TEC Realtors, Inc., d/b/a Coldwell Banker Commercial TEC Realtors VS D & L Fairway Property Management, L.L.C., Alfred B. Dempsey and Shearn N. Lemoine
Annotate this Case
Download PDF
a STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2009 CA 2145 TEC REALTORS INC DBA COLDWELL BANKER COMMERCIAL TEC REALTORS J I VERSUS D L FAIRWAY PROPERTY MANAGEMENT L ALFRED B C DEMPSEY AND SHEARN N LEMOINE DATE OF JUDGMENT ON APPEAL FROM THE TWENTY SECOND JUDICIAL DISTRICT COURT NUMBER 2007 16706 DIVISION J PARISH OF ST TAMMANY STATE OF LOUISIANA HONORABLE WILLIAM J KNIGHT JUDGE Richard A Richardson Mandeville Louisiana IUI Q 2010 Counsel for Plaintiff Appellant TEC Realtors Inc da Coldwell b Banker Commercial TEC Realtors Sam J Collett Jr Bailey Dirmann Morse Covington Louisiana Counsel for Defendants Appellees D L Fairway Property Management C L Alfred B Dempsey and Shearn N Lemoine MEMMME BEFORE PARRO KUHN AND McDONALD JJ REVERSED IN PART AND REMANDED Disposition Kuhn J Plaintiff TEC Realtors Commercial TEC Realtors TEC Inc doing business as Coldwell Banker brought this suit against defendants D L Fairway Property Management L DL C Alfred B Dempsey and Shearn N Lemoine to recover a real estate commission allegedly owed to it under the terms of a listing agreement along with attorneys fees and costs Plaintiff and defendants respectively each filed a motion for summary judgment On August 17 2009 the trial court signed a judgment denying plaintiffs motion for summary judgment granting defendants motion for summary judgment and dismissing plaintiffs claims with prejudice at its cost Plaintiff has suspensively appealed the trial court judgment We reverse that portion of the judgment that s granted the defendants motion for summary judgment and dismissed plaintiffs claims with prejudice at its cost and we remand this matter for further proceedings 1 D L is wholly owned by its managing members Dempsey and Lemoine 2 We note that the portion of the trial court judgment that granted the defendants motion for s summary judgment and dismissed plaintiff claim is appealable Because the denial of a motion s for summary judgment is an interlocutory judgment the portion of the judgment denying s plaintiff motion for summary judgment is not appealable La C arts 1841 and 2083 P Louisiana Power and Light Co v Slaughter 042361 p 6 La App 1st Cir 11 917 05 4 2d So 532 536 writ denied 06 0217 La 4 926 So 550 We decline to exercise our 06 24 2d supervisory jurisdiction to review that portion of the trial court judgment that denied plaintiff s motion for summary judgment Our court has addressed interlocutory issues on the appeal of a partial final judgment when they are identical to the issues raised in the appeal See Dean V Steel Inc 05 1226 p 4 n La App 1st Cir 5 935 So 186 189 n 3 06 2d 3 writ denied 061334 La 9 937 So 387 Louisiana Power and Light Co 04 2361 p 06 22 2d Griffin Crane 7 917 So at 536 However the issues raised in plaintiff s motion for summary judgment are 2d not identical to the issues raised by the defendants motion In particular in order for plaintiff to establish that it is entitled to judgment as a matter of law it must establish the amount of the commission and attorneys fees due under the terms of the contract trial court 2 issues not reached by the I PROCEDURAL AND FACTUAL BACKGROUND On October 2 2006 Dempsey and Lemoine entered into an Exclusive Listing Contract for Lease of Property the Stirling listing agreement Stirling Property Inc Stirling with as broker for a term of one year commencing September 25 2006 and ending September 25 2007 The parties do not dispute that Dempsey and Lemoine acted on behalf of DL in its capacity as either lessor andor owner of the property subject to the listing agreement a commercial condominium located in Mandeville Louisiana In the Stirling listing agreement Thomas F Danos was designated by Stirling as one of the Lessor Designated s s Agent According to one of Danos affidavits during the term of this listing agreement the subject property was submitted to Pontchartrain Surgery Center C L Pontchartrain On behalf of the defendants Danos negotiated with William Barrois also an agent of Stirling who represented Pontchartrain but no agreement was reached According to Dempsey affidavit Barrois introduced s Pontchartrain to D L and started the lease discussions s Dempsey affidavit conceded that Danos was an agent for Stirling during the term of the Stirling listing agreement but Dempsey asserted therein that Danos had nothing to do with the introduction or procurement ofPontchartrain as a lease prospect On or about January 26 2007 Danos terminated his relationship with Stirling and placed his real estate agent license with TEC According to Danos s affidavit the Stirling listing agreement was terminated by agreement between him The Stirling listing agreement designated Joe Kramer Matt Organ and Tom Danos as s Lessor Designated Agent s 4 According to Barris affidavit he was designated by Stirling and accepted by Pontchartrain as its designated agent in connection with its negotiations and the subsequent lease of the property from DL 3 and Stirling A new Exclusive Listing Contract for Lease of Property the TEC listing agreement was entered into between TEC as Broker and Dempsey and Lemoine as Owner sregarding the subject property The term of the TEC listing agreement commenced February 5 2007 and ended on March 5 2007 This agreement provided in pertinent part as follows The Lease shall be on the following terms s 00 22 PER SQ FT NNN INCLUDING 30 P BUILDOUT F S 2 If a lease is negotiated and executed covering said property during the term of this contract or within 365 days after the expiration of this contract with any party to whom Broker has submitted said property during the term of this contract or any affiliate nominee or representative of such party Owner agrees to