Century 21 Butler Realty, Inc. v. Vasquez

California Court of Appeal Dec 5, 1995 No. B085438Published

Before: Gilbert

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Holding. A real estate broker is entitled to a commission under an exclusive authorization agreement when the property is sold during the contract's term, even if the owners unilaterally attempted to terminate the agency relationship prior to the expiration date.

Issues

Whether a seller's unilateral termination of an agency relationship before the expiration of an exclusive listing agreement relieves the seller of the obligation to pay a commission upon the sale of the property during the original term.
Whether the notice requirements for prospective transferees under the agreement's 'termination' clause apply when the property is sold during the active term of the agreement.

Disposition. reversed

Quotations verified verbatim against the opinion

“Because the Vasquezes breached the original listing agreement by failing to pay the commission, we reverse the summary judgment granted by the trial court in favor of respondents.”

“Century 21 earned its commission because the Vasquezes, through Hockenberry and Brooks, sold the property in February 1993, before the exclusive listing period expired.”

“The word “termination” as used in section 4, subsection (c) of the agreement refers to the end of its term.”

Opinion

GILBERT, J.

A couple enters into an exclusive authorization agreement with a broker to sell their business property. The couple is unhappy with the broker and obtains another broker who sells the property during the original listing period. Is the original listing broker entitled to the commission set forth in the authorization agreement? Yes.

Century 21 Butler Realty, Inc. (Century 21) appeals from the summary judgment granted to respondents, Jess and Lorraine Vasquez, Judy Hockenberry, the Beaver-Free Corporation and Robert Brooks.

Because the Vasquezes breached the original listing agreement by failing to pay the commission, we reverse the summary judgment granted by the trial court in favor of respondents.

Facts

Jess and Lorraine Vasquez decided to sell their restaurant. On October 14, 1992, the Vasquezes executed a written exclusive authorization agreement with Century 21 to sell the property. The agreement was scheduled to expire on March 10, 1993. In November 1992, the Vasquezes’ niece, Judy Hockenberry, recommended changing brokers because Century 21 had not performed adequately and foreclosure was imminent. On November 11, 1992, Jess Vasquez executed a letter drafted by Hockenberry to “terminate” the agreement and Hockenberry mailed it immediately.

On November 16,1992, Hockenberry met with Robert T. Brooks, a broker with Beaver-Free Realty, who agreed to represent the Vasquezes after his firm reviewed the letter. Brooks knew from Hockenberry’s ex-husband that the Vasquezes were trying to sell their property, but he did not know they had listed it until he met with Hockenberry. On November 19, 1992, Hockenberry obtained a written offer to purchase the property from HKM IH, a Burger King franchise. She provided a copy of the offer to Brooks. In February 1993, the Vasquezes sold the property to HKM III through Brooks.

[891]

Century 21 sued the Vasquezes, Hockenberry, Brooks, the Beaver-Free Corporation and others for breaching the listing agreement and for interfering with an economic relationship.

Century 21 Butler Realty, Inc. v. Vasquez

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GILBERT, J.

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