Court Opinion

ID: 4551524
Source: CourtListenerOpinion
Date Created: 2020-07-28 16:02:04.036129+00
Date Added: 2024-06-11T09:24:22.200900
License: Public Domain

IN THE
            ARIZONA COURT OF APPEALS
                            DIVISION ONE

     CK FAMILY IRREVOCABLE TRUST NO. 1, Plaintiff/Appellant,

                                   v.

   MY HOME GROUP REAL ESTATE LLC, et al., Defendants/Appellees.

                         No. 1 CA-CV 19-0207
                          FILED 07-28-2020

          Appeal from the Superior Court in Maricopa County
                         No. CV2017-052809
            The Honorable Theodore Campagnolo, Judge

                              AFFIRMED

                              COUNSEL

Law Offices of Mark D. Svejda, PLC, Scottsdale
By Mark D. Svejda
Counsel for Plaintiff/Appellant

Lipson Neilson P.C., Phoenix
By Daxton R. Watson, Michael H. Orcutt, John J. Browder
Counsel for Defendants/Appellees
            CK FAMILY IRREVOCABLE v. MY HOME, et al.
                       Opinion of the Court

                                OPINION

Judge David B. Gass delivered the opinion of the Court, in which Acting
Presiding Judge David D. Weinzweig and Chief Judge Peter B. Swann
joined.

G A S S, Judge:

¶1             Under Young v. Rose, a real estate agent who does not sign a
listing agreement may not sue to collect a commission under that
agreement. See 230 Ariz. 433, 437, ¶ 24 (App. 2012). At issue here is a
question Young left unanswered: May an agent sue to collect a commission
under a listing agreement signed by the agent but not initialed by the
designated broker within ten business days after it was signed by the
parties? See id. at 435, ¶ 9 n.3 (discussing A.R.S. § 32-2151.01.G).

¶2           The answer is yes. A designated broker’s failure to initial a
listing agreement within ten business days of the parties signing it as
required by subsection 32-2151.01.G “poses no impediment to a civil action
for unpaid commissions.” See id. at 436, ¶ 18. Because the superior court
found the real estate agent was entitled to her commission under the listing
agreement, its ruling is affirmed.1

               FACTUAL AND PROCEDURAL HISTORY

¶3             CK Family Irrevocable Trust No. 1 owned a house in
Chandler (the house). Siblings Richard and Delilah Kohan are the Trust’s
co-trustees. The Trust executed a listing agreement (the agreement) with
My Home Group Real Estate, LLC and Tina Garcia (collectively, appellees)
to market and sell the house. At all relevant times, My Home Group was a
licensed Arizona real estate brokerage, and Garcia was a licensed Arizona
real estate agent affiliated with My Home Group.

¶4          Under the agreement, the Trust was to pay appellees a
commission of six percent of the final sale price. When the house sold in
March 2017, My Home Group was to receive $89,700.00 (the commission).

1      Appellees argue a factual issue regarding when the co-trustees fully
signed the listing agreement also precludes summary judgment in the
Trust’s favor. Because this case can be resolved for appellees as a matter of
law, this opinion need not address the factual issue.

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             CK FAMILY IRREVOCABLE v. MY HOME, et al.
                        Opinion of the Court

The Trust filed a declaratory judgment action alleging appellees were not
entitled to the commission because Andrew Glenn, My Home Group’s
licensed broker, did not review and initial the agreement within ten
business days as required by subsection 32-2151.01.G. The Trust also
alleged appellees breached their fiduciary duty. The parties cross-moved
for summary judgment on the declaratory judgment claim, and the superior
court ruled in appellees’ favor. The parties then stipulated to dismiss the
remaining fiduciary duty claim. The superior court awarded appellees
$14,727.21 in attorney fees and taxable costs based on the agreement and
A.R.S. § 12–341.01.A.

¶5             The Trust timely appealed. This court has jurisdiction under
Article 6, Section 9, of the Arizona Constitution, and A.R.S. § 12-2101.A.1.

