Landmark Commercial Realty, Inc. v. Developers Diversified, Ltd., and W & M Properties

163 F.3d 389, 1998 WL 879870
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 10, 1999
Docket97-3602
StatusPublished
Cited by1 cases

This text of 163 F.3d 389 (Landmark Commercial Realty, Inc. v. Developers Diversified, Ltd., and W & M Properties) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Landmark Commercial Realty, Inc. v. Developers Diversified, Ltd., and W & M Properties, 163 F.3d 389, 1998 WL 879870 (6th Cir. 1999).

Opinions

NELSON, J., delivered the opinion of the court, in which CLAY, J., joined. BOGGS, J. (pp. 11-12), delivered a separate dissenting opinion.

OPINION

DAVID A. NELSON, Circuit Judge.

Under Ohio Rev.Code § 4735.21, a person who performs real estate brokerage services is denied a right of action to collect compensation therefor unless the person has been licensed either as a real estate broker or, in certain situations, as a foreign real estate dealer.

The case at bar is' a diversity action brought by a Florida real estate broker to collect compensation for brokerage services performed in connection with an Ohio real estate transaction. The dispositive question on appeal is whether the plaintiff — a company that was not licensed by the State of Ohio during the relevant time period — had a right [390]*390of action for collection of its commission under a promissory estoppel theory. We conclude, as a matter of Ohio law, that the plaintiff had no such right of action.

I

Landmark Commercial Realty, Inc., the plaintiff herein, is a Florida corporation organized and owned by a Floridian named Robert Kurlander. Both Landmark and Mr. Kurlander have long been licensed by Florida as real estate brokers.

The defendants — Ohio partnerships known as Developers Diversified, Ltd., and W & M Properties — are controlled by Clevelanders Bart Wolstein and John McGill. Through Developers, W & M, and their subsidiary companies and partnerships, Messrs. Wol-stein and McGill are engaged in the development of shopping centers and other commercial properties in some 30 states, including Ohio and Florida.

Wolstein and McGill began using Landmark’s services as early as 1982, and the business relationship continued, off and on, for the next decade. Under an agreement signed in 1984, Developers designated Landmark as its exclusive licensed real estate broker for, shopping center site locations in various Florida markets. Landmark thereafter provided brokerage services to Developers in connection with a number of Florida land transactions involving Wal-Mart Stores, Inc. From time to time Landmark was also asked to assist Developers in Virginia, Ohio, and elsewhere.

In May of 1990 Wal-Mart asked Developers to recommend potential sites for Wal-Mart stores in the Northeastern Ohio area. Developers engaged Landmark to perform this site selection work, allegedly promising compensation in an amount to be determined under the 1984 contract.

Mr. Kurlander worked on the Northeastern Ohio project for the better part of six months, and he appears to have been instrumental in persuading Wal-Mart to buy — for more than $2.4 million — 16 acres of land owned by W & M and offered for sale by Developers in Macedonia, Ohio. Wal-Mart signed a contract to buy the land in April of 1992. With Wal-Mart as an anchor, the Wolstein-McGill interests were able to build a shopping center on the adjoining 70 acres. The defendants refused, however, to pay Landmark the commission that Mr. Kurlan-der understood had been promised.

II

Landmark filed a two-count complaint in federal district court in February of 1993. One count of the complaint alleged that Landmark was entitled to a commission, calculated under the 1984 agreement, of $105,-654.62. The other count alleged that Landmark was entitled to the same amount as the reasonable value of the brokerage services it had performed.

The defendants took Mr. Kurlander’s deposition in November of 1993, at which time Kurlander testified that he had never been licensed as a real estate broker in the State of Ohio. Soon thereafter the defendants moved for summary judgment on the ground that Landmark had conceded it was not a licensed Ohio real estate broker. Five days later Landmark and Mr. Kurlander received Ohio licenses as foreign real estate dealers.1

Citing In re Ferncrest Court Partners, Ltd., 66 F.3d 778 (6th Cir.1995), the district court denied the defendants’ summary judgment motion. (In Ferncrest, as we shall see presently, our court held that Ohio Rev.Code § 4735.20, which prohibits the splitting of real estate commissions with unlicensed persons, did not preclude a licensed Ohio broker from splitting a commission with a broker licensed only in another state.) A motion for reconsideration was also denied on the strength of Ferncrest.

The case ultimately went to trial before a jury of eight. At the conclusion of Landmark’s ease in chief the defendants moved for judgment as a matter of law. This mo[391]*391tion was denied, as was a renewed motion for judgment at the conclusion of all the evidence.

The trial court instructed the jury that the plaintiff was not entitled to recover a real estate brokerage commission as such. Pursuant to Fed.R.Civ.P. § 15(b), however, the complaint was amended to assert a promissory estoppel claim. The case was then submitted to the jury under two theories: promissory estoppel with respect to Developers and quantum meruit with respect to W & M.

The jury found for plaintiff Landmark in the amount of $105,654 on the promissory estoppel claim, and it found for Landmark in the amount of $35,000 on the quantum meru-it claim. Because Landmark was entitled to only one recovery, judgment was entered against Developers alone in the amount of $105,654. This judgment was subsequently amended to include prejudgment interest in the additional amount of $45,227. A motion for judgment n.o.v. was denied, and a timely notice of appeal followed.2

Ill

A

The first sentence of Ohio Rev.Code § 4735.21 reads as follows:

“No right of action shall accrue to any person, partnership, association, or corporation for the collection of compensation for the performance of the acts mentioned in section 4735.01 of the Revised Code, without alleging and proving that such person, partnership, association, or corporation was licensed as a real estate broker or foreign real estate dealer.”

It is uncontested that the brokerage services that were performed by Landmark, and for which Landmark sought compensation, constituted “acts mentioned in section 4735.01____” See Ohio Rev.Code § 4735.01(A).

Section 4735.21 and its precursors have been strictly enforced against persons who, although not licensed by Ohio, have sought to recover brokerage commissions through litigation in Ohio. See Stanson, Inc. v. McDonald, 147 Ohio St. 191, 70 N.E.2d 359 (1946); Sadowsky v. Ina, 31 Ohio App.3d 246, 510 N.E.2d 837 (1986); Rispo Realty Co. v. Wisniewski, 186 N.E.2d 758 (Ohio App.1962); Maglione v. Wojno,

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163 F.3d 389, 1998 WL 879870, Counsel Stack Legal Research, https://law.counselstack.com/opinion/landmark-commercial-realty-inc-v-developers-diversified-ltd-and-w-m-ca6-1999.