WRTGC-Commercial, LLC v. Precision Commc'ns, 20-CV-0162-CVE-CDL

WRTGC-COMMERCIAL, LLC, d/b/a/ Cantrell-Griffin Business Brokers, an Arkansas LLC, Plaintiff, v. PRECISION COMMUNICATIONS, INC., an Oklahoma corporation, and KAREN KYMAN, a resident of the state of Oklahoma, Defendants.

No. 20-CV-0162-CVE-CDL

United States District Court, N.D. Oklahoma

August 27, 2021

OPINION AND ORDER

CLAIRE V. EAGAN, UNITED STATES DISTRICT JUDGE

Before the Court are plaintiff WRTGC-Commercial, LLC's motion for partial summary judgment on a portion of its breach of contract claim (Dkt. # 47), and defendants' Precision Communications, Inc.'s (PCI's) and Karen Kyman's joint motion for summary judgment (Dkt. # 48).

In its motion (Dkt. # 47), plaintiff states that it has shown, as a matter of law, that PCI owes plaintiff a commission for the sale of its assets consummated in March 2020. Defendants deny that they owe plaintiff any commission because plaintiff is not a party to the contract or, alternatively, because plaintiff's agent breached his fiduciary duties to defendants (Dkt. # 59). Plaintiff has filed a reply (Dkt. # 75). The motion is fully briefed.

In defendants' motion (Dkt. # 48), defendants argue that plaintiff cannot bring any claims against defendants, as plaintiff is not a party to the contract at issue. Defendants state no commission is owed for the sale of the PCI's assets, Kyman's goodwill, or Kyman's real estate because the contracting entity was illegally conducting business in Oklahoma without a license. In its response

(Dkt. # 58), plaintiff argues that it is the proper contracting party, that it is licensed to conduct business in Oklahoma and that it has properly stated breach of contract claims against PCI and Kyman. Plaintiff further contends that, even in the absence of enforceable contracts, it is owed commissions on the sales it brokered under a theory of quantum meruit and fraud. Defendants filed a reply (Dkt. # 76), and the motion is fully briefed.

I. Background

Plaintiff WRTGC-Commercial, LLC, is an Arkansas limited liability company that was created in Arkansas on November 18, 2009. Dkt. # 47-1. Plaintiff has been licensed to do business in Oklahoma since February 11, 2010. Dkt. # 47-2. “Cantrell-Griffin Business Brokers” has been a registered trade name of plaintiff since December 18, 2012. Dkt. # 47-3. Stewart Nance works for Cantrell-Griffin Business Brokers. Dkt. # 58-15, at 2.^[1]

In 2017, Nance approached PCI's president and sole shareholder, Karen Kyman, about the possibility of serving as a business broker for the sale of PCI. On March 27, 2019, Kyman sent Nance an email attaching a presentation that an earlier broker had put together for the potential sale of the business. Dkt. # 75-3. That package stated that “long-term relationships with large clients and partners” were a competitive advantage of PCI. Id. at 11. The presentation stated that “PCI office, ship, and land [were] available as well.” Id. at 15. It stated that those assets were “[c]urrently leased from Karen Kyman.” Id. It also stated that the shareholder (Kyman) was “[o]pen to transferring 100% of [the] company to the right buyer.” Id.

On March 28, 2019, David Jones, an attorney, wrote to Nance, stating that he represented PCI and Kyman. Dkt. # 47-8, at 2. He stated that he attached his proposed mark-up of the “standard listing agreement/real estate contract” that Nance had sent to Kyman. Id. He wrote that he did not believe his comments and edits “substantively change[d] the agreement Karen [Kyman] reached with [Nance].” He outlined that those terms were “6% commission[, ] 12 month agreement which can be terminated upon paying a 3% cancellation fee[, ] 3% commission if Karen [Kyman] brings the buyer to the table.” Id. He also “tweaked the agreement to clarify that PCI does not own the real estate and that the [$]9.6 million asking price does not include real estate.” Id. Jones also added additional terms. He proposed that “if Karen has to carry some of the purchase price, you'll receive the commission when she receives her payment[, ]” that “if the buyer requires working capital (cash or receivables), you won't receive a commission on the cash transferred to the buyer[, ]” that Nance “won't receive a commission on any post-closing wages paid to Karen[, ]” and that “[i]f the buyer leases rather than purchases the real estate, you won't receive a commission on the lease payments.” Id.

