Opinion ID: 2604108
Heading Depth: 1
Heading Rank: 4

Heading: The Agreement Between Phillippe and Shapell Is Subject to the Statute of Frauds.

Text: Civil Code section 1624, subdivision (d) provides that an agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate is invalid unless the agreement or some note or memorandum of the agreement is in writing and subscribed by the party to be charged or by his agent. [2] (1a) Phillippe contends Civil Code section 1624(d) does not apply to the agreement between him and Shapell. We disagree. [3] Phillippe argues that the statute is inapplicable because he was not acting as a broker for the Great Lakes property purchased by Shapell, but only as a professional consultant in the field of subdivision land acquisition. (2) A licensed broker may be able under appropriate circumstances to recover under an oral agreement or in quantum meruit for certain services other than the purchase, sale, or leasing of real property. ( Owen v. National Container Corp. of Cal. (1952) 115 Cal. App.2d 21, 25-26 [251 P.2d 765]; Carey v. Cusak (1966) 245 Cal. App.2d 57, 69 [54 Cal. Rptr. 244].) (1b) Phillippe fails to cite, and we are unable to find in the record, any evidence of professional services rendered to Shapell other than those a broker would reasonably be expected to perform in trying to consummate a sale, for example, furnishing Shapell with descriptions of the property. Phillippe's pretrial pleadings contradict his claim that he was a professional consultant. In his first amended complaint, he alleged that, after he located and presented the Great Lakes property to Shapell, it took over all activities leading to the eventual purchase of the property by Shapell, and that, when a broker was employed by Shapell, the broker served only as a flunky and assistant to Shapell's employees. Phillippe's services were merely incidental to his efforts to bring about a sale of the property to Shapell. Any agreement to perform those Services is thus subject to section 1624(d). ( Owen v. National Container Corp. of Cal., supra, 115 Cal. App.2d 21, 28; see generally 1 Miller & Starr, Current Law of Cal. Real Estate (1975) § 1.55, pp. 74-75.) Phillippe's own evidence makes clear that he was acting as a broker. In his April 5, 1973, letter to Prince, Phillippe stated that he was waiting for a price quote on the property. When Phillippe wrote to Aaron on June 9, 1976, requesting a commission, Phillippe described his relationship with Shapell and the nature of his services as follows: Early in 1973 our firm was asked by Ron Prince of Shapell to do an extensive survey of properties available for sale on the Palos Verdes Peninsula. We agreed to do so on the condition and with the understanding that our firm was working for and represented Shapell, the buyer, as brokers and would be paid a brokerage commission from buyer of 6% of the total consideration paid for the acquired property. (Italics added.) Phillippe viewed himself as a broker. The nature of his claimed compensation was that of a broker's fee  it was contingent on a sale, and it was in the customary amount charged by brokers. We agree with the observation that, if an object looks like a duck, walks like a duck and quacks like a duck, it is likely to be a duck. ( In re Deborah C. (1981) 30 Cal.3d 125, 141 [177 Cal. Rptr. 852, 635 P.2d 446] [conc. opn. of Mosk, J.].) It is clear that Phillippe was acting as a broker. We view Phillippe's characterization of himself as other than a broker as semantic sleight-of-hand. Phillippe tried this case on the primary theory that he is entitled to a broker's commission. The jury found in Phillippe's favor only on his claim for a broker's commission. He now says he was never acting as a broker. (3) Even if that were so, the general rule is that a party may not for the first time on appeal change his theory of recovery. ( Bogacki v. Board of Supervisors (1971) 5 Cal.3d 771, 780 [97 Cal. Rptr. 657, 489 P.2d 537].) (4a) Phillippe also contends section 1624(d) is not applicable to his agreement with Shapell because it is an agreement between brokers. Phillippe's argument on this point is less than clear, but he appears to contend that the statute of frauds does not apply because either: (1) one of the principals to the transaction, Shapell, is a licensed broker, or (2) the agreement was between brokers to share a commission. Neither point has merit. (5) First, the primary purpose of section 1624(d) is to protect real estate sellers and purchasers from the assertion of false claims by brokers for commissions. ( Pac. etc. Dev. Corp. v. Western Pac. R.R. Co. (1956) 47 Cal.2d 62, 67 [301 P.2d 825].) (4b) We perceive no logical reason why a licensed broker or agent who is acting as a seller or purchaser of real property should not be entitled to this protection. Licensees are as subject to false claims as are unlicensed members of the public. [4] Phillippe's argument appears to be that licensed brokers know the requirements of the statute of frauds and thus do not need its protection. His argument is too broad because, if it were accepted, judges, lawyers, and any other group who might reasonably be presumed to know the law, including the statute of frauds, would be stripped of its protection. The fact that Shapell is a licensed broker acting as a principal in the transaction does not render the statute of frauds inapplicable to the agreement with Phillippe. ( Marks v. Walter G. McCarty Corp. (1949) 33 Cal.2d 814, 823 [205 P.2d 1025].) [5] Second, if Phillippe means the statute does not apply because there was an agreement with Shapell to share a broker's commission, we reject that argument as well. Shapell was acting as a principal, not as a broker. The jury found by special verdict that there was no valid agreement between Phillippe and Shapell to share a broker's commission. Substantial evidence supports that finding. It must not be disturbed on appeal. ( Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660 [190 Cal. Rptr. 355, 660 P.2d 813].) Thus, we need not decide whether such commission-sharing agreements are within the ambit of section 1624(d), but we note that the Courts of Appeal have found that such agreements are not subject to the statute. (See, e.g., Iusi v. Chase (1959) 169 Cal. App.2d 83, 86 [337 P.2d 79]; Holland v. Morgan & Peacock Properties (1959) 168 Cal. App.2d 206, 210 [335 P.2d 769].) (6) (See fn. 6.), (1c) In light of the foregoing, we hold that the agreement between Shapell and Phillippe is subject to the requirements of section 1624(d). [6]