8011, Llc, Walter Moss & Kari Graves v. Mr.99 & Associates & Martin S. Rood ( 2016 )

1 I... I -
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
MR. 99 & ASSOCIATES, INC.;
MARTIN S. ROOD,
DIVISION ONE
Respondents,
No. 73737-6-I
UNPUBLISHED OPINION
8011, LLC, a Washington limited
liability company; WALTER MOSS
and JANE DOE MOSS, husband and
wife, and their marital community;
KARI GRAVES and JOHN DOE
GRAVES, husband and wife, and their
marital community; FIRST AMERICAN
TITLE COMPANY,
Appellants.
FILED: December 27, 2016
Dwyer, J. — 8011 LLC appeals from the judgment entered against it in
contract and tort actions brought by Martin Rood based upon 8011's refusal to
pay Rood a commission on the sale of 8011's property. 8011 asserts that Rood
is not entitled to a commission payment because he failed to procure a buyer
under the conditions set forth in their brokerage agreement, including those
conditions entitling Rood to a commission payment if a sale occurred within six
months after the agreement's expiration. 8011 further asserts that Rood is not
entitled to a commission payment because the final sale agreement between the
No. 73737-6-1/2
parties to the sale transaction did not provide for payment of a commission to
Rood.
We conclude that Rood did not satisfy the pertinent conditions in the
brokerage agreement so as to qualify for a commission payment, that the
specificity of the language in the agreement's tail provision precludes resort to
the procuring cause rule, and that the final sale agreement did not provide for a
commission payment to Rood. We also conclude that, under the circumstances
herein, Rood has not established that he was deprived of something of value that
he possessed or of something in which he had a property interest. Thus, Rood is
not entitled to a commission payment based on his tort or equitable theories of
liability. Accordingly, we reverse the judgment ofthe trial court.
I
8011 LLC1 entered into a brokerage contract with Martin Rood2 to lease or
sell commercial property on Highway 99 in Everett. The duration of the
brokerage agreement was for six months, from July 21, 2011 to January 21,
2012. The agreement contained provisions entitling Rood to a 5 percent
commission payment if he brokered a sale either during the duration of the
agreement or, subject to certain conditions, within six months of the agreement's
expiration (the tail provision).
Prior to contracting with 8011 as a sale-side brokerage agent, Rood was
retained by Mazda of Everett (Mazda) as a buyer-side brokerage agent. As
1For ease of reference, we refer to the appellants in this case as 8011.
2For ease of reference, we refer to the respondents in this caseas Rood, the principal
agent for Mr. 99 &Associates.
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No. 73737-6-1/3
such, he sought to purchase real estate on Mazda's behalf. While working with
Mazda but prior to his brokerage agreement with 8011, Rood discussed with
Mazda the notion of acquiring 8011 's property. Mazda declined to pursue
purchase of 8011's property at that time due to a statutory restriction precluding
Mazda from purchasing the property, absent a waiver of the restriction.3
Thereafter, during the term of Rood's brokerage agreement with 8011, Rood took
no further action with regard to Mazda as a prospective purchaser of 8011's
property.
On January 21, 2012, pursuant to its duration provision, the brokerage
agreement between 8011 and Rood expired. The property remained unsold.
During the six-month time period ofthe agreement, Rood did not procure a buyer
for the property. Neither did he satisfy the requisite conditions affording him a
commission payment if the property was sold within six months ofthe expiration
of the agreement. Moreover, although repeatedly sought by Rood, he and 8011
did not agree to extend the length ofthe brokerage agreement or enter into a
new contractual relationship either prior to the agreement's expiration or
thereafter.
Three months after the brokerage agreement expired, Rood contacted
8011, inquiring as to whether it would be interested in selling the property to
Mazda.4 8011 indicated that it would consider an offer to purchase.
38011's property was located 7.5 miles away from an existing Mazda dealership and,
pursuant to RCW 46.96.140, Mazda was precluded from establishing a new Mazda dealership
within 8 miles ofan existing Mazda dealership, unless it obtained a determination ofgood cause
from an administrative law judge orqualified for an exception to the restriction. RCW 46.96.160,
.180.
