Insight

Court Awards Realtor Commission and Attorney’s Fees Despite Breach of Purchase Agreement

Published on: January 26, 2021

The owner of a strip mall retained a realtor to list available property in its shopping center. A purchase agreement was secured and set a deadline to complete the sale. When the purchaser did not complete the sale, the realtor sued the purchaser for lost commission. See Beau Box Commercial Real Estate, LLC v. Pennywise Solutions, Inc., 2019-0114 (La. App. 1 Cir. 10/23/19), 289 So. 3d 600. The case raised the issue of whether the realtor was a third-party beneficiary to the purchase agreement.

After the sale fell through, the realtor filed suit against the purchaser to recover commission for the sale of the property, attorney’s fees, and other costs. In response, the purchaser admitted to the breach of the purchase agreement but argued that the listing agent had no right to recover because it was not a party to the purchase agreement. The trial court disagreed and granted summary judgment in the realtor’s favor. The trial court held that the purchase agreement established a “stipulation pour autrui”(third-party benefit) for the realtor.

The court acknowledged that agents generally are not parties to purchase agreements. However, the language of the specific purchase agreement conferred a benefit in favor of both agents because it explicitly stated that a party defaulting on the purchase agreement “shall be liable” for realtor’s commissions, attorney’s fees, and costs incurred in the enforcement of the contract.

The court also rejected the purchaser’s second argument that it had to be “placed in default” before any cause of action could arise. In response, court found that, when a term for performance is fixed in a contract, the arrival of that term automatically puts the breaching party in default.

The result in Beau Box may be limited to its own facts. However, realtors and parties should now pay closer attention to the terms of purchase agreement, which can create benefits for non-parties to the contract.

Marty Golden has been practicing law based in Baton Rouge, Louisiana for over thirty years, concentrating in civil litigation primarily involving injuries, property damage, insurance coverage, and contract disputes. Much of his practice is defending and advising real estate agents in suits by property buyers and sellers, but Marty also defends other professionals, insurance companies, manufacturers, and business owners. Marty has a special interest in all things procedural, because they are the rules of the road for litigators and knowing them better than his opponent gives him a leg up in court.

Posted by:

Disclaimer

Keogh Cox & Wilson, Ltd. provides this blog as a public service for general information only. The materials contained herein may not reflect the most current legal developments or even express the opinion of all or even most of Keogh Cox attorneys. Such material does not constitute legal advice or form any attorney-client relationship. Keogh Cox and all contributing author(s) expressly disclaim all liability to any person with respect to the contents of this Web site and Blog and expect that no reliance will be made upon the information provided.

Continue Reading

Explore legal perspectives on the issues shaping Louisiana's key industries and courtrooms.

Insight

Do Not Pass Go

The Louisiana Supreme Court recently considered the recoverability of indirect economic damages caused by negligent injury to property of others in MAW Enterprises, LLC, et al v. City of Marksville, et al. The Court found the defendant's duty did not include liability for damages resulting from negligent interference of a contract, and dismissed the case.

MAW involved the City of Marksville's denial of a liquor permit to the plaintiff's lessee. The rent was dependent in part upon the amount of gasoline sales.The plaintiff alleged that the City's improper denial of the liquor permit resulted in lower gasoline sales. Under these facts, the Court held that the plaintiff had no cause of action against the City because the damages claimed were not within the "scope of the duty."

The MAW Court extensively discussed its earlier decision in PPG Industries, Inc. v. Bean Dredging, 447 So.2d 1058 (La. 1984). Citing to the analysis in PPG, the Court reasoned that holding a tortfeasor responsible for indirect economic damages caused by injury to property of others could improperly create liability in an indeterminate amount for an indeterminate time to an indeterminate class.

The Court held that general tort duties duty did not encompass the plaintiff's injury. Additionally, after a lengthy analysis, the Court held that the duties under La. R.S. 26:71　et seq. (involving the issuance of liquor licenses) likewise did not encompass the plaintiff's damages because these duties were owed only to the person whose liquor license was denied or granted, namely the lessee.

One dissenting Justice found the majority's reliance on PPG improper because, unlike PPG, the plaintiff's damages were not caused by a "negligent injury to property resulting in physical damages." The majority's citation to PPG appears to indicate that PPG's reasoning may be applicable to cases involving both physical and non-physical damages.

News

A Jury Awards $5 Million In Favor of Spoked Manufacturing

A Louisiana federal jury awarded $5 million in favor of Spoked Manufacturing in a suit against Besco Tubular. Keogh Cox Partner, Tori S. Bowling and other counsel represented Spoked Manufacturing in the case. Find out more about this decision at LAW 360.

https://www.law360.com/articles/1180212/jury-hits-besco-with-5m-verdict-in-oil-drilling-patent-case

Insight

Trees and Neighbors: A Growing Problem

Louisiana is a river delta state filled with fertile land and the refusal of its local fauna to stay within boundaries is a problem. Trees create hazards. They also bring nuisance in all its forms––pine sap drizzled over a new car, an oak branch casting a sun-blocking shadow over the perfect tanning spot, and on and on. If you own the tree, the problem is easy enough to address; but what if the tree belongs to your neighbor? Can you cut your neighbor’s tree?

While the Louisiana Civil Code provides guidance, it does not answer every question. Under the Civil Code, “a landowner has the right to demand that the branches or roots of a neighbor’s trees, bushes, or plants, that extend over or into his property be trimmed at the expense of the neighbor.” La. Civil Code Art. 688. Nevertheless, the right to "demand" that the problem be addressed is not a “license to cut;” and does not permit a landowner to cut without permission. Kahl v. Luster, 110 So.3d 1101 (La. App. 1 Cir. 12/28/12).In the event a neighbor is less than neighborly and refuses to trim back a trespassing branch, a landowner may bring an "injunction" against his neighbor. Such an action was involved in Scott v. Ramos, 399 So.2d 1266 (La. App. 4 Cir. 1981) where the defendant/neighbor's large oak tree extended over the plaintiff's property and deposited leaves and branches onto his roof and into his yard. In defense of the action, the defendant presented evidence that cutting the tree back to the property line would essentially kill the tree. Over these objections, the Louisiana Fourth Circuit Court of Appeal granted plaintiff a permanent injunction which required the defendant neighbor to “keep the tree, its limbs and branches cut” back to the property line. Further, the court ordered that defendant reimburse the plaintiff for the cost of removing leaves and fallen debris once a year.So, should your neighbor’s tree ever present a hazard or impede on the enjoyment of your property, there are means of relief. However, gassing up your chainsaw, without your neighbor’s permission, is not one of them.