Opinion ID: 1907334
Heading Depth: 2
Heading Rank: 1

Heading: Was the Brokerage Agreement Legal?

Text: The district court concluded that contracts which provide for contingency awards for securing public monies are against public policy. Act Realty, 863 So.2d at 336 (citing Hialeah Gardens, 599 So.2d at 1323-24). This holding conflicts with Robert & Co., where we announced that as a general rule such contracts violate public policy only if shown to involve favors or corrupt means. 33 So.2d at 734. Because no showing of corruption has been made or even attempted in this case, to approve the district court's decision we would have to recede from Robert & Co. We decline to do so. To the contrary, we conclude that, at least as applied to real estate brokerage agreements, which have traditionally provided for fees contingent on the consummation of a sale, the general rule applied in Robert & Co. remains valid. In Robert & Co., the plaintiff agreed to assist the defendant in securing an engineering contract with the City of Tampa. 33 So.2d at 732. After obtaining the contract, the defendant refused to compensate the plaintiff for services rendered. Id. at 733. The plaintiff brought suit, seeking a reasonable fee. The defendant argued that their agreement was unenforceable because (1) the engineering contract was with a public agency, and the compensation for plaintiff's services was contingent; and (2) the means used to secure the contract were personal or political and contrary to public policy. Id. We rejected this argument, noting as a general rule... that an employment in which compensation is contingent on success in securing contracts from public officials is not illegal on its face. It must be shown that it was induced by favors or corrupt means. Id. at 734. Because the record in Robert & Co. was devoid of any showing that the plaintiff had any personal or political influence or that the contract was induced by illegal influence, we concluded the agreement was legal. Id. We derived the general rule in Robert & Co. from two earlier decisions. The first was Edwards v. Miami Transit Co., 150 Fla. 315, 7 So.2d 440 (1942), in which a transit company entered a contingency-fee contract with an individual who attempted to secure a bus franchise from the City of Miami. Id. at 440. We refused to declare the contract facially illegal because it conceivably could have been lawfully performed without any one engaging in any act or practice which was contrary to public morals or to the public welfare. Id. at 442. The other case was Wechsler, 26 So.2d at 884, decided two years before Robert & Co. We held there that [t]he legality of agreements to influence administrative or executive officers or departments is to be determined in each case by weighing all the elements involved and then deciding whether the agreement promotes corrupt means to accomplish an end. Id. at 887. Although Robert & Co., Edwards, and Wechsler were decided more than half a century ago, they represent our most recent statements on this subject. Since then, we have neither confirmed nor questioned their general rule. Twenty-five years after Robert & Co., the Legislature enacted a lawsection 287.055, Florida Statutesthat would have affected that case. Ch. 73-19, Laws of Fla. Known as the Consultants' Competitive Negotiation Act, the statute criminalizes the payment of a contingency fee for soliciting or securing a contract with a public agency regarding architecture, engineering, landscape architecture, surveying, or mapping. See § 287.055(6), Fla. Stat. (2004). Because Robert & Co. involved an engineering contract, one of the subjects covered by the statute, the contract in that case would be illegal today. The brokers nevertheless argue that the general rule of Robert & Co. remains intact, and that the Legislature merely carved out an exception for contracts in certain particular fields. Act Realty responds that the statute expresses a more general public policy against all contingency-fee agreements for the procurement of government contracts. [2] According to Act Realty, [t]here is no principled difference between the danger for corruption posed by the brokerage of professional services to the state for contingency commissions and the brokerage of real estate to the state on the same basis. Brief of Resp't on the Merits at 36-37. To the contrary, we believe the difference is substantial. Real estate brokerage agreements involving single-family homes, commercial businesses, and even government property all have a long history of contingency fees. Flat-fee real estate brokerage agreements are virtually unheard of. As Judge Cope stated in dissent below, It should be obvious that it is permissible for a landowner to hire a real estate broker to sell the owner's land, and to compensate the broker by a commission in the event the real estate broker procures a sale. It makes no difference whether the buyer is a public agency or a private person. There is nothing inherently illegal about such an arrangement. Act Realty, 863 So.2d at 341 (Cope, J., dissenting). Judge Cope's observations are confirmed by a well-known treatise, which summarizes the general rule followed in other jurisdictions as follows: A person having something to sell has the right to sell it through an agent, and this right is an incident to his ownership. To declare that he may not employ an agent, upon commission, where the government is the prospective buyer, is to take away what is ordinarily one of the elements of the enjoyment of ownershipthe unrestricted right to sell. Upon this line of reasoning, commission agreements for a sale to the government have been upheld and enforced in this state where the agreement did not actively require corruption in its performance. Treated as a matter distinct in its nature from agreements to procure legislation, an agreement to compensate an agent for his successful efforts in traffic with the government has been held binding, where unfairness in the dealings or an intention to resort to corruption did not actually appear from the facts. 