COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60383 THOMAS C. WELLS, dba : T.C. WELLS REALTY : : Plaintiff-appellee : : JOURNAL ENTRY -vs- : AND : OPINION LEO KUCHARSKI, ET AL. : : Defendants-appellants : : DATE OF ANNOUNCEMENT : OF DECISION : CHARACTER OF PROCEEDING : Civil appeal from Court of Common Pleas : Case No. CP 152,491 JUDGMENT : AFFIRMED. DATE OF JOURNALIZATION : APPEARANCES: For plaintiff-appellee: For defendants-appellants: JACK M. SCHULMAN, ESQ. EUGENE G. GILLIS, ESQ. SCHULMAN & SCHULMAN 924 Terminal Tower 1700 Standard Building 50 Public Square 1370 Ontario Street Cleveland, Ohio 44113 Cleveland, Ohio 44113 J.F. CORRIGAN, P.J., - 2 - Defendants Leo, Ted, and James Kucharski appeal from the judgment of the trial court which determined that they had breached a listing agreement with plaintiff Thomas C. Wells, d.b.a. T.C. Wells Realty, and which ordered defendants to pay plaintiff a commission. We affirm. I. Plaintiff filed this action for recovery of a real estate commission on July 7, 1988, alleging that pursuant to a written listing agreement for the sale of defendants' golf course and surrounding property, he had procured a ready, willing, and able purchaser, and that defendants refused to enter into a purchase agreement. Defendants denied liability, and the matter proceeded to a bench trial on May 29, 1990. Plaintiff testified that he was a licensed real estate salesman from 1978 to 1986, and a licensed real estate broker from 1986 to the present. He further established that he met defendants while golfing at their Hickory Nut Golf Course, and that on several previous occasions, defendants had retained him to sell the golf course and surrounding property. In 1983, the parties entered into a written agreement whereby plaintiff was to serve as defendants' representative in the sale of the property to the Catholic Diocese. However, according to plaintiff, defendants did not fully cooperate in negotiations, and the Diocese ultimately lost interest in the acquisition. - 3 - Later, in 1985, plaintiff orally agreed to represent defendants in purchase negotiations with Jacqueline and David Slyman. No sale was consummated at this time, however, as defendants raised the price during final negotiations. Several months later, plaintiff again orally agreed to represent defendants in the sale of the property, and he obtained a letter of intent to purchase from three individuals who were seeking an investment opportunity. After almost one year of negotiations, however, defendants decided not to sell the property. In 1987, defendants again solicited plaintiff to represent them in the sale of the property, and plaintiff drafted an exclusive listing agreement. In relevant part, this agreement provided: This will serve as an exclusive agreement between T.C. Wells Realty to serve as the representative for Hickory Nut Golf Course in the sale of Hickory Nut Golf Course, equipment and surrounding properties. This agreement shall be from June 1, 1987 to October 1, 1987. T.C. Wells Realty will extend their best efforts to secure the sale at the sale figure the seller is asking. *** This agreement if sold and signed is a binding transaction between all parties. The following are the terms that will be accepted by the Seller: 1. Sale Price $1,900,000.00 2. Downpayment $1,000,000.00 3. Balance of $900,000.00 payable at 8% interest per year over a period of five years - 4 - 4. The Seller agrees to pay T.C. Wells Realty a commission of $100,000.00 for their efforts in securing this transaction This agreement will be binding on all parties with their signatures. Defendants signed this agreement on or about June 1, 1987, and within the next few months, plaintiff began purchase negotiations with Vic Roessler, and also with Nicholas Hoty. Plaintiff subsequently obtained Roessler's letter of intent to purchase the property, but defendants rejected it because the downpayment did not initially meet their requirements. Concomitantly, plaintiffs negotiated with Hoty during the summer of 1987. These negotiations were then suspended until early 1988, however, due to the illness and subsequent death of one of Hoty's children. Thereafter, on January 5, 1988, plaintiff and Hoty met to continue negotiations and, on this same date, plaintiff procured Hoty's letter of intent to purchase the property. As set forth in this letter, Hoty was to purchase the property, subject to appraisal and zoning contingencies, for $1,950,000.00 with $600,000.00 down and the balance payable over a fifteen year period. In addition, Hoty and plaintiff were to share a 7% commission. Defendants