pay to Broker a commission as set forth below on all gross rents covering said property This commission shall be earned and paid for services rendered if during the Term a All or any portion of the Property is leased to a tenant by Broker Owner or anyone else b A tenant is procured by Broker Owner or anyone else who is ready willing and able to lease the Property on the terms above stated or on any other terms agreeable to Owner c Any contract for the lease on all or any portion of the Property is entered into by Owner or d Owner removes the Property from the market 3 Commission to be paid by OwnerLessor Said commission shall be payable upon final execution of a lease between Owner and a Tenant equal to the following rates Primary Term 6 Renewal Options 5 5 The Stirling listing agreement included an extension clause which provided that Dempsey and Lemoine agreed to pay to the broker a commission as specified in the contract if a lease was negotiated and a contract executed covering the subject property within 365 days after expiration of the contract with any party to whom Broker has submitted said property during the term of this contract 4 According to Dempsey affidavit after the TEC listing agreement was s executed Danos continued discussions on behalf of D L with Barrois who remained the Stirling agent representing Pontchartrain in hopes of consummating a lease between Pontchartrain and D L According to Danos affidavit the subject property was submitted to Pontchartrain through its agent Barrois by Danos and negotiations continued over the terms of the lease Specifically he and Barrois negotiated Ultimately the TEC listing agreement terminated without DL and Pontchartrain consummating a lease agreement On March 16 2007 Dempsey and Lemoine signed an Exclusive Listing Contract for Lease of Property pertaining to the subject property with Gulf States Real Estate Services of Louisiana L Gulf States C The term of this agreement commenced on March 15 2007 and ended March 13 2008 and provided that as Owner s Dempsey Lemoine and D L agreed to pay Gulf States a commission pursuant to the terms of the listing agreement i lease is fa negotiated and executed covering the subject property during the term of this contract or within 180 days after the expiration of this contract The listing agreement further provided Broker designates and Lessor accepts Patrick Graffa ng ino as the Lessor sDesignated Agent s Dempsey affidavit further states in pertinent part that 1 Gulf States through Graffagnino continued negotiations on behalf of DL with Pontchartrain and its agent Barrois and 2 neither TEC nor Danos were involved in any discussions between DL and Pontchartrain after the TEC listing agreement terminated On April 26 2007 D L and Pontchartrain executed a Commercial Lease Agreement for a term of 120 months commencing the earlier of 5 September 1 2007 or upon completion of Lessee improvements DL also s i granted Pontchartrain two renewal options each to extend the lease for a period of five years According to Dempsey affidavit DL paid a total commission of s 71 097 69 which was divided as agreed upon by Gulf States and Stirling Based on the information provided in the above referenced affidavits and the terms of the TEC listing agreement the trial court found that TEC motion for s summary judgment was not well founded i that it was not entitled to a e commission under its listing agreement and the trial court granted defendants motion for summary judgment dismissing TEC claims with prejudice s In written reasons for judgment the trial court found that DL TEC and Pontchartrain discussed the possibility of leasing the subject property during the effective period of the TEC listing agreement The court concluded however that TEC was not the procuring cause of the final lease agreement and that TEC was not entitled to a commission under the terms of the extension clause in the TEC listing agreement In addressing the language of the extension clause the court determined that the two sentences in paragraph 2 of the TEC listing agreement must be read in conjunction with one another reasoning as follows in pertinent part the Court After a careful reading of the entirety of paragraph two finds that the first sentence merely sets forth the parameters of the extension clause if a lease is negotiated and a contract executed within 365 days after the expiration of this contract with any party to whom Broker has submitted said property during the term of this contract The second sentence describes the various conditions under which the commission shall be paid if during the term one of the described events occur 6 Under the terms of the lease DL was not responsible for any buildout costs 6 If a lease is negotiated and a contract executed within 365 days after the expiration of the contract with any party a Broker has already submitted during the term of the contract then the commission shall be paid if any one of the four events ad occurred during the term of the listing agreement None of these events occurred in the instant case No lease was negotiated and confected during the term The subject property was not leased to a tenant during the term A tenant was not procured who was ready willing and able to lease the property on the stated terms or any other terms No contract of lease was entered into during the term and the owner did not remove the property from the market during the term Therefore the Court finds that no event occurred which would trigger the extension clause or tail provision in the TEC listing agreement and entitle TEC to a commission This finding is based on the unambiguous terms of TEC own listing agreement s In accordance with these reasons the trial court signed a written judgment denying TEC motion for summary judgment granting defendants motion for s summary judgment and dismissing TEC claims with