Matthew P. Apodaca v. ERA First Advantage Realty, Inc. (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: December 3, 2020
• Docket: 20A-SC-505
• Status: Published

Opinion

MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be FILED regarded as precedent or cited before any Dec 03 2020, 8:31 am

court except for the purpose of establishing CLERK the defense of res judicata, collateral Indiana Supreme Court Court of Appeals and Tax Court estoppel, or the law of the case.

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE Robert R. Faulkner Max E. Fiester Evansville, Indiana Terrell, Baugh, Salmon & Born, LLP Evansville, Indiana

IN THE COURT OF APPEALS OF INDIANA

Matthew P. Apodaca, December 3, 2020 Appellant-Defendant, Court of Appeals Case No. 20A-SC-505 v. Appeal from the Warrick Superior Court ERA First Advantage Realty, The Honorable Inc., Benjamin R. Aylsworth, Magistrate Appellee-Plaintiff. Trial Court Cause No. 87D02-1907-SC-1365

Kirsch, Judge.

[1] Matthew P. Apodaca (“Apodaca”) appeals the trial court’s ruling that Apodaca

owes a real estate sale commission to ERA First Advantage Realty, Inc. (“ERA

Court of Appeals of Indiana | Memorandum Decision 20A-SC-505 | December 3, 2020 Page 1 of 8 Realty”) for a purchase of residential real estate that Apodaca negotiated and

closed on his own. On appeal, Apodaca raises three issues, but we reach only

one of those issues, which we restate as follows: whether the trial court erred in

ruling that Apodaca was required to pay a commission to ERA Realty and its

agent because ERA Realty and its agent failed to fulfill conditions precedent

under the contract.

[2] We reverse and remand.

Facts and Procedural History [3] In early 2019, Apodaca lived in California, and his job as a field engineer for

Siemens Corporation involved significant travel. Tr. Vol. 2 at 25. He searched

the internet for real estate for investment purposes, but once he learned that

housing in Indiana was much cheaper than housing in California, he began to

look for homes in Warrick County as a potential home for him and his fiancée

so he could travel less, and he and his fiancé could settle down and start a

family. Id. at 26-27. At some point “before March” of 2019, Apodaca

discovered a residence in Elberfeld, Indiana (“the Elberfeld residence”) that was

listed as “for sale by owner property.” Id. at 27. Apodaca contacted the owner

of the Elberfeld residence. Id. At this point, Apodaca had not reached out to

any southwestern Indiana realtors about the Elberfeld residence. Id.

[4] On March 6 or 7, 2019, Apodaca contacted Michael Melton (“Melton”), a real

estate agent for ERA Realty. Id. at 6. Beginning on March 7, 2019, Apodaca

began sending text messages to Melton about properties that Apodaca wanted

Court of Appeals of Indiana | Memorandum Decision 20A-SC-505 | December 3, 2020 Page 2 of 8 to view. Ex. Vol. at 3-6. In none of his communications with Melton did

Apodaca ask Melton about the Elberfeld residence. Tr. Vol. 2 at 19; Ex. Vol. 3 at

3-6. At some point before March 16, 2019, Apodaca contacted the owner of the

Elberfeld residence, and the owner agreed that Apodaca could come view the

residence on March 16, 2019, at 3:00 p.m. Tr. Vol. 2 at 28.

[5] Apodaca and Melton met for the first time on the morning of March 16, 2019,

so they could view several properties in the area later that day. Id. at 10.

Melton presented Apodaca with a contract. Id. at 11, 20, 22. Several hours

after Apodaca and Melton started looking at properties, Apodaca told Melton

for the first time that he had arranged to view the Elberfeld residence on his

own. Id. at 21. Apodaca and his fiancée viewed that property on their own at

3:00 p.m. the same day. Id. at 21, 28, 30.

[6] At some point on March 16, 2019, Apodaca signed a contract with ERA

Realty. Id. at 11. In pertinent parts, the contract, designated as a “Loyalty

Agreement – Buyer’s Exclusive Agency Contract”, provided as follows:

This Contract is entered into and shall commence on 3/16/19 by [ERA Realty] and [Apodaca] . . . . [Apodaca] employs [ERA Realty] for the purpose of exclusively assisting [Apodaca] to locate property described below or other property acceptable to [Apodaca], and to negotiate terms and conditions acceptable to [Apodaca] for purchase of property.

