TEC REALTORS Inc. d/b/a Coldwell Banker Commercial TEC Realtors v. D & L FAIRWAY PROPERTY MANAGEMENT, L.L.C.

42 So.3d 1116

TEC REALTORS, INC. d/b/a Coldwell Banker Commercial TEC Realtors v. D & L FAIRWAY PROPERTY MANAGEMENT, L.L.C., Alfred B. Dempsey, and Shearn N. Lemoine.

No. 2009 CA 2145.

Court of Appeal of Louisiana, First Circuit.

July 9, 2010.

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Richard A. Richardson, Mandeville, LA, for Plaintiff-Appellant, TEC Realtors, Inc. d/b/a Coldwell Banker Commercial TEC Realtors.

Sam J. Collett, Jr., Bailey Dirmann Morse, Covington, LA, for Defendants-Appellees, D & L Fairway Property Management, L.L.C., Alfred B. Dempsey, and Shearn N. Lemoine.

Before PARRO, KUHN, and McDONALD, JJ.

KUHN, J.

Plaintiff, TEC Realtors, Inc., doing business as Coldwell Banker Commercial TEC Realtors ("TEC"), brought this suit against defendants, D & L Fairway Property Management, L.L.C. ("D & L"), Alfred B. Dempsey, and Shearn N. Lemoine, to recover a real estate commission allegedly owed to it under the terms of a listing agreement, along with attorneys' fees and costs.¹ Plaintiff and defendants respectively each filed a motion for summary judgment. On August 17, 2009, the trial court signed a judgment, denying plaintiffs motion for summary judgment, granting defendants' motion for summary judgment, and dismissing plaintiffs claims with prejudice at its cost. Plaintiff hassuspensively appealed the trial court's judgment. We reverse that portion of the judgment that granted the defendants' motion for summary judgment and dismissed plaintiffs claims with prejudice at its cost, and we remand this matter for further proceedings.²

I. PROCEDURAL AND FACTUAL BACKGROUND

On October 2, 2006, Dempsey and Lemoine entered into an "Exclusive Listing Contract for Lease of Property" (the "Stirling listing agreement") with Stirling Property, Inc. ("Stirling") as broker for a term of one year, commencing September 25, 2006, and ending September 25, 2007. The parties do not dispute that Dempsey and Lemoine acted on behalf of D & L, in its capacity as either lessor and/or owner of the property subject to the listing agreement, a commercial condominium, located in Mandeville, Louisiana. In the Stirling listing agreement, Thomas F. Danos was designated by Stirling as one of the "Lessor's Designated Agent[s]."³ According to one of Danos' affidavits, during the term of this listing agreement, the subject property was submitted to Pontchartrain Surgery Center, L.L.C. ("Pontchartrain"). On behalf of the defendants, Danos negotiated with William Barrois, also an agent of Stirling, who represented Pontchartrain, but no agreement was reached.⁴ According to Dempsey's affidavit, Barrois introduced Pontchartrain to D & L and started the lease discussions. Dempsey's affidavit conceded that Danos was an agent for Stirling during the term of the Stirling listing agreement, but Dempsey asserted therein that Danos had nothing to do with the introduction or procurement of Pontchartrain as a lease prospect.

On or about January 26, 2007, Danos terminated his relationship with Stirling and placed his real estate agent's license with TEC. According to Danos' affidavit, the Stirling listing agreement was terminated by agreement between him and Stirling.⁵ A new "Exclusive Listing Contractfor Lease of Property" (the "TEC listing agreement") was entered into between TEC as "Broker" and Dempsey and Lemoine as "Owner[s]" regarding the subject property. The term of the TEC listing agreement commenced February 5, 2007, and ended on March 5, 2007. This agreement provided, in pertinent part, as follows:

The Lease(s) shall be on the following terms:

$22.00 PER SQ. FT + NNN

INCLUDING $30 P.S.F BUILDOUT

...

2. If a lease is negotiated and executed covering said property, during the term of this contract, or within 365 days after the expiration of this contract with any party to whom Broker has submitted said property during the term of this contract (or any affiliate, nominee or representative of such party), Owner agrees to pay to Broker a commission as set forth below on all gross rents covering said property. This commission shall be earned and paid for services rendered if, during the Term: (a) All or any portion of the Property is leased to a tenant (by Broker, Owner, or anyone else); (b) A tenant is procured (by Broker, Owner, or anyone else) who is ready, willing and able to lease the Property on the terms above stated, or on any other terms agreeable to Owner; (c) Any contract for the lease on all or any portion of the Property is entered into by Owner; or (d) Owner removes the Property from the market.

