Opinion ID: 2640812
Heading Depth: 2
Heading Rank: 1

Heading: Erwin acted as a real estate broker in providing services to Cotter under the Agreement

Text: ¶ 18 The threshold issue in this case is whether Erwin acted as a real estate broker in providing the services for which he claims a fee under the Agreement. Determining whether a person acted as a real estate broker through a particular course of conduct is a mixed question of law and fact, in that it requires applying legal precepts (the definition of real estate broker) to factual circumstances (the details of the person's conduct). See Tapper v. Employment Sec. Dep't, 122 Wash.2d 397, 402, 858 P.2d 494 (1993). Analytically, resolving a mixed question of law and fact requires establishing the relevant facts, determining the applicable law, and then applying that law to the facts. Id. at 403, 858 P.2d 494. Here, the essential facts, as found by the trial court, are verities on appeal. [11] Erwin, 133 Wash.App. at 150-51 51, ¶¶ 16-18, 135 P.3d 547. The process of determining the applicable law and applying it to these facts is a question of law that we review de novo. Tapper, 122 Wash.2d at 403, 858 P.2d 494; see also Main v. Taggares, 8 Wash.App. 6, 9, 504 P.2d 309 (1972) (whether agreement constituted a broker's contract for a real estate commission is a legal question). ¶ 19 Both Washington and California law provide that a person who negotiates the sale or lease of real property for compensation satisfies the statutory definition of real estate broker. Under Washington law, a `[r]eal estate broker,' includes a person [who], while acting for another for commissions or other compensation or the promise thereof, [n]egotiates or offers to negotiate, either directly or indirectly, the purchase, sale, exchange, lease, or rental of real estate . . . for others, or [e]ngages, directs, or assists . . . in negotiating or closing such a transaction. Former RCW 18.85.010(1)(b), (e) (1998). Under California law, a real estate broker includes a person who, for a compensation or in expectation of a compensation, . . . does or negotiates to do . . . for another . . . the purchase, sale or exchange of real property or . . . leases on real property. Cal. Bus. & Prof.Code § 10131(a), (b) (West). ¶ 20 Cotter argues that, [u]nder the relevant statutes, the services Erwin provided are nothing other than brokerage services. Suppl. Br. of Pet'rs at 6. We agree. Under either the Washington or the California definition, the Agreement between Cotter and Erwin established a contract for Erwin to act as a real estate broker on Cotter's behalf. The Agreement defined itself as an exclusive engagement to represent and right to sell or lease [designated] facility(ies). Ex. 8, ¶ 4. In the Agreement, Cotter acknowledged that Erwin had requested certain information in order to effectively market facility(ies), Exhibit 8, ¶ 12, and Erwin agree[d] not to advertise the facility(ies) for sale or to `list' said facility(ies) in any multiple listing service without the prior written consent of Cotter. Ex. 8, ¶¶ 16, 17. The Agreement provided that Cotter would pay Erwin a fee, calculated as a percentage of the given transaction, and required Cotter to acknowledge his responsibility to pay [Erwin] that fee in any purchase and sale contract, lease or sublease agreement, and any escrow established. Ex. 8, ¶ 19. Taken together, these terms exemplify an agreement between a real estate broker and a client. ¶ 21 Moreover, applying either Washington or California law, we conclude that Erwin, in fact, acted as a real estate broker through the services he provided to Cotter. After Cotter and Erwin executed the Agreement, Cotter told Erwin to deal with Sleeth regarding the status of efforts to achieve transfers of Cotter's interests. CP at 33, FOF 28. Erwin's efforts generated considerable communication between Erwin and Sleeth, on the one hand, and Erwin and the Ensign Group, on the other, CP at 33, FOF 29, as well as meetings of Cotter, Sleeth, and the Ensign Group. Erwin's efforts resulted in negotiated leases between Cotter and the Ensign Group on two of the Texas SHC facilities and the four California SHC facilities. ¶ 22 Erwin argues unpersuasively that the specialized knowledge required to operate in the niche field of senior health care transactions creates a distinction between a senior health care `consultant' and a traditional real estate `broker.' Suppl. Br. of Resp'ts Carey D. Erwin & Healthcare Prop. Inc., at 15. Irrespective of any specialized knowledge, Erwin, while acting for [Cotter] for . . . compensation or the promise thereof, [n]egotiat[ed], . . . either directly or indirectly, the . . . lease . . . of real estate . . . for [Cotter]. RCW 18.85.010(1)(b). Likewise, for a compensation or in expectation of a compensation, . . . [Erwin] negotiat[ed] to do . . . for [Cotter] . . . leases on real property. CAL. BUS. & PROF.CODE § 10131(b). In so doing, Erwin acted as a real estate broker under Washington and California law. ¶ 23 Nor can we agree with the Court of Appeals that Erwin did not act as a real estate broker because the Agreement was not a typical `listing agreement,' but rather a hybrid `consulting agreement' calculated to capitalize on Erwin's unique expertise in this highly regulated industry and his contacts in the industry throughout the country. Erwin, 133 Wash.App. at 153, ¶ 26, 135 P.3d 547. It is well settled in Washington that the label applied to an instrument does not determine, as a matter of law, whether the services provided pursuant to it are those of a real estate broker. Main, 8 Wash.App. at 10, 504 P.2d 309 (citing Shorewood, Inc. v. Standring, 19 Wash.2d 627, 638, 144 P.2d 243 (1943)). ¶ 24 Moreover, the fact that the Agreement's purpose was completely different from regular real estate activity in terms of the properties involved and the interstate range of possible transactions, does not change Erwin into something other that a real estate broker. CP at 31, FOF 20 (emphasis added). Finding that Erwin handled only a discrete category of properties that he marketed to an interstate base of prospective buyers merely describes the narrow subset of the real estate market within which Erwin operated. The essential nature of Erwin's conduct remains that of a real estate broker. ¶ 25 Pursuant to the Agreement and in expectation of compensation, Erwin provided services to Cotter for the purpose of achieving the transfer of Cotter's interests in several SHC facilities. We hold that, in so doing, under either Washington or California law, Erwin acted as a real estate broker.