Title: Wyoming Realty Co. v. Cook

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Wyoming Realty Co. v. Cook1994 WY 43872 P.2d 551Case Number: 93-122Decided: 04/21/1994Supreme Court of Wyoming
WYOMING 
REALTY COMPANY, a Wyoming corporation, and Joe Bowen,

Appellants 
(Plaintiffs),

 

v.

 

Allen 
L. COOK and Carol A. Cook,

Appellees 
(Defendants).

 

Appeal 
from the District Court, Platte County,

Keith 
G. Kautz, J.

 

Representing 
Appellants:

Frank 
J. Jones, Wheatland.

Representing 
Appellees:

Henry 
F. Bailey, Jr., Cheyenne.

 

Before 
MACY, C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, 
JJ.

THOMAS, 
Justice.

[¶1]      The issue 
presented by this case is whether the public policy of this state requires a 
written listing for the sale of real estate by a licensed broker in order for 
the broker to recover a commission in an instance in which a sale of the 
property was completed through the efforts of the broker. The trial court ruled 
"Wyoming Statutes and regulations of the Wyoming Real Estate Commission clearly 
indicate a public policy which requires written listing and commission 
agreements." A summary judgment was entered denying recovery of the broker's 
commission. An ancillary procedural question exists as to whether genuine issues 
of material fact foreclose the entry of a summary judgment. We hold the trial 
court's interpretation of the law was erroneous, and genuine issues of material 
fact require a trial. The summary judgment entered by the trial court is 
reversed, and the case is remanded for trial.

[¶2]      The appellants, 
Wyoming Realty Company and Joe Bowen (collectively Bowen), state the issues to 
be:

1. 
Do genuine issues of material fact exist which preclude the granting of summary 
judgment?

2. 
Does the public policy of this state require written listings for the sale of 
real estate by licensed brokers?

As 
appellees, Allen L. Cook and Carol A. Cook (Cooks), state the issues 
similarly:

1. 
Was the trial court correct in determining no genuine issue of material fact 
existed?

2. 
Was the trial court correct in determining public policy requires written 
listings for the sale of real estate by licensed brokers?

 

[¶3]      Bowen is licensed 
as a real estate broker, and he is the sole shareholder of Wyoming Realty 
Company, a corporation which has been in the real estate business in Wheatland 
for the past thirty-seven years. The Cooks have resided in the Wheatland 
vicinity for approximately seventeen years. Allen Cook is employed by Basin 
Electric Power Cooperative, and he spends an additional forty hours a week in 
ranching and real estate operations. Bowen and the Cooks had been involved in 
one previous real estate transaction out of which Bowen earned a $10,000 
commission from the Cooks.

[¶4]      On April 1, 1991, 
the Cooks purchased a ranch known as the Dunlop or Ark-la Ranch. Within nine 
months, they sold the ranch to William R. and Barbara M. Whitney (Whitneys) for 
$600,000. The Cooks and Bowen never executed a written listing agreement for the 
ranch. The Cooks knew, however, that Bowen was trying to sell the ranch by 
advertising and showing it to potential purchasers during the summer of 1991. 
Allen Cook admits he gave Bowen consent to show the property sometime during 
that summer. The Whitneys responded to one of Bowen's advertisements concerning 
the ranch. They traveled from California and inspected the property in early 
December, and they purchased the ranch on December 20, 1991. Allen Cook concedes 
Bowen found the buyers (the Whitneys) for the ranch.

[¶5]      At the closing on 
December 20, 1991, the standard five percent commission, amounting to $30,000 in 
this instance, was discussed. The attorney for the Cooks prepared a $20,000 
promissory note for Allen Cook to sign at the closing, which reflected the 
balance owed to Bowen on a sales commission of $30,000. At the closing, Allen 
Cook had to leave early. He did not sign either the promissory note or the 
closing statement, which also reflected the $20,000 promissory note. On December 
23, 1991, Allen Cook wrote Bowen a check for $14,540.30, reflecting "commission, 
Ark-la taxes & filing fees." At a later time, Allen Cook requested his 
attorney to revise the $20,000 promissory note so it would be contingent on the 
Whitneys' continued monthly payments to him and obligate him to pay the 
additional commission only in installments. Allen Cook refused to sign the 
second promissory note, as drafted by his attorney, because of a disagreement 
with Bowen over an unrelated, subsequent real estate 
transaction.