                                  ANALYSIS

¶6            Summary judgment is appropriate when “no genuine dispute
as to any material fact” exists and “the moving party is entitled to judgment
as a matter of law.” Ariz. R. Civ. P. 56(a); see also Orme Sch. v. Reeves, 166
Ariz. 301, 305 (1990). This court reviews a grant of summary judgment de
novo, viewing the facts and reasonable inferences in the light most favorable
to the party opposing the motion and will affirm for any reason supported
by the record, even if not explicitly considered by the superior court. See
Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12 (2003); KB Home Tucson, Inc. v.
Charter Oak Fire Ins. Co., 236 Ariz. 326, 329, ¶ 14 (App. 2014). This opinion,
therefore, assumes appellees violated subsection 32-2151.01.G.

¶7              When interpreting a statute, the primary goal “is to give effect
to legislative intent.” See Parsons v. Ariz. Dep’t of Health Servs., 242 Ariz. 320,
323, ¶ 11 (App. 2017). “[T]he statute’s plain language as the best indicator
of that intent.” See id. If the language is clear and unambiguous, courts
“must give effect to that language without employing other rules of
statutory construction.” Id. If a statute is ambiguous, however, Arizona
courts look “to the rules of statutory construction, and consider the statute’s
context; its language, subject matter, and historical background; its effects
and consequences; and its spirit and purpose.” See Stein v. Sonus USA, Inc.,
214 Ariz. 200, 201, ¶ 3 (App. 2007) (internal citations omitted).

¶8            Beginning with the plain language, § 32-2151.01 is titled
“Broker requirements; record keeping requirements; definition.” The
statute requires a “licensed employing broker” to keep certain records and
to exercise specified controls over the broker’s trust fund account. See A.R.S.

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             CK FAMILY IRREVOCABLE v. MY HOME, et al.
                        Opinion of the Court

§ 32-2151.01.A-.C,2 .E, .F, .H. Failure to maintain the required records may
lead to suspension or revocation of the broker’s license by the Arizona
Department of Real Estate (ADRE). See Holcomb v. Ariz. Dep’t of Real Estate,
247 Ariz. 439, 445, ¶ 20 (App. 2019).

¶9             Subsection G, at issue here, states:

       The designated broker shall review each listing agreement,
       purchase or nonresidential lease agreement or similar
       instrument within ten business days of the date of execution
       by placing the broker’s initials and the date of review on the
       instrument on the same page as the signatures of the parties.
       A designated broker may authorize in writing an associate
       broker who the designated broker employs to review and
       initial these instruments on the designated broker’s behalf.

¶10           This statute does not address a broker’s to right to recover a
commission, much less suggest a party may avoid paying an earned
commission, simply because a broker violated subsection G. Instead, the
statute focuses on the broker’s responsibility to supervise “the substance
and documentation of the real estate transaction itself.” See Santorii v.
MartinezRusso, LLC, 240 Ariz. 454, 457, ¶ 9 (App. 2016).

¶11            To be sure, ADRE may issue a licensing sanction or impose a
civil penalty against a broker who violates any statute regulating the sale of
real estate. See A.R.S. § 32-2153. Holcomb highlighted the difference between
a licensing sanction under § 32-2151.01 and the enforceability of a listing
agreement, noting ADRE is expressly charged with enforcing violations of
§ 32-2151.01. See 247 Ariz. at 445, ¶ 20; see also A.R.S. §§ 32-2102, -2153, -2160.
As such, this court will not speculate on whether ADRE should act against
appellees—that issue lies with the regulatory agency alone. See Focus Point
Props., LLC v. Johnson, 235 Ariz. 170, 175, ¶ 21 (App. 2014). The plain
language of subsection 32-2151.01.G, therefore, does not bar recovery.

