In Re Estate of Starr

443 A.2d 533, 1982 D.C. App. LEXIS 293

• Court: District of Columbia Court of Appeals
• Decided: February 5, 1982
• Docket: 80-1144
• Status: Published

Opinions

KERN, Associate Judge:

This appeal is from the trial court’s denial of a motion to amend an order ratifying the sale of realty by the executor of the estate of Ethel D. Starr and from the trial court’s denial of a motion for reconsideration or for clarification. We conclude that the trial court’s stated grounds for refusing amendment of this order are invalid. Accordingly, we reverse. However, we remand the case to the trial court for a factual finding necessary for a determination of whether the amendment of the order of sale sought by the appellant is appropriate under the particular circumstances.

Appellant is a real estate broker who procured a contract of sale for the decedent’s property at 4414 Greenwich Parkway, N.W., to Kelly C. and Linda W. Sandy, for $120,000, subject to a broker’s commission of six percent. The executor accepted the contract on behalf of the estate,¹ subject to court approval by order nisi. Following notice and publication, the court held the order nisi proceedings on January 23, 1979, to consider higher bids for the property. The initial bid was required to be ten percent in excess of the estate’s net gain from the original contract offer.

Both before and at the nisi proceedings, appellant was advised, first by counsel for the executor and then by her own attorney, that if there were any higher bids over the original purchase contract, she would not be entitled to the commission — even if the ultimately successful bidders were the Sandys. Believing this to be the standard court practice and knowing that a higher bid would be made, appellant, at the beginning of the proceedings, agreed to waive the brokerage fee in order to raise the net amount aceru-ing to the estate under that offer. Almost immediately after counsel for appellant informed the court of waiver, he presented an argument to the court of the inequities of appellant, the real estate broker, losing her commission in this proceeding. The court, however, refused to entertain this argument.

The court at this proceeding first agreed that appellant’s waiver raised the net basis for bidding to $120,000. However, after counsel for the only bidder other than the Sandys and counsel for the estate took the position that the net basis for bids should be equivalent to the estate’s net gain under the original contract offer, as published, the court then ruled that equity favored bids ten percent over the published offer less the six percent commission. The bidding, therefore, commenced at $124,800, representing a ten percent increase over the $112,800 advertised net price. The Sandys met and raised each bid till they ultimately prevailed with the highest offer of $129,000.

Appellant’s counsel attempted at this hearing to make a quantum meruit claim on behalf of appellant for her efforts in procuring the original contract. The court declined to rule on this contention because it deemed the matter not properly before it. On January 26, 1979, the court entered an “Order Finally Ratifying Sale of Realty by Executor,” providing for the sale of the property to the Sandys for $129,000 “all cash and not subject to any broker’s commission.”

On March 28,1980, appellant, by new and different counsel who now represents her on appeal, filed pursuant to Super.Ct.Civ.R. 60(b)(6), a motion to amend the January 26 order to reflect her entitlement to a six percent broker’s commission. Appellant and the attorney who had represented her at the nisi proceeding filed affidavits accompanying the motion, stating that they were only recently informed of the Superior Court practice, acknowledged by the Register of Wills, of allowing commissions to the procuring real estate broker following order nisi proceedings where the ultimately successful bidder was the original contract purchaser. Appellant claimed that she would not have waived her commission at the nisi proceedings concerning the sale of decedent’s house had she known of this practice; and, she asserted that the waiver was based on a desire to aid the Sandys in securing the property.²

On June 23, 1980, the court denied appellant’s motion to amend on five grounds. First, the judge ruled that the motion was untimely; second, that the practice of allowing an estate to pay a commission applies only when there has been no waiver and that appellant’s motion sought relief which would reduce the assets of the estate and thus defeat the purpose of the nisi process; third, that the relief would have the effect of defrauding those who had participated in the bidding; fourth, that appellant’s claim of lack of intelligent waiver as a basis for amending the order would require an adversary proceeding for proper resolution; and fifth, that the movant had no standing because she was not a party in interest. Appellant’s motion for a reconsideration or clarification of the order was denied.

I.

