Gerry Rosenboom and Ucele Williams v. Holly Springs Real Estate and Don Brewer

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November 16, 2005










Olly Neal, Judge

Appellants Gerry Rosenboom and Ucele Williams1 appeal from an order of the Polk County Circuit Court that found that, pursuant to an Exclusive Right to Sell Agreement, appellants were obligated to pay appellees Holly Springs Real Estate (HSRE) and Don Brewer a commission in the amount of $9,900 plus attorney fees and cost. On appeal, appellants argue that "the trial court committed reversible error by contravening long-standing precedent in this area of contract law."

Appellants are common-law husband and wife. On June 9, 2003, wishing to sell certain land that they owned in Polk County, appellants executed an Exclusive Right to Sell Agreement (Agreement) with HSRE. The property was to be listed from June 9, 2003, to December 9, 2003, and had an asking price of $99,900. The agreement provided in pertinent part:

7. LISTING AGENT FIRM'S FEE: If Listing Agent Firm presents to Owner an offer in an amount equal to or greater than the Offering Price, or such lesser price or termsas Owner may accept, or if the Property is otherwise sold or disposed of by Listing Agent Firm or any other person including Owner, during the listing period, Owner agrees to pay Listing Agent Firm a professional fee of: (i) Ten percent (10 %) of the gross amount of any accepted Real Estate Contract or value of any property exchanged for the Property; or (ii) $ , for professional services rendered. In consideration for the Owner's promise contained within this paragraph 7, Listing Agent Firm promises to Owner that it will use reasonable effort to solicit an offer regarding the Property on terms and condition acceptable to Owner. Owner agrees that Listing Agent Firm is not required to investigate the financial or other ability of a prospective Buyer to consummate any proposed or accepted Real Estate Contract. Owner will not owe a fee to Listing Agent Firm if Buyer does not remove any condition set forth in a Real Estate contract and cannot close, unless failure to close is the fault of Owner.

. . .


(Emphasis added.)

On November 2, 2003, Keith Aleshire, an associate broker with HSRE, presented appellants with an offer from Lynn and Billy Greenwade. They offered to pay $87,500 for the property. Appellants rejected the offer. In the meantime, other offers were also received, but appellants rejected the offers because they were less than the full asking price. On December 8, Mr. Aleshire presented appellants with a second offer from the Greenwades. This offer was for the full asking price. Without offering a reason, appellant Rosenboom rejected the offer. The next day the agreement expired.

On February 5, 2004, HSRE filed a complaint in the Polk County Circuit Court against appellants asserting that it had obtained an offer for the full asking price, and, therefore, was entitled to a commission of ten percent of the asking price as provided for in the agreement. In their response, appellants asserted that HSRE was not entitled to the ten-percent commission because they had found certain contingencies unacceptable.

A hearing on the matter was held on September 27, 2004. At the hearing, Mr.Aleshire testified that, following the December 8 rejection, he contacted Mr. Rosenboom on December 9 and asked him to come by the real-estate office so that they could further discuss the offer. Mr. Rosenboom came by the next day. In the meantime, Mr. Aleshire learned that someone else was trying to obtain the property. When he asked Mr. Rosenboom if he had worked out another deal, Mr. Rosenboom replied "that's got nothing to do with it," and again refused to accept the Greenwades' offer.

Mr. Aleshire estimated that he had expended sixty hours in trying to sell the property. He asked for a judgment in the amount of $9,900 plus attorney fees and court costs. He described the Greenwades as "ready, willing, and able to buy this property." He believed that he was entitled to a commission because he had produced a willing and able buyer within the time frame specified in the agreement. However, Mr. Aleshire conceded that the agreement provided that the terms and conditions must be acceptable to the seller and that he would only earn a commission upon his making the terms and conditions acceptable to the seller. He testified that the agreement provided that appellants would have to expend additional funds on the procurement of a survey and title policy. Mr. Aleshire described these as merely negotiable terms.