rejected this proposal due to the contingencies and the fact that it did not meet their requirement of - 5 - $1,000,000.00 down, and on February 3, 1988, plaintiff, Hoty, and defendants Leo and James Kucharski met to resume negotiations. On May 11, 1988, plaintiff procured Hoty's second letter of intent to purchase. Under the terms of this document, the appraisal and zoning contingencies remained, but the downpayment was to be $1,000,000.00, and balance was payable in five years, as demanded by defendants. Defendants rejected this proposal due to the contingencies, and on May 26, 1988, plaintiff procured Hoty's third letter of intent to purchase. This document omitted the contingencies, and therefore fulfilled all of defendants' requirements as set forth in their June 1, 1987 listing agreement with plaintiff. Defendants rejected this proposal, however, indicating that they had now raised the purchase price to $2,100,000.00 and would now pay plaintiff a $75,000 commission if a deal were completed. Plaintiff informed Hoty of the subsequent price increase, and Hoty agreed to pay it. Defendants once again refused to enter into a purchase agreement, however, claiming that the "taxes would kill them." Nicholas Hoty corroborated plaintiff's testimony regarding his letters of intent and further indicated that he considered the letters to be "offers" in accordance with common practice. Finally, Hoty established that at all times, he was ready, willing, and able to purchase the property. - 6 - Defendants presented the testimony of James and Leo Kucharski who stated that they insisted that the listing agreement be effective for only a limited time, and that they did not meet with Hoty until after the agreement had expired. Therefore, they claimed, although they did meet Hoty through plaintiff and did discuss the sale of the golf course with Hoty, they did not believe that plaintiff was entitled to a commission, and they did not believe that they could be bound in the absence of their brother Ted. Finally, Leo Kucharski claimed that defendants did not solicit Hoty's second and third letters of intent, but he admitted on cross-examination that he wrote on the second letter of intent to indicate his disapproval with various provisions. On August 1, 1990, the trial court entered judgment for plaintiff, and awarded him $68,475.00 or the commission which plaintiff would have earned had defendants accepted Hoty's third letter of intent. Defendants now appeal. II. "THE TRIAL COURT ERRED IN FINDING THAT THE LISTING AGREEMENT WAS EXTENDED BEYOND OCTOBER 1, 1987." Defendants and plaintiff agree that if a definite time is specified in a listing agreement, the broker is not entitled to a commission unless he achieves results in this time period, except where the principal acquiesces in further efforts after - 7 - expiration of the time period. See Scott v. Cravak (1977), 53 Ohio App. 2d 248, 248, or where the principal has acted in bad faith. See, generally, 10 Ohio Jurisprudence 3d (1979), Broker's, Section 77; Annotation (1953), 27 A.L.R. 2d 1348, 1353-1354. Defendants maintain, however, that no waiver occurred here. We do not agree, as competent, credible evidence established that plaintiff first contacted Hoty during the effective period of the listing agreement, and James and Leo Kucharski both testified that they met with plaintiff and Hoty in November 1987, after the listing agreement was to expire. In addition, there was competent, credible evidence that plaintiff continued to negotiate for defendants after Hoty prepared his first letter of intent, and that Leo Kucharski reviewed the second letter of intent on behalf of his brothers in order to eliminate those provisions which defendants found unacceptable. Finally, there is competent, credible evidence that defendants reviewed Hoty's third letter of intent, then indicated that plaintiff was to tell Hoty that the price had now been raised to $2,100,000.00. Thus, defendants clearly participated in plaintiffs continued efforts to sell the property after the listing agreement had expired, and therefore waived the termination date set forth in that document. Defendant's first assignment of error is overruled. III. "THE TRIAL COURT ERRED IN INTERPRETING THE TERMS OF THE LISTING AGREEMENT TO PROVIDE - 8 - THAT THE ONLY CONDITION PRECEDENT TO PLAINTIFF/APPELLEE'S ENTITLEMENT TO PAYMENT OF A COMMISSION WAS THAT HE PRODUCE A BUYER READY, WILLING AND ABLE TO PURCHASE THE PROPERTY." Defendants next assert that the trial court erred in determining that plaintiff was entitled to a commission, since the listing agreement drafted