Burland, Reiss, Murphy & Mosher, Inc. v. Schmidt

D. C. Riley, J.

Plaintiff Burland, Reiss, Murphy & Mosher, Inc., (hereafter, "Broker”), secured a summary judgment in the lower court directing defendants, (hereafter, "Seller”), to pay $59,200 as a commission from the sale of certain realty owned by Seller.

The court below rested its decision on an October 15, 1974, contract under which Seller granted Broker "the exclusive right * * * for an unlimited period of time, to find a purchaser” for the property, subject to either party’s right to cancel the contract "by giving 30 days’ prior notice”. Seller further promised Broker that:

"[i]f a purchaser is obtained therefor, by you or by anyone for me, (including myself), during said period, at the stated price and terms, or upon any other price, terms or exchange to which I consent, or if said property is sold by me or for me, within (3) months after expiration of this Agreement, to a purchaser known to me to have been shown the property during such period, to pay you a commission of four (4) per cent of such sale price.”

On July 21, 1975, Seller notified Broker of its intention to cancel the contract, with cancellation effective August 24, 1975. Some time prior to the effective date of cancellation, one Sugarman, the eventual vendee, viewed the subject parcel, and on November 19, 1975, purchased it from Seller. The sale thus occurred after cancellation of the contract, i.e., after the listing period, but within the 3-month post-listing period.

Although informed of the sale prior to its occurrence, Broker did not attend the closing and did not request the 4 percent commission until after the property had been conveyed. Upon Seller’s refusal to pay, Broker instituted the present action and, as noted, met with success on a summary judgment. GCR 1963, 117.2(3).

Seller initially disputes the propriety of summary judgment, alleging that material issues of fact remain to be resolved. Based on the contract, the pleadings and the affidavits of the parties, we agree. In his opposing affidavit, Mr. Harry E. Schmidt, III, a defendant and general partner of Seller, expressed his understanding and intent

"that the extension clause contained in the Contract would entitle plaintiff to a commission only if the Property was sold during the extension period to a person to whom plaintiffs had shown the Property prior to cancellation of the Contract.”

This interpretation is not inconsistent with the language of the contract and thus should have been considered by the lower court. Union Oil Co of California v Newton, 397 Mich 486; 245 NW2d 11 (1976), Michigan National Bank of Detroit v Holland-Dozier-Holland Sound Studios, 73 Mich App 12; 250 NW2d 532 (1976). In our view, the commission clause of the contract raises more questions than it settles. The clause’s indiscriminate use of the phrases "said period” and "such period” fails to specify whether these words refer to the listing period, the post-listing period, both periods, or one or the other period depending upon the context. From the bare language of the contract, we have no way of knowing what the parties intended by the imprecise use of these terms; but by the same token, neither did the lower court on a motion for summary judgment. Since the cardinal rule of contract law is to effecuate the intent of the parties, and since summary judgment is inapplicable where the question of intent plays a leading role, Durant v Stahlin, 375 Mich 628, 652; 135 NW2d 392 (1965) (Souris, J., concurring), we hold the lower court erred reversibly in granting summary judgment to Broker.

Seller also argues that the Broker-Seller contract is unenforceable because it violates Administrative Code, 1973 AACS, R 338.2734(2) and R 338.2731 which provide:

"Rule 34. (1) * * * .

"(2) A listing agreement shall set forth a definite expiration date and shall not contain a provision requiring the party signing the listing to notify the broker of the party’s intention to cancel the listing upon or after the expiration date.”

"Rule 31. A broker or salesman who does not comply with these rules or any provisions of the act is presumed to be guilty of unfair dealing.”¹

In reliance on Brown v Marty, 172 Wis 411; 179 NW 602 (1920), Broker responds that the contract conforms with Rule 34(2) since the "definite expiration date” is 30 days after a cancellation notice has been sent to the other party. Brown involved a statute which required every contract for a real estate commission to describe "the period during which the agent or broker shall procure a buyer or seller”. There the Court held:

"[W]e think the contract in question is sufficiently definite in expressing the time of duration in that it provides a method by which the duration of the contract may be absolutely fixed, to wit, three months after the giving of written notice by the owner.” 172 Wis at 414-415; 179 NW at 603. (Emphasis added.)

Were we faced with language similar to the statute in Brown, we might well arrive at the same conclusion. Rule 34(2), however, is fundamentally different. It requires not a definable expiration date, but one that is definite; it mandates not a manner or method of ascertaining the contract’s expiration, but a date certain. We hold, therefore, that the Broker-Seller contract conflicts with the stricture of Rule 34(2).

This holding, however, avails Seller little. The general rule is that where, as here, a statute or regulation creates a duty unknown to the common law,² the remedy provided therein for violation of the duty is exclusive. Pompey v General Motors Corp, 385 Mich 537, 552; 189 NW2d 243 (1971). Under MCLA 451.213; MSA 19.803, a broker’s violation of any duty imposed by this section or by its attendant rules permits the department of licensing and regulation to "deny, suspend or revoke” the broker’s license. While "[t]his act shall not be construed to relieve a person from civil liability * * * under the general laws of this state”, MCLA 451.213(k); MSA 19.803(k), one cannot be relieved of a liability that apart from this act does not exist. Accordingly, Broker’s violation of Rule 34(2) may not "bar recovery of an [otherwise] earned commission”. Greater Bloomfield Real Estate Co v Braun, 64 Mich App 128, 135; 235 NW2d 168 (1975).

We need not and do not address the other issues raised, given our resolution of the foregoing questions.

Reversed and remanded for trial on the merits. Costs to abide the result.

N. J. Kaufman, P. J., concurred.

1 The department of licensing and regulation is authorized "to enumerate by rule what conduct constitutes 'dishonest or unfair dealing’ as that term is used in [1919 PA 306, as amended, being MCLA 451.201 et seq.; MSA 19.791 et seq.]” McKibbin v Corporation and Securities Commission, 369 Mich 69, 75; 119 NW2d 557 (1963). In Ranke v Corporation and Securities Commission, 317 Mich 304; 26 NW2d 898 (1947), cited in McKibbin, supra, the Supreme Court upheld a prior, substantially similar version of Rule 34(2).

2 At common law, the failure to state a definite expiration date will not invalídate a contract for a real estate commission. Nolan v Swift, 111 Mich 56; 69 NW 96 (1896).