FILED

July 1,1998

Cecil W. Crowson

Appellate Court Clerk

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

JAMES F. COOK, JR., )

d/b/a COOK PROPERTIES, )

)

Plaintiff/Appellant, )

)

VS. ) Davidson Chancery

) No. 94-1989-III

CONSOLIDATED STORES CORP., )

BELZ INVESTCO, L.P., )

URCO, INC., ) Appeal No.

UNION REALTY CO., LTD., and ) 01A01-9605-CH-00245

SOUTH PLAZA CO., )

)

Defendants/Appellees. )

APPEAL FROM THE CHANCERY COURT FOR DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE

THE HONORABLE ROBERT S. BRANDT, CHANCELLOR

For Plaintiff/Appellant: For Defendant/Appellee

Consolidated Stores Corp.:

Hugh C. Howser, Jr.

Kathryn J. Ladd Karyn C. Bryant

Trabue, Sturdivant & DeWitt Boult, Cummings, Conners & Berry

Nashville, Tennessee Nashville, Tennessee

For Defendants/Appellees Belz,

URCO, Union Realty, and South Plaza:

John M. Gillum

John W. Heacock

Manier, Herrod, Hollabaugh & Smith

Nashville, Tennessee

AFFIRMED AND REMANDED

WILLIAM C. KOCH, JR., JUDGE
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O P I N I O N

This appeal involves a dispute over a real estate commission on four retail

properties in Memphis. After a former client leased these properties, a real estate

broker filed suit in the Chancery Court for Davidson County seeking a commission

from its former client and the lessors of the four properties. The trial court granted

the former client’s motion for summary judgment and, following a bench trial,

dismissed the broker’s claims against the four lessors. On this appeal, the broker

asserts that the trial court erred by granting his former client’s summary judgment

motion and that the evidence preponderates against the trial court’s dismissal of his

claims against the four lessors. We have determined that the trial court properly

granted the summary judgment motion and that the evidence does not preponderate

against the trial court’s judgment in favor of the four lessors.

I.

In 1988, Consolidated Stores Corporation retained James F. Cook Jr., a

Nashville commercial real estate broker, to locate retail space in Nashville for two of

its “Big Lots” stores. While these negotiationswere progressing, Consolidated Stores

authorized Mr. Cook to survey the market in Memphis because Consolidated Stores

was considering opening four or five stores there. By July 1990, Mr. Cook had

identified fifteen possible sites in Memphis, eight of which belonged to Belz

Enterprises, the lessor of the property on which one of the Nashville Big Lots stores

was located. In August 1990, Consolidated Stores informed Mr. Cook that it would

not be ready to consider the Memphis market until the Spring of 1991.

Mr. Cook continued to look for suitable retail space in Memphis for

Consolidated Stores and in October 1990 presented Consolidated Stores with

proposed leases prepared by Belz Enterprises for four locations. Consolidated Stores

again informed Mr. Cook that it was delaying its expansion into Memphis. In April

1991, representatives of Belz Enterprises and Consolidated Stores met to discuss

possible retail locations in Memphis but reached no agreement. In November 1991,

Consolidated Stores informed Mr. Cook for the third time that it had postponed

expanding into Memphis and all discussion between Consolidated Stores and Mr.

Cook ended.
1The companies were Belz Investco, Urco, Inc., Union Realty, and South Plaza Company.

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In November 1993 Consolidated Stores and Belz Enterprises negotiated a

renewal of the lease for one of the Nashville Big Lots stores. During these

negotiations, Belz Enterprises encouraged Consolidated Stores to reconsider its plans

to expand to Memphis, and the parties renewed their negotiations without involving

Mr. Cook. In early 1994, Mr. Cook inquired into Consolidated Stores’s expansion

plans in Tennessee and specifically in Memphis. On April 4, 1994, Consolidated

Stores informed Mr. Cook that it had leased four properties in Memphis from Belz

Enterprises on February 17, 1994. Mr. Cook demanded a commission on these

transactions, and when he did not receive one, he filed suit against Consolidated

Stores and the four Belz-related companies that had leased the Memphis space to

Consolidated Stores.1

The trial court granted a summary judgment for Consolidated Stores on the

ground that there was no contractual or other basis for Mr. Cook’s claim that

Consolidated Stores owed him a commission. Following a bench trial, the trial court

entered a judgment for the four Belz-related companies based on its conclusion that

Mr. Cook had not been the procuring cause of these leases. Mr. Cook argues on

appeal that he performed enough work bringing Consolidated Stores and Belz

Enterprises together that these parties, jointly and severally, owe him a commission.