by plaintiff indicates that "[t]his agreement if sold and signed is *** binding ****," (Emphasis added.) and defendants did not enter into a purchase agreement with Hoty. This claim lacks merit. It is well-established that a real estate broker is entitled to a commission where the vendor and purchaser have entered into a valid and enforceable purchase agreement. Ballard v. Thompson (1965), 5 Ohio App. 2d 92, 96; Harley E. Roudar & Co. v. Springtime Co. (1975), 49 Ohio App. 2d 49, 53-54; Century 21 v. McIntyre (1980), 68 Ohio App. 2d 126, 129; Mahon-Evans Realty, Inc. v. Spike (1986), 33 Ohio App. 3d 268, 270; Ferguson Realtors v. Butts (1987), 37 Ohio App. 3d 30, 34. It is also well-established that a real estate broker is entitled to a commission where he procures a purchaser who is ready, willing, and able to enter into a purchase agreement with the vendor on the vendor's terms, but the vendor refuses to enter into a purchase agreement. See Scott v. Cravak, supra, at 250- 251, where the court stated: "We believe, *** the conclusion must be that given in the Restatement of Agency 2d 349, Section 445 (1958): - 9 - "'*** [T]he principal's promise to pay a commission becomes binding upon the production by the broker of a customer ready, able, and willing to consummate the transaction on the specified terms. This promise, although now binding, does not call for performance unless there has been a fulfillment of the further condition, either that such customer shall make a contract enforceable against him or that the conveyance shall be consummated, except that if the principal is responsible for the nonperformance of such condition, it is dispensed with and the promise to pay commission becomes unconditional.' "This same conclusion is enunciated in 12 American Jurisprudence 2d 940, Brokers, Section 199: "'As a general rule, and apart from stipulations in the broker's contract to the contrary, the right to compensation on the part of a broker who has procured a person able, ready and willing to purchase the property on the terms specified by the employer is not lost by a failure of completion of the transaction because of the default of the employer or his refusal to go through with the deal.' "This principle was followed in Kaercher v. Schee (1983), 189 Minn. 272, 249 N.W. 180. Paragraph three of the court's syllabus states: "'Where the broker advises the owner that he has found a purchaser who has agreed, and is ready, able and willing, to buy for the price and on the terms offered by the owner, and the owner then, without good reason or excuse, refuses to contract or sell, his agreement with the broker is breached, and the further production of the purchaser to the owner is dispensed with.'" See, also Bauman v. Worley (1957), 166 Ohio St. 471, 473-475; White v. Nemastil (1985), 29 Ohio App. 3d 1, 6. - 10 - Thus, as recently set forth by the Supreme Court: "a broker retained to procure a buyer or seller of a business is entitled to a commission if he (1) produces a buyer or seller who is ready, willing and able to buy or sell on the principal's terms, and (2) the transaction, or the readiness to perform on the principal's terms, directly results from the broker's efforts, without a break in continuity." (Emphasis added.) Legros v. Tarr (1989), 44 Ohio St. 3d 1, 6. This rule applies, moreover, even where the listing agreement purports to pre-condition the payment of the commission upon a sale. Id. In this case, the unrefuted evidence demonstrated that plaintiff procured a ready, willing, and able purchaser whose readiness to perform directly resulted from the plaintiff's efforts. Accordingly, plaintiff was entitled to a commission. Defendants' second assignment of error is overruled. IV. "THE TRIAL COURT ERRED IN FINDING THAT HOTY WAS A BUYER READY, WILLING AND ABLE TO PURCHASE THE PROPERTY." Defendants next assert that Hoty was not a ready, willing, and able purchaser because the letter of intent was not a binding purchase agreement and because the terms set forth in the first and second letters of intent did not directly meet defendants' requirements. As to the first of these claims, we note that while the letters were not binding absent the subsequent execution of a purchase agreement, they are, from the state of - 11 - the record, unrefuted evidence of Hoty's readiness, willingness, and ability to purchase the property. As to the second of these claims, we note that defendant at no previous time asserted any deficiency in the third letter, and we therefore will not now consider this claim. Cf. Foran v. Fisher Foods, Inc. (1985), 17 Ohio St. 3d 193, 