Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-86-01898/USCOURTS-ca10-86-01898-0/pdf.json

Parties Involved:
Ronald H. Harrison
Appellant
Anna Lambourne
Appellee
David M. Parkinson
Appellant

Document Text:

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FILED 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

United St.ates Court of Appeals 

Tenth Circuit 

FEB 02 1988 

ROBERT L. HOECKER 

Clerk 

ANNA LAMBOURNE, 

Plaintiff-Appellee, 

v. 

DAVID M. PARKINSON; RONALD H. 

HARRISON, 

Defendants-Appellants. 

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No. 86-1898 

(D.C. No. C-84-0882 J) 

(D. Utah) 

ORDER AND JUDGMENT 

Before LOGAN, SEYMOUR, and ANDERSON, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.8. The cause is therefore ordered 

submitted without oral argument. 

In 1981, Lambourne served as a broker in the sale of the 

s t ock of a corporation whose assets were primarily Utah real 

estate. The purchasers of the corporation agreed to pay her 

f i nder's fee, but have not done so. She sued for her fee, and the 

d i strict court granted summary judgment in her favor. 

Appellate Case: 86-1898 Document: 010110025187 Date Filed: 02/02/1988 Page: 1 
Utah requires that real estate brokers be licensed. Utah 

Code Ann. § 61-2-1 (1985). Lambourne is a resident of California 

and is not licensed in Utah. Section 61-2-18 of the Utah statute 

restricts the right to bring an action for the recovery of a 

commission or fee to persons licensed as a principal broker at the 

time of the act or service in question. Utah Code Ann. § 61-2-18 

(1986). 

Lambourne argues that the transaction was for the sale of 

stock and therefore does not fall within the real estate 

provisions of the Utah statute. However, Utah defines real estate 

to include "business opportunities." Utah Code Ann. § 61-2-2(4) 

(1986). At the time of the sale in question, this term had a 

statutory definition: "an existing business, business and the 

good will attached thereto or any one or combination thereof." 

Utah Code Ann. § 61-2-2 (1978). 1 Utah thus includes business 

brokers under the definition of real estate brokers. Section 61-

2-2, by its terms and under the case law, includes sales of 

businesses through the sale of stock. See Phillips v. JCM 

Development Corp., 666 P.2d 876 (Utah 1983) (sale of a 

construction company through stock transfer falls under§ 61-2-2); 

Annot., Validity, Construction, and Enforcement of Business 

Opportunities or "Finder's Fee" Contract, § 1, 24 A.L.R.3d 1160, 

1 The 1985 revision of this section eliminated the definition 

of ''business opportunity." Utah Code Ann. 61-2-2 (1986). The 

revision is not relevant to this case. 

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Appellate Case: 86-1898 Document: 010110025187 Date Filed: 02/02/1988 Page: 2 
1164 (1969). The sale in this case is therefore governed by 

chapter 2 of title 61 of the Utah Code (Division of Real Estate). 

Without discussing the application of section 61-2-18, the 

district court concluded that "[t]he defendants' agreement to 

undertake [the seller's obligation to pay Lambourne a finder's 

fee] represented a portion of the total purchase price for the 

transaction." Rec., Order and Judgment. The court apparently 

distinguished the obligation to pay the total purchase price from 

the finder's fee itself, and based summary judgment on the 

defendants' unfulfilled obligation to pay Lambourne. This 

distinction is not supported by the agreement for sale of the 

stock, and we cannot uphold it. The district court's conclusion 

would mean that brokers and finders could evade Utah's requirement 

that they be licensed simply by convincing the seller to make the 

buyer responsible for payment. Moreover, a finder's fee or 

broker's commission will always be part of the total cost of a 

sale in which a finder or broker renders services. Whether it is 

considered an addition to the purchase price or a reduction in the 

price received by the seller is irrelevant. 

Lambourne was not licensed as required by the Utah statute. 

Unless she can show on remand some reason why this provision 

should not be applied to her, her suit must be dismissed. 

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Appellate Case: 86-1898 Document: 010110025187 Date Filed: 02/02/1988 Page: 3 
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The judgment of the United States District Court for the 

District of Utah is REVERSED and the case REMANDED for further 

proceedings in accordance with this opinion. 

The mandate shall issue forthwith. 

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Entered for the Court 

Stephanie K. Seymour 

Circuit Judge 

Appellate Case: 86-1898 Document: 010110025187 Date Filed: 02/02/1988 Page: 4