Allman v. Charles

433 S.E.2d 3, 111 N.C. App. 673, 1993 N.C. App. LEXIS 866
CourtCourt of Appeals of North Carolina
DecidedAugust 17, 1993
DocketNo. 9226DC583
StatusPublished
Cited by1 cases

This text of 433 S.E.2d 3 (Allman v. Charles) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allman v. Charles, 433 S.E.2d 3, 111 N.C. App. 673, 1993 N.C. App. LEXIS 866 (N.C. Ct. App. 1993).

Opinion

MCCRODDEN, Judge.

Plaintiff brought this action to recover a real estate commission fee of six percent of the $182,500.00 contract price defendant agreed to accept for the sale of her home. Defendant appeals from the judgment finding that .plaintiff had found a buyer ready, willing and able to purchase defendant’s house and ordering defendant to pay a real estate broker’s commission as required by the Exclusive Listing Contract. The issue we determine is whether a real estate broker may collect a commission when he procures a buyer at a price acceptable to the seller, the seller refuses to do any repairs after the buyer’s inspection, and the buyer terminates the agreement.

The facts of the case are as follows. On 15 May 1990, defendant engaged plaintiff as her exclusive agent to sell her home. Plaintiff and defendant signed an Exclusive Listing Contract which provided that the house was to be listed at a price of $194,900.00 and that defendant would pay plaintiff six percent of the gross sales price if plaintiff produced a purchaser within the exclusive listing period. The listing contract also contained a provision requiring defendant to cooperate with plaintiff to facilitate the sale of the house. About this time, plaintiff informed defendant that it was quite possible that she would have to make some repairs to the house in order to sell it. Defendant stated that the only defects of which she [675]*675was aware were a faulty element in the stove, the garbage disposal, and the chimney flue.

On 28 May 1990, plaintiff procured an offer to purchase in the amount of $170,000.00 by Mr. and Mrs. Thomas Koechlin. Plaintiff and defendant formulated a counter-proposal and presented the Koechlins with a written offer to sell and contract (the Contract) for a sale price of $182,500.00, with the closing to be held before 20 June 1990. The Koechlins accepted the offer and executed the Contract.

Soon after the Contract was executed, defendant decided that she no longer wished to sell the house. She offered to pay plaintiff his commission and to pay the Koechlins $10,000.00 to be released from her obligation. The Koechlins, however, wanted to go through with the sale. Defendant then consulted an attorney who advised her that the Contract was binding.

Subsequently, defendant and the Koechlins entered into a written agreement modifying the Contract, but these modifications do not directly bear on the issues presented by this case.

Paragraph 8 of the Contract provided that the electrical, plumbing, heating, and cooling systems were to be in good working order at the time of closing and that the buyer had the right to have these systems inspected, at the buyer’s expense, and that:

[I]f any repairs are necessary, Seller shall have the option of (a) completing them, (b) providing for their completion, or (c) refusing to complete them. If Seller elects not to complete or provide for the completion of the repairs, then Buyer shall have the option of (d) accepting the property in its present condition, or (e) terminating this contract.

Pursuant to this provision of the Contract, the Koechlins had professional inspections made of the plumbing, electrical, structural and heating systems of the house. These inspections indicated that some repairs needed to be made to the house. The combined total of the estimated costs for the repairs was approximately $4,900.00.

After receiving these inspection reports, defendant informed plaintiff that she would not make any repairs, insisting that she would “not pay one dime” toward repairs. Instead of accepting the property as it was or making a compromise offer to share the cost of repairs, the Koechlins exercised their right to terminate [676]*676the Contract. The sale did not close and defendant released the Koechlins’ earnest money.

Defendant first argues that the trial court erred in finding that the Koechlins were ready, willing and able purchasers. She contends that Paragraph 8 rendered the Contract conditional and neither the buyer nor the seller was willing to meet the condition.

The general rule is that when a broker produces a buyer who is ready, willing and able to buy the principal’s land upon the terms offered by the principal, the broker is entitled to his commission. Carver v. Britt, 241 N.C. 538, 85 S.E.2d 888 (1955). Merely negotiating a conditional agreement, however, does not entitle a broker to a commission. 12 C.J.S. Brokers § 149 (1980); 12 Am. Jur. 2d Brokers § 188 (1964).

In Carver v. Britt, the defendant claimed that the plaintiff broker was not entitled to a commission because the acceptance messagé sent by the defendant had stated, “your telegram relative sale my property is accepted subject to details to be worked out . . . .” 241 N.C. at 540, 85 S.E.2d at 889. In finding that the acceptance was not conditional, the Court distinguished between conditions going to the making of the contract and those which merely affect the execution of the contract. “Where an offer is squarely accepted in positive terms, the addition of a statement relating to the ultimate performance of the contract does not make the acceptance conditional and prevent the formation of the contract.” Id. at 540, 85 S.E.2d at 890. On the other hand, a qualification “imposed as a part of the acceptance itself” would invalidate the contract. Id. at 541, 85 S.E.2d at 890.

In the instant case, the continuing validity of the Contract was conditioned on defendant’s making any necessary repairs or the Koechlins’ acceptance of the property as it was. We believe that a provision such as that contained in Paragraph 8 of the Contract, allowing a seller to refuse to make repairs to the property and the purchaser then to terminate the contract, was not a mere detail of execution, but went to the making of the contract. When a buyer and seller cannot work out these conditions of the contract, as the Koechlins and defendant were unable to do in this case, they invalidate the contract. Hence, we find that this contract was conditional and that, until the issue of repairs was resolved, it was not binding on the parties.

[677]*677Defendant also disputes the trial court’s other ground for awarding fees to the plaintiff. In its second conclusion of law, the court found that

[I]n refusing to even consider bargaining or negotiating with the Koechlins over the issue of repairs to the property and in adamantly refusing to spend “even one dime” on any repairs to the property after earlier acknowledging that at least some repairs would be required, the Defendant did not comply with her duty of good faith and fair dealing in attempting to resolve the issue of repairs. The sale of Defendant’s house to the Koechlins was not closed as a consequence of the Defendant’s failure to act in good faith or to make reasonable efforts to resolve the issue of repairs. The Defendant’s failure to act in good faith also constituted a violation of her duties to the Plaintiff under the Exclusive Listing Contract.

In support of the trial court’s conclusion, plaintiff contends that the condition in Paragraph 8, like a condition of obtaining financing, carries with it an implied duty of good faith, citing Mezzanotte v. Freeland, 20 N.C. App. 11, 200 S.E.2d 410 (1973). In Mezzanotte,

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Cite This Page — Counsel Stack

Bluebook (online)
433 S.E.2d 3, 111 N.C. App. 673, 1993 N.C. App. LEXIS 866, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allman-v-charles-ncctapp-1993.