Opinion ID: 1896706
Heading Depth: 1
Heading Rank: 2

Heading: exclusive right to sell

Text: Commander makes two related arguments: First, that the agreement was intended to allow Harrigan to sell to the one prospective buyer he had prior to signing the listing agreement, but to no one else; and second, that the preamble [1] to the entire agreement, which states that Commander had the exclusive irrevocable right and privilege to sell, was entirely consistent with the addendum, which allowed Commander to obtain a commission only if it produced a buyer ready, willing, and able to purchase. Nonetheless, Commander argues that if its arguments are at least reasonable, it is entitled to have a jury decide the case. As to the first point, there is no dispute that Harrigan's concern in signing an unmodified listing agreement with Commander was that he would be required to pay Commander a commission even if he sold the property himself. As a direct result of that concern, Commander modified the contract, using very broad terms. In determining the meaning of the contract, it is significant to compare Paragraph 2 of the unmodified agreement with the addendum that superseded it. The original provision in Paragraph 2 permitted Commander to obtain a commission upon the sale of the property [i]f during the existence of this contract the property [was] sold by you [Commander] or me [Harrigan] ..., or anyone else. Under that contract, to which Harrigan did not agree, Commander would have had the exclusive right to sell the property, but if anyone else did sell the property, then Commander would still have been entitled to a commission. Clearly, the amended provision does exactly the opposite. Rather than allowing Commander a commission no matter who sold the property, the amendment states that Commander could receive a commission only if it produced a buyer. The provisions regarding a sale by Harrigan or anyone else were deleted from the addendum. The only reasonable inference that can be drawn from that change is that if Harrigan or anyone else did sell the property, Commander would not receive a commission. Since we ultimately conclude that there is no evidence that Commander procured Caron, the ultimate purchaser, and because Commander has abandoned its theory that Investment Properties, Inc., was a buyer ready, willing, and able, Commander should not be entitled to a commission. Furthermore, if the agreement was meant to be as limited as Commander suggests, Commander could have drafted the modified provision much more narrowly. In other words, the addendum could have stated that Commander would be entitled to a commission unless Harrigan sold the property to X, Y, or Z (presumably those potential purchasers Harrigan was already working with). But in drafting the addendum, Commander used very broad language with no limitations. Commander also argues that it would not have entered into the listing agreement if it had known it was not exclusive, except with regard to Carroway, the one particular buyer Harrigan had dealt with prior to the agreement with Commander. However, Commander also claims that at the time Harrigan finally agreed to sign the listing agreement, he no longer had Carroway as a prospective buyer, and, thus, that the addendum served no further purpose. Yet, Commander still left the addendum in the agreement. If there was no longer any need for the addendum, why did Commander leave it in the agreement? The logical conclusion is that the addendum remained in the agreement because it was not, as Commander argues, mooted by the fact that one of Harrigan's prospective purchasers no longer appeared interested in the property; such a conclusion would substantiate the conclusion that the agreement was not intended to give Commander an exclusive right to sell the real estate. Commander's second major argument is that the contract, as amended, is unambiguous and means that Commander has an exclusive right to sell Harrigan's property, even though it is entitled to a commission only if it produces a buyer ready, willing, and able. In other words, Commander claims that it need not be entitled to a commission to win this appeal because Harrigan breached the exclusive right provision and Commander is entitled to damages for that breach. However, Commander argues, if this Court finds that the contract is ambiguous, then the lower court's judgment should be reversed because Commander is entitled to a jury trial to resolve the ambiguity. Jones v. Chaney & James Construction Co., 399 F.2d 84 (5th Cir. 1968). Determining whether a contract is ambiguous is a question of law for the trial judge to decide, P & S Business v. South Central Bell Telephone Co., 466 So.2d 928, 931 (Ala.1985), and if the parties' intent can be discerned from reading the contract, then that is also a question of law for the trial judge. Southeast Nursing Home, Inc. v. St. Paul Fire & Marine Ins. Co., 750 F.2d 1531 (11th Cir.1985). The judge found no ambiguity in the contract and we conclude that in light of the undisputed facts, the only reasonable interpretation of the contract is that the addendum to the contract amended the exclusive right provision in the preamble. Commander asserts a right to money damages for breach of the exclusive rights clause in the preamble, claiming that the contract gave it the exclusive right to sell for five months (until April 4, 1984), even though Commander could receive a commission only if it produced a buyer. Thus, Commander claims, it had until April 4 to find a buyer and, by selling the property himself on February 29, 1984, Harrigan prevented Commander from receiving a commission. We disagree. This Court will not insert ambiguities into a contract by strained and twisted meaning where