Pacesetter Properties, Inc. v. Hardaway

635 S.W.2d 382, 1981 Tenn. App. LEXIS 602
CourtCourt of Appeals of Tennessee
DecidedNovember 23, 1981
StatusPublished
Cited by24 cases

This text of 635 S.W.2d 382 (Pacesetter Properties, Inc. v. Hardaway) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pacesetter Properties, Inc. v. Hardaway, 635 S.W.2d 382, 1981 Tenn. App. LEXIS 602 (Tenn. Ct. App. 1981).

Opinion

ABRIDGED OPINION

TODD, Presiding Judge,

Middle Section.

(With the concurrence of the participating judges, the original opinion has been abridged for publication.)

The plaintiff, Pacesetter Properties, Inc., has appealed from the Chancellor’s decree dismissing its suit against the defendants for a real estate broker’s commission.

Appellant presents the following issues for review:

A. Is plaintiff entitled to a reasonable real estate brokerage commission because its agent, George Butler, was the procuring cause of the lease between defendants and their lessee?
[385]*385B. Did the Chancellor err in holding that declaratory relief is unavailable in this case on the ground that a necessary party was not joined?
C. Is plaintiff entitled to judgment equal to the usual and customary commission for similar services in this locality for procuring the Stein-Mart lease?

The complaint alleges that defendants are liable to it upon the following facts:

In October, 1978, defendants agreed to allow one George Butler, then employed by Leasing Management Development Company, to attempt to secure a tenant for defendants’ property; in October, 1978, Butler introduced one Jay Stein to one of the defendants and showed Mr. Stein the property; negotiations proceeded between Mr. Stein, Butler and the defendants until February 1, 1979, when Butler’s connection with Leasing Management terminated and he became connected with plaintiff and withdrew from negotiations at the request of defendants; Leasing Management assigned to plaintiff any commissions due from any lease executed between defendants and Mr. Stein in consideration of plaintiff paying to Leasing Management 20% of the amount collected by plaintiff; on May 8,1979, Stein executed a lease with defendants.

The answer admits that defendants authorized Leasing Management to negotiate a lease with Mr. Stein but only for a period expiring November 15, 1978. It is denied that any lease was negotiated by Butler, Leasing Management or plaintiff. It is admitted that a lease was executed on May 8, 1979, but participation in negotiations therefor by Butler, Leasing Management or plaintiff is denied.

The evidence shows that in early November, 1978, when defendants were demanding a ten year lease, Butler notified defendants that Stein refused a ten year term and considered the rent too high.

Stein lost interest in defendant’s property and became interested in two other properties; he completely lost interest in the Nashville area and started looking for locations in other cities; and it was only after he failed to find a location elsewhere that he reconsidered and reapproached defendants.

On November 7,1978, Hardaway inquired of Butler as to whether Stein was still interested and received a negative reply. Thereupon, Hardaway executed a short term lease with another tenant on the same property.

Several months thereafter, Stein contacted Hardaway to further inquire about Windland Center. The property was still available and the parties decided to deal directly. Hardaway called LMDC to inform them that they would negotiate between themselves. However, Butler continued to telephone the parties to stay abreast of the negotiations.

On May 8, 1979, Hardaway and Stein entered into a two year written lease with three separate options to renew covering a total of eleven years.

Plaintiff argues that it was the proximate, efficient, and procuring cause of the lease between Hardaway and Stein-Mart Nashville, Inc. Mr. Butler, as broker’s agent for LMDC, introduced the parties, showed the property, and participated in the negotiations.

Defendant responds that while it orally authorized plaintiff to procure a lessee for the space in Windland Center, the authorization was limited. It did not extend beyond the negotiations concerning the original proposal. Defendant argues that since a lessee was not found within the time limitations, the authorization terminated and the deal was off. Therefore, Butler’s authority to act as agent on behalf of LMDC expired before a lease was consummated and the right to a commission was extinguished.

Appellant cites Robinson v. Kemmons Wilson Realty Co., 41 Tenn.App. 297, 293 S.W.2d 574 (1956) which contains a comprehensive analysis of authorities and definition of the rights of real estate brokers to a commission where the sale is actually closed by the owner or another agent.

[386]*386In the cited case, the realtor asked the owner whether he wanted to sell his house. The owner replied he would sell it for $24,-500; and the owner authorized the realtor to show the house to Fondren, but only at the stated price. After seeing the house, Fondren offered $20,000 which was refused. An increased offer of $21,500 was likewise refused with the statement that owner would take $23,000 and pay a commission. About three weeks later, Fondren contacted the owner and negotiations produced a sale at $21,500.

The Trial Judge awarded a commission to the realtor, but this Court reversed and said:

In our opinion, this cause turns almost entirely on whether or not negotiations between defendants and the Fondrens, after the introduction of the Fondrens by Wade, were broken off in good faith, and, therefore, whether or not the sale was the result of new and independent negotiations.

... in the instant case, the defendant Albert Robinson did not take the negotiations out of the hands of Wade for the purpose of concluding a sale to the Fon-drens. He took it out of Wade’s hands, or out of the hands of Kemmons Wilson Realty Company, because Wade’s prospect was unwilling to meet the terms on which Robinson was willing to sell ....

In Newman v. Hill, 29 Tenn.App. 388, 196 S.W.(2d) 1008, the suit of the real estate broker was dismissed by the Chancery Court and that dismissal was affirmed by the Court of Appeals, with certiorari denied by the Supreme Court. We quote from the opinion of Ketchum, J., in that case, as follows:

“This is not a case of the owner stepping in and secretly closing a deal with the agent’s customer for the purpose of escaping liability for the commission. The deal involved an exchange of properties rather than a sale, and Wright’s agent, who came into the picture after Newman’s sole agency expired, submitted the offer, and the only offer, that Hill was willing to accept. * * * It is well settled by the authorities that complainant is not entitled to the commission merely because he introduced Wright to Hill as a prospective purchaser before his sole agency expired; the rule in such cases is that the agent is not entitled to the commission unless the contract is obtained with the time limited.” Newman v. Hill, 29 Tenn.App. 388, 391-393, 196 S.W.(2d) 1008, 1009.

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Bluebook (online)
635 S.W.2d 382, 1981 Tenn. App. LEXIS 602, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pacesetter-properties-inc-v-hardaway-tennctapp-1981.