William A. Maxwell is a real estate broker and agent
specializing in commercial properties in the Cumberland County
market. Defendant Michael P. Doyle, Inc. is a corporation located
in Charlotte that provides commercial real estate brokerage
services. Michael Doyle is the president and sole stockholder of
the company and a licensed commercial real estate broker.
Plaintiff's evidence, viewed in the light most favorable to
the plaintiff, tended to show the following. Beginning as early as
1997, Doyle had attempted to convince Tom Wood, the owner of the
Cambridge Arms Apartments in Fayetteville, to allow Doyle to
attempt to sell the apartments. On 13 August 1997, Doyle wrote to
Wood concerning the apartments, but did not receive a response.
Doyle subsequently telephoned Wood a number of times to try to
interest him in selling the apartments. Although Wood did not
always return Doyle's telephone calls, Doyle did speak with Wood on
the telephone approximately five times. Nevertheless, Doyle'sefforts proved unsuccessful and Wood refused to sell the
apartments.
On 13 September 2000, Doyle called Maxwell to discuss the
Fayetteville real estate market. The two met in Fayetteville the
following day and toured several properties. Later that day, Doyle
asked if Maxwell knew Tom Wood. Doyle, who was called by Maxwell
as an adverse witness, explained:
I wanted to see if Bill Maxwell could give me
some help on a property called Cambridge Arms,
that I had failed to sell. And so I said to
Bill . . . if you can make Mr. Tom Wood _ the
person that I had been talking to on and off
for three or four years . . . _ a seller _
meaning he would sell his apartments _ you and
I can split a fee.
Maxwell testified that Doyle offered to split any commission from
a sale of the apartments if Maxwell arranged a meeting with Wood
and gave Doyle access to his Cambridge Arms files.
After agreeing to the proposition, Maxwell made his file
available to Doyle, who removed various items. Maxwell also called
Wood and convinced him to meet with Maxwell and Doyle at Wood's
office on 19 September 2000. At the meeting, Wood stated that the
apartments were not on the market and declined to sign a listing or
commission agreement. He agreed, however, to consider any offers
that plaintiff and Doyle might bring to him. After the meeting,
Maxwell obtained some additional materials relating to the
Cambridge Arms Apartments that he forwarded to Doyle.
Although no commission agreement was signed at the 19
September 2000 meeting, Doyle, unbeknownst to Maxwell, subsequently
did obtain a listing and commission agreement from Wood for the
sale of the Cambridge Arms. Wood telephoned Doyle approximatelyten days after the 19 September meeting and the two met in early
October. As a result of this meeting, Doyle prepared a listing and
commission agreement that Wood signed on 15 October 2000. Doyle
signed the agreement, which provided for a two percent commission
upon the sale of the Cambridge Arms, on 21 November 2000.
The Cambridge Arms was sold on 29 March 2001 for
$14,000,000.00. D efendant earned a commission of $280,000.00 on the
sale. Although Doyle and Maxwell had remained in contact during
that time frame regarding other real estate matters, Doyle never
informed Maxwell of his subsequent contacts with Tom Wood. Maxwell
did not learn of the Cambridge Arms sale until he read about it in
the newspaper. When he called Doyle and requested half of the
commission, Doyle refused to pay him anything.
Plaintiff filed this breach of contract action against
defendant on 27 September 2001 and the case was tried before a jury
at the 30 September 2002 session of Cumberland County Superior
Court. At the close of plaintiff's evidence, the trial court
granted defendant's motion for directed verdict and dismissed
plaintiff's claims.
[1] When considering a motion for a directed verdict, a trial
court must view the evidence in the light most favorable to the
non-moving party, giving that party the benefit of every reasonable
inference arising from the evidence. Clark v. Moore, 65 N.C. App.
609, 610, 309 S.E.2d 579, 580 (1983). Any conflicts and
inconsistencies in the evidence must be resolved in favor of the
non-moving party. Davis & Davis Realty Co., Inc. v. Rodgers, 96N.C. App. 306, 308-09, 385 S.E.2d 539, 541 (1989), disc. review
denied, 326 N.C. 263, 389 S.E.2d 112 (1990). If there is more than
a scintilla of evidence supporting each element of the non-moving
party's claim, the motion for a directed verdict should be denied.
