THIS OPINION
HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN
ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Retail
Properties, Inc., Respondent,
v.
Horne
Properties, Inc., Appellant.
Appeal From Richland County
Alison Renee Lee, Circuit Court Judge
Unpublished Opinion No. 2009-UP-062
Heard January 6, 2009 Filed January 28,
2009
AFFIRMED
Louis H. Lang and Ian D. McVey, of Columbia for Appellant.
James A. Blair, III, of Greenville for Respondent.
PER
CURIAM: Horne Properties, Inc. (Horne) appeals from a jury verdict finding
Retail Properties, Inc. (RPI) entitled to damages of $132,813 for Hornes
breach of its contract with RPI. We affirm.
FACTUAL/PROCEDURAL HISTORY
This matter involves an admitted contract between RPI and Horne,
wherein RPI agreed to represent Horne as a preferred grocery-anchored shopping
center developer in certain South Carolina counties. RPI sued Horne after
Horne failed to pay RPI under the contract for site acquisition services
rendered after Horne developed a Publix at the intersection of Broad River Road and Kennerly Street in Columbia.
RPI is a company formed by Tim Metzler that specializes in tenant
selection. Metzler had previously worked for a company which developed large
shopping centers, such as Wal-Mart. When Metzler left employment with that
company, multiple clients, including Publix Super Markets, requested Metzler
continue to represent them. Metzler testified these chains would engage tenant
representation firms to explain the nuances of the market, traffic patterns,
and demographics and come up with a strategy for possible markets. Metzler
stated the tenant representation role is different from a broker, who
represents the buyer or the seller in a transaction. A tenant representation
firm educates the tenant on where to go; they help create a plan, they create
the submarkets, and they find opportunities.
Publix engaged RPI to initiate the move of Publix stores into South Carolina. As part of this representation, Publix asked RPI to interface with fifteen
or twenty different developers over time. Based on longstanding relationships
with developers, Publix may request the tenant representation firm work with
particular developers. In 2000, Publix requested RPI expand its areas of
responsibility into Columbia and five counties in the Upstate. After driving
around Columbia, Publixs real estate manager, Bob Burkett, and Metzler
identified five market opportunities. At that time one of those developers,
Horne, was soliciting business from Publix. Based on a relationship Burkett
had with William Hanks, a real estate manager for Horne, Burkett asked that RPI
work with Horne when an opportunity arose. Once Metzler, Burkett and Hanks
identified some specific intersections of interest, the president of Horne,
Richard Pressley, joined them in looking at the Columbia and Upstate areas.
According to Metzler, this business relationship ultimately resulted in RPI and
Horne entering into a Fee Schedule agreement on March 2, 2000.
The agreement between RPI and Horne provided as follows:
Retail Properties, Inc. and Horne Properties
Fee Schedule
Retail Properties, Inc. (RPI) agrees to represent Horne Properties
as a preferred grocery-anchored shopping center developer in the following South Carolina counties:
| Richland |
Anderson |
Greenville |
Pickens |
| Lexington |
Cherokee |
Spartanburg |
|
Retail Properties assignment is to assist Publix Super Markets in
improving their market share in the above markets. Whenever there is an
opportunity for a developer to be involved in a shopping center, it will be
presented to Horne Properties. As consideration for being a preferred shopping
center developer, Horne Properties agrees to the following compensation
agreement for RPI.
Site Acquisition
For each property purchased, a fee of $3.00 per sq. ft. on Publix
GLA to be paid to RPI by the Seller and/or the Buyer at closing.
The document
originally submitted by RPI to Horne contained additional services RPI could
offer to Horne in exchange for additional fees and commissions, including
assisting Horne with any joint ventures, Publix leases, and additional tenant
leases. However, these optional services were not desired by Horne and, as a
result, the parties struck through all of these other services. The document
also originally provided under the site acquisition that RPI be compensated a
fee of 5% to be paid by the Seller and/or Buyer at closing with a $75,000
guaranteed minimum per single transaction and $100,000 guaranteed minimum per
assemblage transaction, but this language was modified to provide for the $3
per square foot of gross leasable area compensation, an industry standard. Thus,
the compensation for site acquisition work went from a percentage to a flat
fee. Additionally, language under the site acquisition proposal providing
Horne would guarantee a minimum fee of 2% of the purchase price to be paid to
RPI for the sale/purchase of shopping centers was struck through by the
parties. Pressleys instructions to Metzler were to go find dirt that
Horne could own and Horne was going to develop it from the ground up.
Working under this agreement, Metzler testified RPIs task with regard to site selection was to
identify submarkets, further identify intersections, to help in a site
selection process and, once everyone was in agreement on the site selection for
a possible Publix, to go find the next site. As site selector, RPI was to
present all available opportunities to Horne and if the opportunities could be
developed, assist them in the process. Once an agreement was reached on site
selection, Horne was responsible for continuing on the path to erect a Publix.
