Crye-Leike, Inc. v. Sarah A. Carver , 2011 Tenn. App. LEXIS 282 ( 2011 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
March 23, 2011 Session
CRYE-LEIKE, INC. v. SARAH A. CARVER
Direct Appeal from the Chancery Court for Shelby County
No. CH-08-0122-2 Arnold B. Goldin, Chancellor
No. W2010-01601-COA-R3-CV - Filed May 26, 2011
This is a dispute over a real estate sales commission. The seller entered into a six-month
exclusive listing agreement with a realty company. The agreement expired on August 21,
2007, one day before the eventual purchasers were shown the property. The realty company
filed suit to recover a commission asserting it caused the property to be shown to the
purchasers prior to August 21 and, in the alternative, the parties orally and through their
actions extended the listing agreement to August 30, 2007. The trial court concluded the
realty company was not entitled to a commission under the plain language of the listing
agreement because the property was not shown or submitted to the purchasers prior to August
21 and the parties did not extend the agreement to August 30. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed;
and Remanded
D AVID R. F ARMER, J., delivered the opinion of the Court, in which J. S TEVEN S TAFFORD, J.,
joined. H OLLY M. K IRBY, J., filed a concurring opinion.
Brittan Webb Robinson and Roger A. Stone, Memphis, Tennessee, for the appellant, Crye-
Leike, Inc.
Kenneth Raymond Besser and Al H. Thomas, Memphis, Tennessee, for the appellee, Sarah
A. Carver.
OPINION
I. Background and Procedural History
In February 2007, the defendant/appellee, Sarah Carver, contacted associate real estate
broker Stanley Mills about the possibility of selling her home at 9010 Gandy Cove in
Memphis, Tennessee (the “Property”). As a result, Ms. Carver entered into an “Exclusive
Right to Sell Agreement” (the “Agreement”) with the plaintiff/appellant, Crye-Leike, Inc.,
a realty company with offices in Shelby County, Tennessee. The Agreement, a form contract
that Crye-Leike drafted, contained several detailed provisions governing the parties’
relationship. The Agreement granted Crye-Leike an exclusive right to sell the Property until
August 21, 2007. The Agreement also entitled Crye-Leike to a seven percent commission
plus an administrative fee “if the Real Estate is sold or exchanged by CRYE-LEIKE, or the
undersigned, or any other person, at any price acceptable to the undersigned, during the
existence of [the Agreement].” Additionally, the Agreement provided:
12. The sale or exchange of the Real Estate to anyone to whom this property
was shown or submitted or to any person to whom CRYE-LEIKE shall have
offered the same during the term of this contract, if such sale is consummated
within ninety days after its termination, shall be considered a sale effected by
said CRYE-LEIKE and shall entitle CRYE-LEIKE to the commission herein
agreed to be paid. (This will not apply if the subject property has been listed
with another MLS member firm.) Seller agrees that if he fails or refuses to pay
when due any sum which may be owing to Crye-Leike pursuant to this
Exclusive Right to Sell agreement, he/she agrees to pay all cost of collection
and/or litigation, including a reasonable attorney’s fee.
....
24. The parties agree that this contract constitutes their entire agreement and
that no oral or implied agreement exists. Any amendments to this agreement
shall be made in writing, signed by both parties, and shall be attached to this
original agreement and all other copies hereof.
Crye-Leike marketed the Property in several ways during the term of the Agreement.
Crye-Leike placed a “For Sale” sign at the Property, took photographs of the Property for use
in promotional materials, placed the Property in the Multiple Listing Service (“MLS”)
database,1 and advertised the Property for sale on approximately fifty different internet
websites. Crye-Leike also showed the Property to a few potential homebuyers. These
efforts, however, did not procure a formal offer to purchase the Property during the original
term of the Agreement. Shortly before the expiration of the Agreement, however, a couple
from Alabama expressed interest in the Property to Barbara Weir, a sales associate with
Prudential Collins-Maury, Inc.
1
The MLS is “a computer system listing properties for sale to which the local real estate offices have
access.” Prudential Botts & Assocs. v. Gupton, 1994 WL 398826, at *1 (Tenn. Ct. App. Aug. 1, 1994).
-2-
The potential homebuyers, Calvin and Waukesha Sammons, contacted Ms. Weir to
schedule viewings of homes for sale in Memphis. Mr. Sammons specifically identified the
Property as one that he and his wife were interested in seeing.2 Ms. Weir thereafter contacted
representatives of Crye-Leike on August 21, 2007, to schedule an appointment for her clients
to view the Property. As a result, Ms. Weir showed the Property to the Sammonses on the
morning of August 22, 2007. The Sammonses viewed the Property a second time that
afternoon, a showing Ms. Weir arranged through Crye-Leike’s appointment center. The
Sammonses, although later expressing interest to Ms. Weir, did not initially offer to purchase
the Property.
Ms. Carver was not present at either showing of the Property and did not know the
Sammonses had viewed or expressed interest in the Property until September 12, 2007.3 The
Sammonses contacted Ms. Carver at that time—after terminating the services of Ms.
Weir—to communicate their interest in purchasing the Property. Additionally, the
Sammonses mailed letters to Ms. Carver confirming their interest in the Property and setting
forth their proposed terms of sale. On October 2, 2007, Ms. Carver met the Sammonses for
the first time in person. After negotiating terms, Ms. Carver executed a contract with the
Sammonses to sell the Property for $460,000.4 The sale closed on October 22, 2007.
Crye-Leike demanded upon learning of the sale that Ms. Carver pay a seven percent
commission pursuant to the terms of the Agreement and initiated this action after Ms. Carver
refused. The realty company alleged it was entitled to a commission because its associate
broker, Mr. Mills, participated in or caused the Property to be shown to the Sammonses prior
to August 21 and the Sammonses purchased the Property within ninety days of the
Agreement’s expiration date. Crye-Leike further alleged in its amended complaint that
“through the actions of the plaintiff and defendant, the listing agreement was extended and
terminated on August 30, 2007” and, thus, it was entitled to a commission because the
August 22 showing occurred within the mutually agreed contractual period. Crye-Leike
requested an award of $32,350 for the commission and administrative fee purportedly due
under the Agreement, as well as an award of attorney’s fees, prejudgment interest, and costs.
