NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

D/AQ CORPORATION, dba DAUM COMMERCIAL REAL ESTATE 

SERVICES1, a California Corporation,

Plaintiff/Appellee,

v.

INTRAVEST 2851 KATHLEEN LLC, an 

Arizona limited liability company,

Defendant/Appellant.

No. 1 CA-CV 16-0620

Appeal from the Superior Court in Maricopa County

No. CV2014-014493

The Honorable Randall H. Warner, Judge

The Honorable Douglas Gerlach, Judge

REVERSED AND REMANDED

COUNSEL

Bourque Law Firm, PC, Phoenix

By Arthur J. Bourque

Counsel for Defendant/Appellant 

1 On the court's own motion, the caption is hereby amended as 

reflected in this decision and shall be used on all further documents filed in 

this appeal. 

FILED 1-11-2018
2

Tiffany & Bosco, Phoenix

By Robert D. Mitchell, Sarah K. Deutsch, Amy D. Sells

Counsel for Plaintiff/Appellee 

MEMORANDUM DECISION

Presiding Judge Michael J. Brown delivered the decision of the Court, in 

which Judge Jennifer B. Campbell and Judge Jennifer M. Perkins joined.

B R O W N, Judge:

¶1 Intravest 2851 Kathleen, LLC ("Kathleen") appeals the 

superior court's judgment entered in favor of D/AQ Corporation, dba 

DAUM Commercial Real Estate Services ("DAUM"), following a jury 

verdict awarding damages on DAUM's claim for breach of contract. 

Kathleen argues the court erred as a matter of law in finding that the 

agreement at issue was not subject to statutory requirements governing 

compensation for real estate brokerage services. For the following reasons, 

we reverse and remand. 

FACTUAL AND PROCEDURAL BACKGROUND

¶2 Kathleen showed interest in purchasing commercial real 

estate ("the Property") from Climatec, Inc./JVK Holdings, LLC ("Seller"), 

which had listed the Property with DAUM, a real estate broker. The listing 

agreement provided that DAUM was to receive 2% of the selling price as a 

brokerage commission for sale of the Property. Robert Lundstedt, a real 

estate salesperson, handled the listing for DAUM and served as dual agent 

for Seller and Kathleen in connection with the transaction. 

¶3 Several weeks prior to closing, Kathleen informed Lundstedt 

it intended to sell the Property after acquiring it. Following additional 

discussion between Lundstedt and Mason Cave, one of Kathleen's 

managers, they entered into a listing agreement giving DAUM exclusive 

authorization to lease or sell the Property on behalf of Kathleen once it had 

acquired title. 

¶4 Shortly thereafter, Seller became concerned that Kathleen did 

not have sufficient funds to pay for closing costs and demanded that 

DAUM reduce its commission from 2% to 1.5%. After further discussion, 

Lundstedt emailed Cave the following proposal: 
D/AQ CORP v. INTRAVEST 2851

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3

I'm preparing my broker for the meeting with [Seller] today. 

I told my broker that if [Seller] reduces our fee to 1.5 %, that 

you guys will make up the difference of .5 % at the close of 

escrow, per my discussions with [your business partner] this 

weekend. Can you confirm this, for my broker, before our 

meeting with [Seller] (11am), please? 

Cave's reply email stated: "Confirmed. We make up fee of 0.5% when we 

sell the property." For ease of reference, we refer to this email exchange

hereinafter as the "Agreement."

¶5 The transaction between Seller and Kathleen closed in 

September 2012, with a purchase price of $19,058,823. DAUM was paid 

$274,632.34 from Seller's proceeds as a 1.5% commission. 

¶6 In August 2014, Kathleen sold the property; DAUM 

represented Kathleen, and a different broker represented the buyer. The 

brokers received a combined commission of 4% of the $21,600,000 purchase 

price. Although a dispute arose prior to closing between Kathleen and 

DAUM as to how the commission would be divided between the brokers, 

the relevant point here is that Kathleen refused to authorize the title 

company to pay DAUM the additional 0.5% (approximately $95,000) 

commission contemplated by the Agreement. 

¶7 DAUM filed a complaint for breach of contract alleging that 

Kathleen agreed in writing to "make up for the commission reduction" in 

the 2012 transaction by paying the $95,000 when the Property was sold in 

the 2014 transaction. Kathleen moved for summary judgment, asserting the 

Agreement was not enforceable because it failed to meet the statutory 

requirements governing real estate employment agreements and the statute 

of frauds pursuant to Arizona Revised Statutes ("A.R.S.") sections 32-

2151.02 and 44-101(7), respectively. In denying the motion, the superior 

court found that Kathleen's agreement to "make up" the 0.5% difference did 

not constitute a real estate employment agreement as contemplated by 

A.R.S. § 32-2151.02 nor was it subject to the statute of frauds, A.R.S. § 44-

101(7). 