According to Metzler, RPI was to be compensated under the agreement if we
complete a site acquisition and identify a site. In order to complete the
site acquisition, RPI would filter all the information, go down to the
intersection, do the work on the submarket, and if Publix agrees to locate
at that site, RPI would provide introductions to all the property owners.
Metzler testified, [O]nce the initial meetings are completed we are out of the
picture, and on to the next site. To achieve the final site acquisition, the
developer would contract for the property and build a shopping center. As a
site selector, RPI would not be involved in the development of the property.
In regard to the property that is the center of this dispute,
Metzler and Burkett narrowed their search down from a submarket in the area to
the particular intersection of Broad River and Kennerly. At this time, RPI was
under its agreement with Horne. The northwest corner was listed by the
company Edens & Avant. Metzler began to contact the owners of property on
the northeast corner and discovered another developer, Joe Gentry, had title to
one small parcel and held options to purchase all the other properties
necessary for development of that corner. At the instruction of Publix and
Horne, Metzler approached Gentry with the opportunity to sell the property to
Horne at a profit, but Gentry declined because he wanted to develop the
property for Publix himself. Publix instructed RPI to get both sides of
property under contract so that both developers could present packages to
Publix. RPI then provided its full packet of information and research on the
area to both developers. The packages were submitted to Burkett, and he chose
to present the northeast corner that Gentry had under contract for
consideration by Publix. Metzler testified that in 2000, an opportunity
existed for Horne on the northwest corner, but there was no opportunity at that
time for Horne as to the northeast corner that Gentry had under his control.
Both of the packages were ultimately rejected by Publix.
Publix has a written rule whereby no one is allowed to resubmit a
property site for consideration for at least one year. In the spring of 2001,
Philip Greenwall with Publix began traveling with Metzler in South Carolina and
reviewed the areas looked into previously by Burkett and Metzler. While
looking at the northwest corner of Broad River and Kennerly that had been
submitted again by a different developer, Greenwall indicated he liked the
northeast corner better. Greenwall suggested RPI get Horne involved in the
northeast corner, so Metzler contacted Hanks and Pressley, who then instructed
RPI to go back to the northeast corner and contact the property owners. By
this time, Gentry had dropped his options on the northeast corner. Metzler
contacted all of the property owners, who directed him to Tom Efland, one of
the owners who was also acting as a representative for the other property
owners.
At the instruction of Hanks and Pressley, Metzler made arrangements
for a meeting with Horne and Efland. Metzler, Hanks and Pressley met with
Efland at his office on July 11, 2001 and discussed the site, terms and
conditions, and the possibility of putting the northeast corner under contract
with Horne. After the meeting, Metzler was told his work was finished on that
job, that Horne would handle the negotiations with the property owners, and
that RPI would be compensated. Pressley and Hanks then instructed Metzler to
move onto another site in the Upstate.
Approximately two months later, Horne sent RPI a termination
letter dated September 13, 2001, stating it had come to Hornes attention RPI
was representing other developers in the seven counties listed in the agreement
and, because of this conflict of interest, Horne was terminating their
agreement. Metzler testified, while Horne was free to terminate the agreement
at any time, RPI made full disclosure to Horne that it worked with other
developers, sending out periodic reports which included information regarding
RPIs work with all the developers. Horne entered into a contract with Efland
for his piece of property on September 25, 2001. Ultimately, of the several
projects on which RPI worked, Horne closed on two properties after the
termination letter, including the northeast corner of Broad River and
Kennerly. While Horne paid RPI for the other project, it refused to pay on the
Broad River and Kennerly one. RPI presented evidence the gross leasable square
footage of the Publix Horne subsequently developed at this location was
44,271.
Pressley, testifying on behalf of Horne, maintained RPIs duties
under the agreement were to negotiate land contracts and help their personnel
produce market data and trade area statistics, including population, household
income, income per capita, new housing starts, current housing and schools.
Pressley stated Horne terminated its agreement with RPI because (1) RPI was
working in the same market with other grocers, thereby potentially jeopardizing
a relationship with Publix, (2) RPI had other competitive developer
relationships, and (3) RPI failed to pursue the land contracts to the degree
Horne had originally hoped. Pressley testified to the various meetings and
negotiations Horne had with the different landowners in regard to the northeast
corner property. He did not recall any meeting with Efland where Metzler was
present. Contracts were negotiated on the various properties in question for a
period of around eight months, starting in late September 2001. Pressley
testified, had RPI still been representing Horne during that time, Horne would
have expected RPI to be involved with these negotiations and execution of the
contracts. A Publix grocery store was subsequently constructed on the property
and opened in November or December 2003. Pressley testified no payments were
made to RPI at the closing on this property because there were none due.