Ms. Carver denied all material allegations in her answer, and litigation ensued.
2
Mr. Sammons later explained he learned the Property was for sale after browsing an unidentified
internet website that provided an informational report and MLS number for the Property.
3
We note there is no evidence that Ms. Carver in bad faith attempted to deprive Crye-Leike of a
commission.
4
Notably, the parties entered into a contractual agreement for the sale of the Property only after
bargaining over certain terms and agreeing on a price different from that contained in the listing agreement.
-3-
The parties proceeded to a bench trial in April 2010.5 A major dispute at trial
concerned whether the parties orally agreed to extend the Agreement. According to Ms.
Carver, the Agreement expired on August 21 without any mention of continuing the parties’
relationship. She testified she at no point had a conversation with Mr. Mills about extending
the Agreement beyond August 21. Instead, she called Mr. Mills sometime between the
expiration of the Agreement and August 30 pointedly to request that he remove her home
from the market. And she called a second time on August 30 specifically to request that
Crye-Leike remove the “For Sale” sign from her property.6 Mr. Mills offered a different
version of events. He agreed Ms. Carver called to terminate the listing around August 30 but
testified he had previously contacted Ms. Carver about extending the Agreement. According
to Mr. Mills, Ms. Carver agreed to extend the listing for “maybe a couple of weeks” and then
make up her mind about whether to renew the Agreement. Mr. Mills conceded, however, he
did not reduce the alleged oral agreement to writing and he did not attach any signed writing
to the original contract.
The trial court ruled in favor of Ms. Carver, setting forth detailed findings of fact and
conclusions of law in a memorandum opinion. The trial court rejected Crye-Leike’s
contention that the parties orally modified the Agreement to extend until August 30. The
court explained the Agreement plainly prohibited amendment of its terms by oral
modification. The Agreement instead required any amendment to be made in writing, signed
by the parties, and attached to the original contract, which the parties did not do. The court
also rejected the contention that the parties extended the agreement through their actions.7
The court added:
Plaintiff’s listing agent for the Property, Mills, testified that he was aware of
the Agreement’s expiration date and its provision barring oral agreements and
requiring any modifications to be made in writing. This entire dispute could
have been avoided if Mills had simply obtained the Defendant’s signature on
a written modification agreement extending the expiration date of the
Agreement. Nonetheless, Mills chose not to reduce the alleged modification
to writing as required by the Agreement.
5
The parties filed and the trial court denied competing motions for summary judgment.
6
Ms. Carver buttressed her testimony with a Crye-Leike work order confirming the removal of the
“For Sale” sign from the Property on September 1, 2007, which she entered as an exhibit at trial.
7
The court did not expressly explain why it rejected Crye-Leike’s argument that the parties extended
the Agreement through their actions, but it appears the court found the contractual language in paragraph
twenty-four dispositive.
-4-
The only remaining avenue of recovery existed in paragraph twelve of the Agreement, which
the court noted could conceivably entitle Crye-Leike to a commission. The court nonetheless
held the Sammonses were not shown or submitted the Property until after the contractual
expiration date of August 21, resolving the ambiguity of the terms “shown” and “submitted”
in favor of Ms. Carver. The court consequently concluded Crye-Leike was not entitled to
receive a commission on the sale of the Property. Crye-Leike timely appealed.
II. Issues Presented
Crye-Leike presents the following issues, as we perceive them, for appellate review:
(1) whether the Property was shown, submitted, or offered to the
Sammonses prior to August 21, 2007;
(2) whether the parties orally amended the Agreement to extend the listing
period through August 30, 2007; and
(3) whether the parties, through their actions, extended the Agreement to
August 30, 2007.
III. Standard of Review
We review the judgment of a trial court in a bench trial de novo upon the record,
according a presumption of correctness to the factual findings of the court below. Tenn. R.
App. P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993) (citation
omitted). This Court will not disturb a trial court’s finding of fact unless the evidence
preponderates against its finding. Berryhill v. Rhodes, 21 S.W.3d 188, 190 (Tenn. 2000)
(citation omitted). Factual findings based on the trial court’s assessment of witness
credibility receive an even higher degree of deference. See Keyt v. Keyt, 244 S.W.3d 321,
327 (Tenn. 2007) (citations omitted). We will overturn factual findings turning on the
credibility of the witnesses only if clear and convincing evidence demonstrates error in the
court’s evaluation. Wells v. Tenn. Bd. of Regents, 9 S.W.3d 779, 783 (Tenn.1999). Our
review is de novo with no presumption of correctness where the trial court does not produce
findings of fact. Archer v. Archer, 907 S.W.2d 412, 416 (Tenn. Ct. App. 1995) (citations
omitted). We likewise review the trial court’s resolution of legal questions de novo with no
presumption of correctness. Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn. 2000) (citation
omitted). “The interpretation of a contract is a matter of law that requires a de novo review
on appeal.” Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn. 1999) (citing Hamblen Cnty.
v. City of Morristown, 656 S.W.2d 331, 335-336 (Tenn. 1983)).
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IV. Analysis
A. Shown, Submitted, or Offered
The first question before this Court is whether Crye-Leike is entitled to a commission
because the Property was shown, submitted, or offered prior to August 21 to persons
purchasing the property within ninety days of the Agreement’s expiration. Crye Leike argues
it should receive a commission on the sale of the Property because the eventual purchasers,
the Sammonses, would not have learned about the Property absent the efforts of Mr. Mills.
Crye-Leike contends not only that it was the procuring cause of the sale from Ms. Carver to
the Sammonses, but also that the Property was shown, submitted, and offered to the
Sammonses through the listing of the Property on various internet websites prior to the
expiration of the Agreement. Ms. Carver disagrees that Crye-Leike earned a commission.