194. Defendants' third assignment of error is overruled. Judgment affirmed. - 12 - It is ordered that appellee recover of appellants their costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Court of Common Pleas to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. BLACKMON, J., CONCURS. JAMES D. SWEENEY, J., DISSENTS. (SEE ATTACHED DISSENTING OPINION) JOHN F. CORRIGAN PRESIDING JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, at which time it will become the judgment and order of the court and time period for review will begin to run. COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60383 THOMAS C. WELLS, dba : T.C. WELLS REALTY : : : PLAINTIFF-APPELLEE : D I S S E N T I N G : vs. : O P I N I O N : LEO KUCHARSKI, ET AL. : : : : DEFENDANTS-APPELLANTS : DATE: JAMES D. SWEENEY, J., DISSENTING: I respectfully dissent from the majority opinion. I would sustain the appellants' first assignment of error, and hold that the trial court erred in finding that the listing agreement was extended beyond October 1, 1987. The agreement in its entirety states: This will serve as an exclusive agreement between T.C.Wells Realty to serve as the representative for Hickory Nut Golf Course in the sale of Hickory Nut Golf Course, equipment and surrounding properties. This agreement shall be from June 1, 1987 to October 1, 1987. T.C.Wells Realty will extend their best efforts to secure the sale at the sale figure the seller is asking. Hickory Nut Golf Course consisting of owners, Leo, Ted and Jim Kucharski as principal owners are asking $1,900,000.00 for 300+ acres plus buildings and homes on Marks Road - 2 - and Boone Road - all golf carts and equipment on premises to serve the course. This agreement if sold and signed is a binding transaction between all parties. The following are the terms that will be accepted by the Seller: 1. Sale Price $1,900,000.00 2. Downpayment $1,000,000.00 3. Balance of $900,000.00 payable at 8% interest per year over a period of five years 4. The Seller agrees to pay T.C.Wells Realty a commission of $100,000.00 for their efforts in securing this transaction This agreement will be binding on all parties with their signatures. It is also worthy of note that one of the sellers, James Kucharski, signed the contract under duress. Appellants concede, however, that the contract was binding as between themselves and Mr. Wells. The duration of this contract was explicitly set forth as June 1, 1987 to October 1, 1987. The contract was binding only if an agreement to sell the property was signed during the duration of the contract. While I agree with the majority that there is authority for holding that in some circumstances, provisions such as these are deemed waived, such facts are not present in the case sub judice. This contract was instigated by Mr. Wells due to past difficulties between himself and the appellants. Mr. Wells had previously presented potential buyers for the property, but - 3 - during the course of negotiations, appellants always changed their demands and no deal was ever successful. Mr. Wells insisted on the above contract in order to protect his commission. While the contract was in effect, the only efforts made by Wells to sell the property consisted of showing the property to a potential buyer. No offer was made, and no evidence that an offer was even contemplated by the potential buyer is found in the record. There is no evidence that a ready, willing and able buyer was brought to the attention of the sellers during the contract. See Penscil v. Golaska (1949), 86 Ohio App. 465. The first offer did not occur until three months after the expiration of the contract. Based on these facts, and the prior dealings of the parties, any efforts on behalf of appellants by Mr. Wells past the expiration of the contract were at his own risk. He could have chosen to include in the contract a clause which would have protected him under these circumstances, but he did not. As the court held in Sulphur Springs Realty, Inc. v. Blackstone (1982), 7 Ohio App. 3d 27: Without specific reference to such a possibility, the clause is ambiguous. The age-old maxim of ambiguitas contra stipulatorem est (an ambiguity is resolved against the stipulator) applies to the instant cause. See Franck v. Railway Exp. Agency (1953), 159 Ohio St. 343, 345-346 [50 O.O. 318], and O'Neill v. German (1951), 154 Ohio St. 565, 571 [44 O.O. 11]." - 4 - See also Central Realty v. Clutter (1980), 62 Ohio St. 2d 411, where the court held that ambiguities are resolved against the party who prepared the agreement. I would reverse the decision of the trial court. .