Clark, 65 N.C. App. at 610, 309 S.E.2d at 580.
As our Supreme Court has explained, questions concerning the
sufficiency of the evidence to withstand a Rule 50 motion for
directed verdict "present only a question of law; that question is
whether substantial evidence introduced at trial would support a
verdict in favor of the nonmoving party." In re Will of Buck, 350
N.C. 621, 624, 516 S.E.2d 858, 860 (1999). See also
Roberts v.
William N. & Kate B. Reynolds Memorial Park, 281 N.C. 48, 53, 187
S.E.2d 721, 724 (1972) ("A motion for a directed verdict presents
the question of whether, as a matter of law, the evidence offered
by plaintiff, when considered in the light most favorable to the
plaintiff, is sufficient to be submitted to the jury.")
; Paul A.
Bennett Realty Co. v. Hoots, 7 N.C. App. 362, 364, 172 S.E.2d 215,
216 (1970) ("Whether the evidence is sufficient to carry the case
to the jury is a question of law and is always to be decided by the
court.").
B
ecause the trial court's ruling on a motion for a
directed verdict addressing the sufficiency of the evidence
presents a question of law,
it is reviewed
de novo.
Denson v.
Richmond County, 159 N.C. App. 408, 411, 583 S.E.2d 318, 320 (2003)
("
We apply de novo review to . . . a trial court's denial of a
motion for directed verdict . . . .").
Nonetheless, defendant urges us to apply an abuse of
discretion standard, citing prior decisions of this Court.
We areconfident that those decisions did not intend to hold, contrary to
well-established Supreme Court precedent, that a decision regarding
the sufficiency of the evidence, a question of law, should be
reviewed under an abuse of discretion standard. Instead, these
decisions are more properly construed as applying an abuse of
discretion standard only when the trial court has actually
exercised its discretion, such as when the court chooses, in a
close case, to reserve decision on a motion for a directed verdict
until after the jury has rendered a verdict. See, e.g., Turner v.
Duke Univ., 325 N.C. 152, 158, 381 S.E.2d 706, 710 (1989) ("[W]here
the question of granting a directed verdict is a close one, we have
said that the better practice is for the trial court to reserve its
decision on the motion and allow the case to be submitted to the
jury."). A court does not exercise discretion when deciding a
question of law.
Thus, we apply a de novo standard of review in considering the
merits of plaintiff's appeal as to the motion for a directed
verdict. T
his Court's review is limited to "those grounds asserted
by the moving party at the trial level." Freese v. Smith, 110 N.C.
App. 28, 34, 428 S.E.2d 841, 845-46 (1993). At trial, defendant
argued in support of its motion for a directed verdict (1) that
plaintiff had not presented sufficient evidence of an enforceable
agreement; and (2) that plaintiff had not presented sufficient
evidence that he was the procuring cause of the sale.
[2]
At the outset, we note that the parties devote much of
their briefs to strenuous argument over whether the contractrequired plaintiff to be the "procuring cause" of the sale.
Defendant argues that plaintiff was required to show that he was
the procuring cause of the sale and that he failed to do so.
Plaintiff contends either that the terms of the contract altered
the strict application of the procuring cause rule, or,
alternatively, that his evidence was sufficient to establish that
he was in fact a procuring cause of the sale. We find that these
arguments are beside the point.
Our Supreme Court set forth the procuring cause rule in
S & W
Realty & Bonded Commercial Agency, Inc. v. Duckworth & Shelton,
Inc., 274 N.C. 243, 250-51, 162 S.E.2d 486, 491 (1968) (emphasis
added) (internal citations omitted):
Ordinarily, a broker with whom an owner's
property is listed for sale becomes entitled
to his commission whenever he procures a party
who actually contracts for the purchase of the
property at a price acceptable to the owner.
