Shands v. Wm R. Winton, Ltd.

91 P.3d 416, 2003 Colo. App. LEXIS 1783, 2003 WL 22723039
CourtColorado Court of Appeals
DecidedNovember 20, 2003
Docket02CA1926
StatusPublished
Cited by2 cases

This text of 91 P.3d 416 (Shands v. Wm R. Winton, Ltd.) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shands v. Wm R. Winton, Ltd., 91 P.3d 416, 2003 Colo. App. LEXIS 1783, 2003 WL 22723039 (Colo. Ct. App. 2003).

Opinion

Opinion by

Judge GRAHAM.

Defendant, Wm R. Winton Ltd., a British limited liability company, appeals the trial court’s judgment in favor of plaintiff, David Shands. We affirm.

The dispute concerns a real estate commission. Most of the salient facts are undisputed. Shands, a licensed real estate broker, had a listing for a portion of Winton’s Larimer County property in 1998-1999. When the listing expired in September 1999, Shands left his sign on the property with Winton’s permission. In May 2000, Fred Ziegler contacted another local real estate broker, Lou Kinzli, and expressed interest in the property. Over the next two months, Kinzli contacted Shands and made several offers on behalf of Ziegler to Winton, through Shands, to purchase the property.

On August 11, 2000, Shands and Winton entered into an exclusive right-to-sell designated party listing agreement, which provided Winton would pay Shands a commission under the following circumstances:

(1) Any Sale of the Property within the Listing Period [August 11, 2000, through December 31, 2000] by Seller, by Broker or by any other person;
(2) Broker’s finding a buyer who is ready, willing and able to complete the transaction as specified herein by Seller; or
(3) Any Sale of the Property within 365 calendar days subsequent to the expiration of the Listing Period (“Holdover Period”) to anyone with whom Broker negotiated and whose name was submitted, in writing, to .Seller by Broker during the Listing Period (including any extensions thereof); provided, however, that Seller shall owe no commission to Broker under this subsection (3) if a commission is earned by another licensed real estate broker acting pursuant to an exclusive right-to-sell listing contract or an exclusive agency listing contract entered into during the Holdover Period.

The designated party provision in the listing agreement applied to Ziegler and Z WEST Development and Investment Inc., a Colorado corporation wholly owned by Ziegler. Z WEST was not yet formed when the agreement was executed.

On August 22, 2000, Z WEST and Winton entered into a purchase contract for the property. Shands was shown as the listing agent. Although the closing date was originally set for December 2000, that closing never occurred because Z WEST had difficulties securing financing. In January 2001, Shands’s attorney wrote to Winton, Kinzli, and the closing agent, stating that Shands expected his share of the commission if the property was sold to Z WEST during the holdover period.

On February 1, 2001, Z WEST and Winton entered into a contract for the sale of the property with a closing date scheduled for February 16, 2001. Kinzli was listed as the transaction broker. The closing instructions acknowledged Shands’s potential claim and directed that the $27,500 that Shands claimed (one-half of the commission) be placed in escrow.

Because Z WEST lacked the financial resources to purchase the property, Ziegler contacted SKESKE I, a Missouri limited liability company, to secure the funds. On February 14, 2001, Z WEST and Winton entered into a mutual rescission agreement, which provided that the parties:

[AJgree that upon [Wmton] or his power of attorney, acknowledging and executing the certain Contract to Buy and Sell Real Estate with SKESKE I L.L.C., a Missouri limited liability company, dated February 14, 2001 the following shall occur: *418 [Z 1VEST] shall relinquish all rights under the contract dated February 1, 2001 and forfeit all the earnest money in the total amount of $14,000.

In March 2001, Ziegler filed articles of incorporation for WSZ, LLC. Z WEST and Ziegler’s cousin each owned twenty-five percent of WSZ, and SKESKE owned fifty percent.

On May 4, 2001, there was a simultaneous closing whereby Winton conveyed the property- to SKESKE who then conveyed the property to WSZ. Both conveyances were by warranty deeds, which were recorded in reverse order.

Shands filed a breach of contract claim against Winton. After a bench trial, the court found that Shands was entitled to one-half of the commission under the listing agreement, noting that, “[although under a different entity, Z WEST ultimately purchased an interest in the property under circumstances that suggests bringing in outsiders for additional financing at best; and to cut out [Shands] and benefit Kinzli at worst.” The trial court entered judgment in favor of Shands for $27,500, plus interest. This appeal followed.

Winton contends that the trial court erred in determining that Shands was entitled to a commission under the listing agreement because the property was sold to SKESKE, a party with whom Shands never negotiated, whose name was never submitted in writing to Winton, and who was not identified in the listing contract as a purchaser. We disagree.

In reviewing a breach of contract case, we defer to the trial court’s findings of fact if the record supports them, and we review its conclusions of law de novo. Albright v. McDermond, 14 P.3d 318 (Colo.2000).

A broker’s right to recover a commission is dependent on the terms of the listing agreement. Horton-Cavey Realty Co. v. Spencer, 37 Colo.App. 96, 544 P.2d 998 (1975). Written contracts that are complete and free from ambiguity express the intention of the parties and will be enforced according to their plain language. Fallenius v. Walker, 787 P.2d 203 (Colo.App.1989).

However, the purpose of a listing contract is to compensate a broker who is the procuring cause of a sale. Colorado has long recognized that a seller of real estate cannot circumvent the listing broker by changing the terms of the contract or selling to a straw-man who then acts as a conduit and ultimately conveys the property to the purchaser who originally was procured by the broker. See Hayutin v. De Andrea, 139 Colo. 40, 337 P.2d 383 (1959).

. Where the terms are changed and the seller sells directly to the buyer who was introduced to him by the broker, the broker is nevertheless entitled to a commission because he is the procuring cause of the sale. Such circumstances involve the direct appropriation of the client by the seller, and the holdover provision of the purchase contract entitles the broker to the commission. Brewer v. Williams, 147 Colo. 146, 152, 362 P.2d 1033, 1036 (1961)(quoting Houston v. H.G. Wolff & Son Inv. Co., 94 Colo. 73, 77, 28 P.2d 255, 256 (1933): “[T]his was but another case of an owner circumventing his broker by appropriating his client and seeking to escape a commission by slight changes in the terms of the trade.”). As the court in Houston observed, “[Without paying for the seed, [the seller] sought to reap the field the broker had sowed.

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Bluebook (online)
91 P.3d 416, 2003 Colo. App. LEXIS 1783, 2003 WL 22723039, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shands-v-wm-r-winton-ltd-coloctapp-2003.