BURLAND, REISS, MURPHY & MOSHER, INC. v SCHMIDT
Docket No. 29598
Court of Appeals of Michigan
Submitted May 9, 1977, at Detroit. Decided September 21, 1977.
78 Mich App 670
Appeal from Oakland, Robert L. Templin, J.
OPINION OF THE COURT
1. JUDGMENT—SUMMARY JUDGMENT—CONTRACTS—INTERPRETATION OF CONTRACT.
Summary judgment for a plaintiff in an action on a contract was improper where a defendant‘s affidavit opposing the motion for summary judgment expressed an interpretation of the contract which was not inconsistent with the language of the contract, and therefore should have been considered by the court.
2. CONTRACTS—INTENT OF PARTIES—SUMMARY JUDGMENT.
The cardinal rule of contract law is to effectuate the intent of the parties, and in a case where the question of intent plays a leading role summary judgment should not be granted.
3. BROKERS—REAL ESTATE BROKERS—CONTRACTS—CONTRACT FOR COMMISSION—EXPIRATION DATE—ADMINISTRATIVE CODE—STATUTES.
Failure of a real estate broker to include a definite expiration date in an exclusive listing agreement constitutes unfair dealing under the requirements of a statute and the Administrative Code (
REFERENCES FOR POINTS IN HEADNOTES
[1] 73 Am Jur 2d, Summary Judgment § 5.
[2] 17 Am Jur 2d, Contracts § 244.
[3, 5-7] 12 Am Jur 2d, Broker § 45.
17 Am Jur 2d, Contracts § 486.
[4] 73 Am Jur 2d, Statutes §§ 11, 291.
[5, 6, 8] 12 Am Jur 2d, Brokers §§ 216, 220.
Broker‘s right to commission on sales consummated after termination of employment. 27 ALR2d 1348.
Construction of provision in real-estate broker‘s listing contract that broker shall receive commission on sale after expiration of listing period to one with whom broker has “negotiated” during listing period. 51 ALR3d 1149.
[6] 12 Am Jur 2d, Brokers § 19.
Grounds for revocation or suspension of license of real-estate broker or salesman. 56 ALR2d 573.
[7] 17 Am Jur 2d, Contracts § 495.
The general rule is that where a statute or regulation creates a duty unknown to the common law, the remedy provided by the statute or regulation is exclusive.
5. CONTRACTS—CONTRACT FOR COMMISSION—REAL ESTATE—EXPIRATION DATE—COMMON LAW.
At common law, the failure to state a definite expiration date will not invalidate a contract for a real estate commission.
6. BROKERS—REAL ESTATE BROKERS—CONTRACT FOR COMMISSION—EXPIRATION DATE—RECOVERY OF COMMISSION.
A real estate broker‘s violation of a statute and regulation which require a contract for a commission to contain a definite expiration date may lead to the suspension, denial, or revocation of the broker‘s license but does not bar the broker‘s recovery of an otherwise earned commission.
DISSENT BY V. J. BRENNAN, J.
7. BROKERS—REAL ESTATE BROKERS—CONTRACTS—NOTICE OF CANCELLATION—ADMINISTRATIVE CODE.
A real estate broker‘s contract which provides that either party may cancel the contract by giving 30 days’ notice thereby provides a date certain for notification of cancellation and satisfies the requirements of a regulation set forth in the Administrative Code which requires that a listing agreement shall set forth a definite expiration date (1973 AACS, R 338.2734[2]).
8. JUDGMENT—SUMMARY JUDGMENT—BROKERS—REAL ESTATE BROKERS—CONTRACTS.
Summary judgment was properly granted to a plaintiff real estate broker in an action to enforce payment of a commission where the terms of the broker‘s contract were clear, and where it is definite that the buyer viewed the property prior to the expiration date of the contract and knew that the property was for sale through the plaintiff‘s efforts.
Complaint by Burland, Reiss, Murphy & Mosher, Inc., against Harry E. Schmidt, III, Ward C. Case,
Honigman, Miller, Schwartz & Cohn (by Peter M. Alter and Patrick T. Duerr), for plaintiff.
Miller, Canfield, Paddock & Stone (by Carl H. vonEnde), for defendants.
Before: N. J. KAUFMAN, P. J., and V. J. BRENNAN and D. C. RILEY, JJ.
D. C. RILEY, J. Plaintiff Burland, Reiss, Murphy & Mosher, Inc., (hereafter, “Broker“), secured a summary judgment in the lower court directing defendants, (hereafter, “Seller“), to pay $59,200 as a commission from the sale of certain realty owned by Seller.
The court below rested its decision on an October 15, 1974, contract under which Seller granted Broker “the exclusive right * * * for an unlimited period of time, to find a purchaser” for the property, subject to either party‘s right to cancel the contract “by giving 30 days’ prior notice“. Seller further promised Broker that:
“[i]f a purchaser is obtained therefor, by you or by anyone for me, (including myself), during said period, at the stated price and terms, or upon any other price, terms or exchange to which I consent, or if said property is sold by me or for me, within (3) months after expiration of this Agreement, to a purchaser known to me to have been shown the property during such period, to pay you a commission of four (4) per cent of such sale price.”
