Case Title: ROBERT S. CHEEK, II, d/b/a CHEEK REAL ESTATE SERVICES V. JACKSON WAX MUSEUM, INC., by and through its President, TIM SMITH

Citation: 2009 WY 151, 220 P.3d 1288

Docket Number: 457930

State: wyoming

Court: Wyoming Supreme Court

Date: 2009-12-11T00:00:00Z

Document:
ROBERT S. CHEEK, II, d/b/a CHEEK REAL ESTATE SERVICES V. JACKSON WAX MUSEUM, INC., by and through its President, TIM SMITH2009 WY 151220 P.3d 1288Decided: 12/11/2009
OCTOBER 
TERM, A.D. 2009

 
 

ROBERT 
S. CHEEK, II, d/b/a CHEEK REAL ESTATE 
SERVICES,Appellant(Plaintiff),v.JACKSON WAX MUSEUM, 
INC., by and through its President, TIM 
SMITH,Appellee(Defendant).

 
 

Appeal 
from the District Court of Teton County

The 
Honorable Nancy J. Guthrie, Judge

 
 
Representing 
Appellant:

Christopher 
S. Leigh, Jackson, Wyoming; Leonard R. Carlman of Hess, Carlman & D'Amours, 
LLC, Jackson, Wyoming.  Argument by 
Mr. Carlman.

 
 
Representing 
Appellee:

Vonde 
M. Smith of Law Offices of Vonde M. Smith, P.C., Jackson, 
Wyoming.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

 
 
KITE, 
Justice.

 
 
            

[¶1]      Jackson Wax 
Museum, Inc. (the Museum) entered into a brokerage agreement with Robert S. 
Cheek, II, doing business as Cheek Real Estate Services (CRES), in which Mr. 
Cheek agreed to act as the Museum's exclusive broker for leasing property owned 
by the Museum.  Mr. Cheek found a 
tenant which entered into a lease with the Museum.  The Museum paid Mr. Cheek the commission 
due under the brokerage agreement.

 
 
[¶2]  After the term of the initial lease, the 
Museum and the tenant renegotiated the lease.  The Museum did not pay Mr. Cheek a 
commission for the renegotiated lease.  
Mr. Cheek filed a complaint against the Museum seeking payment of the 
commission.  The district court 
granted summary judgment for the Museum, finding that no commission was owed 
because the new lease was not an extension or renewal of the original lease, but 
was instead a new lease made directly between the Museum and the tenant.  

 
 
[¶3]  Mr. Cheek appeals the order granting 
summary judgment to the Museum, claiming the district court misinterpreted the 
new lease agreement.  We agree and 
reverse the district court's order.       

 
 
ISSUE

 
 
[¶4]      The determinative 
issue presented is whether the district court misinterpreted the lease language 
when it concluded Mr. Cheek was not entitled to a commission for the 
renegotiated lease.

 
 
FACTS

            

[¶5]  On December 1, 1993, Tim L. Smith, 
president of the Museum, and Mr. Cheek entered into a one year listing agreement 
providing that Mr. Cheek would act as the exclusive agent for leasing the 
Museum's property at 55 S. Cache Street in Jackson, Wyoming.  Paragraph 5 of the listing agreement 
provided:

 
 
In 
the event that:  (i) at any time 
during the term of this agreement a lease of all or any portion of the Premises, 
upon any terms acceptable to us, shall be made with any tenant who was procured 
by CRES, or by us, or by any other person: or (ii) at any time after the 
expiration or the termination of this agreement a lease of all or any portion of 
the Premises, upon any terms acceptable to us, shall be made with any tenant to 
whom the Premises were submitted by CRES, or by us, or by any other person 
during the term of this agreement; then, and in either such event, we agree to 
pay to CRES one (1) full commission as provided in paragraph 7 of this 
agreement.

 
 
Paragraph 
7 of the listing agreement provided in relevant part:

 
 
The 
leasing commission shall be four percent (4%) of the aggregate rental for the 
entire term including renewals, extensions, or additional space. . . 
.

 
 
Paragraph 
8 further provided:

 
 
Leasing 
commissions are earned upon the execution of a lease by the parties and are 
payable upon commencement.  Landlord 
may also cho[o]se, at its option, to pay the commission over the first two years 
of the base term in four equal payments due at the end of each six months of the 
first two years.  Commissions on 
renewals are payable upon commencement of the renewal 
term.

 
 
[¶6]  In the fall of 1994, the parties agreed 
to extend the listing agreement for another year, until December 1, 1995.  In August of 1995, Mr. Cheek found a 
tenant to lease the Museum property and the Museum and the tenant entered into a 
lease agreement.  The lease term was 
from January 11, 1996, through January 10, 2006.  Consistent with the terms of the listing 
agreement, the Museum paid Mr. Cheek his commission for the term of the 
lease.

