Re/Max R.E. Professionals, Inc. v. Armstrong

NO. 4-96-0837

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

RE/MAX R.E. PROFESSIONALS, INC., ) Appeal from
an Illinois Corporation, ) Circuit Court of
Plaintiff-Appellee, ) Champaign County
v. ) No. 91L296
GARY R. ARMSTRONG and JANE )
ARMSTRONG, ) Honorable
Defendants-Appellants. ) Thomas J. Difanis,
) Judge Presiding.
_________________________________________________________________
PRESIDING JUSTICE STEIGMANN delivered the opinion of
the court:
In March 1991, plaintiff, RE/MAX R.E. Professionals,
Inc. (RE/MAX), filed a two-count complaint against defendants,
Gary R. Armstrong and Jane Armstrong, alleging that it was
entitled to recover a real estate commission under the terms of a
listing agreement and a withdrawal agreement. In January 1995,
RE/MAX filed a motion for summary judgment as to count I (breach
of contract), and in March 1995, the trial court granted RE/MAX's
motion. The Armstrongs appeal, arguing that (1) the docket entry
did not constitute an entry of judgment; and (2) the court erred
by granting RE/MAX's motion for summary judgment. We reverse and
remand.
I. BACKGROUND
The following facts appear from the complaint, deposi-
tions, affidavits, and attached documents. On July 25, 1990,
RE/MAX and the Armstrongs signed a "RESIDENTIAL LISTING AGREE-
MENT" (listing agreement) granting RE/MAX the exclusive right to
sell real estate owned by the Armstrongs. The listing agreement
provided, in relevant part, as follows:
"If, during the term of this agreement,
anyone, including myself [(the Armstrongs)],
produces a purchaser, ready, willing and able
to purchase said property *** I agree to pay
you a commission of *5% -- FIVE PERCENT.
Said commission shall be paid on closing the
sale herein contemplated or upon failure by
the purchaser or me to perform under the
contract of sale. ***
The term 'sale' as used herein shall be
construed to include any exchange to which I
consent in writing." (Emphasis added.)
On August 8, 1990, Gary telephoned RE/MAX and informed
one of its brokers that the Armstrongs were no longer interested
in selling their property. On August 10, 1990, Gary signed a
"UNIFORM LISTING WITHDRAWAL AGREEMENT" (withdrawal agreement).
The withdrawal agreement became effective on August 13, 1990, and
provided, in relevant part, as follows:
"(2) Should said property be sold or
exchanged within 90 days from the effective
date hereof, through any source, to any per-
son or organization, I agree to pay you a
commission in the amount provided in the
listing agreement.
***
(4) This withdrawal agreement does not
invalidate any part of the original listing
agreement except with respect to the enact-
ment of this withdrawal agreement exactly as
stated on this form." (Emphasis added.)
During mid-August 1990, the Armstrongs showed their
property to the ultimate buyers, Charles Miller and Jacqueline
Cardinale (the buyers). Shortly thereafter, the buyers visited
the Armstrong property again, and the Armstrongs quoted them a
price of approximately $100,000. The Armstrongs then went on
vacation and arrived back home in late September 1990. A few
days later, the buyers looked at the property for the third time.
A week or so later, the buyers made a counteroffer, and the
Armstrongs accepted it. Although the Armstrongs and the buyers
reached a verbal agreement on all of the terms of the sale, they
never entered into a written sales contract for the subject
property. On November 13, 1990, they closed the sale of the
subject property.
In March 1991, RE/MAX filed a complaint against the
Armstrongs to recover a real estate commission under the terms of
the listing and withdrawal agreements. In January 1995, RE/MAX
filed a motion for summary judgment as to count I, and the trial
court subsequently granted the motion. In September 1996, RE/MAX
moved for a voluntary dismissal of count II (fraud) and a final
and appealable judgment as to count I, which the court granted.
II. ANALYSIS

A. Entry of Judgment
The Armstrongs first argue that the docket entry in
this case does not constitute an entry of judgment. The
Armstrongs specifically contend that when a plaintiff seeks money
damages only, the judgment "must state the amount of money the
judgment calls for."