She argues Crye-Leike’s display of information about the Property in an internet
advertisement was not, construing the terms strictly against the drafter of the Agreement, a
showing of the Property, a submission of the Property, or an offering of the Property to the
Sammonses. She further argues the mere booking of an appointment to show the Property
did not constitute a showing of the Property. Crye-Leike did not perform any services within
the contractual term entitling it to a commission according to Ms. Carver.
The trial court determined, after considering Crye-Leike’s argument that the phrase
“shown or submitted” encompassed the transfer of information from Crye-Leike to the buyer
of the Property via internet advertisement, that the terms “shown” and “submitted” were
susceptible to multiple interpretations. Construing these terms strictly against Crye-Leike
as the drafter of the agreement, the court concluded the term “shown” included only those
situations where a representative of Crye-Leike was “physically present at a property to allow
access to it so that a prospective buyer may view it.” The court further concluded the term
“submitted” concerned a scenario where Crye-Leike provided a prospective buyer and his
or her agent an opportunity to view a property by giving access to a secure lock box or
comparable device containing a key to the property. Because Crye-Leike did not show or
submit the Property to the Sammonses prior to the expiration of the contract, the court
concluded Crye-Leike was not entitled to the requested commission.8
We agree with the trial court’s general approach to contractual interpretation. “A
cardinal rule of contractual interpretation is to ascertain and give effect to the intent of the
parties.” Allmand v. Pavletic, 292 S.W.3d 618, 630 (Tenn. 2009) (citing U.S. Bank N.A. v.
8
The trial court did not expressly address whether Crye-Leike offered the Property to the Sammonses,
although Crye-Leike mentioned the issue in its opening statement. One might question on the record before
us whether the parties actually tried this issue, but Ms. Carver does not object to its consideration on appeal.
-6-
Tenn. Farmers Mut. Ins. Co., 277 S.W.3d 381, 386–86 (Tenn. 2009); Allstate Ins. Co. v.
Watson, 195 S.W.3d 609, 611 (Tenn. 2006)). “In interpreting contractual language, courts
look to the plain meaning of the words in the document to ascertain the parties’ intent.”
Watson, 195 S.W.3d at 611 (citing Planters Gin Co. v. Fed. Compress & Warehouse Co., 78
S.W.3d 885, 889-90 (Tenn. 2002)). “When the language of the contract is plain and
unambiguous, courts determine the intentions of the parties from the four corners of the
contract, interpreting and enforcing it as written.” Union Realty Co., Ltd. v. Family Dollar
Stores of Tenn., Inc., 255 S.W.3d 586, 591 (Tenn. Ct. App. 2007) (citing Int'l Flight Ctr. v.
City of Murfreesboro, 45 S.W.3d 565, 570 (Tenn. Ct. App. 2000)). “In such a case, the
contract is interpreted according to its plain terms as written, and the language used is taken
in its ‘plain, ordinary, and popular sense.’” Maggart v. Almany Realtors, Inc., 259 S.W.3d
700, 704 (Tenn. 2008) (quoting Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc.,
521 S.W.2d 578, 580 (Tenn. 1975)); (citing Planters Gin Co., 78 S.W.3d at 890).
“However, on occasion, a contractual provision may be susceptible to more than one
reasonable interpretation, rendering the terms of the contract ambiguous.” Id. (citing
Planters Gin. Co., 78 S.W.3d at 890. “‘Ambiguity, however, does not arise in a contract
merely because the parties may differ as to interpretations of certain of its provisions. A
contract is ambiguous only when it is of uncertain meaning and may fairly be understood in
more ways than one.’” Id. (quoting Johnson v. Johnson, 37 S.W.3d 892, 896 (Tenn. 2001)).
If a contract is ambiguous, “the court must apply established rules of construction to
determine the intent of the parties.” Watson, 195 S.W.3d at 611 (citing Planters Gin Co., 78
S.W.3d at 890). Tennessee courts adhere to the general rule that ambiguities in a contract
are construed against the drafter. E.g., Spiegel v. Thomas, Mann & Smith, P.C., 811 S.W.2d
528, 531 (Tenn. 1991) (citing Hanover Ins. Co. v. Haney, 425 S.W.2d 590 (1968)); Ralph
v. Pipkin, 183 S.W.3d 362, 367 (Tenn. Ct. App. 2005) (citing Certain Underwriter's at
Lloyd's of London v. Transcarriers Inc., 107 S.W.3d 496, 499 (Tenn. Ct. App. 2002)).
“However, the courts will not rewrite an unambiguous term simply to avoid harsh results.”
Pipkin, 183 S.W.3d at 367 (citing Transcarriers Inc., 107 S.W.3d at 499). “The court will
not use a strained construction of the language to find an ambiguity where none exists.”
Maggart, 259 S.W.3d at 704 (citing Farmers–Peoples Bank v. Clemmer, 519 S.W.2d 801,
805 (Tenn. 1975)).
We agree with the trial court that the Agreement is ambiguous. Our analysis varies,
however, because we find the ambiguity does not stem solely from the use of the terms
shown, submitted, or offered. While there are varying definitions of these terms, the parties
have not proposed any acceptable definition which alone precludes Crye-Leike from
recovering. Rather, the pivotal issue in our view is whether the Agreement requires
individualized or direct contact with a purchaser as opposed to the mere advertisement of a
property to the general public. Paragraph twelve of the Agreement, which entitles Crye-
-7-
Leike to a commission for a sale occurring within ninety days of the Agreement’s expiration,
is triggered only if the sale is made “to anyone to whom” the Property was shown or
submitted or “to any person to whom” Crye-Leike offered the Property during the term of the
contract. This language is susceptible to more than one reasonable interpretation.