4 Mazda indicated that it had obtained a waiver of the statutory restriction.
No. 73737-6-1/4
Beginning in May and overthe following four months, a series of proposed
"Purchase & Sale Agreements" (PSAs) between 8011 and Mazda were
exchanged, with the parties negotiating the price per square foot for the property
and, later, negotiating a commission payment for Rood.
Mazda's initial offer, drafted by Rood, described Rood's firm both as the
selling firm and as the listing firm. The offer also included a provision detailing a
5 percent commission payment to the selling firm to result from the sale of the
property, with or without a written listing or commission agreement in place.
The offer was not accepted. Instead, negotiations continued. From June
until mid-July, 8011 and Mazda each signed and submitted two counteroffers
with the same commission payment terms as above, but offering varying prices
per square foot. The negotiations stalled, however, when, upon receipt of
Mazda's second counteroffer (its third offer overall), 8011, which by now had
seen two of its own counteroffers rejected, did not respond.
On July 31, 2012, Mazda, through Rood, signed and submitted a new
PSA to 8011 with a higher price per square foot. The new offer (Mazda's fourth
overall) provided the same commission provisions for Rood. Again, 8011 did not
respond.
In late August, Rood prepared two additional PSAs, one of which provided
for him to receive a reduced commission payment and the other ofwhich
contained the same commission terms as in previous offers. Neither Mazda nor
8011 agreed to sign either of the documents. Afew days later, a brokerage
agent hired by 8011 drafted two counteroffers, both of which provided for a
No. 73737-6-1/5
smaller (2.5 percent) commission payment to Rood, identified Rood as the selling
firm, and left blank the listing firm provision. Again, neither 8011 nor Mazda
signed either of the documents.
In mid-September, Mazda drafted and signed two PSAs, both of which
provided for a 2.5 percent commission payment to Rood, identifying him as the
selling firm and no one as the listing firm. Neither offer was accepted. Two
weeks later, 8011 notified Mazda that it would no longer consider selling the
property to Mazda and discontinued negotiations.
Nevertheless, on October 8, 2012, Mazda submitted an offer to 8011 with
different commission terms (the final PSA). The offer identified Rood as the
"selling firm," but the commission provision was crossed out and, later in the
agreement, a handwritten provision, added by Mazda, stated that, "seller will pay
no real estate commissions at closing. Buyer does not warrant as to seller's
liability for commission."
By October 12, Mazda and 8011 had signed the PSA, closing the sale a
few months later. No commission was paid to Rood.
Rood commenced this action against 8011, alleging various theories of
contract and tort liability, charging that 8011 had unlawfully deprived him of his
commission payment for his role as the selling agent for 8011 's property. 8011
counterclaimed, asserting violations of the Consumer Protection Act (CPA)
arising from Rood's conduct as a dual agent. Eventually, Rood moved for
summary judgment dismissal of the CPA claim, which the trial court granted, and
No. 73737-6-1/6
partial summary judgment in his favor on the commission claim, which the trial
court denied.
Later, before a different judge, Rood and 8011 submitted cross motions
for summary judgment. On May 27, 2015, the court denied both. With trial set
for June 23, 2015, 8011 moved for reconsideration of the denial of its motion.
While 8011's motion was pending and with trial set to begin in less than
two weeks, the trial court offered the parties the cost- and time-saving
opportunity to strike the trial and have the judge decide the case as a matter of
law. The parties accepted the trial court's offer.
The trial court granted judgment in favor of Rood, denying 8011's motion
for reconsideration and awarding Rood $107,000—based upon the 5 percent
commission provision in the expired brokerage agreement—plus reasonable
attorney fees, costs, and prejudgment interest. The total judgment amount was
$334,757.67.
8011 now appeals.
II
This case comes to us with an odd trial court procedural history. This
oddity has engendered squabbling between the parties in their appellate briefing.
Before we can turn to the merits of this appeal, we must resolve several
preliminary questions:
1. By what procedure did the trial court decide this case? Was this
procedure authorized by statute or court rule?