If any act of the broker in pursuance of his
authority to find a purchaser is the
initiating act which is the procuring cause of
a sale ultimately made by the owner, the owner
must pay the commission provided
the case is
not taken out of the rule by the contract of
employment.
The Court explained the basis for the rule: "The law does not
permit an owner to reap the benefits of the broker's labor without
just reward if he has requested a broker to undertake the sale of
his property and accepts the results of service rendered at his
request."
Id. at 251, 162 S.E.2d at 491 (internal quotation marks
omitted).
The procuring cause doctrine as adopted in
S & W Realty thus
relates to a dispute between the seller of property and the broker.
Likewise, the question in the cases cited by the parties is whetherthe plaintiff broker was entitled to a commission from the
defendant seller. This analysis has no application to
circumstances such as those presented here: a breach of contract
dispute between two brokers regarding a split of a commission
already paid by the seller.
North Carolina courts have not previously discussed this issue
specifically. Significantly, however, the few decisions addressing
disputes between brokers over a commission do not mention the
concept of procuring cause, but rather apply general contract
principles.
See, e.g.,
Smith v. Barnes, 236 N.C. 176, 72 S.E.2d
216 (1952) (no consideration supplied for agreement to split
commission);
Chears v. Robert A. Young & Assoc., Inc., 49 N.C. App.
674, 272 S.E.2d 402 (1980) (rights under an agreement to divide
commissions do not arise until the seller has paid the commission);
Bennett v. Hoots, 7 N.C. App. 362, 172 S.E.2d 215 (1970) (no
evidence of a contract to divide commissions)
.
Decisions from other jurisdictions have expressly held that
the procuring cause rule does not apply to disputes between brokers
arising out of an agreement to divide a commission. As one court
has explained:
[W]here one broker sues another for a share of
commissions after an agreement between them to
that effect and the subsequent sale of the
property involved[,] . . . the issue was not
who was the "efficient producing cause" of
each sale, but rather what were the terms of
the agreement between the parties regarding
the distribution of commissions earned.
De Benedictis v. Gerechoff, 134 N.J. Super. 238, 242-43, 339 A.2d
225, 228 (1975) (internal citations omitted).
See also
Howell v.
Steffey, 204 A.2d 695, 696 (D.C. 1964) (when one broker who was notthe procuring cause of a sale sues another broker for a share of
the commission, the rights of the parties are governed by the terms
of the brokers' agreement with each other "rather than by the
contract of sale . . . or by rules which customarily govern the
rights of real estate brokers to commission for the sale of land");
Blake v. Gunkey, 88 Kan. 272, 274, 128 P. 181, 182 (1912) (where
two brokers agreed to work together and divide commissions from any
sale of land, the question of which agent was the procuring cause
of the sale was an "entirely immaterial matter");
Drew v. Maxim,
150 Me. 322, 324-25, 110 A.2d 602, 604 (1954) (in action for breach
of fee-splitting contract with another broker, the doctrine of
procuring cause is "not applicable")
.
Likewise, one commentator
has observed:
To entitle a broker to recover his share
of compensation under the terms of a
particular fee-splitting arrangement, he must
show that he performed the services required
of him in accordance with the terms of the
contract. . . . [including] when he is
required to merely initiate the transaction or
otherwise assist in consummating the deal.
John D. Perovich, Annotation,
Construction of Agreement Between
Real-Estate Agents to Share Commissions, 71 A.L.R.3d 586, 591
(1976).
In light of the explanation of the procuring cause doctrine by
our Supreme Court in
S & W Realty, we agree with the jurisdictions
cited above and hold that a broker suing another broker for a
division of a commission pursuant to an agreement between the
brokers need not establish that he or she was a procuring cause of
the sale. Instead, the question is whether there was a breach of
an enforceable contract between the brokers. [3] We must, therefore, determine whether Maxwell offered
sufficient evidence of a breach of a valid, enforceable contract
with Doyle for division of a commission. To be enforceable, the
terms of a contract must be sufficiently definite and certain.