Paragraph twelve could broadly give rise to a commission where the Property is
generally shown, submitted, or offered to the public via advertisements and the eventual
purchaser learns about the property through said advertisements. Relying on accepted
definitions of the term “show,” one might variously define the showing of a home to include
those instances where a person acts (1) “to cause or permit [the home] to be seen,” (2) “to
offer [the home] for sale,” (3) “to display [the home] for the notice of others,” or (4) “to point
[the home] out to others.” Webster's Ninth New Collegiate Dictionary 1090 (1991). One
might likewise define the submission of a home to a potential homebuyer to require, inter
alia, that a person “present or propose [a home] to another for review, consideration, or
decision.” Id. at 1175. Further, one might define an “offer” of the Property to require that
Crye-Leike “present [the home] for acceptance or rejection” or “make [the home] available.”
Id. at 819. The display of a detailed internet advertisement arguably satisfies the contractual
requirement that the Property be shown, submitted, or offered to an eventual purchaser where
modern technology permits one to see or examine residential properties without being
physically present at the property; permits a real estate broker to present the home generally
to the public, including the purchaser, for review, consideration, or decision; and permits a
real estate broker to present the home generally to the public, including the purchaser, for
acceptance or rejection.
The showing, submission, or offering of a property to the eventual purchaser might,
however, encompass a much more limited set of factual scenarios where targeted, personal
interactions occur between a real estate professional and the individual homebuyer. The
showing of a property to an eventual purchaser could require that a representative of Crye-
Leike or another real estate professional be physically present to allow access to a property.
A submission of a property to an eventual purchaser could only encompass a setting in which
a property is personally presented for the consideration, review, or decision of an individual
client. And an offering of the property to an eventual purchaser might occur only where one
of Crye-Leike’s agents has presented the home to the purchaser individually for acceptance
or rejection.9 Adoption of the more narrow construction of paragraph twelve would lead to
9
Ms. Carver argues Crye-Leike would have “offered” the Property to the Sammonses only if the
internet advertisement amounted to a legally binding offer to sell, thereby creating the power of acceptance
in the purchaser and giving rise to a binding contract in the event of acceptance. We disagree, however, that
such a definition of the term “offered” should prevail where the contract does not expressly delegate
(continued...)
-8-
the conclusion that the Property was not shown, submitted, or offered to the Sammonses prior
to August 21.
We conclude the Agreement is ambiguous and therefore disagree with Crye-Leike’s
suggestion that evidence of the eventual purchasers’ response to an internet advertisement
directed at the general public prior to the expiration of the Agreement entitled the realty
company to a commission on the subsequent sale of the Property. The Agreement, construed
strictly against Crye-Leike, requires something more. Neither Mr. Mills nor Ms. Weir
provided the Sammonses with access to the Property or an opportunity to view the Property
in person prior to August 21. Neither Mr. Mills nor Ms. Weir individually proposed the
Property to the Sammonses for the consideration, review, or decision prior to August 21.
And Mr. Mills did not individually present the Property to the Sammonses for acceptance or
rejection prior to August 21. We therefore hold the Property was not shown, submitted, or
offered to the eventual purchasers prior to expiration of the Agreement as expressly set forth
therein. Crye-Leike is not entitled to a commission under paragraph twelve of the
Agreement.
Crye-Leike next contends it should recover because Mr. Mills was the “procuring
cause” of the sale between Ms. Carver and the Sammonses.10 See generally Pacesetter
9
(...continued)
authority to the agent to enter into a binding agreement without further assent from the seller. Kelly v.
Longmire, 435 S.W.2d 818, 821-22 (Tenn. 1968) ([I]t is the settled rule in Tennessee and in many other
jurisdictions that a contract authorizing a real estate agent to sell a tract of land does not authorize the agent
to make a contract of sale which would be binding on the owner, because such a contract must, in the absence
of extraordinary provisions, be considered only a contract of employment of an agent.”); accord McFadden
v. Crisler, 213 S.W. 912, 914 (Tenn. 1919). Because the Agreement did not explicitly vest Crye-Leike and
its agents with authority to make a binding offer to sell the property, we decline to interpret the use of the
term “offered” in paragraph twelve as limiting the circumstances under which Crye-Leike might be entitled
to a commission to those involving a binding offer to sell.
10
We express no opinion on whether Crye-Leike’s efforts were the procuring cause of the eventual
sale of the Property to the Sammonses. We note, however, this Court in Robinson v. Kemmons Wilson Realty
Co., 293 S.W.2d 574 (Tenn. Ct. App. 1956), stated as follows:
‘If a broker, after introducing a prospective customer to his employer to no purpose,
abandons his employment entirely, or if, after procuring a person who proves to be unwilling
to accept the terms of his principal, he merely ceases to make further endeavors to negotiate
a deal with that particular individual and all negotiations in that direction are completely
broken off and terminated, he will not be entitled to a commission if his employer
subsequently renews negotiations with the same person, either directly or through the
medium of another agent, and thus effects a sale without further effort of the broker first
(continued...)
-9-
Props., Inc. v. Hardaway, 635 S.W.2d 382 (Tenn. Ct. App. 1981) (analyzing the procuring
cause doctrine at length); Robinson v. Kemmons Wilson Realty Co., 293 S.W.2d 574 (Tenn.
Ct. App. 1956) (same). The existence of the procuring cause doctrine as a basis and/or
prerequisite for recovery of a commission in some cases, however, does not preclude a seller
and broker from defining more precisely the broker’s duties under a listing agreement. Mark
S. Dennison, Cause of Action By Real-Estate Broker to Recover Commission, in 27 Causes
of Action Second (COA 2d) 703, 749 (2005) (citing Caldwell v. Consolidated Realty and
Mgmt. Co., 668 P.2d 284, 286 (Nev. 1983); Greene v. Hellman, 412 N.E.2d 1301, 1307
(N.Y. 1980); Nollner v. Thomas, 533 P.2d 478, 481 (Nev. 1975)). It also does not prevent
contracting parties from more broadly or more narrowly defining the circumstances under
which a broker is entitled to a commission. Id. (citations omitted). “Where the broker’s
entitlement to a commission hinges on specific contractual language, that language, of
course, will control.” Id. (citation omitted); see also Kahler, Inc. v. Weiss, 539 N.W.2d 86,
90 (S.D. 1995) (“Under the explicit terms of this contract, the question of who was the
procuring cause of the sale is irrelevant.”); Aerotronics, Inc. v. Pneumo Abex Corp., 62 F.3d
1053, 1064 (8th Cir. 1995) (“In both Michigan and Ohio, the procuring cause doctrine is
limited by the terms of a contract; it cannot be used to supplant or contradict the terms of a
contract entered into between parties.”).
