Blumfield Agency v. Little Belt, Inc.

No. 82-341
IN THE SUPREP4E COURT OF THE STATE OF JYIONTANA

1983

BLUMFIELD AGENCY, BILL EDWARDS
and DUROCHER REALTY,
Plaintiffs and Appellants,

LITTLE BELT, INC., a Mont. corp.,
RUSSELL B. PEDERSON, JEROME D.
PEDERSON, and WALLACE PEDERSON,
Defendants and Respondents.

Appeal from: District Court of the Fourteenth Judicial District,
In and for the County of Wheatland, The Honorable
Nat Allen, Judge presiding.

Counsel of Record:
For Appellants:

Alexander & Baucus; Ward E. Taleff, Great Falls,
MT
Graybill, Ostrem, Warner & Crotty; Donald L.
Ostrem, 18-6th St. No., Ste. 200, Great Falls,
Montana
For Respondents:
Moore, Rice, OIConnell & Refling; Yary Lou Schlegal,
P. 0 Box 1288, Bozeman, MT 59715
.

Submitted on Briefs: December 16, 1982
Decided: April 28, 1983

~ i l e d : APR 2 8 1983

--
Clerk
Mr. Justice Daniel J. Shea delivered the Opinion of the
Court.

Plaintiffs appeal a summary judgment of the Wheatland
District Court which denied them recovery of a real estate
commission and which held them liable for the defendants'
attorney fees.
The facts are not in dispute. Whether plaintiffs are
entitled to a real estate commission depends on the
interpretation of the language in a listing agreement which
provides that the brokers were "employed . . . to sell or
exchange the property described hereon at the selling price
and on the terms noted. . . ." Plaintiffs would give no
meaning to this language and would also ignore our previous
holdin9 in Diehl and Associates, Inc. v. Houtchens (1977),
173 Mont. 372, 567 P.2d 930, where we interpreted virtually
identical language. On the attorney fees question, Blumfield
Agency argues that the fee awarded is excessive; plaintiff
Durocher Realty argues it should not be bound by the award of
attorney fees because it was not a party to the agreement
between Rlumfield Agency and the defendants. We affirm.
Defendants own a ra.nch in Wheatland County and listed it
for sale through the Blumfield Agency of Great Falls. After
obtaining the listing, Blumfield Agency, pursuant to an
authorization in the listing agreement, enlisted the aid of
Durocher Realty in September to help sell the ranch. These
agencies entered into a cooperative agreement. The listing
agreement, a standard preprinted form, with print so small it
is hardly readable, provided that the Blumfield Agency was
employed ". . . - - -or exchange the property described
to sell
hereon at the selling price and on the terms noted . . ."
(Emphasis added.)
On September 16, 1980, six days after the listing
agreement was signed, Robert Durocher, working as the
Durocher Agency, found a prospective buyer and presented an
earnest money and buy-sell agreement to the
defendant-sellers, and the defendants signed the agreement on
the same day. Before the sale could be completed, however,
problems developed.
Farmers Home Administration held a mortgage on the
property, a fact known to all parties (and to the plaintiffs)
at the time the buy-sell agreement was signed. Both the
defendant-sellers and the prospective purchasers proceeded on
the assumption the mortgage could be assumed and for the same
interest rate. The Farmers Home Administration would only
transfer the loan if certain conditions were met. The
prospective purchasers were either unable or unwilling to
assume those conditions. One of the conditions was that the
interest rate be doubled.
The defendant-sellers were at all times willing to
complete the sale on the terms of the buy-sell agreement with
the prospective buyers. It appears that the prospective
purchasers were also willing to do so, but Farmers Home
Administration imposed conditions which in effect changed the
terms of the buy-sell agreement. The deal fell through.
The plaintiffs, without consent of or even notice to the
defendant-sellers, returned the earnest money payment to the
prospective purchasers and by so doing terminated the
buy-sell agreement. A short time later the
plaintiff-realtors filed suit against the defendant-sellers
asking for commissions in the amount of $199,500 and attorney
fees as provided for in the listing agreement. After
extensive discovery, both parties moved for summary judgment.
Summary judgment was granted to the defendant-sellers and
this appeal followed.
The controlling authority is Diehl and Associates, Inc.
v. Houtchens, supra. The language in the listing agreement
in Diehl is almost identical to the language in the listing
agreement in this case. In Diehl, we held that a listing
agreement that employs a broker to sell property does not
entitle the broker to a commission until the sale is
completed--title must pass and the purchase price must be
paid. Diehl, 173 Mont. at 379, 567 P.2d at 935. There, we
explained the differences in real estate contracts which
contain this kind of language and those which merely require
that the broker find a buyer who is ready, willing and able
to perform. The language here provides that the broker is
employed to "sell or exchange the property," and it clearly
falls within our holding in Diehl.
The undeniable situation in this case is that the
defendant-sellers were at all times willing to perform on the
conditions of the buy-sell agreement and it appears that the
prospective purchasers were also. However, a third party,
the Farmers Home Administration, effectively changed the
conditions by insisting, among other things, that the
interest rate be doubled. Neither the seller nor the
prospective purchaser can be faulted in this situation.
Given these circumstances, it would be manifestly
unconscionable to now permit the brokers to recover a
$199,500 commission. A commission was to be paid only upon
completion of a sale.
 The listing agreement provided that in the event of a
dispute and court action, attorney fees for trial and
appellate work would be paid to the prevailing party. The
trial court ordered that the plaintiffs pay $8,415 in
attorney fees.
The position of the plaintiffs in this appeal is
baffling. One law firm filed a brief on behalf of the
Blumfield Agency and Bill Edwards. Another law firm filed a
brief on behalf of Durocher Realty. The Blumfield Agency and
Bill Edwards have not raised any issue concerning attorney
fees. Accordingly, for this reason alone we affirm the award
of attorney fees as against Blumfield Agency and Bill
Edwards.
On the other hand, Durocher Realty raises two issues
with regard to attorney fees. First, Durocher claims that he
should not have to pay any attorney fees because he was not a
party to the listing agreement but only assisted Blumfield
Agency in finding a purchaser. Second, Durocher argues for
several reasons, but without any citation to the record, that
the fee is too high. We affirm on both issues.
Blumfield Agency and Durocher Realty signed a
co-brokers' agreement, and by its terms Durocher Realty could
share in the commission if a sale was completed. In filing
suit here, Durocher Realty did precisely that--Durocher
claimed a broker's fee for finding a purchaser. The
complaint did not separate the claims of Blumfield Agency and
Durocher Realty--both sued for a commission and asked for
payment of attorney fees if they prevailed. If Durocher can
avail himself of the benefits of the listing agreement in the
event he won, it is hardly fair that he can disavow the
burdens of this listing agreement because he lost. A party
cannot avail himself of the benefits of a contract on the one
hand but avoid the burdens of that same contract on the other
hand.
Durocher, without reference to the record, claims
several factors were considered which made the attorney fees
too high. Nor does he cite any authority for his position.
We cannot believe therefore, that Durocher is serious about
his claim. If so, it would have been presented with
references to the record and with citations of authority.
The attorney fees awa.rd as to Durocher is also affirmed.
The order granting summary judgment to defendants and
awarding attorney fees is affirmed.