¶8 At trial, Kathleen unsuccessfully moved for judgment as a 

matter of law, again asserting lack of compliance with statutory 

requirements governing a broker's right to collect a commission. The 

motion was denied. The superior court declined to instruct the jury on 

whether the Agreement satisfied the statutory requirements. The jury 

awarded damages to DAUM in the amount of $95,290, and the court 
D/AQ CORP v. INTRAVEST 2851

Decision of the Court

4

awarded attorneys' fees to DAUM pursuant to A.R.S. § 12-341.01(A). After

entry of judgment, the court denied Kathleen's renewed motion for 

judgment as a matter of law, and this timely appeal followed. 

DISCUSSION

¶9 The issue before us is whether the superior court erred in 

determining that the Agreement was not subject to statutory requirements 

that govern real estate commission agreements. In reviewing the court's 

ruling, "we view the evidence and all reasonable inferences therefrom in the 

light most favorable to the party opposing the motion." Aegis of Ariz., L.L.C. 

v. Town of Marana, 206 Ariz. 557, 567, ¶ 34 (App. 2003). We review de novo 

the court's grant or denial of a motion for judgment as a matter of law. Id.

¶10 "Arizona places 'strict requirements' on real estate 

professionals who seek to recover commissions." Young v. Rose, 230 Ariz. 

433, 436, ¶ 13 (App. 2012). As relevant here, the statute of frauds provides 

that "an agreement authorizing or employing an agent or broker to purchase or sell 

real property, or mines, for compensation or a commission" shall not "be brought 

in any court . . . unless the promise or agreement upon which the action is 

brought, or some memorandum thereof, is in writing and signed by the 

party to be charged, or by some person by him thereunto lawfully 

authorized." A.R.S. § 44-101(7) (emphasis added). A.R.S. § 32-2151.02 

establishes the requirements for a real estate employment agreement, 

which is defined as "a written agreement by which a real estate broker is 

entitled to compensation for services rendered pursuant to § 44-101, 

paragraph 7." A.R.S. § 32-2151.02(E) (emphasis added). 

¶11 Given these statutory requirements, "a real estate agent may 

sue to recover compensation due under a real estate employment 

agreement only if there is a written agreement that complies with both 

A.R.S. §§ 44–101(7) and 32–2151.02(A)." Young, 230 Ariz. at 437, ¶ 24 

(emphasis added). 

¶12 DAUM argues that the Agreement did not "authorize or 

employ" DAUM to purchase or sell real property for a commission, but was

merely an agreement to make up the 0.5% difference that was necessary to 

facilitate closing the deal. According to DAUM, there was "already a valid, 

enforceable real estate employment agreement" for the 2% commission and 

the Agreement was an entirely new agreement. We conclude that DAUM 

reads the statutes too narrowly; a broker (including a salesperson) who 

seeks "compensation for services" arising from the purchase or sale of real 
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Decision of the Court

5

estate must comply with the requirements for a real estate employment 

agreement set forth in A.R.S. § 32–2151.02(A). 

¶13 DAUM represented the Seller and Kathleen during the first 

transaction. As provided in its listing agreement with DAUM, Seller was 

responsible for the payment of all of DAUM's 2% commission. After Seller 

pressured DAUM to reduce its commission, the structure of the 

commission changed because Seller was only willing to pay 1.5%. DAUM 

and Kathleen then entered the Agreement, which provided that Kathleen 

would "make up the difference" by paying the 0.5% commission upon 

resale of the property. Regardless of how the Agreement is labeled, or 

when the commission was to be paid, the undisputed evidence shows that 

the Agreement was entered to compensate DAUM for the services it 

provided in connection with Kathleen's purchase of the Property. 

¶14 Lundstedt testified that before closing, Seller told him there 

was not enough money to cover the closing and suggested that DAUM 

reduce its commission. Lundstedt then told one of Kathleen's members, 

"I’m getting squeezed by the seller on the commission and, basically it stems 

from you guys aren’t -- you don’t have the ability to put -- you know, put 

up enough money." Kathleen then agreed to pay the 0.5% commission. 

Lunstedt confirmed at trial that he was "providing brokerage services" for 

Kathleen in the first transaction, and that DAUM "wanted to be paid for 

those services." 