 
 
[¶7]  In 2006, Mr. Cheek became aware that the 
Museum and the tenant had entered into a second agreement, entitled "First 
Amendment to Lease Agreement," in which the tenant leased the property for 
another ten years.  Mr. Cheek 
notified the Museum that he was entitled to his commission for the second lease. 
 The Museum responded that Mr. Cheek 
was not entitled to a commission.

 
 
[¶8]  Mr. Cheek filed this action against the 
Museum, alleging claims for breach of contract, quantum meruit and unjust 
enrichment.  The Museum answered the 
complaint by denying the claims and asserting numerous affirmative 
defenses.  The Museum then moved for 
summary judgment on Mr. Cheek's claims.

 
 
[¶9]  In support of its motion, the Museum 
asserted Mr. Cheek was not entitled to a commission on the second lease because 
the Museum's obligation to him was discharged upon payment of the one full 
commission; the second lease was a distinct lease not covered by the listing 
agreement; and the parties' course of conduct showed there was no intent to 
allow the original lease to be renewed or extended.  The Museum also contended that Mr. Cheek 
had no claims for unjust enrichment or quantum meruit. 

 
 
[¶10]  Mr. Cheek responded to the Museum's 
motion and also moved for summary judgment on his claims against the 
Museum.  In support of his motion, 
he contended the listing agreement clearly and unambiguously provided for 
additional commissions in the event of renewals or extensions of the lease 
entered into between the Museum and a tenant procured by Mr. Cheek; therefore, 
upon renewal of the lease with the tenant he procured, the Museum was obligated 
to pay his commission.

 
 
[¶11]  Following a hearing on the motions, the 
district court entered an order granting the Museum's motion.  The district court concluded the 
amendment to the lease agreement was not a renewal but an entirely new lease; 
therefore, the Museum was not bound by the terms of the listing agreement and 
did not owe Mr. Cheek a commission.  
Mr. Cheek timely appealed from the district court's order.        

 
 
STANDARD 
OF REVIEW

 
 
[¶12]  Summary judgment is appropriate when there are 
no genuine issues of material fact and the moving party is entitled to judgment 
as a matter of law.  W.R.C.P. 
56.  A genuine issue of material 
fact exists when a disputed fact, if it were proven, would establish or refute 
an essential element of the cause of action or defense.  Omohundro v. Sullivan, 2009 WY 38, ¶ 7, 
202 P.3d 1077, 1081 (Wyo. 2009).  
Because summary judgment involves a purely legal determination, our 
review is de novo.  Id.  We review a district court's order 
granting summary judgment using the same materials and following the same 
standards as the district court.  Id.  We examine the record in the light most 
favorable to the party opposing the motion, affording to that party the benefit 
of all favorable inferences that fairly may be drawn from the record.  State ex rel. Arnold v. Ommen, 2009 WY 
24, ¶ 13, 201 P.3d 1127, 1132 (Wyo. 2009).  
In reviewing summary judgment orders involving contracts, we are governed 
by similar principles.  When 
contractual language is clear and unambiguous, the interpretation and 
construction of contracts is a matter of law for the courts.  Vargas Ltd. Partnership v. Four "H" Ranches 
Architectural Control Comm., 2009 WY 26, ¶ 11, 202 P.3d 1045, 1050 (Wyo. 
2009).  We review questions of law 
de novo without giving any deference 
to the district court's determinations.  
Id.  

 
 
DISCUSSION

 
 
[¶13]  Mr. Cheek contends the district court 
erred in concluding the First Amendment to Lease Agreement was an entirely new 
lease rather than a renewal or extension of the original lease.  He asserts the "amendment to lease 
agreement" was just that, an amendment to the original lease agreement, 
incorporating the original lease by its express terms and declaring that it was 
a modification of the original lease.  
Because the amendment to lease agreement was an extension of the original 
lease agreement, Mr. Cheek contends, he was entitled to his commission in 
accordance with the brokerage agreement.

 
 
[¶14]  In determining whether the district 
court's interpretation is correct, we apply the rules governing contract 
interpretation.  A lease is a 
contract and is interpreted according to the rules applicable to contract 
interpretation.  Brown v. Johnston, 2004 WY 17, ¶ 25, 85 P.3d 422, 429 (Wyo. 2004).  Our goal 
is to determine and effectuate the intention of the parties.  Omohundro, ¶ 9, 202 P.3d  at 1081.  We first examine the language used in 
the lease, giving the words their plain and ordinary meaning.  Id.  We consider the whole document and not 
just one clause or paragraph.  Id.  A disagreement between the parties as to 
the meaning of a lease does not give rise to an ambiguity.  Id.  

