Lane v. Urgitus

145 P.3d 672, 2006 Colo. LEXIS 878, 2006 WL 3000111
CourtSupreme Court of Colorado
DecidedOctober 23, 2006
Docket06SA49
StatusPublished
Cited by56 cases

This text of 145 P.3d 672 (Lane v. Urgitus) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lane v. Urgitus, 145 P.3d 672, 2006 Colo. LEXIS 878, 2006 WL 3000111 (Colo. 2006).

Opinions

Justice HOBBS

delivered the Opinion of the Court.

This case involves a dispute over real estate transaction referral fees among Colorado licensed real estate brokers who were members of the Denver Metropolitan Commercial Association of- REALTORS® ("DMCAR") when the transactions and disputes in this case arose.1 An express condition of membership is that members will submit such disputes to binding arbitration. Each of the brokers separately executed an application form for membership that included consent to arbitration in accordance with the requirements of interconnected local and national REALTOR® professional organizations.

The complaint alleges the existence of a referral fee agreement among the licensed Colorado real estate brokers, who are parties to this case.2 The district court entered an [675]*675order for binding arbitration pursuant to seetion 1822-207, C.R.S. (2005), of Colorado's Uniform Arbitration Act. In bringing this original proceeding under C.A.R. 21, the defendant brokers assert that no arbitration agreement existed because (1) the parties did not execute an arbitration agreement with each other, (2) membership in a voluntary association does not create a contract among members of that organization, and (8) even if there was an agreement to arbitrate, it ceased to exist when the defendant brokers withdrew their membership from DMCAR.3

We affirm the district court's arbitration order. We hold that the district court did not err in ordering arbitration because (1) each of these licensed real estate brokers had previously consented to arbitration with other members of the professional organization should disputes arise among themselves; (2) each of these brokers were members of the organization when they entered into the alleged referral fee agreement and the disputes arose; and (8) their consents to arbitrate constituted an implied condition of the alleged referral fee agreement enforceable under Colorado's Uniform Arbitration Act, sections 18-22-201 to -2839, C.R.S. (2006).

Our holding and reasoning in this case are limited to the cireumstance of an agreement among the parties to the lawsuit that includes an implied condition to arbitrate. We do not decide or address whether by-laws of a voluntary association are enforceable against and among individuals absent a contractual relationship that would include an implied condition as exists in this case.

Because the district court should have stayed the lawsuit pending arbitration pursuant to section 18-22-207(7), rather than dismissing it, we set aside the district court's order of dismissal, and order the lawsuit stayed pending arbitration.

I.

Plaintiff Robert Lane, d/b/a Lane Realty Company, ("Lane") is a licensed Colorado real estate broker and employing broker at Lane Realty Company. He served as chief financial officer for Weberg Enterprises, Incorporated from 1985 until 2002, when the company closed, and as property manager for Weberg Properties, the real estate arm of John Weberg's property. In 2002 John We-berg solicited Lane's advice regarding realtors who could assist Weberg in disposing of his real estate portfolio. Lane alleges that he contacted several realtors and, on July 22, 2002, he entered into a "referral fee agreement" with CB Richard Ellis, Incorporated ("CBRE") for "a referral of 20% on any deals going forward with John P. We-berg."

The complaint alleges the following. In February 2004, after the sale of one of We-berg's properties, Fairways Plaza Shopping Center, CBRE paid Lane approximately $52,000 as a referral fee. When a second Weberg property sold in 2004, the County Line property, Ronald Urgitus, the employing broker of CBRE, refused payment of the referral fee. Lane learned of a listing with CBRE for the sale of a third Weberg property, Denver Distribution Center. Lane contacted Richard Calhoun, managing broker at CBRE, regarding the status of his referral fees for the two listings for which he had received no fee. Calhoun refused payment.

On January 21, 2005, pursuant to the procedures of the Denver Board of REALTORS®, Lane submitted a Request and Agreement to Arbitrate form to DMCAR. The DMCAR sent a notice of the arbitration request to Urgitus and Calhoun on February 8, 2005, and requested a response by February 28, 2005.4 Urgitus and Calhoun did not respond, and they withdrew [676]*676their membership in DMCAR on May 9, 2005.

In his suit filed in July 2005 to collect the fees allegedly owed to him, Lane sought an arbitration order. The brokers involved on both sides of this action are Colorado licensed real estate brokers. Urgitus filed an application for membership with DMCAR, was accepted, and was a member of this association when the disputes for which the court ordered arbitration arose. Calhoun filed an application for membership with DMCAR, was accepted, and was a member of this association when the disputes for which the court ordered arbitration arose.5

The application for membership Urgitus signed for DMCAR contained the following provisions:

In the event my application is approved, I agree as a condition of membership to complete the orientation and ethics course of DMCAR; and to otherwise on my own initiative thoroughly familiarize myself with the Code of Ethics of the National Association of REALTORS®, including the duty to arbitrate business disputes in accordance with the Code of Ethics and Arbitration Manual of the Board and the Constitutions, Bylaws, and Rules and Regulations of DMCAR, the Colorado Association and the National Association. I further agree to satisfactorily complete a reasonable and non-discriminatory written examination covering such Code, Constitutions, Bylaws, Rules and Regulations, and duty to arbitrate. I further agree that my act of paying dues shall evidence my initial and continuing commitment to abide by the aforementioned Code of Ethics, Constitutions, Bylaws, Rules and Regulations, and duty to arbitrate, all as from time to time amended.

(Emphasis added). The application form Calhoun signed for DMCAR contained provisions equivalent to those Urgitus signed. Incorporated by reference in the signed applications, the Code of Ethics, Arbitration Manual, and Standards of Practice of the National Association of REALTORS® provides in "Part Two-Membership Duties and Their Enforcement" that:

The duties of membership include the following: (a) to abide by the Code of Ethics of the National Association of REALTORS®; (b) to abide by the bylaws of this Board and its rules and regulations; and (c) to submit to arbitration all disputes specified in Part ten of this Manual by the procedure therein provided, and to abide by the arbitrators' award....

"Part Ten-Arbitration of Disputes," in turn, provides that "[t]he obligation to participate in arbitration contemplated by this Article includes the obligation of REALTORS® (principles) to cause their firms to arbitrate and be bound by any award." The matters that must be arbitrated include "entitlement to commissions and compensation in cooperative transactions that arise out of the business relationships between REALTORS® and between REALTORS® and their clients and customers...." Article 17 of the Standards of Practice of the National Association of REALTORS® provides:

In the event of contractual disputes ...

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Cite This Page — Counsel Stack

Bluebook (online)
145 P.3d 672, 2006 Colo. LEXIS 878, 2006 WL 3000111, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lane-v-urgitus-colo-2006.