even though
the sale did not go through. The District Court agreed and granted
summary judgment in favor of broker.
A district court judge may grant summary judgment when:
[Tlhe pleadings, depositions, answersto interrogatories,
and admissions on file, together with the affidavits, if
any, show that there are no genuine issues of material
fact and that the moving party is entitled to judgment as
a matter of law.
Sherrodd, Inc. v. Morrison-Knudsen Co. (1991), 249 Mont. 282, 284,
815 P.2d 1135, 1136; Rule 56 (c), M.R.Civ.P. Upon reviewing a grant
or denial of a motion for summary judgment, this Court applies the
same standard as the district court.
The provision in the contract pertaining to the broker's
commission provides in part that:
FOR VALUE RECEIVED, you and your agents are emploved
to find a buver readv and willins to purchase or exchange
the property described above at the price and terms noted
or at such other price and terms as I/we accept. You are
authorized to accept a deposit on the purchase price. In
the event I/we sell or exchange the property, or a
written asreement is executed for the sale or ex=hanse of
the property durins the term of this asreement, I/we
asree to pav you in cash a commission equal to 10% of the
sellins price. [Emphasis added.]
This Court's role in interpreting contracts is to construe the
instrument according to its terms and this Court may neither insert
nor omit terms to the contract. Martin v. Laurel cable TV, Inc.
(1985), 215 Mont. 229, 696 P.2d 454; 5 1-4-101, MCA. In situations
in which the terms of the contract are clear and unambiguous, it is
the duty of the court to enforce the contract as the parties
intended. First Sec. Bank v. Vander Pas (1991), 250 Mont. 148, 818
P.2d 384.
In this case, the District Court concluded that the language
of the listing agreement was clear and unambiguous as to broker's
right to his commission. Broker was entitled to a commission upon
procuring a buyer "ready and willing to purchase" and who entered
into a written agreement to make the purchase. The District Court
found that the broker in this instance satisfied the requirements
in the listing agreement. The District Court concluded that there
were no genuine issues of material fact regarding this question and
granted summary judgment in favor of broker. We agree with the
District Court that the result is unfortunate. We also agree that
the result was mandated by the clear and unambiguous language of
the listing agreement and the well-established law in this area.
Seller argues that the buyers backed out of the deal through
no fault on his part. Additionally, seller argues that the buyers
are now in control of the premises, as well as his equipment and
inventory. Seller fails to recognize, however, that the present
litigation involves the listing agreement between himself and the
broker. The rights or obligations of the buyers, under their
contract to purchase the business, are not at issue here.
It is well-established law in Montana that a broker's right to
recover a commission is conditioned on the broker's ability to
accomplish that which he or she undertook to do in the contract of
employment. Diehl and Associates, Inc. v. Houtchens (1977), 173
Mont. 372, 567 P.2d 930; First Trust Co. of Montana v. McKenna
(1980), 188 Mont. 534, 614 P.2d 1027; Ehly v. Cady (l984), 212
Mont. 82, 687 P.2d 687. Pursuant to the clear and unambiguous
language of the listing agreement in this case, the broker became
entitled to his commission when the buyers entered into a written
contract to purchase the business for the price requested by the
seller. The District Court noted that:
[Seller's] contractual obligation [under the listing
agreement] overrides the unfortunate result of the
buyers1 backing out of the deal through no fault of
[seller]. It is one of the risks taken when entering
into such a listing contract.
It is indeed unfortunate that seller is required to pay a
commission even though the sale did not occur, butthe language of
the listing agreement and past precedent of this Court require such
a result.
As a final matter, appellant points out that on June 12, 1991,
respondent dismissed the complaint against codefendant Robert V.
Rogers. A review of the District Court record in this action
indicates that Robert V. Rogers was dismissed from the action and
that he was not brought in again at a later date. Therefore,
Robert V. Rogers was not a party to this case and is not
responsible for the judgment entered by the District Court against
appellant Randy A. Rogers.
The decision of the District Court to grant summary judgment
in favor of the broker is affirmep.
Justice
We concur:
Justice Terry N. Trieweiler dissenting.
I respectfully dissent from the opinion of the majority.
The listing agreement upon which the plaintiff relies is
neither clear nor unambiguous and should be construed in favor of
t h e defendant. Such a construction would also produce a more
reasonable result.