It is well-settled in Tennessee “that parties to an agreement have the right and power
to construct their own bargains.” Planters Gin Co. v. Federal Compress & Warehouse Co.,
78 S.W.3d 885, 892 (Tenn. 2002) (internal quotation marks omitted) (quoting Blake D.
Morant, Contracts Limiting Liability: A Paradox with Tacit Solutions, 69 Tul. L. Rev. 715,
716 (1995)). As this Court has stated,
The rights and obligations of contracting parties are governed by their written
agreements. The courts must interpret these contracts as written. We are not
at liberty to make a new contract for parties who have spoken for themselves,
nor are we at liberty to relieve parties from their contractual obligations simply
because these obligations later prove to be burdensome or unwise.
10
(...continued)
employed.’ 8 Am. Jur., Brokers, Sec. 144, p. 1069.
Robinson, 293 S.W.2d at 585. The application of this rule is “doubly strong” where the resumption of
negotiations is not brought about by any effort of the seller but instead results from an unexpected inquiry
of the eventual purchaser. Id. As this Court has previously explained, a broker who introduces a purchaser
and seller does not obtain a “perpetually vested interest” in any transaction taking place between those
parties. Pacesetter Properties Inc. v. Hardaway, 635 S.W.2d 382, 389 (Tenn. Ct. App. 1981).
-10-
Hillsboro Plaza Enters. v. Moon, 860 S.W.2d 45, 47 (Tenn. Ct. App. 1993) (internal citations
omitted). “A broker’s right to be paid a commission is a contractual matter.” Mande Realty
v. Deerhead Resort, Inc., Sequatchie Circuit App. No. 87-9-II, 1988 WL 5694, at *2 (Tenn.
Ct. App. Jan. 29, 1988) (citing Robinson, 293 S.W.2d at 582-83). Thus, where contracting
parties agree upon the detailed circumstances under which a broker is entitled to a
commission after the expiration of a listing agreement, the contractual language setting forth
those rights and duties will control. Cf. Grubb & Ellis/Centennial, Inc. v. Gaedeke Holdings,
Ltd., 401 F.3d 770, 774 (6th Cir. 2005) (interpreting contractual language leaving “little room
for interpretation regarding the right to a commission after the agreement has ended” as not
requiring a realty company to establish it was the procuring cause of a sale to recover under
Tennessee law). Because the Agreement does not provide Crye-Leike a right to a
commission if it was the “procuring cause” of a sale taking place after the contract’s
expiration, the application of the doctrine under the facts is irrelevant. The crux of the matter
is whether Crye-Leike has demonstrated a right to recover a commission under the
Agreement. It has not.
B. Oral Modification
The next question before this Court is whether the parties orally modified or amended
the Agreement to remain in effect beyond August 21. Although the trial court noted Mr.
Mills testified vaguely on the alleged oral modification of the Agreement, the court did not
offer a factual finding on whether the parties agreed prior to August 21 that Crye-Leike
would continue to market the Property. The court instead concluded the plain and
unambiguous language of the contract precluded oral modification of the expiration date.
Thus, the contractual provision barring oral modification, not the existence of an actual oral
agreement, was dispositive.
The trial court’s interpretation of the Agreement finds support in the trial testimony
of Richard Leike, a principal and broker at Crye-Leike, who conceded that any amendment
of the expiration date should have been made in writing. Mr. Leike testified not only that he
expects Crye-Leike agents to abide by the written modification requirement, but he also
candidly explained he would not expect to be bound by an oral agreement between an agent
and a seller that was not put into writing. He further stated that the Agreement, a form
contract which he had a hand in creating, never calls for the making of an oral agreement.
The following exchange illustrates Mr. Leike’s understanding of the language prohibiting
oral modification:
[Defendant’s counsel]: Under the procedures in effect at your company, or
if [the expiration date] is to be extended or shortened, would it have to be put
in writing?
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[Mr. Leike]: Should be, yes, sir.
[Defendant’s counsel]: I mean, if a person claims I signed this, but I called
one day, and I told them that I wanted to change [the expiration date] to be
July the 21st instead of August the 21st, and the agent said yes, but they didn’t
put it in writing, you wouldn’t expect to be bound by it, would you?
[Mr. Leike]: No, Sir.
Mr. Leike similarly testified that any alleged oral modification of the commission due under
the Agreement would be ineffective unless documented by a signed commission deviation
form or other writing.
Crye-Leike nevertheless contends the language excluding oral modification does not
apply under the facts. Crye-Leike argues Ms. Carver waived the right to enforce the
provision of the contract requiring all amendments to be made in writing and, thus, their oral
agreement to extend the Agreement was binding. Crye-Leike submits its actions in
scheduling appointments with Ms. Carver after August 21 to show the Property and Ms.
Carver’s delay in requesting Crye-Leike remove the “For Sale” sign from her property until
August 30 support its contention that the parties reached an oral agreement to extend the
contractual listing period. Crye-Leike further submits these actions demonstrate waiver of
Ms. Carver’s right to enforce the language in the contract strictly requiring all amendments
to be made in writing. Ms. Carver disagrees, arguing that no oral agreement occurred and
that Tennessee Code Annotated section 47-50-112(c) prohibited the asserted waiver.11
11
Tennessee Code Annotated section 47-50-112(c) provides in pertinent part that if any contact
“contains a provision to the effect that no waiver of any terms or provisions thereof shall be valid unless such
waiver is in writing, no court shall give effect to any such waiver unless it is in writing.” Tenn. Code Ann.
