Court Opinion

ID: 2732485
Source: CourtListenerOpinion
Date Created: 2014-09-12 13:02:26.310381+00
Date Added: 2024-06-11T12:15:55.446186
License: Public Domain

IN THE DISTRICT COURT OF APPEAL
                                       FIRST DISTRICT, STATE OF FLORIDA

WELLS CAPITAL                          NOT FINAL UNTIL TIME EXPIRES TO
INVESTMENTS, LLC,                      FILE MOTION FOR REHEARING AND
                                       DISPOSITION THEREOF IF FILED
      Appellant,
                                       CASE NO. 1D13-5232
v.

EXIT 1 STOP REALTY,

      Appellee.

_____________________________/

Opinion filed September 12, 2014.

An appeal from the Circuit Court for Duval County.
Hugh A. Carithers, Judge.

Roger K. Gannam of Lindell & Farson, Jacksonville, for Appellant.

Gary B. Tullis, Jacksonville, for Appellee.

OSTERHAUS, J.

      Appellant Wells Capital Investments, LLC, appeals a judgment requiring it

to pay a commission on the sale of its property to Appellee Exit 1 Stop Realty, a

real estate broker. Appellant argues that no commission is due because Exit 1 Stop

voluntarily abandoned the sales brokerage commission agreement that the parties

entered in 2009, long before the negotiation and final sale of the property in 2012.
We agree and reverse. Because Exit 1 Stop stopped marketing and communicating

with the seller about the subject property three years before the negotiations

leading to the sale, we conclude that it abandoned the commission agreement as a

matter of law and may not recover an agreement-related commission.

                                         I.

      The pertinent facts in this case are not disputed. In 2009, Wells Capital, a

commercial real estate developer in Jacksonville, owned two contiguous parcels of

land in Orange Park that it wished to lease or sell. In the spring of 2009, General

RV (GRV) contacted Exit 1 Stop, a real estate brokerage firm, looking for

Jacksonville-area land for its RV business. Recognizing that one of the parcels

offered by Wells Capital might suit GRV (“Parcel 1”), Exit 1 Stop entered into a

sale and lease commission agreement with Wells Capital in May 2009. Under the

agreement, it would receive a commission if Parcel 1 was sold or leased to GRV

(Parcel 1 Agreement). The agreement contained no expiration date, but it permitted

Wells Capital to continue marketing Parcel 1 to others. Another party ultimately

signed a ten-year lease for Parcel 1, so Exit 1 Stop received no commission. At that

point, Exit 1 Stop ceased marketing or communicating with Wells Capital about

Parcel 1.

      Instead, the parties shifted their focus to Wells Capital’s other property

(“Parcel 2”). Wells Capital and Exit 1 Stop signed a second sale and lease

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commission agreement for Parcel 2 that mirrored their prior agreement. GRV

ultimately leased Parcel 2 in late 2009 (and subsequently bought it), earning Exit 1

Stop a commission under the Parcel 2 agreement.

      Years passed and the tenant leasing Parcel 1 from Wells Capital fell on hard

times, requiring the lease on Parcel 1 to be terminated in March 2012. Wells

Capital began to market Parcel 1 a second time and, as part of this effort, pitched a

sale of the property directly to GRV without involving Exit 1 Stop. After months

of negotiating they struck a deal and GRV bought the property in June 2012.

      After the sale closed, Exit 1 Stop learned of the sale and sought a sales

commission. Wells Capital refused and Exit 1 Stop sued. Later, the trial court held

a non-jury trial on the issue of whether Wells Capital owed a sales commission on

Parcel 1 under the 2009 agreement and Exit 1 Stop prevailed. The trial court noted

that the Parcel 1 Agreement had no express termination date, but considered it still

to be binding because Exit 1 Stop had brought the parties together initially and

would have helped negotiate the final sale but for its exclusion by Wells Capital

and GRV. The trial court ordered Wells Capital to pay a $60,000 commission to

Exit 1 Stop on the Parcel 1 sale. Wells Capital then appealed.

                                         II.

      Because the material facts in this case aren’t disputed, the issue of whether

Exit 1 Stop forfeited its right to a sales commission by abandoning the 2009

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agreement is an issue of law, subject to de novo review. See Richland Grove &

Cattle Co. v. Easterling, 526 So. 2d 685, 686 (Fla. 1988). In Richland Grove, the

Florida Supreme Court held that the failure to specify a time period in a brokerage

agreement “does not give rise to a ‘brokerage in perpetuity.’” Id. at 687 (citation

and internal quotations omitted). Instead, when a real estate broker’s contract does

not provide a time for performance, the law implies a “reasonable time limitation,”

requiring a broker to procure a purchaser within a reasonable time. Id.; see also

Shuler v. Allen, 76 So. 2d 879, 882 (Fla. 1955). A brokerage agreement terminates

if the broker abandons efforts to find a purchaser.