On July 21, 1975, Seller notified Broker of its
Although informed of the sale prior to its occurrence, Broker did not attend the closing and did not request the 4 percent commission until after the property had been conveyed. Upon Seller‘s refusal to pay, Broker instituted the present action and, as noted, met with success on a summary judgment. GCR 1963, 117.2(3).
Seller initially disputes the propriety of summary judgment, alleging that material issues of fact remain to be resolved. Based on the contract, the pleadings and the affidavits of the parties, we agree. In his opposing affidavit, Mr. Harry E. Schmidt, III, a defendant and general partner of Seller, expressed his understanding and intent
“that the extension clause contained in the Contract would entitle plaintiff to a commission only if the Property was sold during the extension period to a person to whom plaintiffs had shown the Property prior to cancellation of the Contract.”
This interpretation is not inconsistent with the language of the contract and thus should have been considered by the lower court. Union Oil Co of California v Newton, 397 Mich 486; 245 NW2d 11 (1976), Michigan National Bank of Detroit v Holland-Dozier-Holland Sound Studios, 73 Mich App 12; 250 NW2d 532 (1976). In our view, the commission clause of the contract raises more questions than it settles. The clause‘s indiscrimi-
Seller also argues that the Broker-Seller contract is unenforceable because it violates Administrative Code, 1973 AACS, R 338.2734(2) and R 338.2731 which provide:
“Rule 34. (1) * * * .
(2) A listing agreement shall set forth a definite expiration date and shall not contain a provision requiring the party signing the listing to notify the broker of the party‘s intention to cancel the listing upon or after the expiration date.”
“Rule 31. A broker or salesman who does not comply with these rules or any provisions of the act is presumed to be guilty of unfair dealing.”1
In reliance on Brown v Marty, 172 Wis 411; 179
“[W]e think the contract in question is sufficiently definite in expressing the time of duration in that it provides a method by which the duration of the contract may be absolutely fixed, to wit, three months after the giving of written notice by the owner.” 172 Wis at 414-415; 179 NW at 603. (Emphasis added.)
Were we faced with language similar to the statute in Brown, we might well arrive at the same conclusion. Rule 34(2), however, is fundamentally different. It requires not a definable expiration date, but one that is definite; it mandates not a manner or method of ascertaining the contract‘s expiration, but a date certain. We hold, therefore, that the Broker-Seller contract conflicts with the stricture of Rule 34(2).
This holding, however, avails Seller little. The general rule is that where, as here, a statute or regulation creates a duty unknown to the common law,2 the remedy provided therein for violation of the duty is exclusive. Pompey v General Motors Corp, 385 Mich 537, 552; 189 NW2d 243 (1971). Under
We need not and do not address the other issues raised, given our resolution of the foregoing questions.
Reversed and remanded for trial on the merits. Costs to abide the result.
N. J. KAUFMAN, P. J., concurred.
V. J. BRENNAN, J. (dissenting). I must disagree with the majority‘s disposition of this case. The regulation under consideration in this case states in part:
“Rule 34.(1) * * * .
(2) A listing agreement shall set forth a definite expiration date and shall not contain a provision requiring the party signing the listing to notify the broker of the party‘s intention to cancel the listing upon or after the expiration date.” 1973 AACS, R 338.2734(2).
Upon consulting the contract involved in this case, I find the following provision for notice of cancellation by the parties:
“In consideration of your services in offering the following described property for sale, I hereby grant you the exclusive right * * * for an unlimited period of time, to find a purchaser therefor; however, either party
may cancel this contract by giving 30 days’ prior notice.”
In my opinion, the contract clearly satisfies the requirements of the regulation. A date certain for notification of cancellation is provided “by giving 30 days prior notice“; and, by stipulating that “either party may cancel this contract“, certainly plaintiff has not cast the burden of notification exclusively upon defendant-seller. I must also disagree with the majority and their assessment of an analogous situation faced by the Wisconsin courts. See Brown v Marty, 172 Wis 411; 179 NW 602 (1920). The majority‘s attempt to distinguish Brown by the semantic difference between a “definable” expiration date and a “definite” expiration date is not persuasive. The principle and legal reasoning employed in Brown is equally applicable to the situation we face in this case. In short, Brown can be compared with the present question and, when compared, leads to the conclusion that plaintiff-broker no more violated the Michigan Department of Licensing regulation than did the broker in Brown. I find no error in the trial court‘s grant of summary judgment based on his acceptance of plaintiff‘s interpretation and argued compliance with the regulation.
As to whether any material issue of fact remained to take to trial, again I do not believe the trial court erred in granting summary judgment to plaintiff. GCR 1963, 117.2(3). I find the language and dates in the listing agreement and cancellation notice is and are clear. Therefore, I would affirm the court‘s holding that plaintiff complied with his part of the agreement.
Further, having found that plaintiff‘s contract negotiated with defendant-seller was not legally improper, the facts clearly sustain plaintiff‘s right
Consequently, given the legal propriety of the contractual agreement between plaintiff-broker and defendant-seller and the factual certainty of the events as they occurred pursuant to the legal agreement, the trial court had no choice but to grant plaintiff summary judgment. Our course of action on appeal is equally determined. Defendant was afforded an adequate opportunity to present its case to the trial court. The trial court should be affirmed.