The Armstrongs have waived their contention regarding
an alleged deficiency in the judgment by failing to cite any
relevant authority in support of their claim as required by
Supreme Court Rule 341(e)(7). See 155 Ill. 2d R. 341(e)(7);
People v. $1,124,905.00 United States Currency, 269 Ill. App. 3d
952, 956, 647 N.E.2d 1028, 1031 (1995). In this portion of their
brief, the Armstrongs cite only one case; yet that case has
nothing to do with the argument they make.
B. The Trial Court's Grant of RE/MAX's
Motion for Summary Judgment

The Armstrongs argue that the trial court erred by
granting RE/MAX's motion for summary judgment. The Armstrongs
specifically contend that their property was "sold" on November
13, 1990, the closing date (which occurred after the 90-day
period set forth in the withdrawal agreement). Although we dis-
agree with that contention, we nonetheless conclude that the
trial court erred by granting RE/MAX's motion for summary judg-
ment.
Summary judgment is proper when (1) the resolution of a
case hinges on a question of law, and (2) the moving party's
right to judgment is clear and free from doubt. Truman L. Flatt
& Sons Co. v. Schupf, 271 Ill. App. 3d 983, 986, 649 N.E.2d 990,
993 (1995). In considering a motion for summary judgment, the
trial court must consider the affidavits, depositions, pleadings,
and exhibits on file and has a duty to construe the evidence
strictly against the movant and liberally in favor of the nonmov-
ing party. In re Estate of Hoover, 155 Ill. 2d 402, 410-11, 615 N.E.2d 736, 739-40 (1993). The trial court will grant the motion
if it finds no genuine issue of material fact exists and the
moving party is entitled to judgment as a matter of law. Watkins
v. Schmitt, 172 Ill. 2d 193, 203, 665 N.E.2d 1379, 1385 (1996);
735 ILCS 5/2-1005(c) (West 1994).
A reviewing court's role is to consider anew the facts
and law relating to the case and determine whether the trial
court was correct in finding that no genuine issue of material
fact exists, and if none exists, whether the court correctly
entered the judgment as a matter of law. Kellner v. Bartman, 250
Ill. App. 3d 1030, 1033, 620 N.E.2d 607, 609 (1993).
The rights and obligations of a real estate broker are
determined by the terms of the listing or other brokerage agree-
ment. Bennett & Kahnweiler, Inc. v. American National Bank &
Trust Co., 235 Ill. App. 3d 896, 905, 601 N.E.2d 810, 816 (1992).
Where the agreement terms are unambiguous, the parties' intent
must be determined solely from the language of the agreement.
Bennett, 235 Ill. App. 3d at 905, 601 N.E.2d at 816. The inter-
pretation of an unambiguous written contract is a question of
law. Kellner, 250 Ill. App. 3d at 1033, 620 N.E.2d at 609.
Likewise, the determination of whether an ambiguity exists is
also a question of law. Kellner, 250 Ill. App. 3d at 1033, 620 N.E.2d at 609.
In this case, the facts are not controverted; instead,
the parties disagree about the legal effect of the contract terms
and the actions of the Armstrongs and the buyers. Thus, the
question before us is whether the trial court erred by granting
RE/MAX's motion for summary judgment as a matter of law based on
those facts.
The terms of the listing agreement and the withdrawal
agreement are unambiguous. The withdrawal agreement clearly
provides that it does not invalidate any part of the listing
agreement except with respect to those provisions "exactly as
stated" in the withdrawal agreement. Thus, whenever the with-
drawal agreement and the listing agreement disagree regarding any
provision explicitly stated in the withdrawal agreement, the
withdrawal agreement prevails. This record shows such a dis-
agreement existed. The withdrawal agreement invalidates that
portion of the listing agreement that provides that the
Armstrongs owed RE/MAX a commission if a "ready, willing and
able" purchaser was produced during the term of the listing
agreement or if, within 180 days after the expiration of the
term, "a sale is made to any person to whom the property was
shown, by anyone, including [the Armstrongs] during said term."
Instead, the withdrawal agreement explicitly provides that the
Armstrongs owed RE/MAX a commission if the subject property was
"sold or exchanged within 90 days from the [August 13, 1990,]
effective date [of the withdrawal agreement]." (Emphasis added.)
In addition, the remaining valid portions of the
listing agreement unquestionably provide that a "sale" does not
encompass a verbal agreement to sell real estate. The listing
agreement states that "[t]he term 'sale' as used herein shall be
construed to include any exchange to which [the Armstrongs]
consent in writing." (Emphasis added.) Therefore, the terms of
the listing and withdrawal agreements provide that RE/MAX was
entitled to a commission only if the Armstrongs entered into a
written contract for the sale (or other exchange) of their
property during the term of the withdrawal agreement.
