Court Opinion

ID: 9858492
Source: CourtListenerOpinion
Date Created: 2023-09-24 16:25:53.718719+00
Date Added: 2024-06-11T09:54:38.533410
License: Public Domain

McGIVERIN, Justice
(dissenting).
I respectfully dissent from the result reached by the majority. I do so on two grounds.
I. First, I join the dissent of Justice Uhlenhopp for the reasons stated therein.
II. Second, even if the Iowa Real Estate Commission rule in question is held valid for the reasons stated in the majority opinion, I additionally dissent from the result for the following reasons.
Some sellers of realty refuse to, or do not, sign a listing contract with a broker yet* promise to pay a reasonable commission to the broker if he is the procuring cause of a sale of the premises. That is what happened here. The trial court in this court-tried law action found that defendant seller orally listed his building with plaintiff and that plaintiff broker obtained “a ready, willing, and able buyer who substantially met [defendant seller’s] terms.”
After the sale defendant refused to pay a commission, and plaintiff commenced this action for the alleged orally-agreed rate of commission. He was met by defendant’s contention that a rule of the Iowa Real Estate Commission, 700 I.A.C. § 1.23, which states in part, “[a]ll listing agreements shall be in writing ....,” was in substance a statute of frauds and that upon proper objection the rule precluded evidence of the alleged oral listing agreement.
I agree the charge of the real estate commission is to protect the public. However, I do not believe the commission’s intent could be to preclude a broker from a commission when he had done the work of procuring a buyer in reliance on the oral agreement, which the seller then disowned. As the court in Frash v. Eisenhower, 376 N.E.2d 1201, 1204 (Ind.App.1978), said in regard to its version of 700 I.A.C. § 1.23, “a seller of real estate cannot use the statute to effect a fraud on the realtor.”
The interpretation utilized and result reached by the majority would not treat brokers equally with other classes of litigants appearing in court seeking a fee for services rendered. Brokers would be singled-out for one-sided treatment and a special statute of frauds when they performed the services but the seller, for one reason or another, failed to sign a written listing agreement.
The result reached by the majority (reversal of the judgment for the broker and the end of his claim) is incompatible with the result reached in Wunschel Law Firm, P.C., v. Clabaugh, 291 N.W.2d 331, 337 (Iowa 1980), involving an attorney. I recognize there is authority to the contrary at Annot., 41 A.L.R.2d 905, 906-10 (1955), which is cited by the majority.
*557There is another view, however, which allows the real estate broker an action based on quantum meruit notwithstanding denial of a cause of action based upon oral contract. See Flammia v. Mite Corp., 401 F.Supp. 1121, 1130-33 (E.D.N.Y.1975) (quantum meruit claim for finder’s fee upon acquisition of corporation not barred by New York statute of fraud requiring brokerage commission and finder’s fee contracts to be in writing or evidenced by written note or memorandum; series of memoranda indicate plaintiff entitled to relief), aff’d 553 F.2d 93 (2d Cir. 1977); cf. Groves Bros. & Co. v. Schell, 379 S.W.2d 857, 859-60 (Mo.App.1964) (action in quantum meruit allowed to recover value of services rendered by plaintiff after oral authorization to obtain lessee for defendant’s real property); Center Investments, Inc. v. Penhallurick, 22 Wash.App. 846, 847-51, 592 P.2d 685, 686-88 (1979) (award of real estate sales commission upheld where defendant and plaintiff had no written commission agreement and option between plaintiff and co-defendant had been terminated before plaintiff procured buyer).
In Wunschel, an attorney brought an action for fees based on a contingent fee contract. We held “that a contingent fee contract for the defense of an unliquidated tort damage claim which is based upon a percentage of the difference between the prayer of the petition and the amount awarded is void.” 291 N.W.2d at 337. We reversed a trial court judgment for plaintiff attorney. Id. However, we went on to say:
The contract is not invalid because of illegality of the services but merely because on policy grounds we cannot approve the way in which the fee was to be calculated. In this situation, plaintiff performed valuable services for defendant for which it is entitled to be compensated. Therefore our decision is without prejudice to plaintiff’s right to obtain a reasonable fee from defendant on a quantum meruit basis.

Id.

I believe the same is true here by analogy. The trial court found that plaintiff broker performed valuable services. The services were not illegal. The petition in Wunschel, as here, was based on an express contract and not quantum meruit. Therefore, to follow our own precedent in Wun-schel, our decision should be without prejudice to plaintiff’s right to attempt to obtain a reasonable commission fee from defendant on a quantum meruit basis. Plaintiff broker should be treated in court on the same basis as the plaintiff attorney was in Wunschel.
Assuming the case should be reversed for the reasons stated by the majority, I would do so without prejudice to plaintiff’s right to amend his petition to seek recovery for his services on a quantum meruit basis.
LeGRAND, J., joins this dissent.