Initially, it is appropriate to address the issue of standing. Super.Ct.Civ.R. 60 states that a court may grant relief to “a party or his legal representative from a final judgment, order or proceeding.” Because of the special nature of probate proceedings, we are of the opinion that appellant is a party who may seek the relief provided by Rule 60. The nisi hearing, the subject of which is the sale of property, directly involves a variety of parties, unlike the usual adversary proceeding. Here, appellant was involved in the proceeding from its initiation. The contract which she procured on behalf of the estate instigated the proceeding. Appellant was present and was represented by counsel at the hearing, which was a part of such proceeding. Furthermore, appellant, as negotiating agent of the sales contract which provided for a broker’s commission, had a right which she may seek to enforce.³

The executor’s reliance on Bulloch v. Fisher, 58 App.D.C. 165, 26 F.2d 537 (1928), is misplaced. In Bulloch which involved a receiver’s sale of realty, the real estate broker procured a contract for the property from a prospective purchaser, but the court approved an offer from another purchaser. Here, appellant procured the original contract purchasers who were ultimately the successful bidders and hence the purchasers; therefore, unlike the real estate broker in Bulloch, appellant here has standing to assert a claim to a commission.

II.

Appellant contends that she is entitled under Rule 60(b)(6) to relief from the court’s order in the form of amendment. Rule 60(b) provides in pertinent part:

On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; ... or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken....

Because it is possible to conclude that this case is the unusual situation to which Rule 60(b)(6) is applicable, we must remand this case for a determination by the court of certain matters.

The record reflects that appellant waived her right to a commission on the contract price only because she was led to believe by the lawyers in the nisi proceeding that the presence of a bidder there who was willing to bid higher than the initial bid precluded her from receiving her commission even if the purchasers she obtained were ultimately successful in their bid. It is clear from the record that appellant would not have waived the commission had she known that the practice of the probate court was to allow a commission where the buyer located by that broker is the ultimate purchaser. What is not clear from the record is whether this practice in fact exists and how well-known the practice is.

The only evidence of the particular practice in the record other than the statements of appellant and her counsel⁴ is several statements by the trial judge in her order denying appellant’s motion to amend the nisi order. The trial judge first refers to “an alleged ‘equitable practice’ of allowing an estate to pay commission when the original offeror is the successful final bidder,” thus seeming to cast doubt on the existence of such a practice. The court appears to acknowledge the existence of the practice, however, as it proceeds to explain in its opinion that the practice applies only where there has been no waiver.

The court’s references to the practice are contained in the following reason for denial listed in the June 23 order:

The motion, although labelled innocuously as one seeking “amendment” of an order, actually seeks recovery of a sum of money which would reduce the assets of the estate. The basis upon which it addresses this is one that urges the Court to “reaffirm” an alleged “equitable practice” of allowing an estate to pay commission when the original offeror is the successful final bidder. That practice applies when there has been no waiver of broker’s commission. To apply it when there has been a waiver of commission triggers insurmountable entanglements of computation into the question of whether the final offer made in open court in the presence of competing bidders in fact is the highest offer net-to-the-estate, and the purpose of the nisi process would be defeated.

Furthermore when it is applied, the practice involves entry into a new contract whereby the estate becomes contract obligor for that amount of commission that is attributable to the original offer. In such a case, there having been no waiver, there is no reduction of what, during the sale, was accepted as the highest offer net-to-the-estate, and no one’s interests are affected adversely thereby. [Emphasis supplied.]

It is impossible to determine from this discussion by the trial court whether a court practice of allowing a commission actually exists, and if so, what guidelines govern the practice. In light of this ambiguous language, we cannot, without a further delineation by the court of this practice, assess whether the court abused its discretion in denying appellant’s motion under Rule 60(b). Because we conclude further factual findings are necessary to enable a proper resolution of this case, we set forth our analysis of Rule 60 under each of the alternatives which the trial court might find.

If the court finds upon remand that the practice as stated by appellant and counsel does not in fact exist, then appellant has no basis for relief from the nisi order. Under these circumstances, the trial court did not abuse its discretion in denying her motion.

On the other hand, if the trial court finds that the practice exists, that it is well-known as a standard court practice, and that it is knowable by attorneys practicing before that court, then appellant’s motion falls into the rubric of a Rule 60(b)(1) request for relief because appellant’s ignorance of the practice amounts to mistake. Under these circumstances the motion for relief properly was denied on the basis of untimeliness, as appellant did not file her motion until over a year after the order was entered. Moreover, her attorney’s failure to ascertain adequately the applicable court procedures and to so advise appellant is not excusable neglect and may not be the type of mistake warranting relief from the order. See Citizens Building & Loan Ass’n of Montgomery County v. Shepard, D.C.App., 289 A.2d 620, 622 (1972); Railway Express Agency, Inc. v. Hill, D.C.App., 250 A.2d 923, 926 (1969). If these facts are brought out on remand, we could not say that the trial court abused its discretion in denying the order.