prejudice s TEC has appealed the trial court judgment urging that the trial court erred in interpreting s the unambiguous provisions of paragraph 2 of the TEC listing agreement II ANALYSIS In the instant case TEC does not claim to be the procuring cause of the lease confected between D L and Pontchartrain Rather TEC bases its claim on the extension clause of its listing agreement TEC asserts it is entitled to collect a because 1 the event described in its listing agreement a lease of the subject property occurred during the extension period i within 365 days after e the expiration of its listing agreement and 2 the lease was executed with Pontchartrain a party to whom TEC had submitted the property during the term of its listing agreement TEC asserts it need only meet the requirements of the first sentence of paragraph 2 to be entitled to its commission urging that the second sentence covers situations not covered by the first sentence and that the second 7 sentence expands rather than limits the situations in which it is entitled to a commission Defendants respond that neither TEC nor Danos was the procuring or consummating agent for the Pontchartrain lease and the procuring cause doctrine eliminates TEC right to recover any commission s In their brief defendants urge the following facts to support their legal contention s Pontchartrain While at Stirling Danos had nothing to do with introduction Danos then moved his agency to TEC and a new listing agreement was signed by D L with TEC TEC did nothing during its brief 30 day listing term but unsuccessfully continue negotiations with the lease prospect originally procured by Stirling Defendants assert that based on the second sentence of paragraph 2 of the TEC listing agreement in order for TEC to recover a commission TEC was required to procure a tenant ready willing and able to lease the subject property on the terms provided in the TEC listing agreement or on other terms agreeable to D L Defendants urge that the terms of the Pontchartrain lease are significantly different than the terms outlined in the TEC listing agreement Further defendants argue that none of the qualifying situations set forth in the second sentence of paragraph 2 of the TEC listing agreement occurred Defendants also contend it would be a preposterous result for TEC to recover a commission based on its extension clause resulting in defendants obligation to pay multiple A Procuring Cause Doctrine and Extension Clauses Generally a real estate broker is entitled to a commission if it has been a procuring cause of the transaction See Creely v Leisure Living Inc 437 So 2d 816 820 La 1983 This general principle has been recognized even where the term of the broker listing agreement has expired See Cramer v Guercio 331 s E 2d So 550 552 La App 1st Cir 1976 see also Jackson v Free 442 So 2d 1346 1348 La App 3d Cir 1983 Our jurisprudence has defined procuring cause as a cause originating or setting in motion a series of events which without break in their continuity result in the accomplishment of the prime object of the employment of the broker which may variously be a sale or exchange of the principal property an ultimate s agreement between the principal and a prospective contracting party or the procurement of a purchaser who is ready willing and able to buy on the principal terms s Creely 437 So at 820 21 and cases cited therein Thus in order to 2d establish that his efforts were the procuring cause of a sale a broker must show more than the mere fact that his actions in some way aided the sale Sleet v Harding 383 So 122 124 La App 3d Cir 1980 2d Under the terms of an extension clause however a realtor may be entitled to recover a commission even if he is not a procuring cause of the transaction at issue In a typical real estate brokerage contract generally referred to as a listing agreement the broker undertakes the obligation of finding a buyer ready willing and able to purchase the described property for the price specified or on any other terms acceptable to the seller If the broker accomplishes this within the listing period he is entitled to a commission normally expressed as a percentage of the price obtained Unfortunately for brokers sellers have proven to be extremely resourceful in devising schemes to avoid paying the agreed commissions One common ploy has been the owner refusal to s accept the buyer offer during the listing period only to accept a s similar offer from the same buyer shortly after the period has expired 7 In the absence of an extension clause the broker claim is based on a theory of quantum s meruit the owner should not be allowed to avail himself of the efforts of the broker without paying a fair compensation John M Norwood and Cornelius J Hyde Extension Clauses in Louisiana Listing Agreements 42 La L Rev 1011 1013 1982 8 The procuring cause doctrine can provide a basis for recovery when no extension clause is present in the listing agreement or it may provide a basis for recovery independent of the extension clause Steven K Mulliken When Does The Seller Owe The Broker A Commission A Discussion of the Law and What it Teaches About Listing Agreements 132 Mil L Rev 265 283 1991 see Creely 437 So at 820 Jackson 442 So at 1348 2d 2d 9 Louisiana courts have been quick to find that under such circumstances the commission has nonetheless been earned since the broker was in fact the procuring cause ofthe sale In order to afford the broker even greater protection most listing agreements include an extension clause sometimes referred to as a protection clause The extension clause generally provides that if within some designated period after the expiration of the listing agreement the property is sold to a person with whom the broker has carried on some designated activity during the listing the commission is to be paid Thus two time periods are discernible