Opinion ID: 901823
Heading Depth: 1
Heading Rank: 6

Heading: Substantial Performance of Listing Agreement

Text: [¶ 12.] In Kahler, Inc. v. Weiss, we adopted the rationale of the North Dakota Supreme Court, that in order for a broker to collect a commission, `[t]he broker must show substantial performance of the duties imposed on him by the contract, even if he does not produce a buyer to be eligible for a commission.' 539 N.W.2d 86, 91 (S.D.1995) (quoting Kruger v. Soreide, 246 N.W.2d 764, 773 (N.D.1976)). Consideration for the exclusive listing agreement requires [a] broker [to] perform with best efforts [in order] to collect a commission under an exclusive selling agreement. Id. at 91. Whether the broker performed with best efforts depends on the facts of the case. Those best efforts include evidence of expenditure of time, effort, or money. Kruger, 246 N.W.2d at 773. [¶ 13.] Here, the listing agreement between Bootjack Ranch and Kjerstad Realty specifically contemplated the broker would show the property as part of his efforts. Even though Kjerstad Realty admitted Ensz did not technically show the property to Trask, it claimed it was unnecessary because Trask was familiar with the property. Thus, Kjerstad Realty claimed it was entitled to the commission because it substantially performed under the contract. Normally, substantial performance under a listing agreement is a question of fact. Kahler, Inc., 539 N.W.2d at 90. Since Kjerstad Realty brought the matter to the circuit court as a summary judgment action, the facts must be viewed in the light most favorable to Bootjack Ranch. [¶ 14.] It is undisputed the only contact between Kjerstad Realty and Trask took place at a social gathering at Hanson's residence, not at Bootjack Ranch. The social gathering was to celebrate Hanson's birthday. In her affidavit, Hanson said she wanted to invite Trask to her birthday party to meet Ensz and that Trask had an interest in the Bootjack Ranch. Trask arrived at the party with flowers and an ice cream cake for Hanson. Hanson claimed the conversations at the party between her, Trask, and Ensz regarding Bootjack ranch were not specific as to price or other terms or conditions related to a purchase of the Bootjack Ranch. Both Hanson and Trask described Ensz as antagonistic toward Trask regarding the sale of Bootjack Ranch and that Ensz's comments were not productive and did not facilitate any negotiations. Ensz did not meet with or discuss the purchase of the ranch with Trask before this meeting nor did he communicate with Trask after the meeting. Trask relates in his affidavit that he was never shown or physically taken to any portion of the Bootjack Ranch property by anyone associated with Kjerstad Realty, so to have `knowledge' or `familiarity' of the entire property. [¶ 15.] In reviewing a grant of summary judgment, we must accept the non-moving party's version of the facts as true. Kjerstad Realty disputes Trask's statement by arguing Trask had intimate knowledge of the property because he leased part of the ranch, owned property that bordered the ranch, and was Hanson's friend. Although Kjerstad Realty's argument concludes that Trask had intimate knowledge of the property, the record does not establish what part of Bootjack Ranch Trask leased or how much knowledge Trask had of the 6,365 acres. Just because someone may be a neighbor, friend, or partial rentor does not automatically absolve a realtor of obligations under the listing agreement. We must accept as true that Kjerstad Realty's efforts did not provide Trask with `knowledge' or `familiarity' of the entire property or that Ensz's antagonistic nature on January 20th did not facilitate, in any way, negotiations or conversations for the sale of Bootjack Ranch. [¶ 16.] The main testimony as to Kjerstad Realty's efforts came from Ensz. Ensz indicated he knew Trask leased a portion of the ranch, but he did not know which portion Trask leased. Ensz also testified that Hanson, Trask, and Ensz discussed topics other than the purchase of the ranch at length and that he remained at Hanson's house for four to five hours. Ensz testified Trask was interested in purchasing the ranch on a contract for deed but the parties did not discuss a down payment, interest rate, amortization period, or any details of the purchase at the meeting. Ensz testified Hanson was reluctant to sell the ranch on a contract for deed. Ensz admitted no one from Kjerstad Realty actually took Trask out and showed him the ranch. Ensz also testified Trask left him out of the conversation and that Trask directed his questions toward Hanson. Ensz indicated Trask was supposed to call him to put together a purchase agreement but the call never happened because Hanson removed the ranch from the market. [¶ 17.] Whether the efforts of Kjerstad Realty constituted substantial performance involves disputed material facts. Kjerstad Realty admits it did not perform at least one of the requirements of the agreementshowing the property to Trask. Consequently, to prevail, Kjerstad Realty must show it substantially performed under the terms of the agreement for entitlement to its commission. Whether Kjerstad Realty has substantially performed under the agreement is a question for the fact finder. Thus, this is not a case for which summary judgment for Kjerstad Realty was warranted. [¶ 18.] We reverse and remand for trial. [¶ 19.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and SEVERSON, Justices, concur.