Khawaja, H. v. Re/Max Central
151 A.3d 626
| Pa. Super. Ct. | 2016Background
- Khawaja, a licensed real estate agent, entered a one-year independent-contractor agreement with RE/MAX on Jan. 19, 2015; RE/MAX retained 30% of commissions (up to $17,163) as fixed/admin fees, after which Khawaja would receive 100% of further commissions.
- RE/MAX terminated the agreement on April 22, 2015; some listings had closed after termination and Khawaja alleged unpaid commissions of $26,982.86.
- Paragraph 14(D) of the Agreement permits deduction of out-of-pocket expenses and a 20% "referral fee" from a "terminated Contractor's commission(s)" but explicitly ties the provision to situations "in the event the Contractor terminates."
- Khawaja sued for breach of contract and unjust enrichment; RE/MAX issued some checks but withheld amounts claiming a 20% referral fee; RE/MAX filed preliminary objections (demurrer) asserting no further payments were owed.
- The trial court sustained the demurrer and dismissed the breach claim, reasoning Paragraph 14(D) did not apply (because RE/MAX terminated the contract) but otherwise claiming Khawaja failed to establish entitlement to more; it also dismissed unjust enrichment. The trial court later acknowledged error in dismissing the contract count.
- The Superior Court reversed dismissal of the breach claims (Counts I and III), holding Paragraph 14(D) did not permit RE/MAX to keep a 20% referral fee when RE/MAX terminated the agreement, but affirmed dismissal of the unjust enrichment claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Paragraph 14(D) permits RE/MAX to withhold a 20% "referral fee" from commissions when RE/MAX (not the agent) terminates the Agreement | Khawaja: Paragraph 14(D) is inapplicable because RE/MAX terminated; she is entitled to commissions once fixed fees were satisfied | RE/MAX: The phrase "terminated Contractor's commission(s)" applies to any terminated contractor, so the 20% referral fee may be retained | Held: Paragraph 14(D) applies only where the Contractor (agent) terminates; RE/MAX has no right under 14(D) to retain a 20% referral fee when RE/MAX terminated. Breach claim reinstated and remanded. |
| Whether dismissal on preliminary objections was appropriate instead of allowing amendment or further proceedings | Khawaja: Any pleading defects could be cured by amendment; dismissal was premature | RE/MAX: All monies due were paid; demurrer appropriate | Held: Superior Court reversed dismissal as to breach claims (trial court erred); the contract claim as pleaded was legally sufficient so remand for further proceedings. |
| Whether unjust enrichment claim could proceed despite an express written contract | Khawaja: Pleaded unjust enrichment alternatively | RE/MAX: Express written contract governs; unjust enrichment unavailable | Held: Unjust enrichment dismissed and affirmed — cannot plead unjust enrichment where an express written contract governs the transaction. |
| Whether the trial court erred by considering affidavits on preliminary objections | Khawaja: Affidavits supported her claims of unpaid commissions | RE/MAX: Affidavits showed all commissions were paid except authorized deductions | Held: Trial court should have decided preliminary objections on the pleadings only; consideration of affidavits was error but harmless here because dismissal was reversed on other grounds. |
Key Cases Cited
- Perelman v. Perelman, 125 A.3d 1259 (Pa. Super. 2015) (standard of review and deference on preliminary objections)
- Anchel v. Shea, 762 A.2d 346 (Pa. Super. 2000) (clear, unambiguous contract terms are enforced as written)
- Villoresi v. Femminella, 856 A.2d 78 (Pa. Super. 2004) (unjust enrichment unavailable when an express contract governs)
- Reilly v. City Deposit Bank & Trust Co., 185 A. 620 (Pa. 1936) (contract provisions must be interpreted in context to harmonize terms)