Opinion ID: 2334962
Heading Depth: 2
Heading Rank: 3

Heading: Legal and Factual Issues Remain

Text: The conclusions we have reached thus far do not dispose of this case, however. It would be a gross understatement to say that this transaction was merely a sale. Moreover, although the statute precludes a licensee from receiv[ing] payment of a commission on the sale of real property, Insignia apparently never expected to be compensated in that fashion. According to Insignia, the Developers explicitly stated that they did not want to sell the Property. For several months thereafter, Insignia invested considerable time, talent, and effort preparing the Offering Memorandum and otherwise assisting the Developers in finding a source (or sources) to refinance their debt or recapitalize their business. So far as we can tell from the record, Spitz first mentioned the possibility of a sale in his March 5th letter, and even then it appeared to be only one of three options. He stated that 1899 LLC had presented the property for sale, joint venture equity financing and debt financing to West-Wind. Thus, even after March 5th, it was far from clear that a sale of the Property would occur. Speaking colloquially, the prospect of a sale emerged late in the game. Up until March 5th, no one would have thought that D.C.Code § 42-1705 applied to the parties' relationship at all. Therefore, there would have been no legal requirement for Insignia to insist that the terms of its compensation be set forth in a written contract. On remand, the court should consider whether, as Insignia asserts, the parties reached an oral agreement on how Insignia would be compensated for its efforts to help the Developers attract refinancing or recapitalization. See Eastbanc, Inc. v. Georgetown Park Assocs. II, L.P., 940 A.2d 996, 1002 (D.C.2008) (discussing the prerequisites for an enforceable contract). There would have been nothing illegal about an oral contract formed before a sale was contemplated. Cf. Cevern, Inc. v. Ferbish, 666 A.2d 17, 19-20 (D.C.1995) (discussing principle that an illegal contract, made in violation of a statutory prohibition designed for police or regulatory purposes, is void and confers no right upon the wrongdoer). The trial court should also consider whether the February 20th Letter was a binding contract, even if it does not qualify as a written listing agreement. Although the court held that this document was not a binding contract, it did so because the letter's ratification was contingent upon an event that did not occur defendant Spitz's signing and ratification of the agreement. We conclude that this issue must be examined anew. Walter Rector undoubtedly could establish pre-conditions for the effectiveness of his own execution and delivery, see Schlosberg v. Shannon & Luchs Co., 53 A.2d 722, 723 (D.C.1947) ([O]ne may sign an agreement on condition that he shall not be bound thereby until another also signs. . . .), but it is not clear as a matter of fact or law that he had the authority to restrict the manner in which Christian Spitz could give his assent to the February 20th Letter. See Davis v. Winfield, 664 A.2d 836, 838 (D.C.1995) (recognizing that assent to a written contract may be demonstrated by conduct, even if a signature is lacking). Moreover, Insignia asserts that Rector's approval was irrelevant because Spitz had sole and exclusive authority to `negotiate and enter' a professional services contract with Insignia on behalf of 1899 LLC. Resolving these issues apparently will, among other things, require examination of the agreements governing 1899 LLC. With respect to some of Insignia's claims, however, its after-acquired knowledge of how 1899 LLC was governed may be less important than the contemporaneous representations of Rector and Spitz. We note that this letter sets forth a schedule of fees by which Insignia would be compensated; none of these fees are contingent upon a sale of the Property, nor are they calculated based on a sale price. If this schedule of fees becomes relevant, what did the parties mean by the terms refinancing, financing, total debt capital committed, and total equity capital committed? Did the transaction that occurred fit within these terms? If the parties did reach an agreement, whether oral or written, had WestWind been carved out so that Insignia would not be entitled to compensation if a deal with WestWind was consummated? Even if there was no agreement, a contract may have been implied by the conduct of the parties. See generally Jordan Keys & Jessamy, LLP v. St. Paul Fire & Marine Insurance Co., 870 A.2d 58, 62 (D.C.2005). Alternatively, Insignia may be entitled to recover the value of its services (or a portion of them) under an unjust enrichment theory. See id. at 63. We agree with the trial court that, if there is no written listing agreement, a licensee may not seek to receive payment of a commission on the sale of real property by alleging that the parties had reached an oral agreement, that a contract was implied in fact, or that he is entitled to compensation for the value of his services. Thus, we do not suggest that a licensee who assists in the sale of real property may avoid the force of D.C.Code § 42-1705 by suing on alternative theories. However, this was a complex transaction, and the intentions of the parties evolved over a period of several months. At the outset, they did not contemplate that the Property would be sold. A statute that prevents a licensee from receiving a commission for the sale of real property, in the absence of a written listing agreement, does not necessarily preclude that licensee from receiving compensation for services contracted-for and provided before it was clear that the Property would be sold. We cannot at this point say that there is no genuine issue as to any material fact and that [the Developers are] entitled to a judgment as a matter of law. Super. Ct. Civ. R. 56(c). Further inquiry is necessary to determine whether Insignia is entitled to some form of compensation for its efforts to assist the Developers in refinancing their debt or recapitalizing their business.