Estate of Greenberg v. Skurski

OPINION

By the Court,

Thompson, J.:

Andy Skurski, a licensed real estate broker, commenced this action against members of an investment group to recover a real estate commission allegedly earned during negotiations for the sale and purchase of the Starlite Industrial Park. The district court entered judgment in favor of Skurski for the sum of $66,875. That judgment imposed a joint and several liability against the members of the investment group.

The district court found that one of the members of the investment group owning the Starlite Industrial Park, Eric Staniek, was a subagent, empowered to negotiate for and bind all members, and that Staniek had made a deal with Skurski to sell the Industrial Park to the Janitell brothers. Moreover, the court also found that the Janitell brothers were ready, willing and able to purchase the property upon terms prescribed by the sellers. There is no evidence possessing substance to support either finding. For reasons hereafter expressed we reverse and direct the entry of judgment for appellants-defendants. United Mortgage Co. v. Hildreth, 93 Nev. 79, 559 P.2d 1186 (1977).

1. Starlite Industrial Park was owned by nine persons as tenants in common.¹ Their ownership was subject to a deed of trust in favor of Nevada Savings and Loan Association to secure a loan in the sum of $693,000. Their ownership also was subject to the provisions of a sales agreement between them and Nevada Savings and Loan designating specific prices to be paid for the release of certain lots within certain blocks of the Industrial Park as those lots were sold.

The tenants in common, by written document, appointed Mayer Greenberg agent and attorney in fact for each of them with regard to the Industrial Park and the loan thereon from Nevada Savings and Loan Association. No one else was authorized to act for them.

A real estate consultant, working on behalf of the owners, sent to Skurski and other real estate brokers a 73-page document containing a detailed description of the Starlite Industrial Park. Thereafter, Skurski showed the property to the Janitell brothers who were interested in purchasing commercial property in the Las Vegas area.

Negotiations between some of the sellers and Skurski and the Janitell brothers commenced in early June 1973, and on August 11, 1973, Eric Staniek advised Skurski that they had a deal.

As already noted, the district court found that Eric Staniek was a subagent of Mayer Greenberg with authority to act for all of the tenants in common owning the Industrial Park. We perceive no basis for such a finding. The document appointing Mayer Greenberg agent and attorney in fact for each tenant in common does not authorize the appointment of a subagent. There is no evidence to suggest that Ruth Greenberg, Phillip Greenberg, Daniel Greenberg, Harold Haytin, Lois Haytin, Louis Corwin or Mattie Staniek authorized Eric Staniek to act for them.

A subagent is a person appointed by an agent empowered to do so, to perform functions undertaken by the agent for the principal, but for whose conduct the agent agrees with the principal to be primarily responsible. Restatement (Second) of Agency §5(l)(1957).We read nothing in the record suggesting that the principals empowered Mayer Greenberg to appoint a subagent, nor may the record be read to indicate that Mayer Greenberg agreed with his principals to be responsible for the conduct of Eric Staniek.

The agency relationship normally is grounded on the trust and confidence the principal places in his agent. Consequently, the law has come to look upon that relationship as personal in nature. It is for this reason that agency duties ordinarily cannot be delegated without the express authority of the principal where the duties involve any personal discretion, skill or judgment. Knudsen v. Torrington Company, 254 F.2d 283 (2d Cir. 1958).

There is no question but that the duties placed upon Mayer Greenberg to act for the principals with regard to the Starlite Industrial Park involved the personal discretion, skill or judgment of Greenberg. His personal performance was called for and his duty to so perform was not assignable to Eric Staniek or anyone else without the consent of his principals. Sumner v. Nevin, 87 P. 1105 (Cal.App. 1906) (holding that a contract entered into between a broker and the owners of a tract of land, by which the broker was given the exclusive selling rights of the land, being founded on personal qualities, was not assignable without the consent of the parties thereto).

2. A precondition of entitlement to a broker’s commission is that he produce a buyer, ready, willing and able to purchase the property upon terms prescribed by the sellers. Bell v. Krupp, 86 Nev. 247, 467 P.2d 1013 (1970). This did not happen. The ownership of the Industrial Park was subject, not only to a deed of trust in favor of Nevada Savings and Loan Association, but also to the provisions of a sales agreement with that Association designating specific prices to be paid for the release of certain lots within certain blocks of the Industrial Park as those lots were sold.

The parties to this litigation as well as the Janitells deemed the release clause to be a very important element in a sale if one were to occur. The existing release clause designated in the agreement with Nevada Savings and Loan was not acceptable to the Janitells. A different release clause having the approval of Nevada Savings and Loan was never agreed upon between the sellers and the Janitells or Skurski. Therefore, it is clear that the broker did not meet the precondition of entitlement to a commission.

The judgment below is reversed and the cause is remanded with direction to enter judgment for defendants-appellants.

Mowbray, C. J., and Manoukian, J., concur.

1 The owners were Mayer Greenberg, Ruth Greenberg, Phillip Greenberg, Daniel Greenberg, Harold Haytin, Lois Haytin, Louis Corwin, Mattie Staniek and Eric Staniek. Mayer Greenberg died before this action was brought and his estate was named a defendant in his stead.