Opinion ID: 2566112
Heading Depth: 1
Heading Rank: 5

Heading: Breach of Contract Issues

Text: [¶10] Initially, Roney asserts that the trial court erred in concluding that the listing agreement constituted an express contract between Roney and BBC. Roney claims that she and Gould were the only parties particularly identified within the listing agreement, and even though BBC signed the agreement, it was not a party to the agreement. Roney contends that the agreement unambiguously sets forth Gould and herself as parties to the agreement, and it was therefore improper for the district court to rely upon extrinsic evidence in ultimately concluding that BBC was a party to the agreement. In contract litigation, when the terms of the agreement are unambiguous, the interpretation is a question of law.... Examination Management Services, Inc. v. Kirschbaum, 927 P.2d 686, 689 (Wyo. 1996); Union Pacific Resources Co. v. Texaco, Inc., 882 P.2d 212, 218-19 (Wyo. 1994). Whether a contract is ambiguous is a question of law for the reviewing court. Prudential Preferred Properties v. J and J Ventures, Inc., 859 P.2d 1267, 1271 (Wyo. 1993). We review questions of law de novo without affording deference to the decision of the district court. Hermreck v. United Parcel Service, Inc., 938 P.2d 863, 866 (Wyo. 1997); Griess v. Office of the Atty. Gen., Div. of Criminal Investigation, 932 P.2d 734, 736 (Wyo. 1997). According to our established standards for interpretation of contracts, the words used in the contract are afforded the plain meaning that a reasonable person would give to them. Doctors' Co. v. Insurance Corp. of America, 864 P.2d 1018, 1023 (Wyo. 1993). When the provisions in the contract are clear and unambiguous, the court looks only to the four corners of the document in arriving at the intent of the parties. Union Pacific Resources Co., 882 P.2d at 220; Prudential Preferred Properties, 859 P.2d at 1271. In the absence of any ambiguity, the contract will be enforced according to its terms because no construction is appropriate. Sinclair Oil Corp. v. Republic Ins. Co., 929 P.2d 535, 539 (Wyo. 1996); Prudential Preferred Properties, 859 P.2d at 1271. Amoco Prod. Co. v. EM Nominee Partnership Co., 2 P.3d 534, 540 (Wyo. 2000). Double Eagle Petroleum & Min. Corp., at ¶7. [¶11] Each of the listing agreements, including the listing agreement involving the Downtown property, specifies only the names of Roney and Gould within the body of the contract. However, Richard signed each of the listing agreements on behalf of BBC at the bottom of those agreements. The listing agreements also provided, in applicable part: 1. EXCLUSIVE AUTHORIZATION: Nedra Roney (Owner) hereby employs and grants Coldwell Banker  John Gould (Broker) the exclusive and irrevocable right, commencing on 3-22-01 and expiring at 11:59 p.m. on 3-21-03 (Listing Period) to sell: [the Downtown property]. 2. TERMS OF SALE: A. LIST PRICE: The listing price shall be [Two Million Two Hundred Thousand Dollars]. . . . C. ADDITIONAL TERMS: [Gould] to identify local area Broker to co-list and market property. Wyoming laws, rules & regulations prevail. . . . 5. COMPENSATION TO BROKER: . . . A. Owner agrees to pay to Broker as compensation for services irrespective of agency relationship(s) seven percent of the listing price . . . as follows: . . . (3) If, without Broker's prior written consent, the Property is (i) withdrawn from market . . . during the Listing Period, or any extension. [¶12] Upon our review, we agree with Roney that the language used within the Downtown property listing agreement is clear and unambiguous. However, we hold that BBC was a party to the agreement. Specifically, the agreement states that Gould was to identify a local broker to co-list the Downtown property. Thus, the agreement explicitly provides for a third party to be involved. There is little doubt that Roney and Gould contemplated that a co-listing broker would need to be retained to market and sell the Downtown property. Moreover, the agreement patently states that seven percent of the listing price would be due as a commission should Roney withdraw the Downtown property from the market during the listing period without consent. [¶13] In this case, it is undisputed that Gould and Roney's attorney met with BBC in an effort to find a local real estate broker to list the Downtown property. Ultimately, BBC was formally retained for such services when Richard signed the listing agreement on behalf of BBC. By providing the listing agreement to BBC, Roney and Gould indicated their intent to include BBC as co-listing broker and that BBC be a party to that agreement. Thereafter, Roney withdrew the Downtown property from the market during the listing period without full consent and, four months later, listed the property with a different Jackson broker for sale at the same listing price. Roney's actions triggered the requirement that she pay BBC the specified commission and all other related expenses enumerated within the listing agreement. Even if we assume that the listing agreement's designation of Roney and Gould as the parties within the body of the agreement coupled with BBC's signature at the bottom of the listing agreement renders the listing agreement ambiguous, we would reach the same result. The surrounding circumstances mandate such a conclusion. [¶14] The parties entered into listing agreements involving the sale of five separate properties. Each of these listing agreements contained the same terms. Most importantly, these agreements called for the involvement of a co-listing broker where the properties were located. Again, as indicated under these provisos, BBC was retained in such capacity. Furthermore, when Gould was questioned at trial, the following colloquy transpired: Q. You understood from the beginning, didn't you, that you couldn't practice your profession as a real estate sales person in Wyoming? A. That's correct. Q. And so you did not solicit any offers? A. No, I did not. Q. On the Wyoming property you made no contacts with any other realtors looking for offers or advertising the property, did you? A. In my California market and on my website the properties were there, but not in Wyoming, no. Q. Okay. You were careful not to do that in Wyoming because you recognized that there was a criminal penalty if you acted as  A. My license is in California, not in Wyoming. That's why Mr. Richard was brought in. Q. But surely didn't you as theas the longtime advisor of Ms. Roney you wanted her to be represented in Wyoming by a competent and reliable real estate professional? A. I did. Q. Somebody who could do all of the things that a broker and sales person does on the ground here that you could not do? A. Correct. Q. And