the listing period and a subsequent extension period The extension clause itself delineates what must transpire between the broker and the eventual purchaser for the commission to be collectable But in any event the presence of the extension clause should prevent the broker from having to meet the rigid standard of having been a procuring cause of the sale Thus the broker right to his commission should be based on s whether the contractual provision of the extension clause in question has been satisfied John M Norwood and Cornelius J Hyde Extension Clauses in Louisiana Listing Agreements 42 La L Rev 1011 10 11 10 12 1982 omitted footnote In the instant case defendants urge that the terms of the extension clause require TEC to be a procuring cause in order to collect a commission For the reasons that follow we find no merit in this contention B s TEC Extension Clause The clause at issue in TEC listing agreement provides s 2 If a lease is negotiated and executed covering said property during the term of this contract or within 365 days after the expiration of this contract with any party to whom Broker has submitted said property during the term of this contract or any affiliate nominee or representative of such party Owner agrees to pay to Broker a commission as set forth below on all gross rents covering said property This commission shall be earned and paid for services rendered if during the Term a All or any portion of the Property is leased to a tenant by Broker Owner or anyone else b A tenant is procured by Broker Owner or anyone else who is ready willing 10 and able to lease the Property on the terms above stated or on any other terms agreeable to Owner c Any contract for the lease on all or any portion of the Property is entered into by Owner or d Owner removes the Property from the market Emphasis added 1 General Principles of Contractual Interpretation Generally legal agreements have the effect of law upon the parties and as they bind themselves they shall be held to a full performance of the obligations flowing therefrom Boh Bros Cont Co L v State ex rel Dep C tof Transp and Dev 08 1793 p 4 La App 1 st Cir 39 So 982 984 writ denied 09 27 3d 09 0856 La 6 9 So 870 09 5 3d The interpretation of a contract is the determination of the common intent of the parties La C art 2045 When the words of a contract are clear and explicit and lead to no absurd consequences no further interpretation may be made in search of the parties intent La C art 2046 The words of a contract must be given their generally prevailing meaning La C art 2047 A provision susceptible of different meanings must be interpreted with a meaning that renders it effective and not with one that renders it ineffective La C art 2049 Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole La C art 2050 A doubtful provision must be interpreted in light of the nature of the contract equity usages and the conduct of the parties before and after the formation of the contract La C art 2053 The first sentence of paragraph 2 addresses two different time periods during the term and within 365 days after the expiration of this contract The parties do not dispute that if during the term of the contract February 5 2007 through March 5 2007 a lease had been negotiated and executed covering the 11 subject property the defendants would have been obliged to pay TEC a commission as specified in the contract The parties do not agree however on the interpretation that should be afforded to the extension clause or that portion of the first sentence of paragraph 2 which provides that Owner agrees to pay a commission if within 365 days after the expiration of this contract a lease is negotiated and executed with any party to whom Broker has submitted said property during the term of this contract Emphasis added Defendants urge that the first sentence is modified by the second sentence of paragraph 2 The second sentence provides that the broker commission shall be s earned if one of four events occurs during the term of the contract including a lease of all or a portion of the property by the broker or anyone else procurement of a ready willing and able tenant the owner entering into any contract for the lease of all or any portion of the property or the owner removing the subject property from the market Such a provision protects a broker from being precluded from recovering a commission in the instance that an owner might lease his property contract to lease his property or otherwise remove his property from the market during the term of the listing agreement Further a broker might otherwise be precluded from recovering a commission if the broker finds a tenant who is ready willing and able to lease the property on the terms stated in the listing agreement but the owner decides not to lease the property to the tenant The second sentence addresses events such as these that might occur during the term of the listing agreement and makes no reference to the 365day period of the extension clause 12 Interpreting each sentence in light of the other sentence we find that the first and second sentences of paragraph 2 must be read independently of each other in other words if the contingencies of a particular sentence are met the commission is authorized Because the first sentence references two distinct time periods i the contract term and the extension period and the second sentence e references only the contract term it is impossible to interpret the second sentence as modifying the first sentence without nullifying the reference to the extension period in the first sentence Further when the sentences are interpreted independently of one another the contractual provisions logically authorize the recovery of a commission for the broker based on certain contingencies as set forth in each sentence We also reject defendants interpretation of the second sentence