Swor v. Tapp Furniture Co.

146 S.W.3d 778, 2004 Tex. App. LEXIS 8867, 2004 WL 2236418

• Court: Court of Appeals of Texas
• Decided: October 6, 2004
• Docket: 06-04-00035-CV
• Status: Published

Opinion

OPINION

Opinion by

Justice ROSS.

Bill Swor sued Dian Emerson, Jay Emerson, and Tapp Furniture Company (collectively, the Emersons) to recover a fee for finding a buyer to purchase a funeral home business, Tapp Funeral Home, owned by the company. Swor alleged causes of action for breach of contract, quantum meruit, promissory estoppel, tor-tious interference with contractual relations, and civil conspiracy. The Emersons filed a motion for summary judgment on their affirmative defenses claiming that, because Swor had no real estate license or written commission agreement, he violated Sections 19 and 20(b) of the Real Estate License Act 1 and was barred from bringing an action to recover a real estate commission. In response, Swor filed a motion for summary judgment, contending that no evidence existed to support the Emersons’ affirmative defenses. The trial court granted the Emersons’ motion and denied Swor’s. Swor appeals, contending the trial court erred in granting the Emersons’ motion and in denying his no-evidence motion.

To prevail on a motion for summary judgment, a movant must establish that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c). Summary judgment for a defendant is proper when the defendant negates at least one element of each of the plaintiffs theories of recovery or pleads and conclusively establishes each element of an affirmative defense. Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997); Wornick Co. v. Casas, 856 S.W.2d 782, 733 (Tex.1993).

The movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). However, once the movant establishes that it is entitled to summary judgment, the burden shifts to the nonmovant to show why summary judgment should not be granted. Casso v. Brand, 776 S.W.2d 551, 556 (Tex.1989). In reviewing a summary judgment, we accept all the nonmovant’s proof as true and indulge every reasonable inference in the nonmovant’s favor. Science Spectrum, Inc., 941 S.W.2d at 911. All doubts about the existence of a genuine issue of a material fact must be resolved against the movant. Johnson County Sheriff's Posse, Inc. v. Endsley, 926 S.W.2d 284, 285 (Tex.1996).

A no-evidence summary judgment is essentially a pretrial directed verdict. We therefore apply the same legal sufficiency standard in reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict. Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 506 (Tex.2002). We must determine whether the nonmov-ant produced any evidence of probative force to raise a fact issue on the material questions presented. Id.; Woodruff v. Wright, 51 S.W.3d 727, 734 (Tex.App.-Texarkana 2001, pet. denied). We consider all the evidence in the light most favorable to the party against whom the no-evidence summary judgment was rendered, disregarding all contrary evidence and inferences. Merrell Dow Pharms., Inc. v. Hawner, 953 S.W.2d 706, 711 (Tex.1997). A no-evidence summary judgment is improperly granted if the nonmovant presents more than a scintilla of probative evidence to raise a genuine issue of material fact. Jackson v. Fiesta Mart, Inc., 979 S.W.2d 68, 70-71 (Tex.App.-Austin 1998, no pet.). More than a scintilla of evidence exists when the evidence “rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.” Hamer, 953 S.W.2d at 711; see King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.2003).

In general, an order granting a summary judgment may be appealed, but an order denying a summary judgment may not. Novak v. Stevens, 596 S.W.2d 848, 849 (Tex.1980). However, an exception to this rule exists when both parties file motions for summary judgment and the court grants one and overrules the other. Tobin v. Garcia, 159 Tex. 58, 316 S.W.2d 396, 400 (1958). On appeal, the proper disposition is for the appellate court to render judgment for the party whose motion should have been granted. Members Mut. Ins. Co. v. Hermann Hasp., 664 S.W.2d 325, 328 (Tex.1984); McLemore v. Pac. Southwest Bank, FSB, 872 S.W.2d 286, 289 (Tex.App.-Texarkana 1994, writ dism’d by agr.). Each party must clearly prove its right to judgment as a matter of law, and neither party may prevail simply because the other party failed to make such proof. Bd. of Adjustment of City of Dallas v. Patel, 887 S.W.2d 90, 92 (Tex.App.-Texarkana 1994, writ denied); James v. Hitchcock Indep. Sch. Dist., 742 S.W.2d 701, 703 (Tex.App.Houston [1st Dist.] 1987, writ denied). The proper disposition on appeal is for the appellate court to render judgment for the party whose motion should have been granted. McLemore, 872 S.W.2d at 289.

Swor testified in his deposition that Dian, president of Tapp Furniture Company, expressed to him an interest in selling Tapp Funeral Home. She asked Swor to find financing for her son and another employee to purchase the funeral home. Swor testified that, when that deal did not materialize, Dian orally agreed to pay him a fee of ten percent of the sale price, if he introduced a buyer. Swor introduced Jeff Orwosky as a potential buyer. Dian and Orwosky entered into a contract for Orwo-sky to purchase the funeral home for $1.2 million.

The oral agreement of the finder’s fee between Swor and Dian did not specifically reference the selling of the real estate. The absence of a specific reference to real estate raises a fact issue as to whether “a funeral home” necessarily includes both assets and associated real estate. David Gavin Co. v. Gibson, 780 S.W.2d 833, 834 (Tex.App.-Houston [14th Dist.] 1989, writ denied). Hall v. Hard established that whether the nature of an agreement contemplates the sale of real estate is a fact question which, if not submitted to the jury, would preclude summary judgment. 160 Tex. 565, 335 S.W.2d 584, 590 (1960).

