Case Name: ACT REALTY, CO., INC., Appellant, v. ROTEMI REALTY, INC., et al., Appellees
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 2003-08-20
Citations: 863 So. 2d 334
Docket Number: No. 3D02-1707
Parties: ACT REALTY, CO., INC., Appellant, v. ROTEMI REALTY, INC., et al., Appellees.
Judges: Before COPE and LEVY, JJ., and NESBITT, Senior Judge.
Reporter: Southern Reporter, Second Series
Volume: 863
Pages: 334–343

Head Matter:
ACT REALTY, CO., INC., Appellant, v. ROTEMI REALTY, INC., et al., Appellees.
No. 3D02-1707.
District Court of Appeal of Florida, Third District.
Aug. 20, 2003.
Rehearing and Rehearing En Banc Denied Jan. 16, 2004.
Craig J. Troeino, Miami, for appellant.
Sheldon R. Rosenthal, Miami, for appel-lees.
Melinda L. McNichols, for the School Board of Miami-Dade County as amicus curiae.
Before COPE and LEVY, JJ., and NESBITT, Senior Judge.

Opinion:
LEVY, Judge.
"What are you going to believe . .what you see with your own eyes or what I tell youV'
Although the parties in this case say that the contract and events that form the basis of this case are just part of a routine real estate transaction, anyone who reads the Record in this case, including the contract at issue and the transcript of the proceedings below, will quickly realize that what took place here is violative of, and repugnant to, the public policy of this State which, in the final analysis, seeks to promote and protect the integrity of gov- eminent and, ultimately, the best interests of the public at large.
Appellant, ACT Realty Co. ("ACT Realty"), appeals from a Final Judgment in favor of Appellees/Brokers Rotemi Realty, Inc. and Martin-Hidalgo & Associates Realty, Inc. ("the brokers") in which the trial court concluded that the brokers were the procuring cause of a sale of property to the Miami-Dade County School Board ("School Board"), thereby entitling the brokers to a commission on the sale. We reverse and remand to the trial court with instructions.
ACT Realty owned a 10-acre parcel of property that was surrounded by a 50-acre parcel of property controlled by Michael Cease. On January 21, 1999, ACT Realty entered into a Commission Agreement with the brokers. In this agreement, ACT Realty agreed to pay a real estate brokerage commission to the brokers on the sale of the 10-acre parcel. According to the Commission Agreement, the agreement would be valid only if the brokers were "able to procure a sale with the school board of Dade County Florida as the buyer." The Commission Agreement further provided that "[t]he amount of the commission will be equal to the amount of the sale proceeds due [to ACT Realty] at closing that is over $1,000,000." On August 25, 1999, the School Board and ACT Realty entered into a contract for the purchase of the 10-acre parcel. The selling price for the 10 acres was $1,164,650.50. After the School Board and ACT Realty completed the sale, $164,650.50 remained in the trust account of the escrow agent. Although the commission to the brokers was to be $164,650.50 under the terms of the Commission Agreement, the Record reflects some arrangement wherein $20,000.00 was withdrawn from the escrow account for the purposes of paying a fee to a lobbyist hired to facilitate the sale. After the sale, a dispute arose as to whether the brokers were entitled to a commission on the sale of the property. Francis X. Santana, the escrow agent, initiated this interpleader action for the purpose of obtaining a judicial determination of which party was entitled to receive the remaining escrow funds in the amount of $144,650.50. ACT Realty and the brokers filed cross-complaints and a trial was conducted.
At trial, ACT Realty contended that the brokers were not entitled to a commission because they had little to do with the sale ultimately occurring. Specifically, ACT Realty argued that (1) the School Board decided to purchase the property before the brokers became involved in the transaction, (2) the brokers learned of the School Board's interest in the property when they observed certain materials at the School Board's office, and (3) the transaction was concluded as a result of the efforts of Cease and Melton. The trial court entered a Final Judgment in favor of the brokers, concluding that they were the procuring cause of the sale of the property. This appeal follows.