§ 47-50-112(c) (2001) (emphasis added). There is, at a minimum, room for disagreement about whether a
sufficient distinction exists between oral modification or amendment of a contractual term and waiver of a
contractual right such that Tennessee Code Annotated section 47-50-112(c) does not apply in cases involving
the former. But see Francis L. Lloyd Jr., Contracts To Be Enforced As Written -- Or Not!, 45 Tenn. B.J. 18,
22, 25 (2009) (interpreting this Court’s decision in Tidwell v. Morgan Building Sys., Inc., 840 S.W.2d 373(Tenn. Ct. App. 1992), as treating Tennessee Code Annotated section 47-50-112(c) applicable to a
contractual prohibition against modification other than in writing, and suggesting the legislature amend
Tennessee Code Annotated section 47-50-112(c) to codify “the existing judicial understanding that the
subsection makes effective a contractual prohibition against oral modification, even through the existing
statutory language uses the narrower term ‘waiver’”). We do not need to address this issue, however,
because Crye-Leike has not established a waiver of the language requiring written amendment of the
contract. We also do not have to determine whether Crye-Leike impermissibly asserted waiver as an
“offensive weapon.” GuestHouse Intern., LLC v. Shoney's N. Am. Corp., 330 S.W.3d 166, 202 (Tenn. Ct.
(continued...)
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A principal to an exclusive listing agreement may, as a general matter, waive the
agreement’s expiration date, accept the continued services of the broker, treat the contract
as still in force, and consequently entitle the broker to a commission for a subsequent sale.
Miller v. Bacon, 12 Tenn. App. 123, 1930 WL 7596, at *3 (Tenn. Ct. App. 1930) (citation
omitted). To establish waiver, however, the broker must demonstrate the principal
voluntarily relinquished a known right. Chattem, Inc. v. Provident Life & Accident Ins. Co.,
676 S.W.2d 953, 955 (Tenn. 1984) (citing Baird v. Fidelity–Phenix Fire Ins. Co., 162
S.W.2d 384, 389 (Tenn. 1942)).12 Waiver occurs where a party “by express declaration; or
by acts and declarations manifesting an intent and purpose not to claim the supposed
advantage; or by course of acts and conduct, or by so neglecting and failing to act, as to
induce a belief that it was [the party’s] intention and purpose to waive.” 94th Aero Squadron
of Memphis, Inc. v. Memphis–Shelby Cnty. Airport, 169 S.W.3d 627, 636 (Tenn. Ct. App.
2004) (internal quotation marks omitted) (alteration in original) (quoting Jenkins Subway,
Inc. v. Jones, 990 S.W.2d 713, 722 (Tenn. Ct. App. 1998)). “[W]aiver is proven by a clear,
unequivocal and decisive act of the party, showing a purpose to forgo the right or benefit
which is waived.” GuestHouse Intern., LLC v. Shoney's N. Am. Corp., 330 S.W.3d 166, 202
(Tenn. Ct. App. 2010) (internal quotation marks omitted) (quoting E & A Ne. Ltd. P'ship v.
Music City Record Distribs., Inc., No. M2005-01207-COA-R3-CV, 2007 WL 858779, at *7
(Tenn. Ct. App. Mar. 21, 2007)). “A party who raises the issue of waiver has the burden of
proving it by a preponderance of the evidence.” Madden Phillips Const., Inc. v. GGAT Dev.
Corp., 315 S.W.3d 800, 813 (Tenn. Ct. App. 2009) (citing Jenkins, 990 S.W.2d at 722).
We conclude Crye Leike has not borne its burden to demonstrate waiver. The only
evidence of the alleged oral modification comes from the testimony of Crye-Leike’s agent.
Mr. Mills testified that he contacted Ms. Carver as the expiration date neared to see if she
wanted to continue the listing. According to Mr. Mills, Ms. Carver told him “at that point
that she wanted to list it -- continue for a while, maybe a couple of weeks, and then she
would make up her mind.” Ms. Carver unequivocally denied that any such conversation
occurred. In addition to Ms. Carver’s testimony rejecting the assertion that the parties orally
agreed to extend the Agreement, there is no evidence demonstrating the parties discussed or
contemplated waiving the provision of the Agreement requiring amendments to be made in
a writing signed by the parties.
11
(...continued)
App. 2010) (footnote omitted) (citation omitted) (quoting Am. Jur. 2d Estoppel & Waiver § 167 (2000))
(internal quotation marks omitted).
12
“[T]he definition of waiver as ‘a voluntary relinquishment by a party of a known right,’ applies to
a waiver of the right to enforce a provision in a contract, not to the waiver of a right acquired under the
contract in the agreed exchange.” GuestHouse Intern., LLC v. Shoney's N. Am. Corp., 330 S.W.3d 166, 201-
02 (Tenn. Ct. App. 2010) (citations omitted).
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Given the limited and vague nature of Mr. Mills’s testimony, we conclude the
preponderance of the evidence does not establish a clear, unequivocal, and decisive act of
Ms. Carver to waive the contractual provision requiring any amendment to be made in
writing and signed by the parties. Moreover, the record does not contain evidence of an
express declaration that Ms. Carver would not require amendments to be made in writing,
acts or declarations manifesting intent not to enforce the provision requiring amendment of
the Agreement by a signed writing, or a course of conduct supporting waiver of the same.
Because the Agreement plainly requires “[a]ny amendments . . . shall be made in writing,
signed by both parties, and shall be attached to this original agreement and all other copies
hereof,” we agree with the trial court that no enforceable oral modification of the
Agreement’s expiration date occurred.