¶15 "Compensation" is defined as "any fee, commission, salary, 

money or other valuable consideration for services rendered or to be 

rendered as well as the promise of consideration whether contingent or 

not." A.R.S. § 32-2101(16). It is undisputed that DAUM performed services 

throughout the transaction for both parties. Until the Agreement was 

entered, the compensation for such services was to be paid from Seller's 

side of the ledger; after the Agreement, part of the compensation for 

services switched to Kathleen's side. Whether DAUM had already entered 

into a real estate employment agreement with Seller is irrelevant—nothing 

in the statutory provisions limits a broker from entering into only one 

agreement. Stated differently, simply because DAUM signed a listing 

agreement with Seller did not excuse DAUM from complying with the 

statutory requirements governing agreements for compensation of services.

As the broker that provided brokerage services to Kathleen for 

compensation, DAUM was required to ensure that the Agreement 

complied with A.R.S. § 32-2151.02(A). 
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¶16 To be enforceable, a real estate employment agreement must

(1) "[b]e written in clear and unambiguous language," (2) "[f]ully set forth 

all material terms, including the terms of broker compensation," (3) "[h]ave

a definite duration or expiration date, showing dates of inception and 

expiration," and (4) "[b]e signed by all parties to the agreement." A.R.S. 

§ 32-2151.02(A)(1)-(4). 

¶17 Assuming that DAUM could establish that it complied with 

requirements 1, 2, and 4 of § 31-2151.02(A), the Agreement is unenforceable 

because it does not have a definite duration or expiration date. Although a 

reasonable time for performance of a contract may generally be implied, 

Zancanaro v. Cross, 85 Ariz. 394, 398 (1959), the same principle does not 

apply here because our legislature has placed strict requirements on real 

estate professionals who seek to recover commissions, Young, 230 Ariz. at 

436, ¶ 13. Thus, real estate employment agreements must contain a definite 

duration or expiration date. See Red Carpet-Barry & Assocs. v. Apex Assocs.,

130 Ariz. 302, 305 (App. 1981) (concluding that an alleged "finder's fee 

contract" was a "listing agreement," and thus broker could not "avoid the 

necessity of a written listing agreement with a definite expiration date").

The Agreement provided that the commission would be paid when the 

property was re-sold by Kathleen. When that would occur, however, was 

uncertain at best. 

¶18 DAUM cites cases from other jurisdictions for the proposition 

that an ascertainable event is of sufficiently certain duration even though 

there is uncertainty of when the event will occur. See Overman v. Fluor 

Constructors, Inc., 797 F.2d 217 (5th Cir. 1986); Aaland v. Lake Region Grain 

Coop., Devils Lake, N.D., 511 N.W.2d 244 (N.D. 1994); H.L. Miller Mach. Tools, 

Inc. v. Acroloc Inc., 679 F. Supp. 824 (C.D. Ill. 1988); Rooney v. Tyson, 697 

N.E.2d 571 (N.Y. 1998). These cases are not persuasive, as none of them 

involve real estate commissions, much less the type of stringent statutory 

requirements applicable in Arizona. The Agreement's duration was 

indefinite and therefore fails to satisfy the requirements of a real estate 

employment agreement. 

¶19 Although denial of the 0.5% real estate commission under 

these circumstances may seem harsh, real estate brokers are presumed to 

know the law. See Young, 230 Ariz. at 437, ¶ 24 (citing Gray v. Kohlhase, 18 

Ariz. App. 368, 371 (1972)). Accordingly, because the Agreement does not 

comply with Arizona's strict requirements for real estate employment 

agreements, it is unenforceable. See Young, 230 Ariz. at 436, ¶ 18 (rejecting 

the "contention that non-compliance with A.R.S. § 32–2151.02(A)(4) merely 

provides a basis for regulatory action against a licensed real estate 
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Decision of the Court

7

professional, but poses no impediment to a civil action for unpaid 

commissions"). Kathleen is therefore entitled to judgment as a matter of 

law.2 

¶20 Kathleen requests attorneys' fees pursuant to A.R.S. 

§ 12-341.01, which allows us to award fees to the prevailing party. In our 

discretion, we deny the request. As the prevailing party, however, 

Kathleen may recover costs incurred on appeal upon compliance with 

Arizona Rule of Civil Appellate Procedure 21. 

CONCLUSION

¶21 We reverse the superior court's judgment in favor of DAUM

and remand for entry of judgment in favor of Kathleen. 

 

2 Given our conclusion that DAUM is not entitled to collect the 0.5% 

commission, we need not address Kathleen's arguments that the court erred 

in denying several proposed jury instructions.