2. What is the proper content of the record before us on review?
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No. 73737-6-1/7
3. What is our proper standard of review?
A
To recap the situation: (1) both plaintiffs and defendants moved for
summary judgment on the merits, (2) each motion was denied, and (3)
defendants (8011) moved for reconsideration.
With the parties 13 days from the start of an expensive and time-
consuming trial, the judge's law clerk contacted them with an offer: "Judge
Wilson has decided that the case is ripe for a decision on your summary
judgment motions [H]e WILL provide a decision to resolve the case if parties
are willing to strike the trial." However, the law clerk informed counsel, Judge
Wilson did not believe that he could find the time to rule prior to their scheduled
trial date.
In response, "Plaintiffs agree[d].. . [that] Judge Wilson may decide this
action as a matter of law." Eventually, a satisfactory alternative to trial was
mutually agreed upon.
[A]ll parties agree that Judge Wilson may decide this action in its
entirety based on the summary judgment pleadings, defendants'
motion for reconsideration, plaintiffs' pleadings in opposition to
defendants' motion for reconsideration, and defendants' reply
pleadings in support of reconsideration. As a result, we agree to
strike the June 23, 2015 trial date.
After this memorialization of the agreement, the law clerk further informed
counsel, "if parties want to submit proposed findings of fact and conclusions of
law, he will consider those as well."
However, upon ruling on the case, the only findings of fact entered were
those related to the attorney fee award, not to the merits of the dispute. As to his
No. 73737-6-1/8
ruling on the merits, Judge Wilson referred to that ruling as one granting plaintiffs'
cross motion for summary judgment.
The manner in which the case was decided was unusual. But it was
lawful. When a superior court has subject matter jurisdiction over a dispute
all the means to carry it into effect are also given; and in the
exercise of the jurisdiction, if the course of proceeding is not
specifically pointed out by statute, any suitable process or mode of
proceeding may be adopted which may appear most conformable
to the spirit of the laws.
RCW 2.28.150.
Here, both parties' motions for summary judgment had been denied. Only
the defendants sought reconsideration. But the court's final decision was, on the
merits, in favor of the plaintiffs.
Plainly, this was not a straightforward CR 56 decision. Neither was it
solely a ruling on the defendants' CR 59 motion for reconsideration.
Instead, the judge offered the parties a substitute for trial—a ruling as a
matter of law on the merits based on the pleadings and evidence that had been
submitted to him. The parties agreed to this process. Thus, the trial judge
decided the case by means of a trial by affidavits without fact-finding. This was
authorized by statute. RCW 2.28.150.
B
Our next task is to determine the content of the record before us.
Specifically, the parties dispute whether Judge Wilson (and therefore the
appellate court) was authorized to consider the declaration of Kari Graves.
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No. 73737-6-1/9
Graves is a party to this case and her declaration was in the court file,
having been submitted in support of an earlier motion seeking virtually the same
relief. Normally, where, as here, a judge offers a substitute for trial, suggesting
that the case can be decided on the pleadings already submitted, we would
assume that a party's declaration would be considered. After all, the party is
giving up the right to a trial at which the party would be allowed to testify to the
same facts as those set forth in the declaration.
It is also true, however, that—as to the second round of summary
judgment motions—Graves' declaration was not resubmitted to the trial court.
Rood argues that the parties' agreement regarding the documents to be
considered included only the last round of motions, pleadings, and supporting
documents. Because we can decide the merits of this appeal without resort to
Graves' declaration, we choose to do so, eliminating the need for us to divine the
parties' intentions regarding the declaration at issue.
C
Our final preliminary task is to identify the proper standard of review.
Because the trial judge decided the case without engaging in fact-finding, we will
apply the summary judgment standard of review.5
We engage in a de novo review of a ruling granting summary
judgment. Anderson v. Weslo, Inc., 79 Wash. App. 829, 833, 906
P.2d 336 (1995). Thus, we engage in the same inquiry as the trial
court. Wilson Court Ltd. P'ship v. Tonv Maroni's, Inc., 134 Wn.2d
5Rood's argument that we should apply an abuse of discretion standard because a
motion for reconsideration was pending misses the point. The parties agreed to have the trial
judge decide the entire case, not just the motion for reconsideration. Indeed, had the judge
decided only the motion for reconsideration, Rood could not have prevailed, as Rood did not seek
reconsideration of the ruling denying his summary judgment motion. The CR 56 standard of
review is clearly appropriate.