[¶6]      Bowen filed this 
action, based on a theory of quantum meruit, seeking to recover the $20,000 due 
on his sales commission; $3,306 for repairs that had been made at the ranch; 
and, in addition, damages for libel and malicious prosecution because of a 
complaint Cook had filed against Bowen with the Wyoming Real Estate Commission 
(Commission). After discovery had been completed on May 24, 1993, the district 
court granted a partial summary judgment sought by the Cooks, which denied 
recovery by Bowen of the balance of the sales commission. The district court 
also dismissed without prejudice the libel and malicious prosecution claim, 
ruling it was premature, and the court deferred disposition of the claim for 
repair work pending its resolution at trial. Bowen appealed the partial summary 
judgment entered by the district court.

[¶7]      The Wyoming 
legislature did contemplate the use of written listing agreements in enacting 
WYO. STAT. § 33-28-111 (1987). In subsection (a)(xx), the legislature, in 
establishing the disciplinary power of the Commission over licensees, included 
the power to discipline for:

Failing 
to obtain written listing agreements identifying the property and containing all 
terms and conditions under which the property is to be sold including the price, 
the commission to be paid, the signatures of all parties concerned and a 
definite expiration date; * * *.

This 
statute, as implemented by the Commission's rules and regulations, is primarily 
regulatory in nature.

[¶8]      The rules and 
regulations that have been promulgated also contemplate the use of written 
listing agreements by licensees. For example, the Commission's definition of 
written listing agreements is:

The 
term "written listing agreements" means any real estate agency employment 
agreement, including but not limited to buyer's brokerage agreement, seller's 
listing contract and property management contract.

 

WYOMING 
REAL ESTATE COMMISSION RULES AND REGULATIONS Section 3(g) (May 20, 
1991).

The 
listing of property is referred to consistently a second time in the 
Commission's rules and regulations with respect to the furnishing of copies of 
documents:

A 
broker, shall at the time of signing, deliver a copy of any document to the 
party or parties executing the same when such instrument has been prepared by 
the broker or under his supervision, or is within his control, including but not 
limited to instruments relating to the employment of the broker, the listing of 
property, the consummation of a lease, purchase, sale or exchange of property, 
or to any other type of real estate transaction in which he participates as a 
broker.

WYOMING 
REAL ESTATE COMMISSION RULES AND REGULATIONS Section 9(a) (May 20, 
1991).

[¶9]      Nebraska has 
adopted legislation that provides:

Every 
contract for the sale of lands between the owner thereof and any broker or agent 
employed to sell the same, shall be void, unless the contract is in writing and 
subscribed by the owner of the land and the broker or agent. * * 
*

NEB. 
REV. STAT. § 36-107 (1988 Reissue).

In 
Kaus v. Bideaux, 709 F.2d 1221 (8th Cir. 1983), the United States Court 
of Appeals interpreted this statute in an instance in which the written listing 
agreement had expired, and the parties went forward under a verbal arrangement. 
It affirmed an award to a broker for the balance of a sales commission. The 
court stated:

Defendants' 
primary contention is that the district court erred in concluding that Neb. Rev. 
Stat. § 36-107, which requires that sales agreements between real estate brokers 
and owners be in writing, did not bar plaintiffs from recovering the remaining 
balance of the commission. In reaching this conclusion, the court reasoned that 
this statute, an extension of the statute of frauds, see Svoboda v. 
DeWald, 159 Neb. 594, 68 N.W.2d 178 (1955), would not operate to preclude 
recovery because plaintiffs had fully performed under the oral agreement, and 
that principles of equity and fairness required that the statute "not be allowed 
to shield defendants against plaintiffs' legitimate claim for services which 
were honestly rendered." Our review convinces us that the district court's 
conclusion was correct, and we affirm the judgment in favor of the plaintiffs on 
the basis of the court's well-reasoned opinion.

Kaus, 
709 F.2d  at 1222.

[¶10]   The regulatory statute adopted in 
Wyoming, taken together with the regulations of the Commission, appear, at best, 
to evidence a legislative intent to structure a special statute of frauds. They 
are similar in tenor to the statute of frauds which 
provides:

(a) 
In the following cases every agreement shall be void unless such agreement, or 
some note or memorandum thereof be in writing, and subscribed by the party to be 
charged herewith:

(i) 
Every agreement that by its terms is not to be performed within one (1) year 
from the making thereof;

(ii) 
Every special promise to answer for the debt, default or miscarriage of another 
person;

(iii) 
Every agreement, promise or undertaking made upon consideration of marriage, 
except mutual promise to marry;

(iv) 
Every special promise by an executor or administrator, to answer any demand out 
of his own estate;

(v) 
Every agreement or contract for the sale of real estate, or the lease thereof, 
for more than one (1) year;

(vi) 
To charge any person upon, or by reason of a representation or assurance 
concerning the character, conduct, credit, ability, trade or dealings of 
another, to the intent or purpose that such other may obtain thereby, credit, 
money or goods.

