Case Title: Bensen v. Gall

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1991-12-01T00:00:00Z

Document:
NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
 that corrections may be made before this opinion goes to press.


                                 No. 90-466


 Hal Bensen                                   Supreme Court

                                              On Appeal from
      v.                                      Chittenden Superior Court

 John D. Gall and the Estate of               December Term, 1991
 Arthur W. Mason


 John P. Meaker, J.

 Christopher D. Ekman of Heilmann, Ekman & Associates, Inc., Burlington,
   for plaintiff-appellant

 John J. Boylan, Burlington, for defendant-appellee Gall

 Keith J. Kasper of McNamara, Fitzpatrick, McCormick & Mertz, Burlington,
   for defendant-appellee Estate of Mason


 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


      DOOLEY, J.   This is the second time that the events giving rise to
 this controversy have been before the Court.  In Colony Park Assoc. v. Gall,
 154 Vt. 1, 572 A.2d 891 (1990), we affirmed an award of specific performance
 of a contract for the sale of land by defendants to Colony Park Associates
 (Colony Park).  Plaintiff, a real estate broker, brought this action seeking
 a commission for the sale.  The trial court granted summary judgment to
 defendants because plaintiff did not have a written listing agreement as
 required by Rule 2.11 of the Vermont Real Estate Commission.  On appeal,
 plaintiff argues that language in the contract of sale met the requirement
 of the rule, that events in the specific performance trial collaterally
 estopped defendants from denying their obligation to pay the commission, and
 that denial of a commission will unjustly enrich defendants.  We affirm.
      By letter dated December 7, 1984, defendant Gall authorized plaintiff
 to sell the property  There was no written listing agreement.  Colony Park
 became interested in the property and, on May 31, 1985, submitted to
 defendants a letter of intent detailing the terms on which they would
 purchase.  This led to an August 20, 1985 contract of sale prepared on
 plaintiff's standard form.  The following words were above defendants'
 signature:
         I AGREE TO SELL THE ABOVE DESCRIBED PROPERTY ON THE
         TERMS AND CONDITIONS HEREIN STATED AND AGREE TO PAY THE
         ABOVE SIGNED REALTOR AS FEE FOR SERVICES THE SUM OF Ten
         percent (10%) of Selling price (excluding the $18,000.
         payable to Arthur W. Mason for foundation, etc.)
         DOLLARS, OR ONE-HALF THE DEPOSIT IN CASE SAME IS FOR-
         FEITED BY PURCHASER, PROVIDED THE SAME SHALL NOT EXCEED
         THE FULL AMOUNT OF THE COMMISSION.  COMMISSION TO BE
         PAID OUT OF FIRST MONEY RECEIVED.

 Defendants refused to pay the commission and refused to close.  Plaintiff
 sued for the commission.
      The superior court dismissed the action because plaintiff failed to
 obtain a written listing agreement as required by Rule 2.11(2) of the
 Vermont Real Estate Commission. (FN1) In relevant part, the rule provides:
 (2)  Before showing real estate for sale, lease or rent,
 you must have executed a written contract with the
 seller listing said real estate for sale, lease or rent,
 or the express permission of the broker who has such a
 listing agreement.  A listing agreement shall contain:
                (a) Identification of the type of listing agreement
              in bold face type stating either:  NONEXCLUSIVE
              (open);  EXCLUSIVE AGENCY;  EXCLUSIVE RIGHT TO SELL,
              LEASE OR RENT.
                (b) Clear property description and location.
                (c) All terms and conditions of sale, lease or
              rental.
                (d) The agreement date and specific expiration date
              not to exceed twelve (12) months from the date of
              agreement.  A listing agreement cannot contain any
              provision for automatic extension or renewal beyond
              the expiration date.
                (e) A statement of the amount of commission to be
              paid the broker, clearly stated in the listing
              agreement.
                (f) The signatures of all parties to the listing
              contract
              . . . .

              (4) Copies of all listing . . . contracts executed
              by a broker shall be given to all parties involved
              at the time of the execution.

 In response to plaintiff's argument that the contract for sale of the
 property met the requirements of the rule, the court held that it did not
 contain all the items required by the rule and that a purchase-and-sale
 contract could not cure deficiencies in a listing agreement.  The court also
 denied relief based on equitable estoppel and collateral estoppel.
      We recently summarized the law with respect to listing agreements and
 the requirements of the rules of the Real Estate Commission in MacDonald v.
 Roderick, 3 Vt. L.W. 23, 25 (Jan. 3, 1992).  Drawing on our case law and the
 effect of public policy requirements on the enforceability of contracts as
 set forth in { 179(a) of the Restatement (Second) of Contracts, we stated:
         [A] violation of the rules of the Real Estate Commission
         with respect to the form or content of a listing
         agreement will bar recovery of a commission only if the
         violation somehow taints the agreement or makes its
         enforcement unfair.  That taint will always be found
         where the agreement is oral because the requirement of a
         writing ensures that the parties are fully aware of the
         terms of the agreement.  When, as here, the claim is
         that the violation occurred because of failure to use
         required language or because of the omission or
         misstatement of a required term, there will be no effect
         on the broker's right to recover a commission unless the
         violation makes recovery unfair in the particular case
         before the court.

 MacDonald, 3 Vt. L.W. at 25.  The trial court here correctly denied
 plaintiff a commission because he failed to have a written listing
 agreement, unless there is a reason to except this case from the general
 rule.  Plaintiff argues three such reasons.
      The first is that enforcement of the rule gives defendants a windfall,
 because the undisputed evidence shows that they retained plaintiff and he
 produced a ready, willing and able buyer who paid defendants a purchase
 price above that sought by them.  Plaintiff argues that under theories of
 unjust enrichment and equitable estoppel defendants should be required to
 pay the commission.
      It is clear that defendants retained the entire proceeds of the sale
 free of plaintiff's commission, even though plaintiff's work procured the
 sale.  This is the necessary consequence of enforcing the Real Estate
 Commission rule by denying a commission when the broker fails to comply with
 it.  To allow plaintiff to prevail on this argument would eliminate the
 enforcement mechanism for the rule.  In cases from other jurisdictions on
 which plaintiff relies, the courts have held that violation of a statute or
 rule requiring a listing agreement to be in writing is not a defense to a
 broker's action for a commission.  See Coldwell Bankers-Gordon Co. Realtors
 v. Roling,