 
 
[¶15]  The First Amendment to Lease Agreement 
states in pertinent part as follows:

 
 
            
This First Amendment to Lease Agreement (the "Amendment") is made as of the 
_____ day of ________, 2005, by and between WAX MUSEUM OF OLD WYOMING, INC., a 
Wyoming corporation ("Landlord") and EDDIE BAUER, INC., a Delaware 
corporation ("Tenant").  

 
 
RECITALS:

 
 
            
WHEREAS, pursuant to that certain Lease Agreement dated on or about 
January 11, 1996 (the "Lease"), Landlord leased to 
Tenant and Tenant leased from Landlord the premises . . . 
.

 
 
            
WHEREAS, Landlord and Tenant desire to modify certain terms of the Lease 
as set forth herein.

 
 
            
NOW, THEREFORE, in consideration of mutual covenants and other good and 
valuable consideration, the receipt and legal sufficiency of which is hereby 
acknowledged, the parties hereto agree as follows:

 
 

1.                  
 TERM.  The term of the Lease as set forth in 
Section 1.1 on page 2 of the Lease shall be and is hereby extended for a period 
of ten (10) years, beginning on February 1, 2006, such that the term of the 
Lease will now end on January 31, 2016. 

 
 

2.                  
FIXED 
RENT.  Section 3.2 on page 4 of the Lease 
titled "Fixed Rent" is hereby 
amended to add the following language at the end of that 
section:

 
 


Term

Annual 
      Fixed Rent

Monthly 
      Fixed Rent

 
 
Lease 
      Years 11-12

 
 
* 
      * * *

 
 
* 
      * * *

 
 
Lease 
      Years 13-15

 
 
* 
      * * *

 
 
* 
      * * *

 
 
Lease 
      Years 16-20

 
 
* 
      * * *

 
 
* 
      * * *

 
 

3.                  
PERCENTAGE 
RENT.  Section 3.3 on page 5 of the Lease 
titled "Percentage Rent" is hereby 
amended to add the following language at the end of that 
section:

 
 
For 
the Lease Years 11-20, Tenant hereby covenants . . . .

 
 


 
 
Lease 
      Year

 
 
Breakpoint

 
 
Lease 
      Years 11-12

 
 
* 
      * * *

 
 
Lease 
      Years 13-15

 
 
* 
      * * *

 
 
Lease 
      Years 16-20

 
 
* 
      * * *

 
 

4.                  
LEASE 
TO REMAIN IN EFFECT; SUCCESSORS.  The lease as herein amended shall remain 
in full force and effect in accordance with the terms thereof . . . 
.

 
 
[¶16]  Considering this language, we note first 
that the document is entitled an "amendment" to the "lease agreement."  The "lease agreement" to which the title 
refers is identified in the first paragraph of the recitals as "that certain 
Lease Agreement dated on or about January 11, 1996 (the Lease')," that is, the original 
lease agreement.  Thus, the above 
document was clearly intended to be an amendment to the original lease 
agreement.

 
 
[¶17]  The plain and ordinary meaning of the 
word "amend" is "to alter formally by modification, deletion or addition."  Webster's Third New Int'l Dictionary 68 
(2002).  Giving the language used 
its plain and ordinary meaning it is apparent the parties intended the document 
as a modification of the original lease agreement.  Consistent with this interpretation, the 
second paragraph of the recitals states that the parties desired "to modify 
certain terms of the Lease." 

 
 
[¶18]  The next paragraph reflects that the 
parties agreed to modify three sections of the original lease:  Section 1.1 on page 2, the lease term; 
Section 3.2 on page 4, entitled "fixed rent"; and Section 3.3 on page 5, 
entitled "percentage rent."  
Addressing the first section, the amendment extended the term of the 
original lease for another ten year period.  As used in this context, the plain and 
ordinary meaning of the term "extend" is "to cause to be longer."  Id. at 804.  Thus, it appears the parties intended to 
modify the original lease by making the lease term longer.  

 
 
[¶19]  Consistent with this intent, the next 
two paragraphs, in which the fixed rent and percentage rent provisions of the 
original lease were amended, referenced the lease years under the amended lease 
as years 11-12, 13-15, and 16-20 and not, as an entirely new lease would have 
done, as years 1-2, 3-5 and 6-10.  
Finally, numbered paragraph 4 of the amendment states that "The Lease," 
identified in the recitals as the 1996 lease, as amended, "shall remain in full 
force and effect in accordance with" its terms.  Giving the language used in the 
amendment its plain and ordinary meaning, it is clear the parties intended to 
modify and extend the original lease.  
On the face of the amendment, there is no language suggesting that the 
parties intended to enter into an entirely new lease 
agreement.

