Summary 2009 WY 150

Summary of Decision issued December 10, 2009

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Grommet v. Newman

Citation: 2009 WY 150

Docket Number: S-08-0148, S-08-0149

Appeal from the District Court of Platte County, the Honorable John C. Brooks, Judge.

Representing Grommet: Patrick J. Murphy of Williams, Porter, Day & Neville, PC, Casper, Wyoming and Thomas S. Peters of Peters Associates, LLC, Teton Village, Wyoming.

Representing Newman: Michael E. Warren of Sawyer & Warren, PC, Torrington, Wyoming.

Facts/Discussion: Newman asserted that he was owed a real estate commission and an award of attorney’s fees by Grommet, in accordance with the terms of a real estate listing agreement between them. The real estate sale affected a large ranch property owned by Grommet and the Wyoming National Guard (WNG) was the purchaser. Newman’s appeal hinged on the contention that the district court resolved the issues in the case on perceived equities rather than the four corners of the contract.

The Contract: Grommet and Newman disputed which contract was in force at the times crucial to the outcome of the case. The Court noted the existence of a contract that ran from 2003 through 2005. Another agreement was signed in August 2005 which interrupted the 2003 agreement and was in fact an extension of the original agreement with an increased sales price. Newman made a disclosure pursuant to § 33-28-306 at the time the 2003 agreement went into effect. The Court concluded it was sufficient to fully advise Grommet and to comply with the statute.
The Court stated the facts pointed clearly and convincingly to the conclusion that an oral extension of the listing contract existed after it expired in February 2006 which continued the contract until the end of March 2006 when Grommet sent the letter to Newman terminating his services.
Newman contended that he was due the commission for the sale since the word “earned” in the agreements meant “procuring cause” of the sale. The Court disagreed stating that earned meant only that a subsequent broker did whatever he was required to do under his contract to earn a commission.
Bad Faith: Newman alternatively alleged that Grommet acted in bad faith and the he was therefore responsible to pay the commission regardless of the listing agreement. The facts showed that up until he was terminated in March 2006, Newman was doing all he could to facilitate the sale including advertising and lobbying the legislature and the governor. His efforts were ongoing through requests by, the knowledge of and the acquiescence of Grommet. The district court found bad faith did exist on the part of Grommet believing that the termination letter from Grommet was an after-the-fact document prepared to serve as a paper trail for dismissing Newman and that the termination was designed solely to lower the real estate commission and get Brockman’s assistance in raising the sale price. Brockman’s assistance was primarily that of appraiser.

Case No. S-08-0148
Special contract of employment: The Court held that whether the contract at issue was a “special” or “general”: contract was simply not an issue of significance in the case and declined to embrace the reasoning offered by Grommet.
Application of “procuring cause of sale”: Grommet did not associate the discussion with any particular portion of the district court’s findings, so the Court concluded that it need not further address the issue.
New broker extinguishes Newman’s claims: Grommet contended that the hiring of Brockman extinguished any right Newman had to earn a commission because their contract protected him from paying “dual commissions.” The record supported the district court’s findings that Grommet breached the covenant of good faith and fair dealings.
Oral extension of contract: When the Court considered all the testimony offered by Newman and disregarded the contradictory testimony offered by Grommet, the Court concluded that the district court’s findings were not clearly erroneous.
Denial of due process: The matter was thoroughly discussed and resolved during the trial. When the district court made its decision to reverse its initial grant of partial summary judgment it was made clear that Grommet could recall witnesses that had already testified and been excused. The district court’s decision to consult more recent cases that enlarged upon previous precedents pertinent to the implied covenant of good faith and fair dealing did not unfairly surprise Grommet or alter the landscape of the case.
Grommet did not breach the implied covenants: Grommet’s arguments depended almost entirely on the testimony and actions of Grommet and his witnesses. The district court accorded no credibility to them. In addition, the Court noted that the WNG and the State must operate transparently. The record strongly suggested that the price of the ranch was raised only because WNG had $10M appropriated for the purchase of lands to enlarge the military training area around Guernsey. There were no authentic competing buyers.
Filing of lis pendens by Newman: Grommet contended that the filing with the intent of blocking the sale of the ranch was a tort. The filing did not delay the sale. The Court deemed the matter to have been resolved by the parties and that it played no role in the resolution of the issues raised in the instant case.
Extension void under brokerage disclosure statute: Grommet claimed that the listing agreement and any extension thereof was void under § 33-28-306 because his broker’s disclosure had not been acknowledge by all sellers. The Court agreed the extended contract was enforceable based upon the ongoing relationship of Newman and Grommet in buying, selling and swapping real property.
Newman’s fraud on the Wyoming Real Estate Commission: Grommet claimed that Newman defrauded the real estate commission when he submitted evidence to the commission in connection with his assertion that Newman violated Wyoming Statutes and the ethics of his profession. Grommet claims to have been damaged when the Commission dismissed Grommet’s complaint. The Court examined the evidence produced at trial and state the claims were not supported by the evidence.
Newman’s breach of fiduciary duties owed to Grommet: The Court found no credible evidence in the record to support Grommet’s assertions that Newman breached the contract first by failing to tell of offers made on the ranch by other buyers.
Attorney’s fees for Grommet: The district court’s findings were fully supported by the evidence adduced at trial and the district court faithfully applied the correct rules of law to those facts, therefore, the Court would not consider an award of attorney’s fees for Grommet.

Case No. S-08-0149
The Court was comfortable in sustaining the district court’s explicit and implicit findings that Newman was the “procuring cause” of the sale. The Court was also comfortable in concluding that Newman sold the ranch and that he earned the commission provided for in the governing contract. The Court also noted that it was comfortable that Brockman was not the procuring cause of the sale, did not sell the ranch and did not earn a commission. The Court disagreed with the district court’s finding/conclusion that Grommet only violated the implied covenants of good faith and fair dealing and not the contract itself. By the terms of the contract, Newman was entitled to a reasonable attorney’s fees award.

Conclusion: The judgment of the district court awarding Newman his commission was affirmed. That part of the district court’s judgment which determined that an attorney’s fee award would be inequitable under the circumstances of the case was reversed and the matter remanded for ascertaining a reasonable attorney’s fee to award to Newman.

Case No. S-08-0148: Affirmed.
Case No. S-08-0149: Reversed and remanded.

J. Hill delivered the decision.

Link: http://tinyurl.com/yhwd3am.

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