3. Commission to be paid by Owner/Lessor. Said commission shall be payable upon final execution of a lease between Owner and a Tenant, equal to the following rates:

Primary Term: 6%

Renewal Options: 5%

According to Dempsey's affidavit, after the TEC listing agreement was executed, Danos continued discussions on behalf of D & L with Barrois, who remained the Stirling agent representing Pontchartrain, in hopes of consummating a lease between Pontchartrain and D & L. According to Danos' affidavit, the subject property "was submitted to [Pontchartrain] through its agent, Barrois, by [Danos] and negotiations continued. Specifically, [he] and Barrois negotiated over the terms" of the lease. Ultimately, the TEC listing agreement terminated without D & L and Pontchartrain consummating a lease agreement.

On March 16, 2007, Dempsey and Lemoine signed an "Exclusive Listing Contract for Lease of Property" pertaining to the subject property with Gulf States Real Estate Services of Louisiana, L.L.C. ("Gulf States"). The term of this agreement commenced on March 15, 2007, and ended March 13, 2008, and provided that as "Owner[s]", Dempsey, Lemoine, and D & L agreed to pay Gulf States a commission pursuant to the terms of the listing agreement "[i]f a lease is negotiated and executed covering [the subject property], during the term of this contract or within 180 days after the expiration of this contract...." The listing agreement further provided, "Broker designates and Lessor accepts `Patrick Graffagnino' as the `Lessor's Designated Agent.'"

Dempsey's affidavit further states, in pertinent part, that 1) Gulf States, throughGraffagnino, continued negotiations on behalf of D & L with Pontchartrain and its agent, Barrois; and 2) neither TEC nor Danos were involved in any discussions between D & L and Pontchartrain after the TEC listing agreement terminated. On April 26, 2007, D & L and Pontchartrain executed a "Commercial Lease Agreement" for a term of 120 months, "commencing the earlier of September 1, 2007 or upon completion of Lessee's improvements."⁶ D & L also granted Pontchartrain two renewal options, each to extend the lease for a period of five years. According to Dempsey's affidavit, D & L paid a total commission of $69,097.71, which was divided as agreed upon by Gulf States and Stirling.

Based on the information provided in the above-referenced affidavits and the terms of the TEC listing agreement, the trial court found that TEC's motion for summary judgment was not well-founded, i.e., that it was not entitled to a commission under its listing agreement, and the trial court granted defendants' motion for summary judgment, dismissing TEC's claims with prejudice.

In written reasons for judgment, the trial court found that "D & L, TEC, and [Pontchartrain] discussed the possibility of leasing the subject property during the effective period of the TEC listing agreement." The court concluded, however, that TEC was not the procuring cause of the final lease agreement and that TEC was not entitled to a commission under the terms of the extension clause in the TEC listing agreement. In addressing the language of the extension clause, the court determined that the two sentences in paragraph 2 of the TEC listing agreement must be read in conjunction with one another, reasoning as follows, in pertinent part:

After a careful reading of the entirety of paragraph two ..., the Court finds that the first sentence merely sets forth the parameters of the extension clause: "if a lease is negotiated and a contract executed... within 365 days after the expiration of this contract with any party to whom Broker has submitted said property during the term of this contract...." The second sentence describes the various conditions under which the commission shall be paid if, during the term, one of the described events occur.

... If a lease is negotiated and a contract executed within 365 days after the expiration of the contract with any party a Broker has already submitted during the term of the contract, then the commission shall be paid if any one of the four events (a-d) occurred during the term of the listing agreement. None of these events occurred in the instant case. No lease was negotiated and confected during the term. The subject property was not leased to a tenant during the term. A tenant was not "procured" who was ready, willing and able to lease the property on the stated terms or any other terms. No contract of lease was entered into during the term, and the owner did not remove the property from the market during the term. Therefore, the Court finds that no event occurred which would trigger the [extension clause or] tail provision in the TEC listing agreement and entitle TEC to a commission. This finding is based on the unambiguous terms of TEC's own listing agreement.

In accordance with these reasons, the trial court signed a written judgment, denying TEC's motion for summary judgment, granting defendants' motion forsummary judgment, and dismissing TEC's claims with prejudice. TEC has appealed the trial court's judgment, urging that the trial court erred in interpreting the unambiguous provisions of paragraph 2 of the TEC listing agreement.

II. ANALYSIS

In the instant case, TEC does not claim to be the procuring cause of the lease confected between D & L and Pontchartrain. Rather, TEC bases its claim on the...