         If the broker voluntarily abandons his efforts, once begun, to find
         a purchaser for property, or fails to find one within a reasonable
         time, all without the fault of the owner, then his contract of
         employment is at an end, and thereafter the owner is at liberty to
         sell the property to anyone.

Richland Grove, 526 So. 2d at 687 (quoting Parkey v. Lawrence, 284 S.W. 283,

287 (Tex. Civ. App. 1926)). A dispositive factor in evaluating whether a brokerage

agreement has been abandoned is whether the broker and seller continued

communicating about the property from the time of the agreement until the sale. Id.

      In this case, the undisputed evidence shows that Exit 1 Stop abandoned the

2009 brokerage agreement involving Parcel 1. As noted by the trial court, Exit 1

Stop “ceased its efforts to market [Parcel 1] to GRV” after a third entity leased the

property in 2009. At that time, the parties also switched their focus from Parcel 1

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to Parcel 2, a different parcel than the one at issue here. The parties ultimately

negotiated a lease (and a later sale) of that parcel to Exit 1 Stop’s client, GRV. But

besides the flurry of activity in 2009, culminating in the lease of Parcel 2 by GRV,

Exit 1 Stop had no further communication with Wells Capital about Parcel 1.

Instead, all remained quiet as to Parcel 1 for about three years, at which time the

parcel became available again and Wells Capital and GRV negotiated its sale

directly with each other.

      The three years of silence and total inactivity by Exit 1 Stop, where the

parties’ brokerage agreement had not specified a time period for performance,

constituted legal abandonment of the Parcel 1 brokerage agreement. A number of

cases confirm this conclusion. See, e.g., id. at 686 (“We find that the question is

one of law where, as in this case, the broker did not contact the seller concerning

the specific property for a period of two and one-half years. That circumstance

requires a finding that the contract was abandoned.”); Wilkins v. W. B. Tilton Real

Estate and Ins., Inc., 257 So. 2d 573, 575 (Fla. 4th DCA 1971) (finding

abandonment where the broker had no contact with seller for nineteen months

although broker continued to advertise property and to show property to

prospective buyers); Shuler, 76 So. 2d at 882 (finding seventeen-month gap

constituted abandonment). And it makes no difference that Wells Capital

ultimately sold the property to a buyer that was first introduced by Exit 1 Stop.

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Once a contract is abandoned, a seller is free to sell its property to anyone,

“including the purchaser first found by the broker, either by means of negotiations

directly with the purchaser or through the medium of another broker.” Richland

Grove, 526 So. 2d at 687 (quoting Parkey, 284 S.W. at 287); see also Shuler, 76
So. 2d at 882.

      We recognize that the trial court analyzed this case differently, awarding

Exit 1 Stop a commission on the basis of the “procuring cause” analysis in Rotemi

Realty, Inc. v. Act Realty Co., 911 So. 2d 1181 (Fla. 2005). The circumstances

here are different than in Rotemi Realty. The commission dispute in Rotemi Realty

arose in the context of deciding whether one broker remained entitled to a

commission where another broker and attorney assumed the lead role in

negotiating the sale of a property. Unlike this case, Rotemi Realty did not address

abandonment due to a substantial time gap in the communications between the

broker and seller. Rather, the broker seeking the commission in Rotemi Realty

remained involved in the continuing negotiations—she conveyed the first offer,

reported back the rejection of that offer, regularly communicated with the

prospective buyer, and “maintained ‘constant contact’ with [the attorney who took

over the negotiations], speaking with him ‘practically every day.’” Id. at 1189. The

key point for the court in Rotemi Realty was that the broker had both “initiated”

and “remained involved in the continuing negotiations.” Id.

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      Here, by contrast, Exit 1 Stop initially introduced Wells Capital and GRV in

2009, but then stopped communicating with Wells Capital about Parcel 1 and

ceased marketing efforts for a three-year period prior to the start of the negotiations

leading to the sale of Parcel 1. No “continuing negotiations” occurred in this case.

And during the three-year gap, Exit 1 Stop did nothing in the mode of laying

groundwork related to GRV’s future purchase of Parcel 1. Under these

circumstances, we decline Exit 1 Stop’s invitation to depart from the long-settled

legal test of abandonment.

                                         III.

      We thus conclude that Exit 1 Stop abandoned the 2009 Parcel 1 Agreement

as a matter of law, and that Wells Capital was free to negotiate and sell the

property directly to GRV without any obligation to pay a commission to Exit 1

Stop under that agreement. For this reason, the judgment is reversed and this case

is remanded with instructions to enter judgment in favor of the Appellant.

      REVERSED AND REMANDED.

THOMAS, and RAY, JJ., CONCUR.

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