Case ID: us-ct-cl_185/html/0585-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam : Bennett, Chief Commissioner:\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

401 F. 2d 806
    KUYKENDALL REAL ESTATE COMPANY, A CO-PARTNERSHIP COMPOSED OF RUSSELL KUYKENDALL AND ROBERT KUYKENDALL, OF ENID, OKLAHOMA v. THE UNITED STATES
    [No. 59-66.
    Decided October 18, 1968]
    
      
      Franlc Garter, attorney of record, for plaintiff. Otjen, Garter <& Huddleston, of counsel.
    
      Kathemne H. Johnson, with, whom was Assistant Attorney General Edwin L. Weisl, Jr., for defendant.
    Before CoweN, Ohief Judge, Laeamoke, Dureee, Davis, Collins, Skelton, and Nichols, Judges.
    
   Per Curiam :

This case was referred to Chief Trial Commissioner Marion T. Bennett with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 57(a). The Commissioner has done so in an opinion and report filed on May 15, 1968. On June 13, 1968, defendant filed a notice of intention to except to the Commissioner’s report which, under date of July 9, 1968, the defendant withdrew with the statement that it has no objection to the entry of judgment for plaintiff in the amount determined by the Commissioner. Plaintiff has filed no exception to the Commissioner’s opinion, findings, and recommended conclusion of law and the time for so filing has expired in accordance with the rules of the court. Since the court agrees with the Commissioner’s opinion, findings, and recommended conclusion of law, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case without oral argument. Therefore, plaintiff is entitled to recover and judgment is entered for plaintiff in the sum of $20,950.

OPINION OP COMMISSIONER

Bennett, Chief Commissioner:

Plaintiff, a real estate brokerage firm in Enid, Oklahoma, brought an action for breach of a contract entered into in 1962 with the Federal Housing Administration (FELA) in which plaintiff was granted “the exclusive right to sell” at retail 44 FHA-owned houses in Enid.

In an order of June 13, 1967, 180 Ct. Cl. 1301, the court, in dismissing defendant’s motion for summary judgment, held the defendant liable for the breach because the FHA sold the houses in four parcels, which was deemed to be a retail sale, violating plaintiff’s exclusive right to sell at retail. Defendant had reserved in the contract only the right to dispose of the properties in a lump sale. The court remanded the case to the commissioner for a determination of damages.

Article 1(a) (2) of the contract provided that plaintiff was to receive “5% of the gross sales prices received 'by the Government,” as a commission for retail sales. Plaintiff seeks as damages 5 percent of the $419,000 which the FHA received from the sales which constituted the breach.

The usual measure of damages in this type of case is the commission which would have been received had the breach not occurred. Albright v. Kalbitzer, 62 F. Supp. 815 (E.D. Pa. 1945) ; Ladd v. Teichman, 359 Mich. 587, 103 N.W. 2d 338 (1960) ; Bell v. Dimmerling, 149 Ohio St. 165, 78 N.E. 2d 49 (1948) ; Carter v. Hall, 191 Ky. 75, 229 S.W. 132 (1921) ; Holmes v. Holik, 238 S.W, 2d 260 (Tex. Civ. App. 1951).

For plaintiff to recover its commission in this type of case, it must be shown that plaintiff substantially performed its part of the contract by making a reasonable effort to effect a sale. Ladd v. Teichman, supra. Plaintiff does not have to show that it would have made a sale, but only that a sale reasonably might have been made. Hollweg v. Schaefer Brokerage Co., 197 F. 689 (6th Cir. 1912).

It is uncontradicted here that plaintiff presented two firm offers to the FHA, and continued to attempt to secure offers for nearly 2 years from the effective date of the contract. During this period plaintiff’s efforts were substantially hindered by FHA’s requirement that plaintiff begin individual sales with the unit on the west end of the project, a unit which plaintiff considered to be undesirable and one in which it could not interest prospective purchasers even though a continuous effort was made. Based upon plaintiff’s success in later selling property identical to that involved in the contract, as well as reselling part of this project after the FHA sale, it is reasonable to conclude that plaintiff would have been successful had the FHA not hindered plaintiff and then breached the contract. The record clearly shows that plaintiff made a strong effort to carry out its part of the contract. Defendant sold the properties at retail at prices less than it had authorized plaintiff to sell them.

