Opinion ID: 71338
Heading Depth: 3
Heading Rank: 1

Heading: Artrip's right to property under Florida law

Text: 16 Under Florida law, a property has been sold, for the purpose of establishing entitlement to a commission, once the purchaser executes a binding contract to purchase the property at issue. Hagans Co. v. Manla, 534 So.2d 750, 751 (Fla. 3d DCA 1988). However, the broker and the party responsible for payment of the commission may record in the broker's commission agreement express conditions precedent to the broker's entitlement to that commission, and these conditions must be met before the broker is legally entitled to payment. Id. at 751-52; Harding Realty, Inc. v. Turnberry Towers Corp., 436 So.2d 983, 984 (Fla. 3d DCA 1983). Significantly, there is a distinction under Florida law between a condition precedent to the entitlement to a commission and a condition precedent to the payment of a commission. See Harding Realty, 436 So.2d at 984 (broker was not entitled to commission because commission agreement expresse[d] that entitlement to the commission, as opposed to just payment of the commission, [was] to occur at closing, and closing never occurred). 17 On April 17 and 18, 1989, Ruff, on behalf of the bankruptcy estate, entered into a binding contract of sale for the assets of the estate to the prospect identified by Artrip. The sale was approved by the bankruptcy court, and was consummated. However, Ruff argues that Artrip's appointment by the bankruptcy court as a business broker and the commission agreement were subject to an express condition precedent to his entitlement to the commission. That order states: 18 [A] fee will only be paid upon application, general notice and approval of the Bankruptcy Court. 19 In re Central Micrographic Corp., No. 88-2577-BKC-6S7 (Bankr.M.D.Fla. March 2, 1989) (Order appointing Artrip business broker). Ruff argues that Artrip was not entitled to those fees until the bankruptcy court gave its final approval, which occurred on August 10, 1989. 20 As noted above, there is a difference under Florida law between entitlement to a commission and payment of a commission. The broker in Harding Realty was denied his commission because the commission agreement specifically stated that entitlement to the commission would occur at closing, and the buyers never closed on the properties. Harding Realty, 436 So.2d at 984. In this case, Artrip's commission was agreed upon and approved on March 2, 1989, by the bankruptcy court. Under that order, Artrip was entitled to the commission if his prospect was the successful buyer of the property, which was in fact the case. It is true that the order also stated that Artrip's commission would be paid only upon subsequent application to and approval by the bankruptcy court. The court's order conditioned payment, not entitlement, upon further approval. Under Florida law, the condition as to payment did not undermine Artrip's entitlement. Thus, Artrip was entitled to payment, at the latest, when the sale of the property was consummated pursuant to the April 17 and 18, 1989 contract for sale. Hagans Co., 534 So.2d at 751. The district court properly concluded that, under Florida law, Artrip had an entitlement, and thus had a property interest in the commission. 21