It is uncontroverted that, although the Armstrongs and
the buyers reached a verbal agreement as to all the terms of the
sale within the 90-day period set forth in the withdrawal agree-
ment, they never entered into a written contract for the sale of
the subject property. RE/MAX concedes as much in its brief
("There was no written residential sales contract").
We conclude that (1) the Armstrong's property was not
"sold" within the 90-day period for purposes of entitling RE/MAX
to a commission, and (2) RE/MAX was not entitled to judgment as a
matter of law. Accordingly, we hold that the trial court erred
by granting RE/MAX's motion for summary judgment.
We note in passing that, on appeal, RE/MAX argues as if
the withdrawal agreement states the following: "If the property
is sold or exchanged or a verbal or written agreement for the
sale of the property is entered into within 90 days from the
effective date of the withdrawal agreement, the seller agrees to
pay RE/MAX a commission in the amount provided in the listing
agreement." Clearly, that is not what the terms of the withdraw-
al agreement provide. If that is what RE/MAX wants the withdraw-
al agreement to provide, then it should write the agreement so
that it states exactly that.
In addition, we note that if the terms of the listing
and withdrawal agreements had been ambiguous and required con-
struction, we would construe those terms strictly against RE/MAX
because the agreements are adhesion contracts. See Abbott v.
Amoco Oil Co., 249 Ill. App. 3d 774, 781, 619 N.E.2d 789, 795
(1993) ("generally, burdensome clauses in adhesion contracts
should be construed against the more powerful party").
III. CONCLUSION
For the reasons stated, we reverse the trial court's
grant of RE/MAX's motion for summary judgment and remand for
further proceedings consistent with the views expressed herein.
Reversed and remanded.
GARMAN, J., concurs.
COOK, J., specially concurs.
 JUSTICE COOK, specially concurring:
On July 25, 1990, the Armstrongs executed a listing
agreement purporting to be a bilateral contract that gave RE/MAX
the exclusive right to sell their property. Two weeks later, on
August 8, the Armstrongs notified RE/MAX they were no longer
interested in selling, and the parties executed a withdrawal
agreement. A few days later, the Armstrongs showed the property
to the Millers. The Armstrongs reached a verbal agreement with
the Millers, apparently in October, and on November 13, 1990, two
days after the expiration of an extension period provided for in
the withdrawal agreement, the sale was closed.
A broker is entitled to a commission if the broker has
an exclusive sale agreement with the owner and the property is
sold by anyone during the life of the agreement. Wilson v.
Middendorf, 248 Ill. App. 3d 870, 872, 619 N.E.2d 179, 180
(1993). A broker is also entitled to a commission if the owner
acts in bad faith to cause the sale to occur after the life of
the agreement. Restatement (Second) of Agency 446, Comment e
(1958); Bear Kaufman Realty, Inc. v. Spec Development, Inc., 268
Ill. App. 3d 898, 902-04, 645 N.E.2d 244, 247-48 (1994). Al-
though the circumstances here are suspicious, there is no evi-
dence that either RE/MAX or the Armstrongs dealt with the Millers
prior to August 13, the effective date of the withdrawal agree-
ment (the date the listing agreement was terminated). RE/MAX in
fact dismissed its count II, which had alleged that the
Armstrongs were guilty of fraud or bad faith.
RE/MAX's sole argument is that it is entitled to a
commission by virtue of the language of the withdrawal agreement,
which provides for a commission "[s]hould said property be sold
or exchanged within 90 days from the effective date hereof,
through any source." That language is very unusual, because it
seems to make the owner liable for a commission after the listing
agreement has expired, even if the purchaser had absolutely no
connection with the property during the term of the listing
agreement. Extension agreements such as this are intended to
protect the broker from a defrauding owner who waits until just
after the expiration of the initial listing period before selling
to a purchaser with whom the broker has previously conducted
negotiations. D. Burke, Real Estate Brokers 2.11, at 2:112 (2d
ed. 1992).
Extension agreements are discussed in a number of
Illinois cases. The agreements in those cases require contact
during the period of the listing agreement. See, e.g., Tom
Brinkoetter & Co. v. Cresthaven Country Club, Inc., 118 Ill. App.