of paragraph 2 as requiring TEC to establish it was a procuring cause or as requiring TEC to prove that the Pontchartrain lease was made on the same terms as those specified in the TEC listing agreement TEC commission claim is governed by s the provisions of the TEC listing agreement which does not provide that the commission is dependent on the broker actions being the procuring cause or on s specific lease terms In order to activate the extension clause in this case the broker does not have to be the procuring cause since the terms of the extension Further to be entitled to recover a clause did not require such conduct commission under the terms of this extension clause TEC was not required to have been involved in active negotiations with Pontchartrain when the primary term of the listing agreement expired See Harkey v Gahagan 338 So 133 2d 135 La App 2d Cir 1976 13 2 Submitted In the instant case the extension clause provides that the commission is dependent on the fact that the broker submitted the property during the term of the TEC listing agreement to the tenant who leased it during the extension period The listing agreement provides no definition of the term submitted Webster s Third New International Dictionary 2277 3d ed 1993 defines submit in pertinent part as to send or commit for consideration study or decision The American Heritage Dictionary of the English Language 4th ed 2009 defines submit in pertinent part as to commit something to the consideration or judgment of another The parties do not dispute that Barrois rather than Danos introduced Pontchartrain to D L The facts do not establish whether Danos showed the subject property to Pontchartrain during the term of the TEC listing agreement However during the term of the TEC listing agreement Danos continued discussions on behalf of D L with Barrois according to Dempsey affidavit s Danos affidavit also states that during the term of the TEC listing agreement he 9 Extension clauses used in listing agreements vary widely in their terminology requiring different types of conduct on which the broker sright to a commission is based For example a commission might be due provided purchaser has become interested in said property as a result of the efforts or advertising of said REALTOR if a salelease is confected with anyone to whom said property has been quoted or with anyone to whom said property was shown or submitted by anyone or with whom negotiations involving said property had been carried on Norwood and Hyde 42 La L Rev at 1012 See also J Kemper Annotation Construction of R Provision in Real Estate Broker Listing Contract that Broker Shall Receive Commission on s Sale After Expiration of Listing Period to One With Whom Broker has Negotiated During Listing Period 51 A 1149 1181 1973 f the extension clause most 3d R L erhaps frequently employed is the word negotiate or some form thereof such as negotiated with or had negotiations with The parties to a listing contract are free to frame their agreement in whatever terms they may see fit provided that such terms are neither unlawful nor contrary to public policy and that in so doing they may make a broker right to compensation depend upon the happening of a s designated event or upon the fulfillment of a particular set of circumstances rather than upon the procurement of a purchaser Id at 1168 14 and Barrois negotiated the terms of the lease Regardless of the terminology used e idiscussions or negotiations the affidavits establish that a consideration of terms related to the subject property occurred during the term of the TEC listing agreement As such we conclude that Danos negotiations or discussions with Barrois pertaining to the subject property necessarily entailed a submission of that property to Pontchartrain Thus we find Danos conduct during the term of the TEC listing agreement was sufficient to satisfy the requirement of TEC submitting the property to Pontchartrain during the term of the TEC listing agreement 3 Minimal Causal Connection In Harkey the court affirmed the denial of a realtor claim for a s commission where a sale occurred approximately five months after the listing agreement had expired but during a twelve month extension period Id at 133 The realtor claimed he had submitted the property under the terms of the extension clause to a party who ultimately purchased the property based on his sole conduct of telephoning the purchaser during the listing period and informing him of the property listing and its terms after the owner had advised the realtor 10 The Harkey listing agreement provided in pertinent part This employment and authority shall continue for the period of twelve 12 months from date hereof I agree to pay said agent 6 Percent of the selling price as and for the compensation of said agent hereunder in the event of a sale or an exchange of said real property by said agent or by any other agent or person including myself while this contract is in force or if sold or exchanged within twelve 12 months after termination to anyone with whom said agent or owner had negotiated or to whom this property had been shown or submitted prior to the termination Harkey 338 So at 135 2d 15 that the party had earlier expressed an interest in the property Id at 134 35 In addressing the language of the extension clause the court reasoned as follows The purpose of the extension clause in a real estate listing contract is to insure the realtor right to a fee when the property s owner sells the property subject to the listing after the expiration of the primary term to a purchaser who had been located or otherwise interested in the property by the realtor effort The realtor does not s have to be the procuring cause in order to activate the extension clause He need not have been involved in active negotiation with the purchaser at the time of the expiration of the primary