Brooks v. Hackney, 329 N.C. 166, 170, 404 S.E.2d 854, 857 (1991).
In addition, "[i]t is a well-settled principle of contract law that
a valid contract exists only where there has been a meeting of the
minds as to all essential terms of the agreement."
Northington v.
Michelotti, 121 N.C. App. 180, 184, 464 S.E.2d 711, 714 (1995).
According to Maxwell's testimony, Maxwell and Doyle agreed:
If it materialized into a sale _ and we shook
hands on this in the beginning, that we were
going to co-broker on a 50-50 basis _ that we
would work the Cambridge Arms on the same
basis, because, even though he had known about
them, he had not been able to make any
headway, and since I know Mr. Wood, since I
knew the apartments _ and we shook hands and
had a meeting of the minds right there _ that
if it materialized into a sale and there was a
commission paid and a closing takes place,
that I would get fifty percent of the
commission and that I was to assist him by
letting him go through my files . . . of all
the materials.
Doyle subsequently sent a memo to Maxwell dated 18 September 2000,
that stated:
After reflecting over the weekend regarding a
potential fee schedule for us and a sale
price, I strongly believe that we should
increase Mr. Wood's price by $500,000.00 to
$16,500,000.00 and obtain a Commission
Agreement for 3%, of which we would split
equally.
. . . .
I can be there Tuesday or anytime you can
arrange meeting face to face with Tom Wood for
lunch or any other reason. I'll plan on
Tuesday if you think you can get us a visit.
In arguing that plaintiff's evidence did not establish
sufficiently definite and certain contract terms, defendant relies
largely on the fact that Maxwell used different phrases to describe
the arrangement, such as "finder's fee" or "co-broker." Defendant
does not, however, point to any evidence or cite to any authority
establishing what these labels mean or how they might render the
contract indefinite. See, e.g., Beasley-Kelso Assoc., Inc. v.
Tenney, 30 N.C. App. 708, 718-19, 228 S.E.2d 620, 626, disc. review
denied, 291 N.C. 323, 230 S.E.2d 675 (1976) (noting testimony that
a co-broker was simply "someone that is working with another
broker"). As a result, any inconsistencies in plaintiff's
descriptions of the agreement relate to his credibility _ an issue
for the jury to resolve. See Davis & Davis Realty Co., 96 N.C.
App. at 311, 385 S.E.2d at 542 (internal citation omitted) (trial
court properly denied motion for directed verdict where parties
disputed terms of an oral agreement involving a real estate
commission because "[a]ny inconsistencies in the plaintiff's
evidence with regard to when the commission was actually due and
payable were for resolution by the jury. . . . [P]laintiff's
evidence, albeit somewhat contradictory[,] . . . did not rise to
the level of binding adverse testimony, as argued by defendants.")
Defendant also points to the fact that there was no agreement
as to the time for performance. Our courts have, however, long
held that "where a contract does not specify the time of
performance . . ., the law will prescribe that performance must be
within a reasonable time and that the contract will continue for a
reasonable time, 'taking into account the purposes the partiesintended to accomplish.'" Rodin v. Merritt, 48 N.C. App. 64, 71-
72, 268 S.E.2d 539, 544 (quoting Scarborough v. Adams, 264 N.C.
631, 641, 142 S.E.2d 608, 615 (1965)), disc. review denied, 301
N.C. 402, 274 S.E.2d 226 (1980). See also S & W Realty, 274 N.C.
at 254, 162 S.E.2d at 493-94 (when no time is specified in a
contract for a commission, the sale must occur within "a reasonable
time").
The determination of what constitutes a reasonable time for
performance presents a mixed question of law and fact:
If, from the admitted facts, the Court can
draw the conclusion as to whether the time is
reasonable or unreasonable, by applying to
them a legal principle or a rule of law, then
the question is one of law. But if different
inferences may be drawn, or circumstances are
numerous and complicated, and such that a
definite legal rule cannot be applied to them,
then the matter should be submitted to the
jury. It is only when the facts are
undisputed and different inferences cannot be
reasonably drawn from them, that the question
ever becomes one of law.