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No. 73737-6-1/10
692, 698, 952 P.2d 590 (1998). Summary judgment is properly
granted when the pleadings, affidavits, depositions, and admissions
on file demonstrate that there is no genuine issue of material fact
and that the moving party is entitled to summary judgment as a
matter of law. CR 56(c); Hutchins v. 1001 Fourth Ave. Assocs..
116 Wash. 2d 217, 220, 802 P.2d 1360 (1991). All reasonable
inferences from the evidence must be construed in favor of the
nonmoving party. Lamon v. McDonnell Douglas Corp.. 91 Wash. 2d
345, 349, 588 P.2d 1346 (1979).
Green v. Normandv Park Riviera Section Cmtv. Club. Inc.. 137 Wash. App. 665,
681, 151 P.3d 1038(2007).
8011 asserts that Rood is not entitled to a brokerage commission payment
pursuant to the law of contracts because neither the terms of the brokerage
agreement, the procuring cause rule, nor the terms of the final PSA provided for
a commission payment to Rood. We agree.
A
8011 first asserts that, because Rood failed to procure a buyer as required
by the conditions of the brokerage agreement, Rood is not entitled to a
commission payment pursuant to that agreement. 8011 is correct.
"The touchstone of contract interpretation is the parties' intent." Tanner
Elec. Coop, v. Puoet Sound Power &Light Co.. 128Wn.2d 656, 674, 911 P.2d
1301 (1996). We may determine the parties' intent
not only from the actual language of the agreement but also from
"viewing the contract as a whole, the subject matter and objective
of the contract, all the circumstances surrounding the making of the
contract, the subsequent acts and conduct ofthe parties to the
contract, and the reasonableness of respective interpretations
advocated by the parties."
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No. 73737-6-1/11
Tanner Elec, 128 Wash. 2d at 674 (internal quotation marks omitted) (quoting Scott
Galvanizing. Inc. v. Nw. EnviroServices. Inc. 120 Wash. 2d 573, 580-81, 844 P.2d
428(1993)).
"Courts should not find an ambiguity in order to construe the contract, and
an ambiguity will not be read into a contractwhere it can reasonably be avoided
by reading the contract as a whole." Grant County Constructors v. E.V. Lane
Corp.. 77 Wash. 2d 110, 121, 459 P.2d 947 (1969). "A court cannot, based upon
general considerations of abstract justice, make a contract for parties which they
did not make for themselves." Wagner v. Wagner. 95Wn.2d 94, 104, 621 P.2d
1279(1980).
The brokerage agreement herein constituted an "exclusive lease listing
agreement" between 8011 and Rood. Section 3 of the agreement defined
"lease," in pertinent part, as "sell" or"enter into a contract to . . . sell."
Section 1 ofthe agreement was a duration provision, which read:
"DURATION OF AGREEMENT. This Agreement shall commence on July 21,
2011 and shall expire at 11:59 p.m. on January 21, 2012."
Two sections in the agreement discussed Rood's commission in the event
of a lease or sale. Section 6 stated that, in the event that the property was sold
or leased, Rood would receive a commission payment as long as one of the five
conditions set forth therein was met. Two of these conditions are pertinent here,
entitling Rood to a commission payment when
(a) [Rood] leases or procures a lessee on the terms of the
Agreement, or on other terms acceptable to the Owner; . .. (c)
[8011] leases the Property within six months after the expiration or
sooner termination of this Agreement to a person or entity that
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No. 73737-6-1/12
submitted an offer to purchase or lease the Property during the
term of this Agreement or that appears on any registration listf61
provided by [Rood] pursuant to this Agreement.171
Section 9 of the agreement, entitled "Additional Terms," read, in pertinent part: "If
[Rood] sells this property for [8011], then [Rood] will be entitled to a commission
of 5% of the gross selling price."