term However his activities must have been the cause of creating some minimal interest in the purchaser which contributed to bringing about the eventual sale Here the purpose of the clause and the parties intent was that the realtor would be entitled to his commission if following the elapse of the primary term a sale was made by the owner to a prospect in whom the realtor by his activities had created some minimal interest which contributed to the eventual sale Irk at 135 137 Further addressing the facts of the case the Harkey court found that the purchaser was familiar with the listed property prior to the execution of the listing agreement and the telephone call to him by the realtor the purchaser had made an identical offer to purchase the property some time prior to the listing contract the purchaser upon receipt of the realtor telephone call had quickly expressed no s interest in the property and more than one year had elapsed between the sreceipt of the telephone call from the realtor and his negotiations and purchaser purchase of the exact property at the exact price he had earlier offered to the owner Id at 137 38 Based on these facts the court found there was neither a connexity nor a minimal causal relationship between the realtor activity during s the primary term of the listing agreement and the ultimate sale of the property and 16 thus the realtor was not entitled to recover a commission based on the terms of the extension clause Id at 138 In Gertrude Gardner Inc v Bryant 446 So 451 452 La App 4th 2d Cir writ denied 450 So 358 La 1984 the specified activity of the extension 2d clause required the realtor to quote the property during the term of the listing agreement The court found that while the listing agreement was in effect the s broker real estate agent held an open house during which she showed the house to the eventual purchasers told them the price and provided advertising materials concerning the house Id The Bryant court found that the real estate s agent conduct at the open house constituted a quotation of the property Id at 453 But the Bryant court followed Harkey in further requiring some minimal causal relationship or connexity between the broker activity during the listing s period and the salelease of the property subject to the extension clause Id In addressing Harkey the court stated Commentators have read the Harkey case to require the broker to prove two things in order to recover his commission under the extension clause 1 that he carried on the kind of activity specified in the extension clause and 2 that the activity created some minimal interest in the purchaser which contributed to the eventual sale Id The Bryant court concluded that the real estate agent efforts contributed to creating at least a s minimal interest in the ultimate purchasers in buying the house Id However we note that the Third Circuit rejected the Harkey minimal interest requirement in Tammariello Properties Inc v Medical Realty Co Inc 549 So 1259 La App 3d Cir 1989 finding the requisite contact referenced 2d in the extension clause had occurred Id at 1263 Based on the wording of an 17 addendum to the contract the court concluded that the parties had not intended to require the broker to create a minimal interest in the buyer in order to be entitled to a commission But see Jackson 442 So at 1348 wherein the Third Circuit 2d had previously cited Harkey minimal interest test s This circuit has not previously addressed whether the broker is required to prove that his efforts had some minimal causal connection to the subject real estate transaction to recover pursuant to an extension clause In deciding whether to impose this requirement we consider the purpose of the extension clause as discussed in Harkey i insuring the realtor right to a fee when the property e as s owner sells the property subject to the listing after the expiration of the primary term to a purchaser who had been located or otherwise interested in the property by the realtor effort Harkey 338 So at 135 To hold that a broker is entitled s 2d to collect a commission where his efforts had no minimal causal connexity to the real estate transaction for which he seeks to collect a commission would be contrary to the underlying purpose of the extension clause Accordingly to recover a commission under the extension clause ofthe TEC listing agreement we find TEC must establish a minimal causal connection between its action of submitting the property to Pontchartrain during the term of the TEC listing agreement and the ultimate lease confected between D L and Pontchartrain Although we have found Danos discussionsnegotiations during the term of the TEC listing agreement satisfied the extension clause requirement of TEC ii The extension clause authorized the collection of a commission i after the expiration of f this agreement owner sells the property to any person who had contacted owner directly or had been introduced to the Property by Broker during the time hereof or to any person with whom Broker has had negotiations for such sale Tammariello Properties Inc 549 So at 1262 2d 63 18 submitting the property to Pontchartrain the evidence in the record does not establish connection whether Danos discussions negotiations had a minimal causal to the lease that was ultimately confected with Pontchartrain approximately seven and onehalf weeks after the TEC listing agreement ended A motion for summary judgment will be granted if the pleadings depositions answers to interrogatories and admissions on file together with the affidavits if any show that there is no genuine issue of material fact and the mover is entitled to judgment as a matter of law La C art 966 Summary P B judgment is favored and shall be construed to secure the just speedy and inexpensive determination of every action La C art 966 P 2 A The initial burden of proof remains