For example, the plaintiff's listing agreement provided that
he was employed I1to find a buyer ready and willing to purchase or
exchange the property . . . .I1 Did that simply mean ready and
willing to sign a meaningless and unenforceable agreement to sell
and purchase? Or, did it mean ready and willing to purchase the
property by completing the transaction at the time set for closing?
Keeping in mind that brokers in general, and this broker in
particular, are to be paid a percentage of the purchase price, and
that the purchase price is not realized until closing, the only
reasonable interpretation of this provision is that the broker was
retained to find a buyer who was ready and willing to purchase the
property at the time of closing. Otherwise, the seller has
realized no income with which to pay the brokerage fee and there
would be no limit on the mischief that could be engaged in by real
estate brokers. For example, why require that there be a buy/sell
agreement before the broker's obligation is satisfied? Why not
simply require that a broker produce someone off the street who
says they are "ready and willing to purchasew and leave all other
considerations up to the unfortunate seller?
At best, what amounts to a "ready and willing purchaserw is
ambiguous and should be construed in favor of the seller because it
was the plaintiff realtor who prepared the contract and against
whose interest any ambiguities must be construed.
There is a second ambiguity in the additional provision of the
listing agreement that is relied upon by the majority. It is true
that that agreement clearly provides that in the event a written
agreement is entered into for the exchange of the property, the
realtor is entitled to a commission. However, that commission is
defined as ten percent of the "selling price." What does selling
price mean? Does it mean a price that is agreed upon in a buy/sell
agreement which is never performed? Or does it mean that price at
which the property is actually sold? Again, considering the
customary manner in which brokerage fees are paid, it makes no
sense to interpret "selling price" to mean a price which is never
paid. The realtor prepared and submitted the brokerage agreement
and if he intended the commission to equal ten percent of the price
agreed to, it would have been easy enough to make that provision
clear in the agreement. It appears to me that by linking the
commission to the "selling price," it was the intention of the
parties that if there was no sale there would be no commission.
However, regardless of the intention of the parties, at best, the
term creates an ambiguity regarding the parties8 intentions and
should be construed against the realtor who prepared the contract.
Neither do I find any of the authorities relied upon by the
majority to be persuasive in support of the majority s conclusion.
In fact, in Diehl and Associates, Inc. v Houtchens (1977), 173 Mont
. . 372, 567
P.2d 930, this Court arrived at an opposite conclusion based upon
a real estate listing agreement that included language very similar
to the language included in this agreement. In First Trust Company of
Montana v McKenna (1980), 188 Mont. 534, 614 P.2d 1027, we reversed
.
a district court judgment which awarded a commission to a real
estate broker. However, that case was decided for reasons other
than those discussed in this case. Finally, in Eh&v.Cady (1984),
212 Mont. 82, 687 P.2d 687, we did affirm an award to a real estate
broker, even though the sale was never consummated. However, in
that case, there was a specific finding that the sale was prevented
by the seller's refusal to perform according to the terms of the
buy/sell agreement. In this case, there is a question of fact
regarding which of the parties was responsible for the
nonperformance of the agreement to sell and purchase. That issue
of fact could not be decided by summary judgment.
As a result of this decision, many unsuspecting sellers of
real estate will assume obligations to pay a commission where a
commission was never intended, where no actual benefit was provided
by the broker, and where there were no sale proceeds from which to
pay the commission. This result is not only unfortunate and
unfair, it is contrary to the law of contracts and poor public
policy. For these reasons, I would reverse the District Court and
remand this case for trial to determine which of the parties
prevented the performance of the agreement to sell and purchase.
If the defendant was willing to perform, but was prevented from
doing so by the buyer's refusal to honor the terms of the written
agreement, then I would conclude that the plaintiff is entitled to
no commission because the purchaser found by the plaintiff was not
"ready and willing to purchase." However, if the buyer was willing
to complete the sale but was prevented from doing so by the
seller's refusal to comply with the terms of their written
agreement, then I would conclude that the broker had performed his
obligation under the listing agreement and was entitled to his
commission.
February 3, 1993
CERTIFICATE O F SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
Randy A. Rogers
1755 Walnut
Helena, MT 59624
Joshua Sayegusa
118 South Benton Ave.
Helena, MT 59601
ED SMITH
CLERK O F T H E SUPREME COURT
STATE O F MONTANA
9
BY: h
Deputy f