We Concur:
Mr. Justice Frank B. Morrison, Jr. dissenting:
I respectfully dissent.

The undisputed facts establish that defendants entered
into a real estate broker's employment contract with
plaintiffs Blumfield Agency and Bill Edwards for the sale of
their real property. The brokers employment contract
provided for the payment of a commission equal to seven
percent of the selling price of the real property. That
contract of employment stated as follows:
"For value received, you hereby are employed to
sell or exchange the property described hereon at
the selling price and on the terms noted. You
hereby are authorized to accept the deposit on the
purchase price. You may, if desired, secure the
cooperation of any other broker, or group of
brokers, in procuring a sale of said property. In
the event that you, or any other brokers
cooperating with you, shal'T-find a buyer ready and
--
willing to enter - - - a deal for the said price and
into
terms, orsuch other terms and prices I may accept,
or that during your employment you place me in
contact with a buyer to or through whom at any time
within a 180 days after the termination of said
employment I may sell or convey said property, I
hereby agree to pay you - - - for your services
in cash a
commission a to seven percent - - above
of the
stated selling price. " (emphasis added)
On September 15, 1980, plaintiff Durocher Realty,
cooperating with the listing agreement of plaintiff Blumfield
Agency, presented to the defendants an executed earnest money
receipt and agreement to sell and purchase. Subsequent to
the execution of the purchase and sale agreement, problems
arose between defendants and the purchasers over the
assumption of an existing mortgage with the Farmers Home
Administration. Negotiations aimed at compromise were
conducted, but the ultimate transfer of the real property
between purchaser and seller never took place. The agreement
to sell and purchase was not conditioned upon assumption of
the FHA mortgage and no showing was made that the purchasers
were financially unable to complete the transaction.
 The plaintiffs performed under the listing agreemen.t and
were entitled to their commission. The brokers' work was
finished. What subsequently transpired between sellers and
purchasers is of no consequence. Under the listing agreement
plaintiffs are entitled to their commission.
I would reverse and remand with directions to enter
judgment in favor of plaintiffs.