with the movant However if the movant will not bear the burden of proof at trial he need not negate all essential elements of the adverse party claim but he must point out that there is an s absence of factual support for one or more elements essential to the claim La P C art 966 Once the movant has met his initial burden of proof the 2 C burden shifts to the non moving party to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden at trial See Id Samaha v Rau 071726 p 5 La 2 977 So 880 883 08 26 2d The non moving party may not rest on mere allegations or denials but must set forth specific facts that show that a genuine issue of material fact remains If the non moving party fails to meet this burden there is no genuine issue of material fact and the movant is entitled to summary judgment as a matter of law Berry v Paul Revere Life Ins Co 08 0945 p 6 La App 1 st Cir 7 21 So 385 388 09 9 3d writs denied 09 2220 092241 La 12 23 So3d 942 09 18 19 945 see La P C art 966 A fact is material if it potentially insures or precludes 2 C recovery affects a litigant ultimate success or determines the outcome of the s legal dispute Samaha 071726 at p 6 977 So at 884 quoting Hines v 2d Garrett 04 0806 p I La 6 876 So 764 765 04 25 2d With respect to the defendants motion for summary judgment defendants bore the initial burden ofproof Because defendants would not bear the burden of proof at trial they did not need to negate all essential elements of TEC claim but s they were required to point out that there was an absence of factual support for one or more elements essential to TEC claim In s support of their motion for summary judgment defendants submitted the various listing agreements the commission agreement executed between DL Gulf States and Stirling and s Dempsey affidavit s Dempsey affidavit referenced Danos continued discussions with Barrois on behalf of Pontchartrain during TEC listing s agreement but the affidavit does not address the nature or scope of these discussions Thus we cannot determine whether TEC conduct during the term s of its listing agreement constituted activity that created some minimal causal connection that contributed to the eventual lease with Pontchartrain Although plaintiff must establish the minimal causal connection to support its claim for a commission defendants failed to point out the absence of factual support for this element of plaintiffs claim and thereby failed to meet its initial burden of proof under La C art 966 Accordingly a genuine P C 12 As discussed above in supporting its motion for summary judgment defendants erroneously urged they were entitled to judgment because TEC had not established it was the procuring cause of the Pontchartrain lease 20 issue of material fact remains as to this issue and defendants have not established they are entitled to judgment as a matter of law 4 Multiple Commissions Defendants further urge that as owners they should not be liable for multiple commissions citing Cramer 331 So at 553 In Cramer two realtors 2d who were doing business as Cramer Cadenhead Realtors filed suit to recover a commission under the terms of a listing agreement whereby owners of a house listed it for sale at the price of 53 Id at 551 During the 90day listing 000 period a sales representative for the plaintiff realtors realtor 1 held an open house to show the house to prospective purchasers Through this means the purchasers learned the property was for sale Id Before viewing the house the purchasers contacted a personal friend and realtor realtor 2 who provided them with the specifications of the house according to information provided in a multiple listing service Id After viewing the house the purchasers made an oral offer through realtor 1 which the owners refused Following another open house later that month the owners also refused a second written offer by the purchasers in the amount of 42 Id Thereafter the exclusive listing of the house with 500 plaintiffs agency expired and the owners listed the property with another realty firm realtor 3 Id Realtor 2 in cooperation with realtor 3 submitted a written offer of 46 on behalf of the purchasers that offer was accepted by the 000 property owners and the sale to the purchasers followed within six months of the expiration of the initial listing agreement Id at 551 52 Realtor 1 sued to recover the commission allegedly due them The trial court rejected the plaintiffs 21 claim and this court affirmed reasoning that plaintiffs had not established they were the procuring cause of the sale to the purchasers Id at 552 53 The Cramer court further rejected plaintiffs assertion that they were entitled to a commission since the sale had occurred within six months of the expiration of the listing agreement which provided in pertinent part IWe further agree to pay commission as above stipulated in event of sale of said property by Meus within six months after the expiration of this agreement provided purchaser has become interested in said property as a result of the efforts of advertising of said agent during the active term of this listing and IWe also agree to refer all prospects to the listing Realtor Finding this language to be ambiguous the Cramer court considered parol evidence by witnesses in the real estate profession who testified that the purpose of this clause was to prevent an owner from contacting a prospective purchaser after the listing had expired so as to deprive a listing realtor of his commission and that the clause had no application to a real estate agent operating under a valid listing Id at 553 In dictum the Cramer court further stated Serious consequences to a good faith property owner will result if the six month clause is applicable to an owner duly authorized s real estate broker A property owner listing a house with a realtor could possibly be liable for a double commission or even