Court Determines Liability Under Contract That Was Modified by Seller
Jean Julian Delly sued Arvy Realty and Javier Morales for the refund of a $9,000 real estate brokerage commission that he paid to Arvy under protest. At a nonjury trial, it was established that Hector Villatoro was a licensed real estate broker doing business as Arvy Realty. It was undisputed that, after a buyer for Delly’s property whom he had located without the assistance of a real estate broker was unable to secure financing,
Delly contacted Arvy and Morales. Arvy, a licensed real estate salesperson associated with Arvy, emailed documents to Delly, including a proposed brokerage agreement which Morales had presigned on behalf of Arvy. The form proposed agreement was titled “Exclusive Right to Sell Agreement” but was modified, apparently by Delly, to state that it was “non-exclusive.” Under its compensation provisions, the emailed presigned proposed agreement stated that Delly, as “owner,” would pay the listing broker a total commission of 4% of the selling price, and specified how the payment would potentially be divided with a cooperating broker. But Delly wrote into the agreement and initialed the words “total 2% from seller” before signing and returning the agreement to Arvy and Morales. The agreement also included a provision “that no change, amendment, modification or termination of this AGREEMENT shall be binding on any party unless the same shall be in writing and signed by the parties.”
Arvy and Morales prevailed at trial. Delly appealed.
Arvy and Morales procured a buyer for the property for a selling price of $450,000. At the closing, Delly was presented with an invoice for $18,000, which represented a 4% commission. In order to enable the closing to proceed, Delly paid two checks to Arvy. One $9,000 check had apparently been printed in advance on an attorney’s IOLA trust account and did not state any reservations. A second $9,000 check was handwritten on a separate attorney’s IOLA trust account and stated, on the memo line at the bottom of the check, “PAID UNDER PROTEST BROKER FEE.” Delly sought a refund of the portion of the commission that he paid under protest.
Delly never agreed to the 4% commission that Arvy/Morales had written into the proposed right to sell agreement; nor did they ever agree in writing to Delly’s condition, that he, as seller, would pay a total 2% commission. However, there was no requirement that a contract to pay compensation to a licensed real estate broker be in writing. But Delly’s written statement that he would only pay a total 2% commission constituted a counteroffer, which Arvy and Morales accepted by negotiating a sale of the property after receiving the counteroffer and before any different terms had been established.
Delly appropriately protested payment of $9,000 of the commission by doing so in writing at the time of the payment. Consequently, Delly was entitled to a refund of the $9,000 commission that he paid under protest.
But Delly did not establish that he was entitled to a judgment as against Morales. An agent executing a contract on behalf of a disclosed principal is not liable for a breach of the contract unless it clearly appears that he or she intended to bind himself or herself personally. Morales signed the proposed agreement as Arvy’s agent, and there was nothing in the record to demonstrate that Morales intended to bind himself personally. Furthermore, the two commission checks were made out to Arvy, not Morales. Thus, on this record, Delly did not demonstrate any basis for holding Morales liable.
Accordingly, the trial judgment was modified by vacating the portion that dismissed so much of the complaint as was asserted against Arvy Realty and by providing that Delly was awarded the principal sum of $9,000 as against Arvy.