 
 
[¶20]  We turn next to the language of the 
brokerage agreement to determine the parties' intent with respect to 
modifications or extensions of the lease.  As noted in paragraph 5 above, paragraph 
8 of the brokerage agreement provided for payment of a commission upon "renewal" 
of the original lease.  The word 
"renew" is defined as:  "to grant or 
obtain an extension on."  Id. at 1922.  In the context of a promissory note, we 
have said the term "renewal" means the reestablishment of the particular 
contract for another period of time.  
Belden v. Thorkildsen, 2008 WY 
145, ¶ 15, 197 P.3d 148, 156 (Wyo. 2008).  

 
 
A 
note is "renewed" when a new note evidencing the same obligation is executed and 
delivered by the maker to the holder of the old note.  Renewal does not entail a surrender of 
the outstanding note.  A note is a 
renewal of an earlier note only if they involve the same obligation.  

 
 

Id., 
n. 3.  Giving the language used in 
the brokerage agreement its plain and ordinary meaning, it appears Mr. Cheek and 
the Museum intended a commission to be paid if the original lease was extended 
or renewed. 

 
 
[¶21]  In concluding otherwise, the district 
court identified the issue before it as whether a broker who is not involved in 
negotiations to extend a lease is entitled to a commission when the lessor and 
lessee make a new lease agreement with different terms than the original 
lease.  The district court cited the 
following passage from H.G. Hirschberg, Annotation, Broker's Right to Commission on Renewal, 
Extension, or Renegotiation of Lease, 79 A.L.R.2d 1063 § 2 
(2008):

 
 
[A] 
broker who procured a lease for the lessor and who claims commission on a 
renewal thereof must recover, if at all, on the basis of an express contractual 
provision for commission on renewals.  
And, even where such provision was included in a brokerage agreement, 
most courts have held that the broker was not entitled to commission where 
lessor and lessee, without reference to the renewal or extension provisions of 
the original lease make a new lease agreement which differs in its terms from 
those of the renewal option provisions, and particularly so in respect of the 
term for which it is to run.

 
 
[¶22]  In concluding the amendment was a new 
lease, and not an extension of the original, the district court was influenced 
by the following factors:  1) the 
original lease agreement did not contain an option for renewal or extension of 
the lease; 2) Mr. Cheek's statement in an August 19, 2004, letter to the Museum 
that the original lease had no renewal option clause and it was time to begin 
renewal negotiations with the tenant; 3) the original lease had expired before 
the Museum and the tenant began negotiating a new lease; 4) evidence that Mr. 
Cheek was not involved in negotiating the new lease; rather, the Museum met 
directly with the tenant and they negotiated the new lease themselves; 5) the 
terms of the new lease were substantially different from the original lease; and 
6) the new lease did not reference any renewal or extension provisions of the 
original lease.  The district court 
also expressed concern that the renewal provision of the brokerage agreement was 
"entirely open-ended" and, theoretically, would entitle the broker to a 
commission every time the lease was renewed on into the 
future.

 
 
[¶23]  We share the district court's 
concern.  However, the parties to a 
contract are free to incorporate within their agreement whatever lawful terms 
they desire, and the courts are not at liberty, under the guise of judicial 
construction, to rewrite the contract.  
City of Gillette v. Hladky Const., 
Inc., 2008 WY 134, ¶ 46, 196 P.3d 184, 200 (Wyo. 2008).  Our function is to interpret contracts 
to effectuate the parties' intention, as expressed in the language of the 
agreement.  Id.  If the contract language is clear and 
unambiguous, our obligation on appeal is to determine the parties' intent from 
the words of the agreement as a matter of law.  Mathisen v. Thunder Basin Coal Co. LLC, 
2007 WY 161, ¶ 12, 169 P.3d 61, 65 (Wyo. 2007).  

 
 
[¶24]  Here, the language in paragraph 8 of the 
brokerage agreement clearly and unambiguously provided for payment of a 
commission upon renewal of the lease.  
Likewise, the language of the First Amendment to Lease Agreement clearly 
and unambiguously modified and extended, or renewed, the original lease.  There simply is no language suggesting 
that the First Amendment to Lease Agreement was intended to be an entirely new 
agreement.  

 
 
[¶25]  We reverse the district court's order 
granting summary judgment for the Museum and remand for entry of an order 
granting summary judgment for Mr. Cheek.