WYO. 
STAT. § 1-23-105 (1988).

It 
appears the statute authorizing discipline by the Commission of licensees for 
failure to obtain written listing agreements, and the Commission's regulations 
themselves, are consistent with the statute of frauds, particularly subsection 
(v), in charging licensees with the duty of obtaining written listing 
agreements. An executory contract, in the sense there had been no performance by 
either side of any duties under it, might well result in sustaining the decision 
of the district court relative to public policy and its ruling that the contract 
is invalid.

[¶11]   If the requirement for a written 
listing agreement had been included in the general statute of frauds (WYO. STAT. 
§ 1-23-105), however, an oral listing agreement would be enforceable under the 
protection given at common law to oral contracts performed outside of the 
statute. We have stated frequently that the statute of frauds can be satisfied 
by performance, and an oral contract is not vitiated by the requirements of the 
statute when one of the parties has performed fully. E.g., Davis v. 
Davis, 855 P.2d 342 (Wyo. 1993); Richardson v. Schaub, 796 P.2d 1304 
(Wyo. 1990); Lambousis v. Johnston, 657 P.2d 358 (Wyo. 1983). This common 
law exception to the statute of frauds is a version of equitable estoppel. It 
prevents a party to a contract from perpetrating a fraud or injustice on the 
other party when the latter has fully performed under the terms of the oral 
contract. See RESTATEMENT (SECOND) OF CONTRACTS § 139 (1981). We hold 
this common law remedy is a recognized exception to the requirements delineated 
in the statute of frauds in Wyoming. In our judgment, it is appropriate to 
invoke this exception with respect to any special statute of frauds as well as 
for our general statute of frauds. The legislature has the authority to adjust 
the common law by legislation, but the Commission, as a regulatory agency, does 
not enjoy that same authority.

[¶12]   We reverse the holding of the 
district court that, as a matter of public policy in Wyoming, a written listing 
agreement is a prerequisite to recovery of a real estate sales commission, if 
the contract has been performed by the broker. The broker's right to the 
commission should not be defeated under these circumstances when it is clear 
that the broker is the procuring cause for the sale of the property. If there 
had been no performance of the oral listing agreement by Bowen, the ruling of 
the district court in awarding a summary judgment to the Cooks might well have 
been correct. In this case, however, Bowen's performance, consisting of bringing 
an able and willing buyer to the closing who purchased the Cooks' property, 
removes this oral contract from the requirements of the 
statute.

[¶13]   In other jurisdictions, this result 
has been recognized in instances in which an oral listing agreement is 
proscribed by commission regulation. For example, the Supreme Court of Vermont, 
citing cases from other jurisdictions, affirmed the recovery of a sales 
commission in the absence of a written listing agreement that would have 
complied with the commission rules, stating:

No 
statute requires that the violation of the regulation defeat plaintiffs' right 
to a commission. See Coldwell Bankers-Gordon Co. Realtors v. Roling, 703 S.W.2d 572, 576 (Mo. Ct. App. 1986); Finlay Commercial Real Estate, Inc. v. 
Paino, 133 N.H. 4, 8, 573 A.2d 125, 127 (1990). The regulations do, however, 
reflect a public policy that may be used as a defense against a broker's 
enforcement of the listing agreement. See Restatement (Second) of 
Contracts § 179(a) (1981).

MacDonald 
v. Roderick, 
158 Vt. 1, 603 A.2d 369, 372 (1992).

[¶14]   We accept the rationale espoused in 
these cases and hold public policy is not served by proscribing the recovery of 
a sales commission by a broker who has accomplished the sale, even though the 
written listing agreement was not prepared. We emphasize the equitable litany 
contained in our holding in Battlefield, Inc. v. Neely, 656 P.2d 1154, 
1157 (Wyo. 1983), where we stated:

Courts 
do not like to aid litigants in avoiding their contractual obligations by 
joining in their games of hide-and-seek behind statutory technicalities - 
especially is this so where the other party has performed and the party looking 
to avoid the contract has reaped all the benefits of the performance. We will 
not aid and abet such efforts if we can possibly avoid it.

[¶15]   In this instance, we must agree 
with Bowen that there are genuine issues of material fact to be decided at 
trial. The district court still must determine what the terms of the oral 
contract were, whether there was a breach of those terms, and the amount of 
damages. These issues of fact must be resolved upon 
remand.

[¶16]   The summary judgment entered by the 
trial court is reversed, and the case is remanded for trial.