DERRINGER EVANS DEVELOPMENT, LLC VS. BLUEGRASS REAL ESTATE CONSULTANTS, INC.
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RENDERED: NOVEMBER 13, 2009; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2008-CA-002062-MR
DERRINGER EVANS DEVELOPMENT, LLC
v.
APPELLANT
APPEAL FROM JESSAMINE CIRCUIT COURT
HONORABLE C. HUNTER DAUGHERTY, JUDGE
ACTION NO. 06-CI-00458
BLUEGRASS REAL ESTATE
CONSULTANTS, INC.
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE: KELLER AND NICKELL, JUDGES; LAMBERT,1 SENIOR JUDGE.
KELLER, JUDGE: This is from an order granting summary judgment to
Bluegrass Real Estate Consultants, Inc., (“Bluegrass”), granting a real estate sales
commission for the sale of land owned by Derringer Evans Development, LLC
(“Derringer”). We reverse the order of the Jessamine Circuit Court and remand
1
Senior Judge Joseph E. Lambert sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and KRS 21.580.
with instructions to enter judgment in favor of Derringer. The record reflects that
Derringer, as appellant, was the only party to file a brief in this Court. Pursuant to
CR 76.12(8)(c)(i) we accept the appellant’s statement of the facts and issues as
correct. Our holding however, is based on the merits of the case and upon review
of the entire record.
FACTS
In March of 2004, Derringer entered into a ninety day “Exclusive
Right to Sell Real Estate” contract (the listing agreement) to sell property located
in Nicholasville, Kentucky, with Mike Gooch,2 a broker d/b/a Gooch and
Company, Inc., (“Gooch”). The listing agreement contained a “protection period”
mandating the payment of a commission to Gooch for any sale or exchange of the
property within a ninety day period following its expiration. In July 2004, an
extension of the listing agreement was signed, continuing it through August 2004.
This extension lengthened the protection period through November 15, 2004,
however, the property did not sell within that time period.
Three weeks after the expiration of the protection period, on
December 7, 2004, an offer to purchase the property was submitted by Brenda
McCulley (“McCulley”), through her agent, Steve Cocanougher (“Cocanougher”).
The offer of $133,000.00 was accepted with closing set to occur in March 2005.
By March 2005, McCulley had been unable to obtain financing to close the
contract. Therefore, Derringer agreed to accept a reduced price of $128,000.00 to
2
Bluegrass Real Estate is the successor in interest to Gooch and Company, Inc., and is the
assignee of the contract that is the subject matter of this appeal.
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be paid within a one year period. Finally, in April 2006, McCulley obtained
financing and the transaction closed.
Bluegrass then filed suit seeking a commission from the sale and, after
Derringer filed its answer, Bluegrass filed a motion for summary judgment. The
trial court, in a notation on the docket sheet, denied Bluegrass’s motion. No other
order was entered. Approximately two months later, Derringer filed a motion for
summary judgment. The trial court noted on the docket sheet that Derringer’s
motion was granted and indicated that Derringer’s attorney would prepare a
judgment. No such judgment is in the record. Bluegrass timely filed a motion to
reconsider and to set aside summary judgment (motion to reconsider). Nothing
else took place for approximately sixteen months, until the trial court entered a
notice of dismissal for lack of prosecution. Bluegrass then re-noticed its motion to
reconsider and the trial court ultimately held a hearing on that motion. Following
the hearing, the trial court noted on the docket sheet that language in paragraph
nineteen of the contract was sufficient to meet the requirements of the statute of
frauds. Apparently based on that language, the trial court granted Bluegrass’s
motion and ordered Bluegrass to submit a judgment. Bluegrass apparently did so
and the trial court entered judgment on October 6, 2008, awarding Bluegrass
$5,120.00 as a commission plus interest. The judgment does not set forth any
findings of fact or the trial court’s reasoning for reversing itself.
STANDARD OF REVIEW
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The standard of review on appeal from a summary judgment is
whether the trial court erred in its conclusion that there were no issues as to any
material fact or that “all the evidence, viewed in a light most favorable to the
opposing party, manifestly reveals that no genuine issues of material fact exist and
that the movant is entitled to judgment as a matter of law. . . .” Poe v. Rice, 706
S.W.2d 5, 6 (Ky. App. 1986). “The record must be viewed in a light most
favorable to the party opposing the motion for summary judgment and all doubts
are to be resolved in his favor.” Steelvest, Inc. v. Scansteel Service Center, 807
S.W.2d 476, 480 (Ky. 1991). This case may be resolved suitably by summary
judgment, but, in favor of Derringer rather than Bluegrass.
ANALYSIS
Generally, pursuant to the Statute of Frauds, there must be a writing
evidencing an agreement to pay a real estate commission in order to enforce such a
claim. Kentucky Revised Statute (KRS) 371.010. “Where the contract gives the
agent an exclusive right to sell during a specified period, the agent is entitled to the
commission even if the property is sold during that period by the owner or by
another person.” Mayo v. Century 21 Action Realtors, Inc., 823 S.W.2d 466, 468
(Ky. App. 1992); citing Miller v. Woodward, 234 Ky. 631, 28 S.W.2d 961 (1930).
We have long held that should an owner of property attempt to circumvent an
agent’s right to the commission by intentionally delaying a sale until after the
listing contract expires, the owner may be liable for the commission in the
following circumstances:
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[I]f the owner and broker have a time limit in their
contract covering the sale of the property, then the broker
to earn his commission must make the sale within that
time limit. Should the broker fail to sell within the time
limit and the owner thereafter sell[s] to a prospective
purchaser produced by the broker, the owner is not liable
for the commission unless he deferred the sale until after
the time limit with the intention and purpose of
circumventing the broker's right to the commission.
Reedy v. Beauchamp, 307 Ky. 409, 412, 211 S.W.2d 393, 394 (1948).
As noted above, the trial court did not make any findings of fact in its
judgment. Therefore, we have attempted to glean from the record the court’s
rationale for reversing itself and awarding a commission to Bluegrass. It appears
that the trial court relied on the following language from the listing agreement to
support its holding:
DEFAULT: In the event of default, the parties
may pursue all available legal remedies. . . . In the event
the BUYER defaults, this clause shall operate as an
assignment to the broker(s), who would have received a
commission, of the SELLER’S right to recover damages
from the BUYER in an amount equal to such
commission. . . .
To the extent the trial court relied on the preceding language, that
reliance was misplaced. The preceding language acts as an assignment of rights in
the event of a default while the listing agreement is in effect or during any ninety
day protection period. It does nothing to extend the listing agreement or the
protection period. If Gooch, as a professional real estate agent, had wanted to
extend the listing agreement, he could have and should have obtained a written
-5-
extension to protect any claim to a commission. He cannot rely on the preceding
language to act as a substitute.
To the extent the trial court entered its final judgment in reliance on
an equitable estoppel theory, that reliance is also misplaced. There is no evidence
in the record that Gooch made any effort or expended any time in furtherance of
the ultimate sale of the property. Furthermore, the affidavits submitted by
Bluegrass do not allege that Gooch procured the ultimate purchaser or that
Derringer deferred the sale of the property in an attempt to thwart any claim Gooch
or Bluegrass might have to a commission. Simply put, the listing agreement
expired and neither Gooch nor Bluegrass did anything either explicitly or
implicitly to extend it.
Accordingly, the judgment of the Jessamine Circuit Court is reversed
and this case is remanded for entry of summary judgment in favor of Derringer.
ALL CONCUR.
BRIEF FOR APPELLANT:
NO BRIEF FOR APPELLEE.
David Russell Marshall
Nicholasville, Kentucky
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