3 N.W.3d 427
S.D.2024Background
- The Tronneses entered a listing agreement with Uhre Realty (URC) to sell their Rapid City home and a separate property management agreement with Uhre Property Management (UPM) to potentially lease the property if not sold.
- The home did not sell during the listing period; instead, David Pifke became the tenant through Uhre during the listing’s term.
- After the listing agreement expired, the Tronneses directly communicated with Pifke, eventually selling the property to him after the agreement and its 180-day tail period lapsed.
- URC claimed it was entitled to a sale commission; UPM claimed it was entitled to management fees for the entire lease term, despite early termination.
- The trial court ruled against URC and UPM on their claims, and for the Tronneses on all issues except their tortious interference counterclaim. It awarded attorney fees to the Tronneses as prevailing parties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of Listing Agreement | URC was procuring cause for the sale to Pifke | Pifke was procured only as a tenant, not buyer | No breach; Pifke wasn’t a buyer in term |
| Option to Purchase | Tronneses’ agreement with Pifke was an option | No valid option contract existed | No option; contract terms not satisfied |
| Management Fee Entitlement | UPM owed full 18 months’ fee upon lease signing | Only entitled to fees as rent is collected | Only monthly, as rent accrues; no breach |
| Attorney Fees Under Listing Agreement | Prevailing party entitled to fees | Only nonbreaching party upon breach entitled | No fees; agreement didn’t so provide |
Key Cases Cited
- Ericson v. Ebsen, 216 N.W. 860 (S.D. 1927) (broker only earns commission by producing a ready, willing, and able purchaser during agency period)
- Ziegler Furniture & Funeral Home, Inc. v. Cicmanec, 709 N.W.2d 350 (S.D. 2006) (option contract requirements; must include definite price and consideration)
- Zochert v. Protective Life Ins. Co., 921 N.W.2d 479 (S.D. 2018) (implied covenant of good faith and fair dealing in contracts)
- Edgar v. Mills, 892 N.W.2d 223 (S.D. 2017) (unambiguous contracts to be enforced as written)