no such ambiguities exist. South Central Bell, supra, citing Michigan Mutual Liability Co. v. Carroll, 271 Ala. 404, 123 So.2d 920 (1960). The interpretation Commander suggests would require this Court to place a strained and twisted construction on the agreement. First, the date only indicates the length of the contract; it does not determine the substantive question of whether there was an exclusive right to sell. Since we conclude that there was no exclusive right to sell, there can be no breach of the contract based on a violation of such an exclusive right. Second, from the face of the agreement, as modified, it appears that Commander was entitled to a commission only if it produced the buyer. If, pursuant to the language of the preamble, the agreement was intended to give Commander an exclusive right to sell, there would be no need to specify that Commander would receive a commission only if it produced the buyer. That would be stating the obvious. Certainly no one would conclude that Commander would be entitled to a commission if it did not sell the property. If the language in the addendum is to mean anything, it must mean that Harrigan could sell the property himself, without giving Commander a commission. Furthermore, Commander's interpretation of the agreement would yield ridiculous results. If it were true that the two provisions granted an exclusive right to sell, but a commission only if a buyer was produced, then even if Harrigan violated the exclusive right provision by selling the property himself, Commander would still not be entitled to a remedy (i.e., a commission) under the terms of the contract. There would be no reason to drastically limit Commander's right to a commission and also prohibit Harrigan from selling the property. Thus, even under Commander's interpretation of the contract, it could not recover. We conclude that the face of the agreement, as well as the undisputed facts and intent of the parties, is sufficient for this Court to conclude that the contract did not grant an exclusive right to sell. Nonetheless, the rules of construction would still require this Court to find that the addendum supersedes the general language of the preamble. When there is a conflict in a contract, the specific substantive provisions control over general provisions. McKinney Drilling Co. v. Collins Co., 517 F.Supp. 320, 324 (N.D.Ala.1981). More specifically, this Court has previously rejected the argument that the preamble controls operative provisions of a contract. [W]here the recitals are broader than the contract stipulations, the former will not extend the latter. Ingalls Iron Works Co. v. Ingalls, 256 Ala. 124, 128, 53 So.2d 847, 850 (1951). Thus, where there is an inconsistency in the contract, the specific, unambiguous provisions of the addendum prevail. Pursuant to the addendum, Commander was not entitled to an exclusive right to sell, nor is Commander entitled to a commission. A third rule of construction applicable when contract terms are inconsistent with typewritten terms is that typewritten provisions prevail over printed matter. McKinney, supra ; Industrial Machinery, Inc. v. Creative Displays, Inc., 344 So.2d 743 (Ala.1977). This is a long-held presumption in the law, because typewritten provisions are thought to have commanded stricter attention than a standard form contract provision. McKinney, supra ; Industrial Machinery, supra . Once again, the rules of construction lead us to conclude that if there is any ambiguity in the provisions, the rules of construction provide the answer. Since the typewritten addendum was unambiguous, it prevails. A final rule of construction aiding us in interpreting this contract is the rule that an ambiguous contract is generally construed against the drafter. Colonial Baking Co. v. Pine Dale, Inc., 436 So.2d 856, 858 (Ala.1983), citing Morrow v. Wood, 411 So.2d 120 (Ala.1982); Travelers Insurance Co. v. Kernachan, 283 Ala. 96, 99, 214 So.2d 447 (1968). Commander drafted the provision; thus any ambiguity should be construed against it. If the addendum was intended to mean what Commander asserts, then it could have been drafted much more narrowly. Because the addendum was stated broadly and with no limitations, we find that it permitted Harrigan to sell the property on his own, without entitling Commander to a commission. But Commander further argues that if the contract is given the meaning asserted by the defendants, it gives Commander no better rights than any other real estate agent, and makes the contract useless. We disagree. Commander was permitted to place signs on the property and to place the property on the Multiple Listing Service under the name of the company, and was also authorized to advertise and represent that it had a listing on the property. All of these put Commander in a better position to sell the property than other real estate agents had. Nonetheless, giving Commander the right to sell does not necessarily mean that no one else can be granted that same authority. The provisions in the contract permitted exactly that. Commander was given the authority to try to sell the property, but Harrigan was not precluded from giving another realtor permission to do the same. Until this lawsuit, Commander acted consistent with this interpretation of the contract. Specifically, Harrigan and his attorney informed Commander of the pending offer by Caron. At no time while Harrigan was working on the sale to Caron did Commander give any indication that Harrigan was acting inconsistent with the agreement, nor did Commander ever assert any right to a commission on the sale. To the contrary, Commander worked diligently to try to get either Investment Properties, Inc., or the Johnson-Rast & Hays party to make an offer.