Swor, however, admitted in his deposition he had agreed that all assets, including the real estate of the funeral home, were for sale. He had the appraisal district records of the funeral home, as well as the financing statements of the business, which generally include the profit/loss margin and a list of all assets, liabilities, and capital. According to Swor’s testimony, he was also presented a copy of a contract entered into between Orwosky and Dian. The contract outlined all the assets involved in the sale. Those included inventory, supplies, equipment, furniture, fixtures, vehicles, and real estate.

During his deposition, Swor responded to questioning by the Emersons’ counsel as follows:

[Counsel]: ... I assume that in order to do that you had to have some financial information from the funeral home?

[[Image here]]

[Swor]: I had financial statements on Mike and Oscar.

[Counsel]: Anything else?

[Swor]: Copies of '00 and '01 financial statements of the funeral home.

[Counsel]: Well, did you have appraisal district records—

[Swor]: Yes.

[Counsel]: — for the funeral home and the parking lot and the other improvements?

[Swor]: Yeah, I had that.

[Counsel]: All right. And actually, you even had a plat of the property, didn’t you, real estate?

[Swor]:.... Oh, yeah, that’s attached to the appraisal.

[[Image here]]

[Counsel]: Well, tell me, what was the — -what was the sale supposed to involve?

[Swor]: It was an asset sale.

[Counsel]: Well, what assets were being sold?

[Swor]: All assets of Tapp Funeral Home.

[Counsel]: And what were they?

[Swor]: Whatever they had that were assets.

[Counsel]: Was the inventory going to be sold?

[Swor]: I don’t really know. My — my objective in the whole deal was to put two people together, and it was up to them to make the decision on what they sold and what they didn’t sell.

[[Image here]]

[Counsel]: Well, inventory and equipment was going to be sold, wasn’t it?

[Swor]: Sure. Everything that was an asset.

[[Image here]]

[Counsel]: It’s going to cover vehicles, furniture, equipment, and fixtures—

[Swor]: Right.

[Counsel]: — inventory and supplies—

[Swor]: Uh-huh.

[Counsel]: — and real estate?

[Swor]: Sure.

The fee for handling the sale of property consisting in part of real estate is considered a real estate commission. Id. at 588; Gibson, 780 S.W.2d at 834. Additionally, the definition of real estate broker is so broad that it covers compensation labeled as “finder’s fee.” Terry v. Allied Bancshares, Inc., 760 S.W.2d 45, 47 (Tex.App.-Fort Worth 1988, no writ); see Tex. Occ.Code Ann. § 1101.002 (Vernon 2004). Swor expected to be compensated for assisting in a transaction contemplating a sale of real estate. Therefore, the Real Estate License Act applied to Swor, as a broker.

The Texas Legislature requires that a real estate dealer secure a license from the Texas Real Estate Commission. Tex. Occ.Code Ann. § 1101.351. It is a criminal offense to engage in the business of a real estate broker, or salesperson, without having procured such license. Tex. Occ.Code Ann. § 1101.756 (Vernon 2004); Hall, 335 S.W.2d at 589. In addition, Section 19 of the Real Estate License Act denies the use of the courts to real estate brokers for the recovery of a commission unless the broker seeking recovery alleges and proves that he or she was a duly licensed real estate broker, or salesperson, at the time the alleged cause of action arose. Tex.Rev.Civ. Stat. Ann. art. 6573(a), § 19 (repealed) (current version at Tex. Occ.Code Ann. § 1101.351). Further, Section 20(b) of the Act provides that an action may not be brought for the recovery of a commission for the sale or purchase of real estate unless the agreement on which the action is brought is in writing and signed by the party to be charged. Tex. Rev.Civ. Stat. Ann. art. 6573(a), § 20(b) (repealed) (current version at Tex. Occ. Code Ann. § 1101.559).

It is undisputed that no written agreement existed in the instant case and that Swor was not a licensed real estate broker or salesperson at the time the alleged cause of action arose. The burden was on the dealer or broker to prove that no real estate was included in the transaction. Hall, 335 S.W.2d at 588. Hence, Swor could recover a commission only by showing that he “was not employed to procure prospects or property for the purpose of effecting a transaction that involved any real estate.” See Gibson, 780 S.W.2d at 834. It is clear Swor failed to demonstrate he was not employed to procure any real estate.

We must next determine whether the contract is divisible between nonrealty assets and realty assets. In McFarland v. Haby, the Austin Court of Appeals held that, where part of the consideration is illegal because it violates a statute, the entire agreement is void if the contract is entire and indivisible. 589 S.W.2d 521, 525 (Tex.Civ.App.-Austin 1979, writ ref'd n.r.e.). Swor does not advance any arguments or offer any evidence to suggest that the contract was anything but entire and indivisible.

Applying the rule from McFarland to the findings that the oral agreement between Dian and Swor is indivisible and inseparable, and that Swor violated the Real Estate License Act, the finder’s fee is void and unenforceable. Further, if there is no signed written agreement, as in this case, public policy as expressed in Sections 19 and 20(b) preclude any action to recover a commission, whether in tort or in contract. See Trammel Crow Co. v. Harkinson, 944 S.W.2d 631, 636 (Tex.1997). Therefore, Swor’s claims in quantum me-ruit, promissory estoppel, tortious interference, and civil conspiracy likewise fail.

Because the trial court properly granted the Emersons’ motion for summary judgment, it also properly denied Swor’s motion.

We affirm the trial court’s judgment.

1 . See Tex.Rev.Civ. Stat. Ann. art. 6573(a), §§ 19, 20(b), repealed by Act of May 22, 2001, 77th Leg., ch. 1421, § 13, 2001 Tex. Gen. Laws 4570, 5020 (effective June 1, 2003) (current version at Tex. Occ.Code Ann. §§ 1101.351, 1101.559 (Vernon 2004)).