Klawitter v. Straumann

255 N.W.2d 407, 1977 Minn. LEXIS 1537
CourtSupreme Court of Minnesota
DecidedJune 17, 1977
Docket46687
StatusPublished
Cited by7 cases

This text of 255 N.W.2d 407 (Klawitter v. Straumann) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Klawitter v. Straumann, 255 N.W.2d 407, 1977 Minn. LEXIS 1537 (Mich. 1977).

Opinion

SCOTT, Justice.

This is an appeal from an order denying a new trial in an action for a real estate brokerage commission. The case was tried to a jury in the district court of Meeker County. Following the return of a special verdict favorable to the plaintiff broker, the trial court ordered judgment in plaintiff’s favor and denied defendant sellers’ motion for a new trial. The defendants appeal. We affirm.

In the spring of 1974, Ronald Klawitter, a real estate broker in Meeker County, sent out a flyer to generate real estate listings. Norman Straumann, owner of a 200-acre farm, responded to the flyer by indicating an interest in selling his farm. Klawitter met with Straumann and his wife Marjorie on April 19, 1974. After several hours’ discussion, an exclusive listing agreement was signed by the Straumanns and Klawit-ter. This agreement provided for a total sale price of $170,000, with $5,000 earnest money and $45,000 “On Possession.” The agreement extended until September 1, 1974, and provided that if a sale was made before then, possession was to be given on March 1, 1975. The broker’s fee was set at 5 percent “upon sale of said real estate.”

Klawitter subsequently advertised the farm in local and non-local newspapers, and spoke to a number of interested buyers. In May 1974 Mr. David Schleusner expressed an interest in buying the Straumann farm, and on August 15 he and Klawitter executed an earnest money contract pursuant to which Schleusner paid $5,000 in trust to Klawitter. The terms of this contract differed in several material respects from the listing agreement, including a splitting of the down payment, the date of possession, and the term of the contract for deed. Although the Straumanns did not explicitly refuse this contract, they did not agree to it.

On August 27, 1974, Klawitter and Schleusner entered into a second earnest money contract, the terms of which complied with the listing agreement. The only variation between this contract and the listing agreement was the total price of the farm, which had been raised to $177,000 by oral agreement between Klawitter and Straumann. It was disputed whether this additional $7,000 (for tiling on the farm) was to be added to the total purchase price or to the down payment. Klawitter understood the former, while Straumann testified to the latter. The jury decided this issue in Klawitter’s favor; the Straumanns do not contest this finding on appeal.

Klawitter delivered this second earnest money contract to the Straumanns around August 28, 1974. They did not accept or reject the offer at that time. By September 1, the expiration date of the listing agreement, the Straumanns had neither accepted nor rejected either of Schluesner’s offers. Klawitter met with the Strau-manns for the last time around September 6, when the Straumanns raised a number of matters not covered in the earnest money contracts. Although Klawitter indicated that there was room for negotiation on these matters and that they could be settled without great difficulty, the Straumanns did not enter into a sale agreement. They returned both earnest money contracts to Klawitter’s office at Hector Realty.

Klawitter commenced this action on November 22, 1974, seeking his commission of $8,850, or 5 percent of $177,000. The Strau-manns answered and counterclaimed for damages based upon fraud. Testimony at trial did not conflict substantially over the basic facts of the transaction as outlined above. The trial judge, after hearing an offer of proof from the Straumanns’ attorney, prevented Mr. Straumann from offer *410 ing testimony significantly at variance with the terms of the listing agreement, based on the parol evidence rule. The Strau-manns’ attorney contended that the proposed testimony was not barred in that it tended to show fraud in the procurement of the listing agreement.

Two questions were given to the jury as a special verdict: (1) Did the Straumanns enter into the listing agreement in reliance upon a false representation by Klawitter? (2) Did the parties modify the original listing agreement to provide that the additional $7,000 was to be added to the down payment? The jury answered “no” to both questions. Pursuant to this verdict the trial court concluded as a matter of law that Klawitter was entitled to his brokerage commission, plus costs and disbursements.

On appeal the Straumanns seek reversal and a new trial on two grounds: (1) Klawit-ter’s representations concerning the marketability of the Straumanns’ title to the farm and (2) the exclusion of evidence at trial under the parol evidence rule. The first issue relates back to Klawitter’s first meeting with the Straumanns on April 19, 1974. It was Mr. Straumann’s testimony that at this meeting he had shown Klawit-ter a number of documents relating to his title to the farm. He further testified that after Klawitter had looked at these documents “a little bit * * * five minutes at the longest,” he said the Straumanns would be eligible to sell the farm. The second issue also relates to this meeting. Mr. Straumann’s excluded testimony would have tended to show that the Straumanns had understood the down payment of $50,-000 would be made by September 1,1974, to allow them to purchase another home. The listing agreement actually signed by the Straumanns provided for a down payment of $50,000 but with only $5,000 earnest money by September 1, 1974, the remaining $45,000 to be paid upon delivery of possession on March 1, 1975. The legal issues are therefore as follows:

(1) Is Klawitter to be denied his commission based upon his indication to the Strau-manns that they were eligible to sell the farm?

(2) Was the trial court correct in excluding certain testimony by Straumann under the parol evidence rule?

1. The Straumanns argue that because of an existing mortgage (at 4-per-cent interest with an unpaid principal balance of less than $16,000) on their farm held by Lena Straumann, Mr. Straumann’s mother, which mortgage did not contain a prepayment clause, they were prevented from conveying “good and marketable title” to the farm. As noted above, after briefly examining this mortgage and other title documents, Klawitter had expressed the opinion that the Straumanns were “eligible to sell the farm.” Mrs. Straumann testified that her husband had said “his mother could be taken care of” as to this mortgage.

This argument was rejected in the clearest of language in Mayberry v. Davis, 288 Minn. 73, 178 N.W.2d 911 (1970), which also involved a sale of a farm and a 5-percent broker’s commission. The following language from that decision is dispositive of the argument here:

“We concur in the view that one who contracts with a broker to secure the sale of property which the principal does not own takes the risk of incurring an obligation to pay a commission if title cannot be perfected. It is not the duty of the broker to determine ownership unless he expressly agrees to do so. If the principal has reason to doubt his capacity to produce good title, he may not induce the broker to perform services which prove to be futile. The principal is in a better position than the broker to determine what imperfections there are and what signatures must be obtained to bring about a valid conveyance.” 288 Minn. 77, 178 N.W.2d 913.

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Bluebook (online)
255 N.W.2d 407, 1977 Minn. LEXIS 1537, Counsel Stack Legal Research, https://law.counselstack.com/opinion/klawitter-v-straumann-minn-1977.