C. Extension Through Action
Crye-Leike argues that, even if the alleged oral modification was ineffective, the
parties through their actions extended the Agreement beyond August 21. Crye-Leike
presents a multifaceted argument on this issue. The plaintiff first contends the parties
renewed the agreement by implication when Ms. Carver permitted Crye-Leike to arrange a
second showing of the Property on August 22. Crye-Leike next contends the doctrines of
waiver, equitable estoppel, and acquiescence preclude Ms. Carver from relying on the
expiration date set forth in the Agreement.13 Finally, Crye-Leike submits the parties through
their actions established a quasi contract or implied in fact contract entitling the realty
company to a reasonable fee for its services. We will address these assertions in turn.
i. Implied Renewal
Crye-Leike argues Ms. Carver’s actions prior to and following August 21 impliedly
renewed the Agreement for an unspecified period. This Court in Pyles v. Cole, 241 S.W.2d
841 (Tenn. Ct. App. 1951), considered a similar argument where the sellers had acquiesced
in a real estate broker’s efforts to produce a purchase after the expiration of a ninety-day
listing agreement. Pyles, 241 S.W.2d at 843. This Court reasoned that “where a provision
in a brokerage contract provides for termination at a fixed time the contract will be deemed
renewed and the termination provision waived where the principal has recognized that the
broker is continuing negotiations looking to a sale or requests that he do so.” Id. (citations
omitted). The real estate broker in Pyles was entitled to a commission because the sellers
“impliedly renewed the contract by accepting [the broker’s] efforts and services and agreeing
13
Tennessee Code Annotated section 47-50-112(c), even if it applied under the facts, would not
prohibit Crye-Leike from recovering under alternative theories such as equitable estoppel and quantum
meruit. See Realty Shop, Inc. v. RR Westminster Holding, Inc., 7 S.W.3d 581, 603 (Tenn. Ct. App. 1999).
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to pay commissions in event of a sale to the prospect originated by him.” Id.
The rule of Pyles, however, is inapplicable because the contract governing the parties’
relationship in that case did not contain language similar to the language controlling our
decision. Here, the parties specifically stated “that [the Agreement] constitutes their entire
agreement and that no oral or implied agreement exists.” This provision prohibits implied
renewal of the Agreement. Additionally, Crye-Leike presented no evidence to demonstrate
Ms. Carver recognized Mr. Mills was continuing negotiations looking to a sale or that she
requested he do so. Mr. Mills in fact never entered into negotiations with the Sammonses
regarding the sale of the Property. We accordingly conclude the parties did not impliedly
renew the Agreement.
ii. Equitable Estoppel, Waiver, and Acquiescence
Crye-Leike next contends the acts of Ms. Carver entitled it to a commission on the
sale of the Property under the related theories of waiver, equitable estoppel, and
acquiescence.14 “As with the defense of waiver, the burden of establishing an estoppel also
rests upon the party who invokes it.” Jenkins Subway, Inc. v. Jones, 990 S.W.2d 713, 723
(Tenn. Ct. App. 1998) (citing Third Nat'l Bank v. Capitol Records, Inc., 445 S.W.2d 471, 476
(Tenn. Ct. App. 1969)).
The essential elements of an equitable estoppel as related to the party estopped
are said to be (1) Conduct which amounts to a false representation or
concealment of material facts, or, at least, which is calculated to convey the
impression that the facts are otherwise than, and inconsistent with, those which
the party subsequently attempts to assert; (2) Intention, or at least expectation
that such conduct shall be acted upon by the other party; (3) Knowledge, actual
or constructive of the real facts. As related to the party claiming the estoppel
they are (1) Lack of knowledge and of the means of knowledge of the truth as
to the facts in question; (2) Reliance upon the conduct of the party estopped;
and (3) Action based thereon of such a character as to change his position
prejudicially[.]
Harvey v. Farmers Ins. Exchange, 286 S.W.3d 298, 304 (Tenn. Ct. App. 2008) (quoting
Callahan v. Town of Middleton, 292 S.W.2d 501, 508 (Tenn. Ct. App. 1954)); accord
Osborne v. Mountain Life Ins. Co., 130 S.W.3d 769, 774 (Tenn. 2004) (citations omitted).
“Estoppel requires as a minimum (1) reliance upon the statement or actions of another
14
We again decline to opine on whether and under what circumstances these and other affirmative
defenses provide avenues by which a plaintiff may effectively abrogate a contractual provision.
-15-
without opportunity to know the truth and (2) action based on that reliance which results in
detriment to the one acting.” Werne v. Sanderson, 954 S.W.2d 742, 746 (Tenn. Ct. App.
1997) (citing Campbell v. Precision Rubber Products Corp., 737 S.W.2d 283, 286 (Tenn. Ct.
App. 1987)). “Estoppel is not favored and it is the burden of the party seeking to invoke the
doctrine to prove each and every element thereof.” Buchholz v. Tenn. Farmers Life
Reassurance Co., 145 S.W.3d 80, 85 (Tenn. Ct. App. 2003) (citing Robinson v. Tenn.
Farmers Mut. Ins. Co., 857 S.W.2d 559, 563 (Tenn. Ct. App. 1993)).
“Acquiescence” has been defined as a conduct from which may be inferred an
assent with a consequent estoppel or quasi-estoppel, and also has been
described as a quasi-estoppel, or a form of estoppel. An acquiescence to a
transaction is a person’s tacit or passive acceptance, or an implied consent to
an act. Generally, acquiescence as a defense has a dual nature in that, it may
on the one hand, rest on the principle of ratification and be denominated an
“implied ratification,” or, on the other hand, rest on the principle of estoppel
and be denominated as “equitable estoppel.” The doctrine arises where a
person knows or ought to know that he or she is entitled to enforce his or her
right to impeach a transaction and neglects to do so for such a time as would
imply that he or she intended to waive or abandon his or her right.
31 C.J.S. Estoppel and Waiver § 175 (2008) (footnotes omitted); accord Hinton v. Stephens,
No. W2000-02727-COA-R3-CV, 2001 WL 1176012, at *3 (Tenn. Ct. App. Oct. 4, 2001)
(citation omitted).
Crye-Leike has not established that Ms. Carver waived the right to enforce the
expiration date of the Agreement, that Ms. Carver should be equitably estopped from relying
on the expiration date set forth in the Agreement, or that Ms. Carver acquiesced in the
alleged extension of the Agreement. The preponderance of the evidence does not establish
a clear, unequivocal, and decisive act of Ms. Carver to waive the August 21 expiration date.