II.

THE CLAIMS AGAINST CONSOLIDATED STORES

The trial court summarily dismissed Mr. Cook’s complaint against

Consolidated Stores because of the lack of evidence of an express or implied contract

between Consolidated Stores and Mr. Cook or any other basis for recovery. While

Mr. Cook concedes that there was no oral or written contract, he argues that summary

judgment was improper because the facts could support a finding that the parties had

an implied contract. 

A summary judgment is proper if the moving party demonstrates that there are

no genuine issues of material fact and that he or she is entitled to a judgment as a

matter of law. See Tenn. R. Civ. P. 56.04; Bain v. Wells, 936 S.W.2d 618, 622 (Tenn.

1997). When ruling on a motion for summary judgment, the trial court must take the
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strongest legitimate view of the evidence in favor of the non-moving party, discard

all countervailing evidence, and draw all reasonable factual inferences in the nonmoving party’s favor. See Mike v. Po Group, Inc., 937 S.W.2d 790, 792 (Tenn.

1996); Byrd v. Hall, 847 S.W.2d 208, 210-11 (Tenn. 1993). A court should grant a

summaryjudgmentonlywhen the undisputed facts reasonably support one conclusion

– that the moving party is entitled to a judgment as a matter of law. See McCall v.

Wilder, 913 S.W.2d 150, 153 (Tenn. 1995); Carvell v. Bottoms, 900 S.W.2d 23, 26

(Tenn. 1995).

The only facts supporting any kind of relationship between Mr. Cook and

Consolidated Stores are: (1) that Consolidated Stores agreed to allow Mr. Cook to

survey the Memphis market prior to the first contact between Consolidated Stores and

BelzEnterprises,(2) that Consolidated Stores negotiated briefly with BelzEnterprises

in 1991 based on the earlier proposals Belz Enterprises had submitted to Mr. Cook,

(3) that in 1990 Mr. Cook located two of the properties that Consolidated Stores

eventually leased in 1994, and (4) that Consolidated Stores intentionally did not

involve Mr. Cook in its 1994 negotiations with Belz Enterprises that led to the four

leases.

An implied-in-fact contract is one that is inferred from the parties’ conduct

instead of from an oral or written agreement. See V.L. Nicholson Co. v. Transcon Inv.

and Fin. Ltd., 595 S.W.2d 474, 482 (Tenn. 1980). It arises when circumstances,

including the ordinary course of dealings and custom, show that the parties mutually

assented to contract, see Mefford v. City of Dupontonia, 49 Tenn. App. 349, 356, 354

S.W.2d 823, 826 (1961), and that the parties intended to contract. See Weatherly v.

American Agr. Chem. Co., 16 Tenn. App. 613, 623, 65 S.W.2d 592, 598 (1933).

When a contract is implied-in-fact, the courts will impose a corresponding duty

to pay reasonable compensation. However, a promise to pay will only be implied

when the work was performed under circumstances from which the person seeking

payment could reasonably expect compensation from the benefitted party. See V.L.

Nicholson Co. v. Transcon Inv. and Fin. Ltd., 595 S.W.2d at 482. In real estate

disputes, the courts are reluctant to impose contractual liability for a broker’s services

when they are thrust upon unwilling recipients. See Billington v. Crowder, 553
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S.W.2d 590, 595 (Tenn. Ct. App. 1977). And although we have expressed some

willingness to imply a promise on the part of the purchaser to pay a commission when

the real estate agent is unable to collect from the seller,see Williams v. Millsaps, No.

03A01-9406-CH-00229, 1995 WL 131343, at *6 (Tenn. Ct. App. Mar. 28, 1995),

perm. app. denied (Tenn. Aug. 28, 1995), this is only so in situations where there is

a legally enforceable commission agreement between the seller and agent and the

purchaser, without a valid reason, interferes by preventing the sale.

The undisputed facts in the record do not provide circumstances from which

either the trial court or this court can imply the parties’ mutual assent to contract. Mr.

Cook testified that Consolidated Stores never discussed with him or agreed to pay

him a commission and that he never expected Consolidated Stores to pay him a

commission. At all times during these negotiations, Mr. Cook testified that, as in past

transactions, Belz Enterprises would pay his commission if the parties reached an

agreement. Similarly, Consolidated Stores’s primary representative testified that he

believed that Mr. Cook worked for Belz Enterprises and that it is industry custom that

the lessor pays the agent’s commission. Thus, Mr. Cook never had a reasonable

expectation of payment from Consolidated Stores, and the trial court correctly

declined to find an implied contract based on the undisputed facts. 

