Darrell R. Magby and Debra S. Magby v. Atkinson Realty, Inc. and Century 21 Hayes Realty
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DIVISION III
ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION
OLLY NEAL, Judge
CA06-259
October 11, 2006
DARRELL R. MAGBY AND
DEBRA S. MAGBY
APPELLANTS
v.
ATKINSON REALTY, INC. AND
CENTURY 21 HAYES REALTY
APPELLEES
AN APPEAL FROM THE FRANKLIN
COUNTY CIRCUIT COURT
[CV-04-108]
HONORABLE JOHN S. PATTERSON,
JUDGE
AFFIRMED
Following an October 13, 2005, bench trial, the Franklin County Circuit Court entered
a judgment finding that, pursuant to an Exclusive Right to Sell Agreement, appellants
Darrell Magby and Debra Magby owed appellee Atkinson Realty, doing business as Century
21 Hayes Realty (Century 21), a real estate commission. On appeal, the Magbys argue that
the trial court erred as a matter of law in reaching the conclusion that the de minimus contacts
between Century 21 and Frank Corley were sufficient to constitute the procuring cause for
the sale of real property to Mr. Corley and therefore, the awarding of a commission to
Century 21 was in error. The Magbys also argue that the trial court erred when it determined
that Century 21 was entitled to a full commission on the sale of the property to Mr. Corley
on its claim of entitlement under a quantum meruit theory. We affirm.
The evidence at the bench trial established the following. The Magbys owned an
eighty-acre tract of land in Franklin County. On September 9, 2003, desiring to sell the
property, the Magbys entered into an exclusive right to sell agreement with Century 21. The
agreement was to expire on March 9, 2004. The pertinent parts of the agreement provided:
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 terms
as 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) Six
percent (6 %) 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.
....
10. EXPIRED LISTING CONDITIONS: Unless otherwise specified, Owner agrees
to pay the profession fee set forth in Paragraph 7 to Listing Agent Firm if the Property
is sold or otherwise disposed of directly or indirectly by any person including Owner
during a period of 180 days after expiration or termination of this Exclusive Right to
Sell Agreement (including termination by Listing Agent Firm pursuant to Paragraph
11 below) when any offer, offer and acceptance, or real estate contract was entered
into during the term hereof, or when information given by or obtained through Listing
Agent Firm during the period of the listing resulted in or contributed in any manner
to the sale or disposal of the Property, whether or not Listing Agent Firm was the
procuring cause. However, if Owner employs another real estate firm as exclusive
agent for marketing the Property after expiration of this Exclusive Right to Sell
Agreement, Owner shall pay only one professional fee, and that to the currently
employed real estate firm, without limiting the original or previous Listing Agent
Firm from seeking a share of such professional fee from the currently employed real
estate firm through arbitration, or otherwise.
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(Emphasis added.)
Two weeks before the agreement was set to expire, Wallace Corley saw the Century
21 sign on the Magby property and went to the real estate office to inquire about the property.
There, Michelle Jones, a Century 21 agent, printed out the “spec sheet” on the property and
gave it to Mr. Corley. He declined Ms. Jones’s offer to take him out to view the property.
On March 9, 2004, the agreement expired. Ms. Jones contacted Mr. Magby the
following day to see if the Magbys wanted to re-list the property. Mr. Magby was noncommittal in his answer.
Sometime after the parties’ agreement expired, Mr. Corley returned to Century 21’s
office and inquired further about the property. Ms. Jones gave him a copy of the property
survey and showed him the plat map. At that time, Mr. Corley again declined Ms. Jones’s
offer to view the property. However, later that day, Mr. Corley returned and wanted to view
the property. Because the parties’ agreement had expired, Ms. Jones first called Mr. Magby
to obtain his permission to show the property.
On March 24, 2004, Mr. Corley made an offer to purchase the property for $180,000.
Ms. Jones called Mr. Magby and informed him of the offer. Because he and his wife were
out of town, Mr. Magby said that they would discuss the offer and would come by the office
when they returned home.
In the meantime, Chuck Atkinson, Century 21’s principal broker, had Ms. Green
prepare a contract providing for a one month extension of the parties’ agreement. When the
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Magbys came by, on March 26, to discuss the offer, Mr. Atkinson presented them with the
contract for a one month extension. Mr. Magby refused to sign the contract. Because of Mr.
Magby’s refusal, Mr. Atkinson did not show the Magby’s the offer or inform them who had
made the offer. Ms. Jones testified that, after the Magbys left the office, she called Mr.
Corley and gave him Mr. Magby’s contact information and asked Mr. Corley to inform her
if he was able to work something out with Mr. Magby.
However, Mr. Magby testified that, two days later, after learning from a cousin that
Mr. Corley had purchased property in the area, he obtained Mr. Corley’s information from
a neighbor, and he called Mr. Corley to inquire if he would be interested in viewing the
property. Mr. Corley agreed to view the property a second time. Mr. Corley eventually paid
$175,000 to purchase the property from the Magbys.