Crye-Leike likewise did not establish conduct amounting to a false representation, concealing
material facts, or conveying an impression the facts were otherwise than, and inconsistent
with, those which Ms. Carver now relies upon. And Ms. Carver did not passively accept the
services of Crye-Leike for such a period of time as to impliedly consent to or acquiesce in
the extension of the Agreement. We thus hold Ms. Carver rightfully may assert August 21
as the expiration date of the Agreement.
iii. Quasi Contract
The final issue before this Court is whether Crye-Leike is entitled to recover under the
theory of quasi contract. “Actions brought upon theories of unjust enrichment, quasi
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contract, contracts implied in law, and quantum meruit are essentially the same.” Paschall's,
Inc. v. Dozier, 407 S.W.2d 150, 154 (Tenn. 1966). “Courts frequently employ the various
terminology interchangeably to describe that class of implied obligations where, on the basis
of justice and equity, the law will impose a contractual relationship between parties,
regardless of their assent thereto.” Id. These equitable doctrines are “founded on the
principle that a party receiving a benefit desired by him, under circumstances rendering it
inequitable to retain it without making compensation, must do so.” Id. (citation omitted).
A party seeking to recover on one of these theories must demonstrate the following:
(1) there must be no existing, enforceable contract between the parties
covering the same subject matter, Robinson v. Durabilt Mfg. Co., 195 Tenn.
452, 454-55, 260 S.W.2d 174, 175 (1953);
(2) the party seeking recovery must prove that it provided valuable goods and
services, Moyers v. Graham, 83 Tenn. 57, 62 (1885); Wrinkle v. J.F. Larue &
Son, 9 Tenn. App. 161, 165–66 (1927);
(3) the party to be charged must have received the goods and services,
Paschall's, Inc. v. Dozier, 219 Tenn. 45, 54, 407 S.W.2d 150, 154 (1966); Jaffe
v. Bolton, 817 S.W.2d 19, 26 (Tenn. Ct. App. 1991);
(4) the circumstances must indicate that the parties involved in the transaction
should have reasonably understood that the person providing the goods or
services expected to be compensated, V.L. Nicholson Co. v. Transcon Inv. &
Fin. Ltd., 595 S.W.2d 474, 482 (Tenn. 1980); and
(5) the circumstances must also demonstrate that it would be unjust for the
party benefitting from the goods or services to retain them without paying for
them. Pascall's, Inc. v. Dozier, 219 Tenn. at 54, 407 S.W.2d at 154; Reprise
Capital Corp. v. Rogers Group, Inc., 802 S.W.2d 608, 610 (Tenn. Ct. App.
1990).
Castelli v. Lien, 910 S.W.2d 420, 427 (Tenn. Ct. App. 1995); accord Doe v. HCA Health
Servs. of Tenn., Inc., 46 S.W.3d 191, 197-98 (Tenn. 2001) (citing Swafford v. Harris, 967
S.W.2d 319, 324 (Tenn. 1998)).
The most glaring problem with Crye-Leike’s position is that it did not present this
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issue for consideration before the trial court.15 Crye-Leike’s complaint and amended
complaint alleged only that Crye-Leike caused the Property to be shown to the eventual
purchasers prior to August 21 and, in the alternative, that the parties by their actions extended
the contract through August 30. Crye-Leike’s allegations focused on the right to a
commission under the Agreement; Crye-Leike did not allege that a separate quasi-contractual
or implied obligation to pay the reasonable value of its services arose separate from the
Agreement. Crye-Leike similarly did not argue this issue at the summary judgment stage,
and the trial transcript does not contain a single reference to unjust enrichment, quasi
contract, contract implied in law, or quantum meruit. Furthermore, Crye-Leike did not
submit evidence of the reasonable value of the services rendered after the expiration of the
Agreement. The trial court consequently did not rule on this issue in its memorandum
opinion. Because Crye-Leike did not argue it should recover on the basis of quasi contract
in the trial court, we decline to address it for the first time on appeal.16 See Davis v.
McGuigan, 325 S.W.3d 149, 154 n.1 (Tenn. 2010) (citing Fayne v. Vincent, 301 S.W.3d 162,
171 (Tenn. 2009).
Crye-Leike, a sophisticated party with years of experience in the residential real estate
business, knowingly incurred the risk it might not recover a commission by providing
services in the absence of a signed writing extending the Agreement. As Mr. Leike candidly
testified, Crye-Leike would oppose the assertion of a valid oral modification if the roles of
the parties were reversed. While we do not suggest such conduct necessarily bars a realty
company from recovering under equitable principles, Crye-Leike has not proven by a
preponderance of the evidence that Ms. Carver’s actions gave rise to waiver, equitable
estoppel, or acquiescence under the facts. Crye-Leike, as a result, has not demonstrated the
Property was shown, submitted, or offered to the Sammonses prior to the expiration of the
Agreement on August 21 or that Ms. Carver may not rely upon August 21 as the binding
expiration date of the Agreement. We accordingly conclude Crye-Leike has not established
a right to the requested commission.
V. Conclusion
For the foregoing reasons, we affirm the decision of the trial court. We tax the costs
15
We express no opinion on whether contractual language stating that no implied agreement exists
would bar a finding of unjust enrichment, quasi contract, contract implied in law, or quantum meruit.
16
Crye-Leike likewise did not argue that the parties entered into a separate, enforceable oral contract
governing the provision of services subsequent to August 21 and, in any event, it did not establish the
essential terms of any such contract by the requisite “clear, cogent, and convincing” evidence. Parks v.
Morris, 914 S.W.2d 545, 547 (Tenn. Ct. App. 1995) (citing Alexander v. C.C. Powell Realty Co., 535 S.W.2d
154, 157 (Tenn. Ct. App. 1975)).
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of this appeal to the appellant, Crye-Leike, Inc., and its surety for which execution may issue
if necessary.
_________________________________
DAVID R. FARMER, JUDGE
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