III.

THE CLAIMS AGAINST THE BELZ-RELATED COMPANIES

Mr. Cook also takes issue with the trial court’s dismissal of his claims against

the four Belz-related companies that leased the Memphis retail space to Consolidated

Stores in 1994. He contends that he was the procuring cause of these leases because

he introduced the parties, provided information that became the foundation for the

lease agreements, and cemented Consolidated Stores’s interest in the Memphis

market. We have determined that the evidence does not preponderate against the trial

court’s conclusion that Mr. Cook was not the procuring cause of the leases between

Consolidated Stores and Belz Enterprises.

Real estate brokers earn their commission by producing a purchaser or lessee

acceptable to the seller or lessor who is ready, willing, and able to buy or lease on the

seller’s or lessor’s terms. See Parks v. Morris, 914 S.W.2d 545, 548 (Tenn. Ct. App.
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1995). The right to collect a commission depends on whether the broker actually

made the sale or lease or was the efficient, procuring cause of the sale or lease. See

Pacesetter Properties, Inc. v. Hardaway, 635 S.W.2d 382, 390 (Tenn. Ct. App.

1981); Robinson v. Kemmons Wilson Realty Co., 41 Tenn. App. 297, 318, 293

S.W.2d 574, 583 (1956).

A broker is not entitled to a commission merely because he or she introduced

the parties or showed property unsuccessfully to the ultimate purchaser. See Miller

v. Jones, 54 Tenn. App. 31, 36-37, 387 S.W.2d 627, 630 (1964). If the broker

abandons the listing or fails to furnish a ready, willing, and able purchaser during the

term of the agency, the broker is not entitled to a commission, and the owner may sell

the realty to a prospect who originated with the broker. See Pacesetter Properties,

Inc. v. Hardaway, 635 S.W.2d at 388-89; Miller v. Jones, 54 Tenn. App. at 36, 387

S.W.2d at 630. 

A broker may be entitled to collect a commission if the owner delays the

consummation of the sale in bad faith until after the agency terminates in order to

avoid paying a commission to the agent. See Robinson v. Kemmons Wilson Realty

Co., 41 Tenn. App. at 317, 293 S.W.2d at 583. However, we have held that an owner

is not acting in bad faith by responding to the later overtures of a purchaser without

the broker’s participation when the broker has failed to procure a contract and the

negotiations have broken off. See Pacesetter Properties, Inc. v. Hardaway, 635

S.W.2d at 390. Similarly, when negotiations begun by a broker have broken off

without an agreement, and the purchaser reopens negotiations after a substantial lapse

of time and closes the deal on terms different from the initial proposal, the broker is

not the procuring cause of the sale. See Pacesetter Properties, Inc. v. Hardaway, 635

S.W.2d at 389.

We hold that the evidence does not preponderate against the trial court’s

judgment. Even though Mr. Cook helped solidify Consolidated Stores’s interest in

the Memphis market, he did not bring an offer from a potential lessor that met

Consolidated Stores’s terms. He was never able to bring the parties to an agreement

acceptable to both. The discussions concerning Consolidated Stores’s entrance into

the Memphis market broke off after Consolidated Stores informed Mr. Cook for the

fourth, and final, time that the company was not expanding into Memphis. For two
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years, there was no contact between the parties and Mr. Cook did not actively seek

to renew the negotiations. After this substantial lapse of time, Consolidated Stores

and Belz Enterprises reinstituted negotiations for Memphis properties after doing

business on another property in Nashville. The eventual agreement between

Consolidated Stores and Belz Enterprises involved two of the properties Mr. Cook

originally proposed to Consolidated Stores, but they were in different locations in the

shopping centers, had different square footage, and different lease terms and

conditions. The remaining properties that Consolidated Stores leased were not

proposed by Mr. Cook. Accordingly, we hold that the evidence does not

preponderate against the conclusion that Mr. Cook was not the procuring cause of the

lease transactions between Consolidated Stores and Belz-related companies.

IV.

We affirm the trial court’s decisions to grant the summary judgment dismissing

Mr. Cook’s complaint against Consolidated Stores and to award a judgment in favor

of the four Belz-related companies. We remand the case to the trial court for

whatever further proceedings may be required, and we tax the costs of this appeal to

James F. Cook, Jr. and his surety for which execution, if necessary, may issue.

______________________________

WILLIAM C. KOCH, JR., JUDGE

CONCUR:

____________________________________

HENRY F. TODD, PRESIDING JUDGE

MIDDLE SECTION 

____________________________________

BEN H. CANTRELL, JUDGE