However, if this probate court procedure does exist but is so obscure that appellant’s attorney reasonably could not have ascertained its existence, then appellant’s motion comes within the context of Rule 60(b)(6). If the practice of affording, a commission to the procuring broker is found to be an obscure one, then the events surrounding appellant’s loss of commission fall within those unusual and extraordinary situations to which the application of subsection (b)(6) is restricted. See generally Ohio Valley Construction Co., Inc. v. Dew, D.C.App., 354 A.2d 518 (1976). Under these circumstances, appellant’s waiver of the commission could not have been a knowing waiver because she did not know and could not have ascertained that a practice existed which would have allowed her to receive her commission. Moreover, the record of the nisi hearing indicates that the trial judge was put on notice as to appellant’s lack of a knowing waiver. Her counsel called the inequity of her loss of the commission to the probate court’s attention almost immediately after she had made the waiver, but the court ruled “out of order” any discussion of this loss of a commission.

It was apparent to the court that appellant waived the commission only in order to increase the base price for bidding; yet the court started the bidding as if a commission was to be paid and continued to refuse to entertain arguments regarding any inequity to appellant. In its order denying amendment, the court indicated that the practice of allowing commissions applies only where there has been no waiver. To deny the amendment on that basis, however, would constitute an abuse of discretion if the practice is found to exist and if, as here, the trial court had ample opportunity to correct any misinformation regarding court procedure.

The unique facts of this situation also lead us to conclude that the lapse of fourteen months between the order and the motion was not an unreasonable amount of time within the meaning of Rule 60(b)(6). The record reflects that thirteen months elapsed before appellant’s discovery of the practice of paying commissions to the procuring broker and this discovery afforded her a legal basis for a motion to amend. We recognize that Rule 60 evinces a policy of buttressing the finality of judgments and that the application of subsection (b)(6), which is not limited by a specific time period, has therefore been restricted to unusual and extraordinary situations. See Railway Express Agency, Inc. v. Hill, supra at 925. Considerations of finality are outweighed in this situation by the unusual inequitable result to appellant. Thus, we conclude that, if the court practice of allowing commissions exists and was not reasonably ascertainable by counsel, the court abused its discretion in denying the motion to amend under Rule 60(b)(6) as untimely.

We turn now to the court’s reasoning that allowing appellant to receive a commission would reduce the current assets of the estate. We note that the nisi proceeding would not have taken place had it not been for the work of appellant, who procured the sales contract. A court practice allowing commissions where the contract purchaser is the successful bidder necessarily reduces the potential assets of the estate by the commission amount. Such a practice is favored by public policy, however, as it supplies an incentive to brokers to sell houses of decedents. If that practice exists, then denying application here would result in unjust enrichment to the estate. The appellant’s unknowing waiver should not bar her from recovery.

III.

The trial court noted two additional grounds for denying amendment of its order. We find each of these grounds insufficient to defeat appellant’s claim, provided that the proceedings on remand reveal that appellant otherwise is entitled to relief under Rule 60(b)(6).

The court stated that amendment of the order would “constitute a fraud practice upon the public, and specifically that segment thereof present in court and bidding.” Allowing appellant a commission on the contract which she procured would not so affect the rights or expectations of any persons to such a degree as to constitute a fraud. The public was informed through published notices of the six percent commission on the original sales contract. Despite the “waiver” of commission, the new bidder at the proceeding was allowed to place the bid that she had planned in reliance on this publication. In addition, we cannot find the application of a court procedure allowing a commission to be a fraud upon the estate, which, prior to the nisi proceeding, agreed to a six percent commission and stated that the contract price subject to that commission was fair.⁵

The court further reasoned that denial of the motion for amendment of the nisi order was justified because an adversary proceeding would be required in order to assess appellant’s claim of lack of intelligent waiver and to allow the estate to raise defenses. We are persuaded that the record contains uncontroverted evidence of appellant’s lack of a knowing, intelligent waiver. A waiver must be a voluntary relinquishment of a known right. Gibson v. District of Columbia, D.C.App., 221 A.2d 715, 717 (1966). Appellant clearly did not know of a court procedure allowing her to maintain her commission and it remains now only to be ascertained upon remand whether this procedure existed.