¶12           Section 32-2151.01’s placement within the statutory scheme
supports this conclusion. See Parsons, 242 Ariz. at 323, ¶ 11. The legislature
addressed the right to sue for a commission in § 32-2152. That section is
titled “Action by broker or salesperson to collect compensation” and
requires brokers and salespersons to prove they were licensed when their

2      This opinion does not address the impact of a violation of subsection
32-2151.01.C, which addresses a requirement for the contents of the real
estate purchase contract, not a listing agreement such as at issue here.

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             CK FAMILY IRREVOCABLE v. MY HOME, et al.
                        Opinion of the Court

claims arose. See A.R.S. § 32-2152.A. Section 32-2152 identifies only two
other limits on the right to recover a commission—“violation of §§ 32-2155
[pertaining to licensing] or 32-2163 [pertaining to use of out-of-state
broker].” See A.R.S. § 32-2152.C. Section 32-2152 does not even reference
§ 32-2151.01. In striving to “give meaning to each word, phrase, clause, and
sentence,” the legislature’s omission of § 32-2151.01 from a list of
requirements bearing on the right to a commission strongly indicates that
statute’s purpose is not to preclude recovery. See Ariz. State Univ. Bd. of
Regents v. Ariz. State Ret. Sys., 242 Ariz. 387, 389, ¶ 7 (App. 2017).

¶13           The Trust primarily relies on Young to argue appellees must
forfeit the commission because Glenn, their licensed broker, did not initial
the agreement within ten business days after Garcia signed it. Young,
however, involved a real estate agent who allegedly had not signed the
listing agreement as required under § 32-2151.02. See 230 Ariz. at 435, ¶ 9.
Construing that statute in pari materia with the statute of frauds, Young held
that agreement would not be enforceable—and the commission forfeited—
in the absence of the agent’s signature. See id. at 436, ¶¶ 16-17.

¶14           Young’s analysis of § 32-2151.02 does not apply here. Section
32-2151.02’s purpose is to establish substantive requirements for an
enforceable listing agreement. Failure to comply with those requirements
renders the agreement unenforceable under the “strict requirements”
Arizona places “on real estate professionals who seek to recover
commissions.” See id. at ¶ 13 (internal quotation omitted). The holding in
Young was consistent basic contract principles and § 32-2151.02, which
render a listing agreement unenforceable without valid signatures from
each party. Young did not address forfeiture of a commission under an
otherwise valid and enforceable listing agreement.

¶15            As discussed above, § 32-2151.01 has a different purpose. It is
regulatory in nature. See Holcomb, 247 Ariz. at 445, ¶ 20. Noncompliance
with § 32-2151.01, therefore, exposes the broker to sanctions by ADRE but
does not affect the validity and enforceability of the agreement itself and
does not lead to forfeiture. Indeed, no Arizona case cited by the Trust, or
found by this court, authorizes or requires forfeiture for a technical
violation of this nature.

¶16          Accordingly, a broker’s failure to comply with subsection 32-
2151.01.G does not require forfeiture of a commission payable under a duly
executed and otherwise valid listing agreement.

                             ATTORNEY FEES

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             CK FAMILY IRREVOCABLE v. MY HOME, et al.
                        Opinion of the Court

¶17           The Trust also appeals the superior court’s award of
$14,727.21 in attorney fees and taxable costs to appellees. Because this
opinion affirms the entry of judgment for appellees, and because the Trust
does not argue the fees were unreasonable, the superior court’s fee and cost
award under the agreement and A.R.S. § 12–341.01.A is affirmed. See A.
Miner Contracting, Inc. v. Toho–Tolani Cty. Improvement Dist., 233 Ariz. 249,
261, ¶ 40 (2013).

¶18            Appellant and appellees requested attorney fees and costs
related to this appeal. This court exercises its discretion to grant appellees,
as the prevailing party, reasonable attorney fees and taxable costs on appeal
upon compliance with ARCAP 21.

                               CONCLUSION

¶19          Because the superior court appropriately granted summary
judgment for appellees, it is affirmed in all respects.

                           AMY M. WOOD • Clerk of the Court
                           FILED:    JT

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