On July 29, 2004, Century 21 filed a complaint seeking a judgment against the
Magbys for a real estate commission, pursuant to the “Exclusive Right to Sell Agreement,”
in an amount equal to six percent of the gross selling price of the property. In the alternative,
Century 21 sought judgment on the basis of implied contract or quantum meruit. Century 21
also sought an award of pre-judgment interest, attorney’s fees, and cost.
In a November 18, 2005, order the trial court awarded Century 21, a six percent
commission ($10,500) plus prejudgment interest, attorney’s fees, and cost. The trial court
specifically wrote:
[Century 21] is entitled to judgment against the [Magbys,] jointly and
severally, on its claim set out in paragraph III of its complaint inasmuch as the court
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finds that during the exclusive listing period set out in the Exclusive Listing
Agreement introduced during the trial as [Century 21's] Exhibit “A”, the ultimate
purchaser of the real estate which formed the basis of the said Listing Agreement
between [Century 21] and the [Magbys] (i) observed the Century 21 “for sale” sign
near the property prior to the listing expiring and (ii) went to [Century 21's] office in
Ozark, Arkansas, making inquiry about said property during the exclusive listing
period whereupon the said purchaser was provided with a “specification sheet”
regarding the [Magbys’] property. As a result of those facts, the court finds that
[Century 21] is entitled to its commission under paragraph 10 of the Listing
Agreement which provides that the commission is earned “. . . when information
given by or obtained through Listing Agent Firm [Century 21] during the period of
the listing resulted in or contributed in any manner to the sale or disposal of the
Property... .”
(Emphasis in the original.) From that order, the Magbys now bring 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).
In their first argument on appeal, the Magbys assert that the trial court erred when it
found that Century 21 was the procuring cause of the sale to Mr. Corley. However, Century
21 points out that, because the trial court’s decision was based upon the express terms of the
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parties’ agreement and not upon the procuring cause, the Magbys’ argument is misplaced.
We agree that the Magbys’ argument is misplaced. Here, the trial court’s decision was based
on paragraph ten of the parties’ agreement.
The first rule of interpretation of a contract is to give the language employed the
meaning that the parties intended, and the court must consider the sense and meanings of the
words used by the parties as they are taken and understood in their plain, ordinary meaning.
Cranfill v. Union Planters Bank, 86 Ark. App. 1, 158 S.W.3d 703 (2004). It is the duty of
the court to construe a contract according to its unambiguous language without enlarging or
extending its terms. Id. In regard to the construction of an agreement’s terms, the initial
determination of the existence of an ambiguity rests with the court. Id. Language is
ambiguous when there is doubt or uncertainty as to its meaning or it is fairly susceptible of
two interpretations. Am. Investors Life Ins. Co. v. Butler, 76 Ark. App. 355, 65 S.W.3d 472
(2002). When a contract is unambiguous, its construction is a question of law for the court.
Cranfill, supra.
Here, the Magbys are not arguing that the agreement is unenforceable or that the
agreement contained ambiguous language. Accordingly, we give the words of the agreement
their plain and ordinary meaning.
Paragraph ten of the parties agreement provides, in pertinent part, that “when information
given by or obtained through Listing Agent Firm during the period of the listing resulted in
or contributed in any manner to the sale or disposal of the Property” the agent will remain
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entitled to a professional fee.
The facts of this case establish that Mr. Corley first learned of the property after
seeing Century 21’s sign advertising that the property was for sale; this occurred prior to the
expiration of the parties’ agreement. He then sought information about the property from
Century 21. Century 21 provided Mr. Corley with the information he requested and made
arrangements for him to view the property. There was conflicting testimony as to whether
Century 21 provided Mr. Corley with Mr. Magby’s information and he contacted Mr. Magby
or whether Mr. Magby obtained Mr. Corley’s information from a third party and contacted
Mr. Corley. It is the province of the fact finder to resolve issues concerning conflicting
evidence and witness credibility. Bank of Am. v. C.D. Smith Motor Co., 353 Ark. 228, 106
S.W.3d 425 (2003).
Under these facts, Century 21’s efforts satisfied the prerequisites for recovery under
the parties’ contract. Therefore, we hold that the trial court did not err when it found that,
pursuant to the “Exclusive Right to Sell Agreement,” Century 21 was entitled to recover a
commission in an amount equal to six percent of the gross selling price of the property.
The Magbys also argue that Century 21 was not entitled to recover under the theory
of quantum meruit. Century 21 presented this argument to the trial court as an alternative
theory of recovery. Because we hold that the trial court did not err when it found that
Century 21 was entitled to recover a commission pursuant to the terms of the “Exclusive
Right to Sell Agreement,” we do not address the alternative theory of recovery.
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Affirmed.
P ITTMAN, C.J., and B IRD, J., agree.
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