With respect to the trial court’s concern regarding the estate’s right to raise defenses, we conclude that the estate had the opportunity to, and did in fact, raise legal defenses to an amendment of the nisi order during the trial court proceedings on the Rule 60(b) motion for relief. The executor argued that relief should be denied appellant on the basis of laches, estoppel, and the general inappropriateness of equitable action by the court. In support of each defense, the executor asserted facts and argued its interpretation of the applicable law. Further factual findings are not necessary to assess the applicability of these defenses. The defenses of laches and estop-pel are precluded due to our conclusion that appellant’s waiver of commission was unknowing. Because appellant acted promptly upon her discovery of a court practice that allowed her to receive a commission, her delay was reasonable⁶ and she cannot be estopped from asserting her claim.⁷ Furthermore, we have concluded that appellant may be entitled to the equitable relief authorized by Rule 60(b)(6). Thus, none of the defenses raised merit denial of the amendment unless on remand the alleged court procedure is found to be nonexistent or readily ascertainable.

Accordingly we reverse the trial court’s decision and remand for further proceedings consistent with this opinion.

So ordered.

1 . In its “Petition to Ratify Executor’s Sale of Realty,” the executor stated that he considered the offer of the Sandys to be “a fair and advantageous and reasonable price for the sale” of the property.

2 . Appellant stated in her affidavit of March 28, 1980, that

[h]ad I understood that the bidding would start at a base price of $112,800.00 ($120,-000.00 less commission of $7,200.00), then I would not have agreed to waive my commission because a waiver in those circumstances would not have benefited either the Sandys or me.

Counsel for appellant and the Sandys at the nisi proceeding stated in his affidavit:

I was contacted by [appellant] who informed me that ... [the] attorney for the Executor in this Estate, had advised her that he believed there would be higher bids made at the hearing ... and that any higher bids would automatically result in the loss of her commission on the original contract, whether or not the Sandys were the ultimately successful bidders at the hearing.... I made a diligent search of the law in the District of Columbia to ascertain the correctness and validity of that position. Notwithstanding my efforts in this regard, I could find no statutory or deci-sional law on this narrow point. Therefore, despite the obvious inequities, I reluctantly concluded that if there were any higher bids made at the hearing, whether or not the Sandys were the ultimately successful bidders, [appellant] would lose her commission on the original contract price.

3 . The trial court’s only stated basis for finding lack of standing was that appellant was not a “party in interest.” It is apparent from the record that it was appellant, as real estate broker, rather than the firm by whom she was employed, who may have been entitled to the six percent commission. Under Super.Ct. Civ.R. 17(a) it is appellant who “has the right sought to be enforced.” Moreover, if the basis for the trial court’s finding of lack of standing was that appellant’s firm was the real party in interest, this would not warrant dismissal without the court affording a reasonable opportunity to substitute or to join the corporate broker as a party-movant. Super.Ct.Civ.R. 17(a).

4 . Appellant and her counsel both state that the “Register of Wills for the District of Columbia takes the position that when the contract purchaser and the ultimately successful bidder at an order nisi hearing are one and the same, the practice of this court is to allow a real estate broker’s commission to the procuring agent on the contract price.”

5 . We note that, if appellant is entitled to relief, the amount to which she is entitled is six percent of the original contract price.

6 . Specifically, in order to establish the defense of laches, the evidence must show that the delay was unreasonable and that it prejudiced the party asserting the defense. Powell v. Zuckert, 125 U.S.App.D.C. 55, 57, 366 F.2d 634, 636 (1966). Finding appellant’s delay in moving for relief from the nisi order reasonable, we need not examine the prejudice to the estate. We note, however, that the only difficulty that the delay caused the estate, viz., the need to amend various tax returns and accounts, is not significant when it is considered in light of the prejudice to appellant arising from a denial of the order’s amendment.

7 .Under the principle of estoppel, a party who knows or should know the truth is absolutely precluded from asserting the contrary of his earlier position. See 28 Am.Jur.2d, Estoppel and Waiver, § 27, pp. 627-28. If the court finds upon remand that the court practice existed and was not reasonably ascertainable by counsel, then appellant is not precluded from now claiming a right to a commission because it cannot be said that she knew or should have known the true court practice. Thus, the defense of estoppel must fail.