Construing the brokerage agreement as a whole, if 8011 sold the property,
Rood would be entitled to receive a commission payment in either of three
scenarios: (1) pursuant to sections 6(a) and 9, if Rood procured a buyer for the
property during the agreement's specified duration; (2) pursuant to sections 6(c)
and 9, if 8011 accepted an offer to sell the property to a buyer within six months
after the agreement's expiration, conditioned on Rood having brought that
buyer's offer to 8011 during the agreement's specified duration; or (3) also
pursuant to sections 6(c) and 9, if 8011 sold the property within six months after
the agreement's expiration to a buyer listed on a "registration list" of potential
buyers, conditioned on Rood having provided such a "registration list" to 8011
during or shortly after the expiration of the agreement's durational period.
Rood did not procure a buyer for the property in the time period specified
by the agreement's duration provision. Rood did not satisfy the conditions
specified in the agreement's tail provision, failing to provide 8011 an offer to
6Section 6 of the agreement permitted Rood to provide 8011 with a registration list within
15 days "after the expiration or sooner termination of [the] Agreement." Section 6 further
described the "registration list" as comprising "persons or entities to whose attention the Property
was brought through the signs, advertising or other action of [Rood], or who received information
secured directly or indirectly from or though [Rood] during the term of this Agreement."
^The remaining conditions were as follows: "(b) [8011] leases the Property directly or
indirectly or through any person or entity other than [Rood] during the term of this Agreement; .. .
(d) the Property is made unleasable by [8011]'s voluntary act; or (e) [8011] cancels this
Agreement, or otherwise prevents [Rood] from leasing the Property."
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No. 73737-6-1/13
purchase from Mazda during the duration of the agreement and failing to provide
a registration list to 8011 during or shortly after the expiration of the agreement's
durational period.
Thus, the brokerage agreement expired without Rood having satisfied the
terms that would entitle him to receive a commission payment. Accordingly,
Rood is not entitled to a commission under the terms of the brokerage
agreement.8
B
8011 next asserts that Rood is not entitled to receive a commission
payment pursuant to the procuring cause rule. 8011 is correct.
"The procuring cause rule states that when a party is employed to procure
a purchaser and does procure a purchaser to whom a sale is eventually made,
he is entitled to a commission regardless ofwho makes the sale if he was the
procuring cause of the sale." Willis v. Chamolain Cable Corp., 109 Wash. 2d 747,
754, 748 P.2d 621 (1988). "This rule is applied to allow agents commissions on
sales completed after a principal has terminated their employment if the sales
resulted from the agent[s'] efforts." Willis, 109 Wash. 2d at 754.
8 Rood asserts that he is entitled to a commission payment under the brokerage
agreement for the sale of the property because, unlike the other provisions entitling him to a
commission two of the agreement's provisions pertaining to sales—section 6(a) and section 9—
do not have'an expiration date. This, he claims, implies that pursuant to those provisions he was
entitled to a commission payment regardless of when the sale ultimately took place. Rood is
wrong. ... .. . .
Aplain reading of the entire agreement reveals that the duration provision in section 1 is
incorporated into the subsections cited by Rood. The duration provision states, "This Agreement
shall commence" on one date and "shall expire" on another. Nothing in the duration provision
indicates an intent to limit the scope of the provision to particular sections of the agreement
Indeed, the broad language of the duration provision makes it clear that the parties intended the
provision to control the entire agreement.
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No. 73737-6-1/14
Importantly, however, the procuring cause rule does not apply when "a
written contract expressly provides 'how commissions will be awarded when an
employee or agent is terminated.'" Svputa v. Druck. Inc. 90 Wash. App. 638, 645,
954 P.2d 279 (1998) (quoting Willis, 109 Wash. 2d at 755). "In the absence of a
contractual provision specifying otherwise, the procuring cause doctrine acts as a
gap filler." Svputa, 90 Wash. App. at 645-46 (citing Indus. Representatives. Inc. v.
CP Clare Corp.. 74 F.3d 128 (7th Cir. 1996)). Washington courts are "reluctant"
to apply "the procuring cause rule to cases involving a clearly written employment
contract." Willis. 109 Wash. 2d at 756.
