Court Opinion

ID: 6928297
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:40:51.691289+00
Date Added: 2024-06-11T16:07:01.220076
License: Public Domain

FAY, Circuit Judge,
concurring in part and dissenting in part:
Most respectfully, I agree with the majority that there clearly was a breach of contract but I also conclude that there was a “sale or exchange” of the property as contemplated by the Listing Agreement.
The majority cites Cooley and McElhinney for the proposition that AG’s conveyance of the property to a newly formed partnership in which it was a partner was not a transfer or sale which entitled the broker to collect his full commission. However, I find both cases distinguishable.
In Cooley, the Court held:
Under the agreement between the defendant and Larkspur,1 defendant received only a credit for a capital contribution of $500,000, which represented the market value of the property. She received no other compensation; there was no unconditional promise on the part of the partnership, or anyone else, to pay her anything; there was no security given to her; and she was not entitled to receive any interest payments on her capital account. Defendant’s only right was to receive a *507share of future profits, if any.2
Cooley, 780 P.2d at 31. (Emphasis added).
As stated by the majority in its rendition of the facts, “[i]n exchange for the conveyance, the partnership agreed to issue to AG a promissory note in the amount of $128,-571....” (Emphasis added). In addition to the promissory note, AG received a $130,000 capital credit on the partnership books and a thirty percent share of the profits or losses.
Here, it is clear that AG received more for the conveyance than did either of the defendants in Cooley or McElhinney. Specifically, AG holds a promissory note for $128,571 to which legal rights attach. AG could conceivably sue to enforce payment on the note which is over and above the capital credit and share of profits. The asset value and legal rights incident to the promissory note coupled with the capital credit and right to future profits constitutes the “valuable recompense” prong of the McElhinney test used to determine if a sale or exchange took place. Accordingly, I would hold that a “sale or exchange” as contemplated by the Listing Agreement took place and the broker was entitled to a commission thereon.
I also disagree with the majority’s holding that the award of attorney’s fees and costs was “tied to” the void penalty provision in paragraph 6 of the Listing Agreement. “Attorney’s fees are recoverable when provided for in a contract.” Knox Kershaw, Inc. v. Kershaw, 552 So.2d 126, 129 (Ala.1989) (citations omitted). The attorney’s fees and costs provision was clearly contemplated by the parties and it can be easily excised from the remainder of paragraph 6 which the District Court found void as a penalty provision. Thus, I would hold that under general principles of contract law, the broker is entitled to collect attorney’s fees and costs expended in the enforcement of the agreement.

. The facts of McElhinney parallel those of Cooley in that the defendant only received credit for a capital contribution and the right to share in future profits. McElhinney, 165 Pa.Super. at 550, 69 A.2d 178. There was no other exchange of consideration.