after checking them out your choice for that service was the [BBC]? A. That's correct. Each of the listing agreements stated explicitly that the local laws, rules and regulations wherein each respective property was located would prevail. Moreover, Roney and Gould entered into an exclusive agreement wherein Gould was authorized to identify and consult with local area brokers to co-list properties owned by Roney. [¶15] The Pinecreek Ranch property located in Idaho sold in June 2001, as a result of the work performed by BBC. Upon the closing of that sale, Roney identified BBC as the listing broker and paid BBC its commission. Similarly, on September 6, 2001, the Lucky Dog property sold through BBC's efforts. BBC also received a commission from this sale. These transactions evidence that Roney understood and intended that BBC formally act as the co-listing broker under each of the listing agreements, including the Downtown property listing agreement. [¶16] On June 20, 2001, Roney asked Gould if she could withdraw the properties located in Wyoming from the market and be released from the listing agreements. Gould agreed to release his portion of the listing agreements, but warned that his release may not be binding on BBC. Gould then requested that BBC release Roney from the listing agreements. Gould advised BBC that Roney often changed her mind concerning the sale of her real estate and that because she was a very important client, he let her do what she wanted to retain her business. Gould's actions show that he believed that BBC was also required to formally release the listing agreements. Roney also apparently believed this to be the case because she ultimately sought and formally obtained BBC's formal agreement to accept payment of its expenses in exchange for releasing Roney from the listing agreement concerning the Smoky Hollow-Mosquito Creek property. In fact, under this agreement, Roney explicitly stated that if BBC agreed to the release, the parties would move forward with a relationship that would benefit both parties and resolve any hard feelings. Such a statement infers that Roney understood that she was contractually obligated to BBC under the Downtown property listing agreement. [¶17] Finally, Roney is the owner of many pieces of real estate worth millions of dollars and often engages in real estate transactions. Throughout the applicable period, Roney utilized the services of Gould, a California licensed real estate agent. Roney had previously worked with Gould in the real estate area for over ten years, and Roney formally made Gould her real estate portfolio manager on March 22, 2001. Roney's attorney was also used to locate a local real estate broker to list the Downtown property as required under the listing agreement. Under the evidence put forth, it was well established that Roney and Gould intended to include BBC as a party to the Downtown property listing agreement. It was essential to enlist the services of a local broker under the contract in order to lawfully market the property for sale in Wyoming. BBC was the chosen local broker and became a party to the listing agreement when Richard signed the agreement on behalf of BBC. [¶18] In a related contention, Roney asserts that Gould's release of the Downtown property listing agreement excused her from any obligations under the contract. However, for the same reasons stated above, we are not persuaded by Roney's argument. BBC was a party to the listing agreement, and its release was also required to discharge Roney's responsibilities under the agreement. [¶19] In a different argument, Roney asserts that the district court impliedly ruled that an enforceable oral contract existed between the parties when it recited the Van Ewing v. Hladky Const., Inc., 2002 WY 95, ¶11, 48 P.3d 1086, ¶11 (Wyo. 2002), case in its findings of fact and conclusions of law. Upon our review, we conclude that this argument is unpersuasive, as we conclude that the district court's order is clear that this was not the court's finding. In any event, we hold that an explicit written contract existed between the parties, and we therefore need not address Roney's arguments regarding the formation of an oral contract. [¶20] Roney next argues that even if there was a valid listing agreement between herself and BBC, BBC first breached the agreement by failing to offer a 3.5 percent commission when BBC listed the property for sale. According to Roney, the co-listing agreement entered into between Gould and BBC constitutes an integral addendum to the listing agreement concerning the Downtown property. She therefore asserts that the terms of the co-listing agreement must be incorporated into the listing agreement. Thus, because the co-listing agreement specified that at least a 3.5 percent cooperating commission would be offered and BBC only offered a 3 percent commission when it listed the property for sale, BBC materially breached the listing agreement precluding BBC from enforcing the contract against Roney. [¶21] We do not agree that the co-listing agreement must be considered an addendum to the listing agreement. To the contrary, while both deal with the sale of the Downtown property, they address separate and distinct subject matters and were entered into by different parties, namely, Roney, Gould, and BBC with respect to the listing agreement and Gould and BBC with respect to the co-listing agreement. The breach of another contract not between the same parties is not a defense. Peters Grazing Ass'n v. Legerski, 544 P.2d 449, 458 (Wyo. 1975). Further, even if BBC breached the contract as alleged by Roney, such action does not amount to a material breach of the listing agreement. As cited by Roney, [t]o be material, the breach [of contract] must be a failure to do something so substantial and fundamental as to go to the root, essence, or substance of the contract, and defeat the object or purpose of the parties in entering into the contract. 17B C.J.S., Contracts § 507 (1999) (footnotes omitted). BBC's actions do not rise to the level of a material breach of the contract. Roney's contention that BBC's failure to offer a higher incentive may have prevented the property from being sold is purely speculative. [¶22] Lastly, Roney argues that the district court wrongfully awarded BBC the full seven percent commission stated within the listing agreement. The listing agreement clearly set forth that Roney owed seven percent of the listing price as a commission should Roney withdraw the Downtown property from the market without consent during the listing period. Any potential dispute between Gould and BBC concerning the division of such amount under the co-listing agreement is not before this court.