Herein, the brokerage agreement included a tail provision governing
Rood's entitlement to a commission should a sale occur after the agreement's
expiration. The brokerage agreement, including its tail provision, "was a contract
negotiated at arm's length ... by sophisticated parties." State v. Farmers Union
Grain Co., 80 Wash. App. 287, 293, 908 P.2d 386 (1996). As a result oftheir
negotiations, the parties agreed to a tail provision setting forth two conditions that
would entitle Rood to a commission payment. Rood satisfied neither.
Because the parties negotiated for a tail provision detailing the
circumstances under which Rood would be entitled to a commission payment
after the agreement's expiration, there is no gap to be filled. Accordingly, Rood
is not entitled to receive a commission payment based on the claim that he was
the procuring cause of the eventual sale of 8011's property.9
a Rood relies on Ctr. Invs.. Inc. v. Penhallurick, 22 Wash. App. 846, 592 P.2d 685 (1979), to
support his assertion that he was the procuring cause of the property's sale. However, the court
in Penhallurick applied the procuring cause rule to the transaction therein because the broker had
an oral brokerage agreement, presumptively one in which no tail provision was included (given
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8011 additionally asserts that the final PSA between 8011 and Mazda
does not entitle Rood to a commission as a third-party beneficiary. We agree.
Again, the touchstone of contract interpretation is the parties' intent.
Tanner Elec. 128 Wash. 2d at 674 (citing Scott Galvanizing. 120 Wash. 2d at 580-81).
Where written words in a contract "are inconsistent with or contradict part of a
printed form, the written words will be presumed to disclose the true intent ofthe
parties." Davis v. Lee. 52 Wash. 330, 340, 100 P. 752 (1909).
[W]here there is no ambiguity, all conversations, contemporaneous
negotiations, and parol agreements between the parties prior to a
written agreement are merged therein. In the absence ofaccident,
fraud, or mistake, parol evidence is not admissible for the purpose
of contradicting, subtracting from, adding to, or varying the terms of
such written instruments.
Fleetham v. Schneekloth, 52 Wash. 2d 176, 178-79, 324 P.2d 429 (1958).
"The creation ofa third-party beneficiary contract requires that the parties
intend that the promisor assume a direct obligation to a third party at the outset of
the contract." Lewis v. Boehm, 89 Wash. App. 103, 106, 947 P.2d 1265 (1997)
(citing Burke &Thomas. Inc. v. Int'l Org, of Masters. Mates &Pilots, 92 Wash. 2d
762, 767, 600 P.2d 1282 (1979)). "To determine if a third-party beneficiary exists
the court should consider the terms of contract and determine if performance of
the contract necessarily and directly benefits a third party." Lewis, 89 Wn. App.
that the opinion does not mention such a provision), 22 Wash. App. at 850, and because the written
agreement between the buyer and seller specifically provided for a payment of a commission to
the broker 22 Wash. App. at 848. Because this matter does not involve an oral brokerage
agreement the parties specifically contracted for a tail provision in their brokerage agreement,
and the final written contract between the buyer and seller did not provide for payment of a
commission, Penhallurick is inapplicable.
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No. 73737-6-1/16
at 106 (citing Del Guzzi Constr. Co. v. Global Nw.. Ltd.. 105 Wash. 2d 878, 886-87,
719P.2d 120(1986)).
The final PSA did not provide a commission for Rood. The commission
provision in the PSA was crossed out and the handwritten word "DELETED"
appears. On the following page, sections regarding listing firms and brokers
were crossed out and the word "NONE" is set forth in both sections. Moreover,
later in the agreement, it is stated, also in handwriting, that "seller will pay no real
estate commissions at closing. Buyer does not warrant as to seller's liability for
commission."
The final PSA between 8011 and Mazda clearly demonstrates that the
parties did not intend to pay Rood a commission. Although the PSA does
indicate that Rood is the "selling firm," any inference in favor of Rood as a third-
party beneficiary to the contract is negated by the other explicit language in the
contract—particularly, 8011 and Mazda crossing out the commission section in
the agreement and further stating that "seller will pay no real estate commissions
at closing." Thus, because Rood did not "necessarily and directly benefit[ ]" from
performance of the contract, Lewis, 89 Wash. App. at 106, Rood cannot be said to
be a third-party beneficiary of the final PSA between 8011 and Mazda.