additional commissions if he subsequently changes realtors after the initial listing expires and the property is sold within six months thereafter by the new listing realtor to someone who had been interested in the property by the first realtor or who had submitted an offer although far less than the ultimate sales price of the property To say the least sanctioning such a result is an absurdity and that would be the precise result here if we require the good faith property owners in the instant case to pay a double commission Id Ultimately the Cramer court construed the ambiguities of the contract against the plaintiffsrealtors who had prepared the contract and the court concluded that 22 the sixmonth clause did not authorize recovery based on the facts presented therein Id at 554 55 We find Cramer distinguishable from the facts of the instant case and we find it does not preclude recovery of a commission by TEC Here we find no ambiguity in the language of the extension clause and no parol evidence was offered by defendants to support their contention that TEC should be precluded from recovering a commission The contract provisions are clear and must be enforced as written Parties are free to contract for any object that is lawful possible and determined or determinable La C art 1971 The defendants as commercial property owners and TEC as broker were free to frame their agreement as they saw fit and to make the broker commission dependent on s whatever conditions they agreed on so long as such conditions were not unlawful or contrary to public policy The mere fact that a contract may work a hardship on one of the parties does not authorize a court to set it aside Englemann v Auderer 10 La App 136 121 So 194 195 La App Orl 1929 It is not the province of the courts to relieve a party of a bad bargain no matter how harsh Sunrise Const and Dev Corp v Coast Waterworks Inc 00 0303 p 7 La App 1st Cir 6 806 So 1 5 writ denied 01 2577 La 1 807 01 22 2d 02 11 2d So 235 Defendants could have contracted to preclude TEC recovery under s the terms of the extension clause in the event that the property was subject to an agreement with another broker But based on the language ofthe contract we find 13 We also note that neither the TEC listing agreement nor any of the other listing agreements pertaining to the subject property contained a provision that precluded recovery under an extension clause if the property was subsequently listed with another broker 23 no basis not to enforce it as written See Alex F Dreyfus Co Inc v Friedman 171 La 90 92 93 129 So 679 67980 1930 Because we find an outstanding genuine issue of material fact and because we are not reviewing that portion of the trial court judgment that denied plaintiffs motion for summary judgment we do not reach the issues of whether TEC is entitled to recover a commission and in the event that it ultimately establishes such an entitlement whether TEC is entitled to recover all or a portion of the commission designated in its listing agreement III CONCLUSION Based on the record before us defendants have not established they are entitled to judgment as a matter of law a genuine issue of material fact exists as to whether there was a minimal causal connection between TEC s action of submitting the property to Pontchartrain during the term of the TEC listing agreement and the ultimate lease confected between DL and Pontchartrain Accordingly we reverse that portion of the trial court sjudgment that granted the defendants motion for summary judgment and dismissed plaintiffs claims with prejudice at its cost and we remand this matter for further proceedings consistent with this opinion Appeal costs are assessed against defendants appellees REVERSED IN PART AND REMANDED 24 STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2009 CA 2145 TEC REALTORS INC D BA COLDWELL BANKER COMMERCIAL TEC REALTORS VERSUS D L FAIRWAY PROPERTY MANAGEMENT L C ALFRED B DEMPSEY AND SHEARN N LEMOINE J BEFORE PARRO KUHN AND McDONALD 37 PARRO 7 concurring I agree with the finding that the defendants have not established that they are entitled to a summary judgment as a matter of law Therefore I believe that the trial court judgment should be reversed and that this matter should be remanded to the trial court for further proceedings I do not dispute that to recover a commission under the extension clause of the TEC listing agreement TEC must establish a minimal causal connection between a finding that it submitted the property to Pontchartrain during the term of the TEC listing agreement and the ultimate lease confected between DL and Pontchartrain Furthermore I agree that a genuine issue of material fact exists as to whether there was a minimal causal connection between TEC efforts and the lease with s Pontchartrain However in light of the evidence offered I also believe that a genuine issue of material fact exists as to whether TEC submitted the property to Pontchartrain during the term of the TEC listing agreement Therefore I would remand for further proceedings on this issue as well Accordingly I respectfully concur Under the fads presented in this case I find the conclusion that Danos continued negotiations and s discussions with Barrois during the term of the TEC listing agreement necessarily entailed a submission of that property to Pontchartrain to be questionable It appears that the inclusion of the phrase Broker has submitted said property during the term of this contract in the extension clause of the TEC listing agreement is ambiguous requiring further consideration of its meaning on remand of this matter See LSAC arts 20452057 For example how many times may one property be submitted C to the sameof prospective lessee or purchaser Under the holding of this case there were three submissions the property to Pontchartrain
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