Appellant Gerry Rosenboom testified that, when he signed the agreement, "I knew in my mind that there were certain things I was willing to do and certain things I was not willing to do." However, he failed to articulate this to Mr. Aleshire. He stated that, other than wanting the full asking price, he did not want to "take a lot of money off of my side of the deal." Mr. Rosenboom said that he rejected the Greenwades' initial offer of $87,500 because it was too low. He agreed that the agreement provided that, if the listing agent presented an offer equal to or greater than the asking price, he would be required to pay a ten percent commission. He said that he understood this to mean an acceptable offer. He agreed thatHSRE had presented him an offer for the full asking price, but he believed that HSRE had failed to bring him "an acceptable contract." Mr. Rosenboom gave three reasons as to why he rejected the Greenwades' second offer: (1) He did not understand on purchase of new financing what the minimum and maximum meant; (2) the $500 earnest money was not enough money on a $100,000 contract; (3) he was not going to furnish a survey.

In a letter opinion dated October 24, 2004, the trial court wrote:

It is clear that the Arkansas law does not require a completed sale or contract. El Dorado Real Estate Co. v. Garret, 400 S.W.2d 497 (1966) and other cases, some of which were cited in both briefs. All Arkansas requires is that the broker produces a purchaser willing, able and ready to purchase on the seller's terms and conditions. Whether or not the terms and conditions have been met is a fact question and, in a jury trial, to be decided by the jury. In this case the court sat as a jury. The element that persuaded the court was the fact that the same prospective purchasers made an offer exactly as the last one except for the price, which first offer was refused, in the court's opinion, because of the purchase price. The seller, under the terms of the exclusive right to sell agreement, could cancel the agreement upon 7 days written notice, but would still own [sic] the commission.

On December 7, 2004, a judgment was entered awarding HSRE $11,037.32, including $9,900 as the ten-percent commission and $1,047.22 for attorney fees and costs. From that decision comes this appeal.

The standard of review of a circuit court's findings of fact after a bench trial is whether those findings are clearly erroneous. Berry v. Cherokee Village Sewer, Inc., 85 Ark. App. 357, 155 S.W.3d 35 (2004). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Id. Disputed facts and determination of the credibility of witnesses are within the province of the judge, sitting as the trier of fact. Id. However, we review questions of law de novo, as the trial court is in no better position than we are to answer a question of law. Curley v. Old Reliable Cas. Co., 85 Ark. App. 395, 155 S.W.3d 711 (2004).

Appellants argue that, under Arkansas law, a broker is entitled to his commission when (1) he produces a ready, willing, and able buyer and (2) the terms of the agreement are acceptable to the seller. We disagree. As a general rule, a broker becomes entitled to his commission when he produces a purchaser who is able, ready, and willing to buy the property at a price and upon the terms named by the seller, although the particulars may be arranged and the matter negotiated and completed between the buyer and seller directly. Moore v. Irvin, 89 Ark. 289, 116 S.W. 662 (1909); Rector-Phillips-Morse v. Huntsman, 267 Ark. 767, 590 S.W.2d 317 (Ark. App. 1979). This is true even when no sale is made. Rector-Phillips-Morse, supra. Furthermore, it is not necessary that an enforceable contract be executed before the broker is entitled to his commission, unless the agreement between seller and broker, in effect, calls for an actual sale of the property. El Dorado Real Estate v. Garrett, 240 Ark. 483, 400 S.W.2d 497 (1966).

To be entitled to his commission, all a broker has to do is produce a ready, willing, and able buyer who is willing to make the purchase based on the terms that have been named by the seller. This means terms that were articulated when the property was initially listed.

Here, the trial court made a finding of fact that the only term that the appellants made absolute was the asking price. This is evidenced by the fact that Mr. Rosenboom testified that he rejected the Greenwades' initial offer because it was too low. Furthermore, appellants failed to put any exceptions in or on the initial contract. Therefore, we cannot conclude that the trial court's findings are clearly erroneous, and we affirm.


Glover and Vaught, JJ., agree.

1 Ms. Williams provided no testimony below.