Nonetheless, Rood relies on the prior offers and counteroffers between
8011 and Mazda in an attempt to contradict the final PSA's excised commission
provisions. His reliance on this parol evidence is unavailing.
Any of the prior negotiations and conversations between Rood, 8011, and
Mazda are considered merged into the final agreement. Because the terms in
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No. 73737-6-1/17
the prior offers and counteroffers contradict the terms in the final PSA, they
constitute parol evidence that cannot be used to determine the parties' intent
concerning the final PSA. Fleetham. 52 Wash. 2d at 179. Thus, there is no
indication within the final PSA that 8011 and Mazda intended to pay Rood a
commission. We will not construe the final agreement at variance with its plain
language.10
D
8011 also claims that Rood cannot prevail because he cannot point to a
brokerage agreement, providing him a commission payment, that complies with
the statute of frauds. We agree.
Abrokerage agreement to sell real property for a commission must satisfy
the statute of frauds.
In the following cases, specified in this section, any agreement,
contract, and promise shall be void, unless such agreement,
contract, or promise, or some note or memorandum thereof, be in
writing, and signed by the party to be charged therewith, or by
some person thereunto by him or her lawfully authorized, that is to
say: ... (5) an agreement authorizing or employing an agent or
broker to sell or purchase real estate for compensation or a
commission.
RCW 19.36.010. The "statute of frauds requires that all real estate brokerage
agreements be in writing and signed by the party to be bound." Bishop v.
Hansen, 105 Wash. App. 116, 120, 19 P.3d 448 (2001). Indeed, the statute
governing a broker's compensation for the sale of real property confirms the
10 Rood relies on Bonanza Real Fstate. Inc. v. Crouch. 10 Wash. App. 380, 385, 517 P.2d
1371 (1974) for the proposition that "[t]he terms of the sale as ultimately consummated are
immaterial if the broker was the procuring cause ofthe sale itself." His reliance on Bonanza is
unavailing. There, the broker satisfied the tail provision of the brokerage agreement. Bonanza,
10 Wash. App. at 382-83. Here, Rood did not.
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No. 73737-6-1/18
applicability of the statute of frauds. "Nothing contained in this chapter negates
the requirement that an agreement authorizing or employing a broker to sell or
purchase real estate for compensation or a commission be in writing and signed
by the seller or buyer." RCW 18.86.080(7).
The fraud sought to be prevented by RCW 19.36.010(5)
"relates to disputes as to the amount of commission or
compensation, the term of the listing agreement, if exclusive or
nonexclusive, and most important, if any agreement existed at all."
House v. Erwin. 83 Wash. 2d 898, 904, 524 P.2d 911 (1974).
Essential to any writing meeting the terms of the statute as it relates
to real estate brokerage agreements is a description of "the parties,
the employment, the description of the real estate and the
agreement to pay the commission . . .." Cushino v. Monarch
Timber Co.. 75 Wash. 678, 685, 135 P. 660 (1913) (emphasis
added).
Bishop, 105 Wash. App. at 120.
The memorandum or memoranda in writing, to satisfy the
requirements of the statute, must not only be signed by the party to
be charged but it must also be so complete in itself as to make
recourse to parol evidence unnecessary to establish any material
element of the undertaking. Liability cannot be imposed if it is
necessary to look for elements of the agreement outside the
writing. It follows that parol evidence is not admissible or
permissible to establish an essential provision of the alleged
agreement nor to supply deficiencies in the writing.
Smith v. Twohv, 70 Wash. 2d 721, 725, 425 P.2d 12 (1967) (citations omitted).
Rood claims that the various writings exchanged between the buyer and
seller during the course of their negotiations evince an intent to afford him a
commission. As these offers and counteroffers were in writing, Rood asserts,
there was compliance with the statute offrauds. We disagree.