When asked where in the agreement between the parties it provided
RPI was supposed to negotiate land options with the property owners, Pressley
stated RPI was a brokerage company, and it was inherent in the term represent
and under the paragraph entitled Site Acquisition. Pressley further
admitted he struck through many of the services offered by RPI, including those
relating to additional tenant lease, Publix lease, and joint venture
arrangement, and that he changed the compensation under site acquisition to the
$3 per square foot of Publix gross leasable area to be paid by the seller
and/or buyer at closing. When questioned on whether there was a specific list
of tasks RPI was required to perform in order to earn a commission, Pressley
again stated that it was inherent in that document. Pressley admitted,
however, that RPI had no authority to bind Horne in contracts.
Prior to submission of the case to the jury, counsel for Horne
submitted four requests to charge in the area of commissions, arguing the
contract in question was in the nature of a brokerage fee agreement. Counsel
stated, [a]lthough there is a flat fee suggested, that flat fee depended on
whether there was a land contract commission. Specifically, Horne sought the
following instructions be given to the jury:
1. A broker is entitled to his commissions, if during the
continuance of his agency, he is the efficient or procuring cause of the sale.
2. A broker will be regarded as the procuring cause if his
intervention is the foundation upon which the negotiations resulting in the
sale is begun.
3. It is the emphatic rule in this state that the broker must not
only show that his efforts were the procuring cause of the sale but must
further show that his intervention was during the continuance of an agency to
sell or to find a purchaser.
4. A broker is never entitled to a commission for unsuccessful
efforts. The risk of failure is wholly his. The reward comes only with his
success. The broker may devote his time and labor, and expend his money with
ever so much devotion to the interests of his employer, and yet if he fails, if
without effecting an agreement or accomplishing a bargain, he abandons the
effort, or his authority is fairly and in good faith terminated, he gains no
right to commission.
The trial court declined to instruct the jury on these four
charges finding, whether you call it a commission, whether you call it a fee .
. . the bottom line is. . . whether or not [RPI] did what [it] was supposed to
do under the terms of the contract, it was a contract for services and not
land acquisition, and it was not a procuring cause issue and thus it was
unnecessary to bring in procuring cause or anything along those lines. The
jury returned a verdict for RPI in the amount of $132,813, and Horne moved for
a new trial based on the courts failure to give the requested instructions.
The trial court denied the motion, and this appeal followed.
ISSUES
1.
Did the trial court err in concluding the fee schedule between the parties was
a contract for services for a flat fee because the fee schedule clearly called
for payment of a commission if earned?
2. Did the trial
court err in failing to charge the jury the law as to procuring cause because
the issue in the case was the entitlement of RPI to a commission?
STANDARD OF REVIEW
An
action for breach of contract seeking money damages is an action at law. Eldeco,
Inc. v. Charleston County Sch. Dist., 372 S.C. 470, 476, 642 S.E.2d 726,
729 (2007). In an action at law, on appeal of a case tried by a jury, the
jurisdiction of the appellate court extends merely to the correction of errors
of law. Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 85,
221 S.E.2d 773, 775 (1976).
LAW/ANALYSIS
On
appeal, Horne asserts the trial court erred in concluding the fee schedule
agreement was a contract for services. It argues that RPI is a real estate
broker that was engaged by Horne to represent it in Hornes attempt to develop
Publix grocery stores. Horne points to the fact that RPI often referred to its
compensation under the agreement as a commission, and argues the $3 per square
foot of leased space language met the definition of commission and, as such,
RPI could only earn a commission if it was the procuring cause of the
transaction. Accordingly, Horne contends the trial court erred in failing to
charge the jury on the law that in order to earn a commission, one must be the
efficient or procuring cause of the transaction. We disagree.
The
trial judge is required to charge only the current and correct law of South
Carolina, and the law to be charged to the jury is determined by the evidence adduced
at trial. State v. Taylor, 356 S.C. 227, 231, 589 S.E.2d 1, 3 (2003).
To warrant reversal for refusal to give a requested instruction, the refusal
must have not only been erroneous, but also prejudicial. McCourt ex rel. McCourt
v. Abernathy, 318 S.C. 301, 306, 457 S.E.2d 603, 606 (1995). Refusal to
give a properly requested charge is not error if the general instructions are
sufficiently broad to enable the jury to understand the law and the issues
involved. Id.
In
arguing its position, Horne relies heavily on the case of Webb v. First Fed.
