Olson v. Neale

570 P.2d 209, 116 Ariz. 522, 1977 Ariz. App. LEXIS 470
Court of Appeals of Arizona·Decided August 30, 1977·No. 1 CA-CIV 3193·Published·Cited by 7 cases

Opinion

OPINION

EUBANK, Judge.

This is an action for broker’s commission arising from the sale of real property. The principal question raised by the parties on appeal is whether an extant broker’s listing agreement is a condition precedent to recovery of a sales commission. We hold that a valid agreement must be in force.

The facts of this case are as follows: On March 6, 1965, Gilbert and Hedwig Olson, gave to William G. Neale and Martha H. Neale, d/b/a Neale & Associates (hereinafter “Neale”) a written non-exclusive listing to sell the Olson ranch. The listing provided for a “broker’s commission,” “fixed at five percent (5%) of the purchase price, to be paid as the land is released and paid for.” By its terms the listing expired July 15, 1965. On three separate occasions the listing agreement was extended, as follows:

Listing Contract

Commencement Date Termination Date

3-6-65 7-15-65

7-27-65 1-1-66

12-29-66 5-31-67

5-31-67 11-1-67

A sale was ultimately consummated in September, 1969, to Recreation Leisure Land through an agent, A. A. McCollum, who had first seen the property through Neale during the summer of 1967. McCollum, however, was an officer (and agent) of an entirely different corporation in 1969 than in 1967, as he was representing Development Services, Inc. in 1967 and Recreation Leisure Land in 1969.

Appellees assert that the Olsons waived any requirement of a listing contract by continuing to meet with Neale and McCollum on four separate occasions in 1968 for the purpose of furthering the ultimate sale. We refuse to accept the doctrine of implied waiver.

Arizona has a Statute of Frauds requirement for brokerage contracts which has been strictly enforced. A.R.S. § 44— 101.7 states:

No action shall be brought in any court in the following cases unless the promise or agreement upon which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged, or by some person by him thereunto lawfully authorized:
******
7. Upon an agreement authorizing or employing an agent or broker to purchase *524 or sell real property, or mines, for compensation or a commission.

Cases interpreting that statute have said that neither partial nor complete performance will take an oral contract between broker and seller out of the Statute of Frauds, Gibson v. W.D. Parker Trust, 22 Ariz.App. 342, 527 P.2d 301 (1974); a real estate broker is presumed to know that an oral contract of employment for rendition of services in negotiating a sale of real estate for compensation or a commission is invalid, Gray v. Kohlhase, 18 Ariz.App. 368, 502 P.2d 169 (1972); and that Arizona does not recognize the applicability of the doctrine of estoppel to real estate listing agreements, see Gibson v. W. D. Parker Trust, supra. While these cases do not pertain to the specific question at hand, they are indicative of the strict requirements placed upon Arizona real estate brokers who seek their commissions.

The listing contract terminating on November 1, 1967, involved in this case, is set forth in the Appendix attached hereto., The contract does not purport to grant commissions to the broker following termination of the contract and is therefore distinguishable from the contracts in Hyde Park-Lake Park, Inc. v. Tucson Realty & Trust Co., 18 Ariz.App. 140, 500 P.2d 1128 (1972) and Limberopoulos v. Tom Fannin and Associates, 17 Ariz.App. 35, 495 P.2d 475 (1972) both of which provided that in the event a sale was made within 90 days after expiration of an exclusive agreement to a party whose name had been submitted to the vendor in writing during the term of the listing agreement, the commission would be earned.

This situation sub judice is also distinguishable from the situation in Mohamed v. Robbins, 23 Ariz.App. 195, 531 P.2d 928 (1975). In Mohamed the real estate contract contained a protective clause, under which the defendant agreed to pay a commission if the property was sold to any person with whom the plaintiff was negotiating or dealing upon expiration of the listing. No time period was specified as to the duration of the clause and it was held that a period in excess of one year was not so unreasonable as to preclude recovery. The court found that the broker was the “procuring cause” of the sale and therefore was entitled to the commission. Here, however, there is no purported agreement giving the broker a commission after termination of the listing contract and so the question of whether the broker was the “procuring cause” is irrelevant.

This case is also distinguishable from other cases which have held the vendor liable for the commission upon finding that the broker was the “procuring cause” of the sale. In those cases the vendor had either deliberately bypassed the broker, e. g., Bowser v. Sandige, 74 Ariz. 397, 250 P.2d 589 (1952), Fornara v. Wolpe, 26 Ariz. 383, 226 P. 203 (1924); or the action involved a contest between two brokers for the right to a commission, e. g., Garver v. Thoman, 15 Ariz. 38, 135 P. 724 (1913), Leadville Mining Co. v. Hemphill, 17 Ariz. 146, 149 P. 384 (1915), Fink v. Williamson, 62 Ariz. 379, 158 P.2d 159 (1945), Porter v. Ploughe, 77 Ariz. 33, 266 P.2d 749 (1954). See also Hearrold v. Gries and Realty Executives, 115 Ariz. 560, 566 P.2d 1036 (filed July 7, 1977).

Moreover, even though McCollum was the acting purchaser’s agent for both the ultimate purchaser and the original prospective party, we feel that appellees cannot be considered the procuring cause when the ultimate purchaser of the property was a different entity from the original prospective party.

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Olson v. Neale, 570 P.2d 209, 116 Ariz. 522, 1977 Ariz. App. LEXIS 470 (Ark. Ct. App. 1977).

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