Paul Clarke v. Alfred Lehtonen--Appeal from 361st District Court of Brazos County

Annotate this Case

IN THE

TENTH COURT OF APPEALS

 

No. 10-94-053-CV

 

PAUL CLARKE,

Appellant

v.

 

ALFRED LEHTONEN,

Appellee

 

From the 361st District Court

Brazos County, Texas

Trial Court # 31,301-361

 

O P I N I O N

 

We reverse a summary judgment denying recovery, under section 20(b) of the Texas Real Estate License Act, on a claim for compensation asserted by a licensee. See Tex. Rev. Civ. Stat. Ann. art. 6573a, 20(b) (Vernon Supp. 1994).

the suit

Paul Clarke is a licensed real estate agent. He sued Alfred Lehtonen for services he rendered to Lehtonen in connection with property in College Station known as the Barcelona Apartments (later renamed the Polo Club), which Lehtonen acquired in 1987 from Northwestern Mutual Insurance Company with Clarke's assistance. Clarke alleges that he (1) assisted in securing financing for the project, (2) assisted in the negotiations with Northwestern, (3) prepared pro-forma operating statements and construction estimates to present to financial institutions, (4) secured bids and negotiated contracts with subcontractors for rehabilitation of the property, (5) provided construction bookkeeping services during the rehabilitation process, (6) used his own accounts to provide construction supplies for rehabilitation, (7) assisted in filing the assumed name, "Polo Club," (8) opened and maintained operating and escrow bank accounts, (9) supervised construction during the rehabilitation process, (10) hired and trained leasing agents and employees for the apartment complex, (11) supervised construction of the leasing office, (12) developed a marketing program for the apartment complex, and (13) managed the operation of the Polo Club as an apartment complex until Lehtonen wrongfully removed him.

Lehtonen asserted in a motion for summary judgment that Clarke is barred from seeking compensation for the services described because he holds a license under the Texas Real Estate License Act, which provides that a licensee may not recover a commission on the sale or purchase of real estate unless the promise or agreement is manifested by a writing. See id.

The court granted a partial summary judgment for Lehtonen, finding that (1) Clarke was a duly licensed real estate broker or salesman, (2) the services he rendered included assisting in the purchase of real estate for compensation, (3) his activities fell within the statute-of-frauds provision, section 20(b), of the Real Estate License Act, and (4) that no writing existed and no exception to the requirement of a writing existed. See id. After the parties agreed to sever Clarke's other claims, the court made the interlocutory partial summary judgment final, and Clarke appealed.

standards of review

The standards for reviewing a summary judgment are well established. Nixon v. Mr. Property Management, 690 S.W.2d 546, 548 (Tex. 1985). The movant has the burden of showing that no genuine issue of material fact exists and that he is entitled to the summary judgment as a matter of law. Id. The reviewing court must accept all evidence favorable to the non-movant as true. Id. Every reasonable inference must be indulged in favor of the non-movant and all doubts resolved in his favor. Id. Evidence which favors the movant will be considered only if it is uncontroverted. Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965).

A defendant who moves for a summary judgment must show that no material issue of fact exists as to plaintiff's cause of action. Griffin v. Rowden, 654 S.W.2d 435, 435-36 (Tex. 1983). A defendant may establish an affirmative defense by proving all of the elements of the affirmative defense as a matter of law, demonstrating that there is no genuine issue of material fact. Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex. 1984). If the order specifies the grounds on which it is based, without expressly ruling on other independent grounds alleged in the motion for summary judgment, then those other grounds may not form the basis for affirming the judgment on appeal. Tilotta v. Goodall, 752 S.W.2d 160, 161 (Tex. App. Houston [1st Dist.] 1988, writ denied). A summary judgment cannot be affirmed on grounds not expressly set out in the motion or in a response. Stiles v. Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993).

Because the court granted the summary judgment on specific grounds, i.e., that Clarke's action is barred by the Real Estate License Act, we will confine our review to those grounds.

the license act

Section 20(b) is a statute of frauds. Tex. Rev. Civ. Stat. Ann. art. 6573a, 20(b). A person holding a license under the act may not recover a "commission for the sale or purchase of real estate" without a written commission agreement or memorandum thereof. Id. The act, however, encompasses activities other than assisting with the sale or purchase of real estate. Section 2(2) lists activities that require licensure if the person expects to receive a fee, commission or other consideration: (1) selling, exchanging, purchasing, renting, or leasing real estate, (2) offering to sell, exchange, purchase, rent, or lease real estate, (3) listing or offering or attempting or agreeing to appraise or auction real estate, (4) dealing in options on real estate, (5) aiding, attempting, or offering to aid purchasers in locating or obtaining real estate, and (6) procuring or assisting in procuring prospects or properties for the purpose of effecting the sale, exchange, lease, or rental of real estate. Id. 1(b), 2(2). Further, section 20(a) of the act, which requires proof that a person holds a license as a prerequisite to collecting compensation for activities described in section 2(2), does not contain the "sale or purchase" language of section 20(b). Id. 20(a) (Vernon Supp. 1994). Thus, when compensation is sought for the enumerated activities, it may be granted for some activities that require a license but not a written compensation agreement. Id. 20(a), (b). Using the overall statute as the basis for our analysis, the question is: Did Lehtonen conclusively prove that Clarke is attempting to collect a commission for assisting him with the purchase of the real estate?

summary judgment proof

Clarke received no commission when Lehtonen purchased the apartments from Northwestern. Lehtonen's motion for summary judgment invokes section 20(b) of the license act and asserts that Clarke's claims are "grounded in [his] alleged involvement in a real estate deal." His affidavit does not state that the compensation Clarke seeks was in fact a commission for assisting him with the purchase of the apartment complex. His affidavit simply denies that Clarke and he were ever partners in the project and that Clarke had any authority to manage or control the business of the apartment complex. // Clarke's response, on the other hand, asserts that "the purchase of the property was ancillary to the business of forming a partnership." His affidavit details the services that he performed in connection with the apartment complex and states, "We never agreed, and I have never contended, that my compensation was to be in the form of a commission based on the purchase of the property." Thus, accepting all evidence favorable to Clarke as true and indulging every reasonable inference and resolving all doubts in his favor, we need look no further to ascertain that Clarke's affidavit raised an issue of fact about whether his compensation agreement was tied to the "purchase" of real estate so as to bring section 20(b) of the license act into play. See Nixon, 690 S.W.2d at 548; Tex. Rev. Civ. Stat. Ann. art. 6573a, 20(b).

 

conclusion

Having found that a fact issue exists about whether Clarke's compensation was related to the purchase of the real estate, material to the court's determination that Clarke's suit was subject to the statute of frauds provision of the Real Estate License Act, we reverse the summary judgment and remand the cause for trial. See id.

BILL VANCE

Justice

 

Before Chief Justice Thomas,

Justice Cummings, and

Justice Vance

Reversed and remanded

Opinion delivered and filed September 28, 1994

Do not publish

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.