7 Richard A. Lord, Williston on Contracts § 16:5, at 357-58 (4th ed.1997) (footnote omitted). The repercussions for the real estate sales industry from a holding that such contracts suddenly violate public policy as applied to purchases (and, by extension, sales) by government agencies would be unpredictable. Regardless of the differences between real estate brokerage agreements and those mentioned in section 287.055, the fact remains that the Legislature limited the scope of that statute and, for whatever reason, chose not to include real estate brokerage (and a great many other types of contracts) within its coverage. We have generally recognized the principle of statutory construction, expressio unius est exclusio alterius the mention of one thing implies the exclusion of another. See Grenitz v. Tomlian, 858 So.2d 999, 1002 (Fla.2003) (quoting Moonlit Waters Apartments, Inc. v. Cauley, 666 So.2d 898, 900 (Fla.1996)). We also have recognized as a general rule ... that statutes in derogation of the common law are strictly construed. BellSouth Telecomm., Inc. v. Meeks, 863 So.2d 287, 290 (Fla.2003). Consistent with these principles, we conclude that section 287.055 applies only to the specific contracts it mentions and is irrelevant here. Act Realty also relies on section 112.3217, Florida Statutes (2004), which prohibits lobbyists from receiving fees contingent on executive branch action. As defined in the statute, the term lobbyists includes those seeking, on behalf of another person, to influence an agency with respect to a decision of the agency in the area of policy or procurement or an attempt to obtain the goodwill of an agency official or employee. § 112.3215(d)-(e), Fla. Stat. (2004). Act Realty contends that the brokers became lobbyists when they attempted to procure the sale of property to a government entity. We disagree. The Legislature has classified real estate brokerage as a distinct professional service, and a body of statutes regulates that profession. §§ 475.001-475.5018, Fla. Stat. (2004). Those statutes impose on brokers the duties of loyalty, honesty, fair dealing, confidentiality, obedience, full disclosure, skill, care, and diligencemany of which tend to mitigate the dangers associated with contingency-fee payments. § 475.278, Fla. Stat. (2004). We doubt that the Legislature intended for restrictions on the occupation of lobbying to cover the separately regulated profession of real estate brokerage. We therefore conclude that the restriction on contingency fees under section 112.3217 does not apply to real estate brokers acting in the ordinary course of their profession, as these brokers were. The preceding analysis indicates that, while the Legislature has created exceptions to the general rule of Robert & Co., it has left the core of the rule intact. We, too, leave the rule as it is. The doctrine of stare decisis counsels us to follow our precedents unless there has been a significant change in circumstances after the adoption of the legal rule, or ... an error in legal analysis. Dorsey v. State, 868 So.2d 1192, 1199 (Fla.2003). Although fifty-seven years have passed since we decided Robert & Co., the relevant circumstances have not significantly changed. Nor did that case involve an analytical error. We therefore apply the doctrine of stare decisis, which provides stability to the law and to the society governed by that law. State v. Gray, 654 So.2d 552, 554 (Fla.1995) (citing State v. Schopp, 653 So.2d 1016 (Fla.1995) (Harding, J., dissenting)); see also Tyson v. Mattair, 8 Fla. 107, 124 (1858) (noting that a commitment to precedent helps to keep the scale of justice even and steady). The general rule continues to be that an employment in which compensation is contingent on success in securing contracts from public officials is not illegal on its face, but rather is illegal only if shown at trial to involve favors or corrupt means. Robert & Co., 33 So.2d at 734. We see no reason why this general rule should not apply specifically to the real estate brokerage industry, in which contingency fees have long been the professional norm. We find it hard to imagine an industry in which good-faith reliance on Robert & Co. has been more widespread. We therefore apply Robert & Co.'s rule to this case. Because the trial record contains no evidence of corruption or improper influence, we quash the decision of the district court and hold that the brokerage agreement between the brokers and Act Realty complies with Florida public policy.