Sav. & Loan Assn, 300 S.C. 507, 388 S.E.2d 823, overruled in part on other grounds by Myrtle Beach Hosp., Inc. v. City of Myrtle Beach,
341 S.C. 1, 532 S.E.2d at 868 (2000). There, Webb, a real estate broker,
attempted to broker a real estate deal for First Federal to sell certain
property to Burger King for $155,000, and an agreement was reached with First
Federal that Webb would receive a $15,000 commission. The offer was made to
Burger King, but Burger King declined. Id. at 509, 388 S.E.2d at 824.
Sometime thereafter, Burger King asked Webb to contact First Federal about the
lot, and when Webb did, he was told it was not available. Approximately six
months later, Burger King again asked Webb to approach First Federal about the
availability of the lot. First Federal indicated it had decided to do nothing
with the property. However, two months later, First Federal began negotiating
with a franchisee of Burger King. Three months after that, a subsidiary of
First Federal leased the property to the franchisee, and a Burger King was
subsequently erected there. Id. at 509, 388 S.E.2d at 825. When Webb
noticed construction of the restaurant, he brought an action against First
Federal alleging he was entitled to compensation based upon quantum meruit and
implied contract. Id. at 508, 509, 388 S.E.2d at 824, 825. Reciting
the same law Horne sought to be instructed to the jury in requests number three
and four regarding entitlement to commissions and procuring cause, this court
noted the unappealed ruling in the matter that the actual contract between Webb
and First Federal had ended when Burger King refused the initial offer, and
determined the facts of the case did not support a contract implied in law. Id. at 512-13, 388 S.E.2d at 826.
We
find the Webb case to be clearly distinguishable. In the case at hand,
RPI sought recovery for breach of the parties written contract, not under the
theory of an implied contract. Further, the evidence adduced at trial shows
RPI was not acting simply as a real estate broker attempting to secure a deal
between parties for the sale of land. Rather, as testified to by Metzler, RPI acted as a tenant
representative, whose role is different from a broker who represents the buyer
or the seller in a transaction. Metzler testified RPIs task with regard to its site selection
duties for Horne was to identify submarkets, further identify intersections,
help in a site selection process and, once everyone was in agreement on the
site selection for a possible Publix, to go find the next site. According to
Metzler, RPI fulfilled these duties with respect to the Broad River and
Kennerly location, and was instructed by Horne to move onto the next site.
Although Pressley disagreed that RPI fulfilled its duties as to this site,
Horne presented no evidence that RPI was not engaged to perform those tasks to
which Metzler testified, and whether Metzler fulfilled those duties under the
contract was a question for the jury. Under the agreement between the parties,
Horne Properties agreed to compensate RPI for performing site acquisition on
each property purchased, the fee being determined based on the square footage
of the Publix thereafter erected. While it is obvious the fee due could not be
computed unless and until a Publix was actually erected on the location in
question, neither this fact, nor the fact that the parties may have referred to
the expected compensation as a commission establishes that RPI was acting
merely as a broker, nor was there any evidence of record that RPI acted merely
as a broker. Further, the trial court instructed the jury on basic contract
law, including that in order for the contract to be binding and enforceable,
the parties must have intended to enter a contract and, through their
negotiations, they must have reached a mutual understanding of the terms of the
contract.
We agree with the trial court that the evidence submitted at trial
shows the contract between the parties was not simply one for land acquisition
entitling RPI to only a brokerage fee, but was a contract for services, with a
flat fee to be determined upon the successful completion of a Publix on the
site upon which RPI performed those services. Accordingly, we hold the trial
court properly declined to charge the
jury on the law relating to commissions and procuring cause as requested by
Horne. See Miller v. Schmid Labs., Inc., 307 S.C. 140, 142-43,
414 S.E.2d 126, 127 (1992) (noting instruction by the trial court of irrelevant
and inapplicable principles of law was clearly erroneous and may have served to
confuse the jury, and holding it is reversible error to charge a correct
principle of law as governing a case when such principle is inapplicable to the
issues on trial). See also Cole v. Raut, 378 S.C. 398,
404, 663 S.E.2d 30, 33 (2008) (noting a jury charge consisting of irrelevant
and inapplicable principles may confuse the jury and will constitute reversible
error if the jurys confusion affects the outcome of the trial). Further, assuming, as Horne contends, there is
evidence that work performed by RPI fell within the definition of a real estate
broker, the issue of the parties obligations under the contract was a question
for the jury. Thus, we find the general
instructions given by the trial court were sufficiently broad to enable the
jury to understand the law and the issues involved such that failure to give
the requested charges was not error.
CONCLUSION
For
the foregoing reasons, the judgment below is
AFFIRMED.
HUFF,
THOMAS, and LOCKEMY, JJ., concur.