The writings upon which Rood relies were either rejected by the other
party or withdrawn without having been accepted. Because none of these offers
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were accepted, they did not and could not create a binding legal agreement
between Mazda and 8011. Cent. Puget Sound Reg'i Transit Auth. v. Heirs &
Devisees of Eastev, 135 Wash. App. 446, 454, 144 P.3d 322 (2006) ("An offeree's
power ofacceptance is terminated 'when the offeree receives from the offeror a
manifestation of an intention not to enter into the proposed contract.'" (quoting
Restatement (Second) of Contracts § 42 (1981))). The legally defunct
counteroffers signed by 8011 cannot satisfy the statute offrauds. Thus, for this
reason as well, Rood cannot establish an entitlement to a commission payment.
For each of the reasons set forth above, Rood fails to demonstrate that
the law of contracts supports his quest for a commission payment.
IV
8011 further asserts that, because Rood is not entitled to a commission
payment, he is not entitled to recover on either his equitable claim of unjust
enrichment or his tort claims of trover, conversion, misappropriation, and tortious
interference with a business expectancy. We agree.
Each of the theories of tort or equitable liability set forth by Rood
presupposes that he was deprived of something of value that he possessed or of
something in which he had a property interest. See, e.g.. Young v. Young, 164
Wash. 2d 477, 484, 191 P.3d 1258 (2008) ("Unjust enrichment is the method of
recovery for the value of the benefit retained absent any contractual relationship
because notions of fairness and justice require it." (emphasis added)); Potter v.
Wash. State Patrol, 165 Wash. 2d 67, 78, 196 P.3d 691 (2008) (Trover "'redress[es]
an interference with one's interest in a chattel.'" (emphasis added) (quoting
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No. 73737-6-1/20
Iglesias v. United States. 848 F.2d 362, 364 (2d Cir. 1988))); Mevers Way Dev.
Ltd. P'ship v. Univ. Sav. Bank. 80 Wash. App. 655, 675, 910 P.2d 1308 (1996)
("[T]o maintain a conversion action, the plaintiff need only establish 'some
property interest in the goods allegedly converted.'" (emphasis added) (quoting
Michel v. Melgren, 70 Wash. App. 373, 376, 853 P.2d 940 (1993))); Ed Nowogroski
Ins.. Inc. v. Rucker. 88 Wash. App. 350, 356-57, 944 P.2d 1093 ("To establish a
trade secret misappropriation claim, a plaintiff must first show that a legally
protected trade secret exists." (emphasis added)), affd, 137 Wash. 2d 427, 971
P.2d 936 (1999); Newton Ins. Agency &Brokerage. Inc. v. Caledonian Ins. Grp..
Inc. 114 Wash. App. 151, 157, 52 P.3d 30 (2002) ("To prove tortious interference
with a business expectancy, a plaintiff must show . . . the existence ofa valid
contractual relationship or business expectancy." (emphasis added)).
As the analysis herein demonstrates, Rood was neither deprived of
something of value nor of something in which he had a property interest. Indeed,
Rood never possessed anything of value. He failed to satisfy the conditions
entitling him to a commission payment during and after the time period specified
in the brokerage agreement. Further, although negotiations between 8011 and
Mazda leading up to the sale may have, at one point, reflected an intention to
benefit Rood, those negotiations were merged into the final agreement, which did
not so provide, resulting in no contractual right being conferred to Rood.
Thus, Rood failed to establish the necessary premise for his theories of
equitable or tort liability against 8011. Accordingly, we also reverse the decision
of the trial court on Rood's tort and equitable claims.
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No. 73737-6-1/21
V
Rood asserts that he is entitled to an award of attorney fees on appeal
and that he remains entitled to the attorney fees he was awarded by the trial
court. Because we conclude that 8011 prevails on appeal, Rood is not entitled to
an award of appellate attorney fees. Further, because we reverse the trial court's
judgment as a matter of law in favor of Rood, the attorney fee award granted
upon that judgment must also be vacated. We remand to the trial court for entry
of judgment as a matter of law in favor of 8011 and for such other ancillary
proceedings as are necessary.
Reversed and remanded.
We concur:
4% &/l*M-
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