Baker v. MacLay Properties Co.

648 So. 2d 888, 1995 La. LEXIS 194, 1995 WL 14936
CourtSupreme Court of Louisiana
DecidedJanuary 17, 1995
Docket94-CA-1529
StatusPublished
Cited by97 cases

This text of 648 So. 2d 888 (Baker v. MacLay Properties Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baker v. MacLay Properties Co., 648 So. 2d 888, 1995 La. LEXIS 194, 1995 WL 14936 (La. 1995).

Opinion

648 So.2d 888 (1995)

Burk BAKER
v.
MACLAY PROPERTIES COMPANY.

No. 94-CA-1529.

Supreme Court of Louisiana.

January 17, 1995.

*891 Steven A. Adams, Baton Rouge, for applicant.

Alfred B. Shapiro, Shapiro & Shapiro, Baton Rouge, for respondent.

WATSON, Justice.[1]

A direct appeal was lodged to review the district court's summary judgment, holding former LSA-R.S. 37:1437(A) and former 3 La.Adm.Code 46:LXVII, Sec. 6301[2] unconstitutional. The former statute and Louisiana Real Estate Commission regulation established a residency requirement for Louisiana real estate brokers' licenses. Out-of-state brokers desiring to do Louisiana business were required to cooperate with Louisiana brokers and give a resident broker at least 50 percent of any fees or commissions.

FACTS

In late December, 1990 or early January, 1991, Judith Rymes[3] and Irving McGowan contacted Burk Baker on behalf of Maclay Properties Co., a Dallas, Texas corporation engaged in the real estate brokerage and property management business. Maclay was *892 interested in transacting business in Louisiana. Under Louisiana law at that time, a real estate broker was required to be domiciled in Louisiana for at least six months and a real estate salesperson had to be a Louisiana domiciliary. The Louisiana Real Estate Commission allowed out-of-state brokers to engage in business in Louisiana if they entered into cooperating brokerage agreements with Louisiana brokers. Baker had been a licensed real estate broker in Louisiana since 1978.

On January 25, 1991, Baker and Maclay entered into a cooperating brokerage agreement under which Baker would act as Maclay's Louisiana broker for a monthly fee of $300.[4] The agreement stated the parties' arrangement "will be in accordance with LA. (sic) statue ref. No. 6301," referring to 3 La.Adm.Code 46:LXVII, Sec. 6301. At that time, Sec. 6301 provided, among other things, that a Louisiana broker acting under a cooperating brokerage agreement receive at least 50 percent of any commissions or fees. This agreement was filed with the Louisiana Real Estate Commission. An earlier draft of the written agreement, which did not make reference to Sec. 6301, was not accepted by the Commission. Under the agreement, Baker became the sponsoring broker for Rymes, Maclay's real estate salesperson in Louisiana.

Maclay paid the $300 monthly fee until it terminated the cooperating brokerage agreement on June 1, 1991. No commissions or fees were paid to Baker. After the agreement had terminated, Baker believed that Maclay managed and closed several property management or lease transactions during the terms of the agreement. Baker demanded documentation concerning these transactions and payment of 50 percent of the commissions. When Maclay refused to comply, Baker filed suit to recover the brokerage fees mandated in the cooperating brokerage agreement.

Maclay denied that any transactions were pending or completed after the date of the agreement and denied that any commissions or fees were due Baker. Maclay filed a reconventional demand against Baker and a third party demand for declaratory judgment against the State and the Louisiana Real Estate Commission, alleging that the regulation mandating the fee and commission sharing clause in the cooperating brokerage agreement and its statutory basis were unconstitutional. A motion for summary judgment was filed by Maclay asserting that the unconstitutional statute and regulation rendered the fee-sharing clause of the cooperating brokerage agreement a nullity, precluding Baker's recovery under its terms.

The trial court granted summary judgment declaring former LSA-R.S. 37:1437(A) and former 3 La.Adm.Code 46:LXVII, Sec. 6301 to be unconstitutional. *893 Baker's demands were dismissed as unenforceable. A direct appeal was taken to this Court. La. Const. art. 5, § 5(D). Although the statute has since been amended and the regulation has been repealed and replaced, the question of their unconstitutionality must still be determined because it bears directly on Maclay's argument that the agreement entered into in conformity with them is unenforceable. See Jordan v. Cosey, 434 So.2d 386 (La.1983) (constitutionality of statute decided after statute's amendment).

LAW AND DISCUSSION

A motion for summary judgment is properly granted only if there is no genuine issue of material fact, and the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966. The mover has the burden of establishing that no material fact issues exist, so inferences drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Potter v. First Federal S & L, 615 So.2d 318, 325 (La.1993). An adverse party may not rest on the pleadings but must set forth, by affidavit or otherwise, specific facts showing that there is a genuine issue for trial. La. C.C.P. art. 967. "Only when reasonable minds must inevitably conclude that the mover is entitled to judgment as a matter of law on the facts before the court is a summary judgment warranted." Reynolds v. Select Properties, Ltd., 93-1480 (La. 4/11/94); 634 So.2d 1180, 1183. An appellate court will review a summary judgment de novo under the same criteria used by the district court which determined summary judgment was appropriate. Reynolds, supra.

Maclay argues the trial court properly granted summary judgment, because the mandatory fee-sharing provision of the cooperative brokerage agreement was based on a statute and regulation which violated the Privileges and Immunities Clause of the United States Constitution.

On January 25, 1991, when the parties entered into the cooperating brokerage agreement, R.S. 37:1437 provided in pertinent part:

§ 1437. Application for license
A. Any person domiciled in Louisiana for not less than six months and desiring to act as a real estate broker or any person domiciled in Louisiana and desiring to act as a real estate salesperson must file an application for a license with the commission.
* * * * * *
E. A nonresident, licensed in his resident state and whose resident state permits a Louisiana resident to obtain a broker's or salesperson's license and engage in the real estate business in that state, may obtain a broker's or salesperson's license and engage in the real estate business in this state under conditions prescribed by the commission. Such conditions shall be equal to or more onerous than the conditions applicable to a resident of Louisiana which are prescribed by the state of the nonresident.

There is no evidence that Texas at that time permitted a Louisiana resident broker to obtain a Texas broker's license. Since Baker admits that Maclay could not legally transact real estate business in Louisiana without entering into an agreement with a Louisiana broker, there was apparently no reciprocity between the states. An out-of-state broker whose resident state did not have a Louisiana reciprocal agreement could conduct business in Louisiana only by following the requirements of 3 La.Adm.Code 46:LXVII, Sec. 6301, which at that time provided:

Chapter 63. Out-of-State Broker Cooperation
§ 6301. Broker Cooperation

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648 So. 2d 888, 1995 La. LEXIS 194, 1995 WL 14936, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baker-v-maclay-properties-co-la-1995.