Rueben v. Gibbs

Annotate this Case

210 N.W.2d 857 (1973)

Carl RUEBEN, d. b. a. Creative Realty, Respondent, v. John GIBBS, G & M Construction, Inc., Defendant, Appellant.

No. 44036.

Supreme Court of Minnesota.

September 21, 1973.

*858 Tuzinski & Marofsky and Lawrence P. Marofsky, Minneapolis, for appellant.

Peterson & Kalina and Douglas J. Peterson, Minneapolis, for respondent.

Considered en banc without oral argument.


Plaintiff, Carl Rueben, is a licensed real estate agent in the State of Minnesota and the owner of Creative Realty. Defendant-appellant G & M Construction, Inc., is in the general construction business. The plaintiff occupied defendant's model home to facilitate sales for the defendant. Six homes were sold by the plaintiff for the defendant. This action is for the nonpayment of commission earned on the last two of these six homes. The municipal court of the city of St. Paul found plaintiff entitled to recover commissions on these last two transactions and G & M appeals from the judgment entered and from an order denying a motion for a new trial.

This case involves the interpretation of Minn.St.1971, § 82.16, subd. 3, which provides as follows:

"No duly licensed real estate broker or salesman shall bring or maintain any action in the courts for any commission, fee, or other compensation with respect to the sale, lease or other disposition or conveyance of real property, or with respect to the negotiation or attempt to negotiate any sale, lease or other disposition or conveyance of real property unless such property was first listed in writing for sale, lease or other disposition with the licensed real estate broker or salesman bringing or maintaining the action."[1]

Plaintiff attached to count I of his complaint a document entitled "Supplement to Earnest Money Contract," dated one day after the execution of the earnest money contract and signed by an officer of defendant. A pertinent provision thereof reads as follows:

"Sellers of above property agree to pay Creative Realty, Co. a realtor fee of 5% of sale price upon completion and closing of home."

The property involved was described in the agreement and in the earnest money contract.

That a sale was made by reason of plaintiff's effort was not disputed. The decisive issue is whether the above agreement substantially complies with the requirement of § 82.16, subd. 3. It will be noted that the statute is part of Chapter 82, dealing with the regulation of real estate brokers. Nowhere in the chapter is a listing agreement defined. Common sense would indicate that a listing agreement contain at least an authorization to sell. The agreement clearly implies a right of the plaintiff to offer the property for sale. The rate of commission is clearly specified. The agreement could serve no other purpose in the transaction and defendant did not dispute that but for the statute some commission was due plaintiff. Under the facts and circumstances of this case, we hold the agreement to be in substantial compliance with the requirement of the statute.

Certain other fact issues raised by the defendant were resolved by the trial court in plaintiff's favor. It is not contended, and upon this review it does not appear, that such findings are clearly erroneous. Therefore, they must be affirmed. Rule 52.01, Municipal Court Rules of Civil Procedure. The recovery allowed under count I is affirmed.

Count II involves a commission earned for a sale of a home built upon a lot not owned by the defendant. Since the commission was based upon the sale of an unbuilt home and not on the sale of "real *859 property" as provided by Minn.St.1971, § 82.16, subd. 3, the statute does not affect the resolution of this issue. Defendant specifically agreed to this commission by providing in a statement it sent plaintiff (plaintiff's exhibit J):

                                "SPEED LETTER
       "TO Creative Realty                  FROM G & M Construction, Inc.
           8470 Center Dr N. E.                  1908 - 19th St. NW
           Spring Lake Park, Minn. 55432         New Brighton 55112
       SUBJECT Closing Statement Wm & Ester Warner
                                 MESSAGE                DATE    9-21   1971
       Selling Price                                       27,900.00
       Less Lot                                            -4,500.00
       Less Painting                                       -  800.00
       Selling Commission 5%                              $ 1,130.00
       Less Dig Basement at 8160                            -  96.00)
       Less Back Fill Hole at 8160                          -  90.00)
       Less Sand Fill needed at 8230 Terrace Rd.            - 130.00)  Pd by
       Less (2) Heat Runs in Basement                       -  70.00)  G & M
       Less Building Permit in Fridley OK By Stan to get    -  61.29)
       Less Down Payment By Warner ck 11063-June 9-         - 500.00)
       Bal Due ck no. 2967 in escrow                       $  182.71"

Accordingly, plaintiff is also entitled to recover under count II.



[1] Minn.St.1971, § 82.16, subd. 3, was repealed by L.1973, c. 410, § 19, but appears in substantially the same language in c. 410, § 17 (Minn.St. 82.33, subd. 2).