We conclude, on the authority of this Court's well-reasoned opinion in City of Hialeah Gardens v. John L. Adams & Co., Inc., 599 So.2d 1322, 1323-24 (Fla. 3d DCA); rev. denied, 613 So.2d 5 (Fla.1992), that the Commission Agreement entered into between ACT Realty and the brokers is void and unenforceable because contracts which provide for contingency awards for securing public monies are against public policy. In City of Hialeah Gardens, we explained that contracts which provide for contingency awards for securing public monies, among other things, have been found to be void as against public policy because such agreements "suggest the use of sinister and corrupt means for the accomplishment of the ends desired." City of Hialeah Gar dens, 599 So.2d at 1323 (quoting Wechsler v. Novak, 157 Fla. 703, 26 So.2d 884, 885 (1946)). We went on to explain that there is a legitimate public policy concern that contingent fee arrangements promote the temptation to use improper means to gain success. See City of Hialeah Gardens, 599 So.2d at 1324.
The test applied by courts to determine whether a contract offends public policy is whether "the contract has a tendency toward such an evil." City of Hialeah Gardens, 599 So.2d at 1323. Moreover,
the test to be applied is not what is actually done but that which may or might be done under the terms of the contract; it is the evil tendency of the contract and not its actual injury to the public that is determinative, as the law looks to its general tendency and closes the door to temptation by refusing to recognize such agreements.
City of Hialeah Gardens, 599 So.2d at 1323-24. As previously stated, the Commission Agreement provided that, assuming the brokers procured a sale of the property to the School Board, "[t]he amount of the commission will be equal to the amount of the sale proceeds due [to ACT Realty] at closing that is over $1,000,000." In other words, ACT Realty sought a price of $1,000,000 for its property, with the brokers' commission to be contingent on the degree of success the brokers had in obtaining a price higher than $1,000,000. Without examining what actually transpired following the signing of the Commission Agreement, this agreement undoubtedly created a situation in which there was a possibility for the use of "sinister and corrupt means" in order (1) to influence the School Board to purchase this particular property from ACT Realty, and (2) for the brokers to earn the highest possible commission by obtaining as high a price as possible, over and above $1,000,000, from the School Board. Thus, there is little doubt that we are required to conclude that the Commission Agreement involved in the instant case is void and unenforceable for public policy reasons. Moreover, given that the Commission Agreement is void for public policy reasons, we also conclude that the escrow agent should be directed to return the amount currently in escrow — $144,-650.50 — to the School Board. Clearly, these funds should not be remitted to ACT Realty because doing so would undoubtedly allow ACT Realty to benefit via a windfall from the illegal contract it entered into.
With regard to the contention that the real estate broker is entitled to a commission based on quantum meruit, we note that the decisions relied upon by the real estate broker did not involve contracts which were void for reasons of public policy and did not involve sales to governmental entities. Here, by contrast, there was a non-customary seller/broker arrangement targeted to a specific governmental buyer and calling for a commission of all funds received in excess of $1 million. The strong public policy which invalidates the parties' contract also precludes recovery on the basis of quantum meruit As we stated with regard to a real estate commission in Bradley v. Banks, 260 So.2d 256, 257 (Fla. 3d DCA 1972): "The contract being void as a matter of public policy, the services rendered in connection therewith cannot be made the basis for a quantum meruit claim ." See also Vista Designs, Inc. v. Silverman, 774 So.2d 884, 888 (Fla. 4th DCA 2001).
Accordingly, we remand to the trial court to direct the escrow agent to return the escrowed funds to the School Board.
Reversed and remanded.
NESBITT, Senior Judge, concurs.
. The above line, from the musical "Chicago", was uttered by a man, whose wife found him with two women, as he tried to explain away the rather suspicious circumstances that he found himself in.
. The original amount in escrow was $164,650.50 prior to the $20,000 payment to the lobbyist. We leave the decision to the School Board to determine whether to seek remuneration for this "outstanding" $20,000. This is not to suggest that the lobbyist may not be entitled to be paid a fee for lawfully rendered services. Accordingly, if the School Board were to seek, and recover, remuneration for the $20,000.00 paid to the lobbyist out of the proceeds of the sale, in excess of one million dollars, received by the landowner, then further proceedings could determine which party might be financially responsible to pay those fees.