Later that day, Nance replied to Jones. Dkt. # 58-11, at 10. In that email, he replied to the clarification of the fact that PCI does not own the real estate, stating “[m]y apologies for not making this apparent with the two agreements to begin with> [sic] I had just focused on the business listing discussions with Karen [Kyman] to this point but had told [her] we would handle the real estate in a separate agreement since it is owned by a different entity (her). I use an Oklahoma licensed broker in our firm to handle OK real estate transactions and suggest we send a separate agreement for the real estate sale to Karen.” Id. In that email, Nance agreed to the pro rata commission payment structure, the exclusion of cash or receivables from the commission, and the exclusion of Kyman's post-closing wages from commission. Nance, however, did object to the exclusion of a commission on the lease of the real estate. Id. He stated “[i]f we sell or lease the real estate, C[antrell] G[riffin] B[uisness] B[rokers] should get a commission.” Id. He stated that “[i]n either case, we are OK licensed real estate agents and will help negotiate the sale or lease.” Id. He continued that he “had told Karen we would handle the real estate in a separate agreement since its [sic] owned by a different entity. Don't see why we need to address in the business listing agreement.” Id.

On April 9, 2019, Jones emailed Nance and copied Kyman. He attached a revised listing agreement which removed “any reference to the real estate, ” stating that he understood Nance “will be providing a separate agreement between an Oklahoma real estate broker and 506 Industrial Road, LLC. Under such agreement, commission will be due upon sale of the real estate but no commission due upon lease of the real estate.” Dkt. # 58-10, at 2. Jones and Nance then proceeded to discuss whether commission would be owed on the sale of accounts receivable. Ultimately the parties agreed that it would be excluded. Dkt. # 58-11, at 2.

Later that month, a business listing contract was executed (“listing contract”). Dkt. # 47-6. The heading of each page of that document states “Cantrell-Griffin Business Brokers” above the text “Business Listing Contract.” The first paragraph of the listing contract states:

“In consideration of the services of WRTGE-Commercial, LLC, through tis [sic] CANTRELL-GRIFFIN BUSINESS BROKERS division hereinafter called ‘Agent,' in selling, leasing or exchanging the stock or assets of the business described herein, Karen Kyman, as the sole stockholder of Precision Communications, Inc. (PCI) (herein, Kyman and PCI collectively called “Seller”) agrees that the Agent shall have the exclusive right to sell the assets or the stock of PCI during the [12 month] term . . .”

Id. at 1 (underline in original).

The listing contract states that the “gross offering price” would be $9, 600, 000, or such lesser price or terms as the Seller may accept. Id. The listing contract also sets out the parameters for payment of the agent. “Seller agrees to pay Agent's full commission when and to the extent that [s]eller receives the sale price, and [s]eller grants a security interest in said proceeds of the closing. Seller agrees to pay [a]gent a professional fee of six percent (6%) of the gross amount of the sale price (the ‘Gross Purchase Price') . . . This fee shall not be less than $100, 000.00. This shall include partial sale of assets, an equity interest, or any method of transfer . . . .” Id. To the extent the seller would receive the payment in installments, the contract provides that the “[a]gent's fee due hereunder shall be due on a pro rata basis.” Id. at 2.

The listing contract states that the real property, on which PCI operated at the time of the listing contract's execution, was not included in the gross offering price. Id. That property was not owned by PCI. The listing contract states that “[a]ny listing agreement between 506 Industrial Road, LLC, and the [a]gency will be by separate agreement.” Id.^[2]

The final term in the listing contract states that the “written contract constitutes the entire agreement concerning the subject matter hereof between the parties and supercedes any previous oral agreements or understandings. This agreement may not be modified except in writing executed by both the Seller and by the Agent.” Id. at 4.

On the last page of the listing contract, the signature blocks state that one contracting party is “WRTCG-Commercial, an Arkansas Limited Liability Company through its Cantrell-Griffin Business Brokers Division, ” and the other contracting party is “Precision Communications, Inc., an Oklahoma corporation.” Dkt. # 47-6, at 4. Karen Kyman signed the contract on behalf of PCI.

On April 26, 2019, Nance emailed Kyman, attaching an Oklahoma real estate form listing agreement and stating that he would “appreciate [Kyman] reviewing [it] and getting back to [him] at [her] earliest convenience.” Dkt. # 75-7, at 2. The agreement attached described the property on which PCI operates at 506 Industrial Road, in Grove, Oklahoma. Id. at 7.

On April 30, 2019, Nance responded to an inquiry from a private equity firm regarding PCI. Dkt. # 75-4, at 6. In that email exchange, Nance explained the value presented by PCI and the circumstances of the business. On May 1, 2019, Nance explained to the interested party that the business with real estate...