Defendant urges that the proper measure of damages is the commission less expenses plaintiff would have incurred. These expenses are not established by the evidence. However, in this case plaintiff incurred expenses, also not established as to amount, before the breach. They would have been absorbed by the commission plaintiff would have been entitled to if defendant had not breached. Plaintiff does not claim these expenses. See Albright v. Kalbitzer, supra at 822. Plaintiff is entitled to judgment for 5 percent of the $419,000 received by defendant, or $20,950.

FindiNgs on Fact

1. Plaintiff, a partnership engaged in the real estate brokerage business, entered into contract No. 117-24 with the Federal Housing Administration on April 23, 1962, in which plaintiff was granted “the exclusive right to sell” at retail 41 duplex houses and 3 single-family houses in Enid, Oklahoma.

2. Plaintiff brought an action for breach of contract in this court after defendant sold the property in four separate sales in late 1964 and early 1965.

3. In an order of June 13, 1967, denying defendant’s motion for summary judgment, the court found defendant liable for breach of contract and remanded the case to the commissioner for a determination of damages.

4. The contract provided that plaintiff would receive 5 percent of the gross retail sales prices as a commission. Defendant received $419,000 for the property from the sales which constituted the breach. Plaintiff seeks as damages 5 percent of this amount, or $20,950, which would have been its commission had it made the sales.

5. The contract became effective May 1, 1962. On May 22, 1962, plaintiff submitted an offer to defendant on behalf of two clients for the purchase of four duplexes at a total price of $37,500. This offer was rejected by the FHA on May 28, 1962, because it considered the price too low.

6. On July 24, 1962, plaintiff submitted an offer to defendant on behalf of two other clients for the purchase of one duplex at a price of $11,250. This offer was rejected by the FHA on July 27, 1962, because of its location in the middle of the project. The FHA suggested that plaintiff begin individual sales at the extreme west end of the project on Rupe Street so that remaining unsold houses would be more attractive for bulk purchasers. This restriction was not a part of the contract. Plaintiff then attempted to interest its clients in the property specified by the FHA but the clients were not interested because of the location and the condition of the property. By letter of August 13, 1962, plaintiff informed defendant of the problems created by having to begin sales with this undesirable property but the FHA reaffirmed its position.

7. On August 31, 1962, defendant submitted to plaintiff its approved sales prices for the houses — “$10,400 As Is— $11,000 Bepaired.”

8. From July 1962 until defendant began selling the properties itself, plaintiff submitted no more offers. However, as late as December 1963 plaintiff was still attempting to make sales beginning at the west end of the project, but it was unable to secure offers. The uncontradicted evidence is that people inquired about other houses, but when they were told that sales had to begin at the west end of the project, they were not interested. On December 30, 1963, plaintiff asked defendant for a price it could quote to a prospective purchaser of three duplexes beginning at the west end of the project, but apparently received no response from the FHA.

9. Plaintiff believed that it could have sold the property if the aforesaid restriction had not been imposed upon it and the contract subsequently breached. In 1964 and 1965 plaintiff sold five identical duplexes in the same area to individuals, and in 1966 and 1967 plaintiff sold two projects totaling 24 duplexes which were part of the properties involved in this case. Plaintiff sold the individual properties for $12,000 each and the 24 duplexes for an average of $10,900. The individual sales prices were well above the listed prices set by the FHA for the properties involved in this case. Plaintiff’s, average price received for the project sales was $1,400 higher than the average price, $9,500, obtained by the FHA when it sold the properties.

10. It is customary for real estate brokers in plaintiff’s area to absorb expenses in the commission received for selling the property. For this reason, plaintiff kept no records attributing specific selling expenses to specific clients or pieces of property. Plaintiff expended substantial amounts of time and money, including newspaper advertisement, over a period of 2 years attempting to sell the property.

Ultimate Finding

11. The weight of the credible evidence establishes that plaintiff did find some buyers and most probably would have found others but for defendant’s breach of the contract. The evidence establishes that plaintiff incurred expenses in connection with attempting to sell the properties but not what those expenses amounted to nor what they would have been but for the defendant’s interference. It is customary for such expenses to be absorbed in the sales commission agreed upon between seller and broker and plaintiff here claims no such expenses as damages. Plaintiff’s damages are measured by its lost commission of 5 percent of the gross sales prices received by defendant, pursuant to article 1(a) (2) of the contract.

CONCLUSION op Law

Based on the foregoing findings of fact and opinion, which are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that plaintiff is entitled to recover from the United States and judgment is therefore entered for plaintiff in the amount of twenty thousand nine hundred fifty dollars ($20,950).