....

C. [ERA REALTY’S] COMPENSATION:

Court of Appeals of Indiana | Memorandum Decision 20A-SC-505 | December 3, 2020 Page 3 of 8 ....

2 . Commission: In consideration for the services to be performed by [ERA Realty], [Apodaca] also agrees to pay [ERA Realty] a commission of $ Paid by Seller or Paid by Seller % of the total purchase price; however, the total commission paid to [ERA Realty] shall not be less than $ Paid by Seller. . . . [ERA Realty] shall use [ERA Realty’s] best effort to cause the seller or the seller’s agent to satisfy [Apodaca’s] obligation to [ERA Realty].

The commission shall be due, earned and promptly paid if:

a. [Apodaca or any other person acting for [Apodaca] or on [Apodaca’s] behalf, acquires any real property or interest as described herein during the term of this Contract through the services of [ERA Realty] or otherwise.

F. FURTHER CONDITIONS:

[Apodaca] will compensate [ERA Realty] 3% on the purchase price of a for sale by owner if the seller will not pay [Apodaca’s] agent commission. [Apodaca] will call [Melton] prior to scheduling appointments with for sale by owners and let [Melton] schedule the appointments.

Appellant’s App. Vol. 2 at 18-19 (emphasis added).

[7] Apodaca negotiated the terms of the purchase of the Elberfeld residence on his

own and closed the sale himself. Tr. Vol. 2 at 30. Melton had no role in the

sale. Id. at 21. At some point before May 20, 2019, Apodaca purchased the

Court of Appeals of Indiana | Memorandum Decision 20A-SC-505 | December 3, 2020 Page 4 of 8 Elberfeld residence for $450.000. Id. at 15-16, 21, 30; Appellant’s App. Vol. 2 at

17; Ex. Vol. 3 at 6. Melton did not receive a commission from Apodaca, which

under the terms of the contract would have been $13,500.00. Tr. Vol. 2 at 16-17.

There was no evidence that Melton, or anyone else on behalf of ERA Realty,

ever attempted to collect any commission from the seller of the Elberfeld

residence or that the seller refused to pay the commission.

[8] On July 17, 2019, ERA Realty sued Apodaca by filing a “Statement of Claim.”

Appellant’s App. Vol. 2 at 10. Even though ERA Realty alleged damages for lost

commissions of $13,500.00, it agreed to the jurisdictional limit of $6,000.00 by

filing the claim in the Small Claims Division of Warrick Superior Court. Id.

On January 30, 2020, the trial court conducted a hearing on ERA Realty’s

claim. Tr. Vol. 2 at 2. On February 3, 2020, the trial court entered judgment

against Apodaca, finding and concluding as follows:

The Court FINDS that the contract executed by . . . [Melton] and [Apodaca] on the morning of March 16, 2019 is valid and enforceable. [Melton] had performed work in preparation prior to that date for [Apodaca’s] benefit and [Apodaca] testified about thoughtful discussion and consideration with his spouse prior to ultimately deciding to enter into the binding contractual agreement and without being subject to duress. As a result of the foregoing reasons, the Court ORDERS that the Plaintiff shall possess a Judgment against [Apodaca] in the full amount being requested, $6,000.00, plus court costs.

Appellant’s App. Vol. 2 at 8. Apodaca now appeals.

Court of Appeals of Indiana | Memorandum Decision 20A-SC-505 | December 3, 2020 Page 5 of 8 Discussion and Decision [9] Apodaca argues that the trial court erred in finding that he was liable under the

contract to pay a commission to Melton because he maintains that Melton was

entitled to a commission under the contract only if Melton fulfilled conditions

precedent in the contract. In addressing Apodaca’s claim, we will assume

without deciding that Apodaca would owe Melton the commission if Melton

fulfilled the conditions precedent in the contract.

