David Minter, Individually and D/B/A David Minter Estate Homes v. Tejas/Conti Realty Corp. and Ronald B. Helle ( 1996 )

cv5-625 TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN



NO. 03-95-00625-CV



David Minter, Individually and d/b/a David Minter Estate Homes, Appellant

v.

Tejas/Conti Realty Corp. and Ronald B. Helle, Appellees



FROM THE DISTRICT COURT OF TRAVIS COUNTY, 53RD JUDICIAL DISTRICT NO. 94-09010, HONORABLE PAUL R. DAVIS, JR., JUDGE PRESIDING

Appellants, David Minter, individually and d/b/a David Minter Estate Homes ("Minter"), appeal from a judgment in favor of appellees, Tejas/Conti Realty Corp. and Ronald B. Helle (collectively "Helle"). In five points of error, Minter contends that the trial court erred in granting judgment for appellees on the basis of the Builder Referral Agreement ("the Agreement") and in refusing to permit a trial amendment regarding negligent misrepresentation. We will reverse the judgment of the trial court.

BACKGROUND

Frank and Elaine Schulte, who were moving from California to Austin, contacted Helle in hopes of purchasing a home in the Austin area. After attempts to find an existing home failed, Helle eventually located a lot acceptable to the Schultes. They agreed to purchase the lot only on the condition that Minter build a home on it. Minter drew up the plans for the home and the deal closed. Helle received a $15,000 commission on the sale of the lot.

Before closing on the lot, Helle asked Minter to sign the Agreement, which entitled Helle to receive a 3% commission on the price of a "custom or speculative home" to be built by Minter. When Minter made a proposal to the Schultes on the cost of construction, he included Helle's commission. The Schultes, however, insisted that they never agreed to pay this commission and would not allow this fee to be calculated in the cost of the home. Minter then refused to pay the commission to Helle and Helle brought this suit.

DISCUSSION

In Minter's first point of error, he contends that the trial court erred in granting judgment on the basis of the Agreement. He claims that the Agreement does not meet the requirements of section 20(b) of the Texas Real Estate License Act (RELA). Tex. Rev. Civ. Stat. Ann. art. 6573, § 20 (West Supp. 1996). Helle in turn contends that RELA does not bar his recovery because the Agreement involves a commission based on the construction costs of a home, including labor and materials, rather than on real estate. We disagree.

Whether a contract is ambiguous is a question of law. R & P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex. 1980). If a contract is so worded that it can be given a certain and definite meaning or interpretation, it is not ambiguous. Alba Tool & Supply Co. v. Industrial Contractors, Inc., 585 S.W.2d 662, 664 (Tex. 1979); Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951). Only if a contract is first found to be ambiguous may the court consider the parties' interpretation; if the meaning of the contract is plain and unambiguous, a party's construction is immaterial. Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 728 (Tex. 1981).

The Agreement signed by Minter and Helle provides in part:

Builder, David Minter , agrees to pay a referral fee in the amount of 3% of the sales price of any custom or speculative home purchased by: Frank and Elaine Schulte. This referral fee is based upon the sales price of the constructed home only and does not include the cost of the lot. Builder agrees to pay this referral to: Ron Helle a licensed real estate agent with Tejas/Conti Realty Corp.

The Agreement makes no mention of the cost of labor and materials, nor does it mention improvements to the land. Rather, it unambiguously calculates the recovery of Helle's commission on the sales price of a constructed "home." Helle's interpretation of the Agreement is inconsistent with its unambiguous language. We conclude that the "home" referred to in the contract means a completed home and not labor or materials.

RELA applies to individuals who receive consideration for procurement of real estate. Tex. Rev. Civ. Stat. Ann. art. 6573, § 4 (West Supp. 1996). Helle clearly fits this description. Under RELA section 20(b), a party cannot seek to recover a commission without an agreement in writing. Section 20(b) provides:

An action may not be brought in a court in this state for the recovery of a commission for the sale or purchase of real estate unless the promise or agreement on which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged or signed by a person lawfully authorized by him to sign it.

Tex. Rev. Civ. Stat. Ann. art. 6573, § 20(b) (West Supp. 1996) (emphasis added). RELA section 2 defines "real estate" as: "a leasehold, as well as any other interest or estate in the land, whether corporeal, incorporeal, freehold, or nonfreehold, and whether the real estate is situated in this state or somewhere else." Tex. Rev. Civ. Stat. Ann. art. 6573a, § 2(1) (West Supp. 1996). The Agreement in this case clearly falls under section 20(b) because it involves a home which is corporeal property and thus real estate.

In order to comply with the requirements under section 20(b), the writing supporting the agreement must: be signed by the person to be charged with the commission, contain a promise that a definite commission be paid or refer to a written commission schedule, state the name of the broker to whom the commission is to be paid and identify with reasonable certainty the land to be conveyed. Moser Co. v. Awalt Indus. Properties, Inc., 584 S.W.2d 902, 906 (Tex. Civ. App.--Amarillo 1979, no writ). In determining whether the property has been adequately described, the same test should be applied as that required to show compliance with the Statute of Conveyance and Statute of Frauds. Tidwell v. Cheshier, 265 S.W.2d 568, 569 (Tex. 1954); see Boyert v. Tauber, 834 S.W.2d 60, 62-63 (Tex. 1992). The writing must furnish within itself, or by reference to some other existing writing, the means or data by which particular land may be identified. See e.g., Owen v. Hendricks, 433 S.W.2d 164, 166 (Tex. 1968). In this case, the description of the property is a "custom or speculative home." It does not identify the property or the location of any home with any specificity. Without stating anything further regarding the particular location of the property, Helle is prohibited from bringing an action to recover his commission.

Helle attempts to characterize the basis for recovery as breach of contract. However, under Texas law it is clear that a plaintiff cannot evade the RELA writing requirement by characterizing a claim for a real estate commission in breach of contract terms. LA & N Interest, Inc. v. Fish, 864 S.W.2d 745, 751 (Tex. App.--Houston [14th Dist.] 1993, no writ). It would be ironic if a broker could recover his commission after breach of a contract when the contract itself would not support recovery of a commission from his principal had it been performed. Id. Helle cannot circumvent the requirements of this act by claiming that his commission is based on construction costs, rather than on the purchase of real estate.

CONCLUSION

Having concluded that the Agreement falls within RELA, it is clear that the writing fails to specify the property with any particularity. We find that the trial court erred in allowing Helle to recover on this basis and uphold point of error one. Accordingly, we need not address the remaining points of error. We reverse the judgment of the trial court and render judgment that Tejas/Conti Realty Corp. and Helle take nothing by their suit.

Jimmy Carroll, Chief Justice

Before Chief Justice Carroll, Justices Aboussie and Kidd

Reversed and Rendered

Filed: July 17, 1996

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