Hardee's Food Systems, Inc. v. Hicks, 5 N.C. App. 595, 599, 169
S.E.2d 70, 73 (1969) (internal quotation marks omitted). In this
case, (1) Maxwell and Doyle dispute when the sale was required to
occur, (2) the issues may involve practices or customs within the
real estate industry, and (3) it is not possible for this Court to
determine based on plaintiff's evidence that a sale of an apartment
complex eight months after the parties entered into their
commission agreement necessarily exceeded a reasonable time. The
question whether the sale occurred within a reasonable time from
the parties' agreement was an issue for the jury. We believe that Maxwell's evidence was sufficiently definite
as to the material terms of the agreement: (1) he was required to
arrange a meeting with Wood and allow Doyle access to his files;
and (2) if a sale resulted within a reasonable period of time, he
was then entitled to a 50-50 split of any commission. Defendant
has not specified any other material terms necessary to the
enforcement of the contract that were missing or indefinite and,
after reviewing the record, we have been unable to identify any.
Since Maxwell offered evidence of the material terms of the
agreement, that he performed his obligations under the agreement,
and that Doyle later brokered the sale of the apartment complex and
earned a sizeable commission that he failed to split with
plaintiff, we hold that there was sufficient evidence of a breach
of contract for this case to be submitted to the jury. We,
therefore, reverse the trial court and remand for a new trial.
[4] Because the question may arise again, we address Maxwell's
argument, in the alternative, that he is entitled to recover the
reasonable value of his services under a theory of quantum meruit.
We hold that the trial court properly granted a directed verdict as
to this claim. Although we note that it appears plaintiff
expressly abandoned this claim at trial, recovery in quantum meruit
is not, in any event, available when, as here, there is an express
contract. Beckham v. Klein, 59 N.C. App. 52, 58, 295 S.E.2d 504,
508 (1982) (internal citations omitted) ("But it is well
established that where an express contract concerning the same
subject matter is found, no contract will be implied. . . . All the
services [plaintiff] rendered and upon which plaintiffs rely intheir quantum meruit theory are services contemplated in the
parties' express agreement and the express contract therefore
controls."). Plaintiff also offered no evidence of the reasonable
value of his services and without such evidence, the claim could
not proceed to the jury. Federal Realty Inv. Trust v. Belk-Tyler
of Elizabeth City, Inc., 56 N.C. App. 363, 366, 289 S.E.2d 145, 147
(1982) ("We find nothing in the record from which the jury could
have quantified the value of defendant's benefit from plaintiff's
services here."). A directed verdict was properly entered as to
the claim based on quantum meruit.
[5] Finally, Maxwell argues that the trial court erred in
denying his motion to compel production of defendant's corporate
bank statements and tax returns for the relevant period. The trial
court reviewed the materials in camera, denied the motion on the
ground that the materials were not relevant, and ordered the
materials sealed for the purpose of appellate review.
Rule 26(b)(1) of the Rules of Civil Procedure provides that a
party "may obtain discovery regarding any matter, not privileged,
which is relevant to the subject matter involved in the pending
action, whether it relates to the claim or defense of the party
seeking discovery or to the claim or defense of any other party[.]"
N.C. Gen. Stat. § 1A-1, Rule 26(b)(1) (2003). A trial court's
determination regarding relevance for purposes of discovery may be
reversed only upon a showing of an abuse of discretion. Adams v.
Lovette, 105 N.C. App. 23, 29, 411 S.E.2d 620, 624, aff'd per
curiam, 332 N.C. 659, 422 S.E.2d 575 (1992). A trial court abuses
its discretion only when its actions are manifestly unsupported byreason. Id. After reviewing the sealed documents, we are unable
to conclude that the trial court's determination was manifestly
unreasonable. This assignment of error is, therefore, overruled.
Reversed in part, affirmed in part, and remanded.
Chief Judge MARTIN and Judge STEELMAN concur.
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