[10] When a trial court enters findings of fact and conclusions of law, findings

control only as to the issues they cover, and a general judgment standard

controls as to issues upon which there were no findings. Jernas v. Gumz, 53

N.E.3d 434, 443 (Ind. Ct. App. 2016), trans. denied. A general judgment entered

with findings will be affirmed if it can be sustained on any legal theory

supported by the evidence. Id. We review facts from a bench trial under the

clearly erroneous standard and thus defer to the trial court’s opportunity to

assess witness credibility. Branham v. Varble, 952 N.E.2d 744, 746 (Ind. 2011).

This deference is “particularly important in small claims actions, where trials

are informal, ‘with the sole objective of dispensing speedy justice’ between

parties according to the rules of substantive law.” Id. (quoting City of Dunkirk

Water & Sewage Dep’t v. Hall, 657 N.E.2d 115, 116 (Ind. 1995)). “Interpretation

of a contract presents a question of law.” Jernas, 53 N.E.3d at 443. “We review

questions of law de novo and owe no deference to the trial court’s legal

conclusions.” Id.

Court of Appeals of Indiana | Memorandum Decision 20A-SC-505 | December 3, 2020 Page 6 of 8 [11] In arguing the contract required Melton to fulfill conditions precedent before

being entitled to a commission, Apodaca points to section C2 and section F of

the contract. In pertinent part, section C2 provides:

Commission: In consideration for the services to be performed by [ERA Realty], [Apodaca] also agrees to pay [ERA Realty] a commission of $ Paid by Seller or Paid by Seller % of the total purchase price; however, the total commission paid to [ERA Realty] shall not be less than $ Paid by Seller. . . . [ERA Realty] shall use [ERA Realty’s] best effort to cause the seller or the seller’s agent to satisfy [Apodaca’s] obligation to [ERA Realty].

Appellant’s App. Vol. 2 at 18 (emphasis added). Section F provides:

[Apodaca] will compensate ERA Realty 3% on the purchase price of a for sale by owner if the seller will not pay [Apodaca’s] agent commission. [Apodaca] will call [Melton] prior to scheduling appointments with for sale by owners and let [Melton] schedule the appointments.

Id. at 19 (emphasis added).

[12] Apodaca contends that there was no evidence before the trial court that Melton

made any effort to cause the seller to pay any obligation for a commission that

Apodaca may have owed Melton. Apodaca also claims there is no evidence

that the seller refused to pay the commission. Thus, he claims the trial court

erred as a matter of law in ruling that Apodaca was required to pay a

commission to Melton.

Court of Appeals of Indiana | Memorandum Decision 20A-SC-505 | December 3, 2020 Page 7 of 8 [13] We agree with Apodaca. “Under contract law, a condition precedent is a

condition that must be performed before the agreement of the parties becomes a

binding contract or that must be fulfilled before the duty to perform a specific

obligation arises.” Ind. State Highway Comm’n v. Curtis, 704 N.E.2d 1015, 1018

(Ind. 1998). “As a general rule, an express condition must be fulfilled or no

liability can arise on the promise that the condition qualifies.” Id. Here, the

contract required Melton to make “best effort to cause the Seller . . . to satisfy

[Apodaca’s] obligation to [Melton].” Appellant’s App. Vol. 2 at 18. Under the

contract, Apodaca was not liable for the commission unless the seller “[would]

not pay the . . . commission.” Id. at 19. There is no evidence that Melton or

any other person on behalf of ERA Realty made such efforts or that the seller

refused to pay the commission. Therefore, the evidence is undisputed that

Melton and ERA Realty failed to fulfill conditions precedent to collection of the

commission. Thus, the trial court erred as a matter of law in finding that

Apodaca was required to pay the commission to Melton for Apodaca’s

purchase of the Elberfeld residence. Accordingly, we reverse the trial court and

direct it on remand to enter judgment for Apodaca on ERA Realty’s Statement

of Claim.

[14] Reversed and remanded.

Pyle, J., and Tavitas, J., concur.

Court of Appeals of Indiana | Memorandum Decision 20A-SC-505 | December 3, 2020 Page 8 of 8