3d 554, 556, 559-60, 454 N.E.2d 1182, 1183, 1185-86 (1983) (pur-
chaser with whom there were negotiations "during the term of this
exclusive listing" (emphasis omitted)); Pilson v. Roush, 82 Ill.
App. 3d 187, 188, 402 N.E.2d 906, 907 (1980) (person "with whom
you have negotiated"); Kokinis v. Kotrich, 81 Ill. 2d 151, 155,
407 N.E.2d 43, 45 (1980) (purchaser to whom it was submitted or
shown during the term of the agreement); Busch v. Eisin, 96 Ill.
App. 3d 909, 910, 422 N.E.2d 135, 136 (1981) ("to a purchaser to
whom it was offered during the period hereof").
The explanation here is apparently found in the origi-
nal listing agreement, which also contained an extension clause,
providing for a commission, "if, within 180 DAYS after the
expiration of said term, a sale is made to any person to whom the
property was shown, by anyone, including myself, during said
term." The withdrawal agreement indicates that it changes the
listing agreement only "exactly as stated" in the withdrawal
agreement. The 90-day extension period in the withdrawal agree-
ment should accordingly be read to require that the purchaser be
one "to whom the property was shown" during the term of the
listing agreement. Any other interpretation of the withdrawal
agreement (e.g., absolute liability intended as a penalty,
absolute liability intended to eliminate broker's need to present
evidence) would raise serious questions of overreaching on the
part of the draftor, RE/MAX.
In the present case, there is no indication the proper-
ty was shown to the Millers during the term of the listing
agreement (July 25, 1990, to August 13, 1990), by either RE/MAX
or the Armstrongs. Accordingly, RE/MAX was not entitled to a
commission under the withdrawal agreement, and the trial court
erred in entering summary judgment in its favor. It was not
improper for the Armstrongs to show the property to new prospects
after August 13. RE/MAX's exclusive right to sell ended on
August 13, when the listing agreement terminated.
The Armstrongs argue that there could be no "sale"
under the withdrawal agreement because there was no closing
during the 90-day extension period. Different considerations
apply to the term of the listing agreement (July 25, 1990, to
August 13, 1990), and to the term of the extension agreement
(August 13, 1990, to November 11, 1990). It is generally not
necessary that a sale be closed during the term of a listing
agreement, it is only necessary that the broker produce a pur-
chaser who is ready, willing, and able to purchase the property
on the prescribed terms. A broker may establish his right to a
commission by a legally binding contract of sale. Hallmark &
Johnson Properties, Ltd. v. Gadea, 218 Ill. App. 3d 921, 926-27,
578 N.E.2d 1180, 1184 (1991); Busch, 96 Ill. App. 3d at 911-13,
422 N.E.2d at 137-38. That might not be the case with an exten-
sion agreement like the present one, where the language regarding
the entitlement to commission is so different from the listing
agreement, especially if the extension agreement is read to make
the owner absolutely liable for a commission on any sale. In my
view, however, it is not necessary to address the Armstrongs'
argument that a closing was required.
I disagree with the majority's statement that the
language of the listing agreement requires that a sale be in
writing. The listing agreement provides that "[t]he term 'sale'
as used herein shall be construed to include any exchange to
which I consent in writing." The purpose of that language is to
make it clear that an "exchange," which is arguably not a "sale,"
is to be treated as a "sale." The majority erroneously reads the
word "exchange" broadly, as "any type of transaction," and con-
cludes that any type of transaction that is in writing will
constitute a sale. Other language in the agreement makes it
clear that an "exchange" is an "exchange of properties," and not
every conceivable transaction. Even if a sale "included" all
exchanges that were in writing, that would not rule out the
possibility there could be some sales that were not in writing.
I do agree with the majority that a legally binding
contract for the sale of real estate must be in writing. 740
ILCS 80/2 (West 1994). If the Armstrongs and the Millers acted
in bad faith to cause the sale to occur after the appropriate
period, however, there would be liability for a commission
although no written contract had been executed. There is no
liability for a commission in this case because the property was
not shown to the Millers by anyone during the appropriate period,
the term of the listing agreement. Even if there had been a
written agreement (or for that matter, a closing) during the
extension period, there would be no right to a commission unless
the Millers were persons "to whom the property was shown" during
the term of the listing agreement.