International Network, Inc. v. Woodard
2017 COA 44
| Colo. Ct. App. | 2017Background
- In April 2006 Woodard (seller) signed an exclusive right-to-sell listing with International Network, Inc. (broker) for a ranch; the agreement included a referral clause requiring the seller to conduct negotiations only through the broker and a 90-day post-listing holdover. The listing was six months but could be canceled by seller on written notice.
- About four months into the listing Woodard secretly negotiated with an attorney representing buyers and then cancelled the listing about a month later; broker ceased marketing the property. Woodard sold the property shortly after the listing expired (within the 90-day holdover) for $3.6 million.
- Broker sued Woodard in 2013 for breach of the referral provision and sought the commission specified in the listing as contract damages. At trial the seller admitted intentionally concealing the negotiations to avoid paying a commission.
- A jury found for broker and awarded $252,000 (the commission). Woodard moved for directed verdict and JNOV, asserting (among other defenses) the statute of limitations, laches, statute of frauds, and that no sale occurred because of an intermediary LLC transfer; the trial court denied relief and excluded certain impeachment evidence.
- On appeal the Colorado Court of Appeals affirmed: it held the claim was timely (discovery was a jury question and the record supported the verdict), rejected seller’s procuring-cause instruction and laches defense because seller’s concealment barred those defenses, found the statute-of-frauds and transfer arguments waived, and upheld limits on impeachment evidence. The court remanded to award broker appellate fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of limitations | Claim filed within 3 years of discovery (broker discovered breach in 2011) | Broker should have discovered breach in 2006 (cancellation and deed recording) so claim is time-barred | Affirmed for broker: discovery was jury question; evidence did not compel finding discovery in 2006 |
| Right to commission / procuring-cause instruction | Broker sought commission as contract damages for breach of referral clause; did not claim procuring cause | Seller contended broker must prove procuring cause (CJI instruction) | Affirmed for broker: seller’s intentional concealment prevents him from invoking procuring-cause defense; damages measured by contractual commission |
| Laches / equitable defenses | Broker: seller’s concealment prevents laches, unclean-hands doctrine | Seller: broker delayed and laches applies | Affirmed for broker: seller’s misconduct (intentional concealment) bars laches; trial court did not abuse discretion |
| Impeachment with bankruptcy evidence | Broker allowed impeachment only with proper foundation; broker’s in limine motion justified limiting impeachment | Seller sought to impeach agent with personal bankruptcy documents showing trustee’s interest | Affirmed: court properly limited cross-examination for lack of foundation; no abuse of discretion |
Key Cases Cited
- Telluride Real Estate Co. v. Penthouse Affiliates, LLC, 996 P.2d 151 (Colo. App. 1999) (broker generally must be procuring cause to recover commission)
- Winston Fin. Grp., Inc. v. Fults Mgmt., Inc., 872 P.2d 1356 (Colo. App. 1994) (exception where seller intentionally excludes broker from sale)
- Kislak Co. v. Geldzahler, 509 A.2d 320 (N.J. Super. Ct. Law Div. 1985) (breach of referral clause entitles broker to stipulated commission)
- E & E Mining, Inc. v. Flying D Grp., Inc., 718 P.2d 58 (Wyo. 1986) (upholding commission as damages for breach of referral obligation)
- Reid v. Pyle, 51 P.3d 1064 (Colo. App. 2002) (party causing other’s failure to comply cannot benefit from that failure)
- Doll v. Thornhill, 6 So. 2d 793 (La. Ct. App. 1942) (broker presumed capable of completing sale; entitled to opportunity)
- Watson v. Cal-Three, LLC, 254 P.3d 1189 (Colo. App. 2011) (measure of damages in contract is to place plaintiff in position had breach not occurred)
- Murry v. GuideOne Specialty Mut. Ins. Co., 194 P.3d 489 (Colo. App. 2008) (accrual: accrues when party has knowledge of facts essential to claim)
- Sterenbuch v. Goss, 266 P.3d 428 (Colo. App. 2011) (accrual and discovery are generally jury questions unless undisputed)