May 24—INDIANAPOLIS — The Indiana Court of Appeals affirmed, reversed and remanded the case of a real estate broker on a breach-of-contract claim against a former owner of the Yule Golf Course in Alexandria.
All elements of the appeal brought before the court by businessman Dale K. Rinker against Casual Lifestyles Realty were decided in favor of the seller's broker. The civil suit originated in the trial court of Madison County Circuit Court 6 Judge K. Mark Dudley.
At issue were whether Rinker owed the broker a remainder of its commission, whether the broker was negligent in suggesting the buyer and whether Rinker is liable for the broker's attorney fees.
"Thus, giving the words of the Listing Contract their plain and ordinary meanings, as we must, it is clear that the parties did not intend that payment of the commission be contingent upon, or otherwise tied to Rinker's actual receipt of the purchase price, and no reasonable person would interpret the above section of the contract otherwise," wrote Judge L. Mark Bailey in the appeals court's 23-page memorandum decision filed May 17.
"While Rinker may have a claim against Buyer for its breach of the Contract for Conditional Sale of the Real Estate and/or the Purchase Agreement, he has no equitable claim against the Broker, which did everything required of it under the plain terms of the Listing Contract."
Rinker and Casual Lifestyles Realty entered into the one-year exclusive listing contract in October 2015. About a year later, Rinker entered into an $800,000 purchase agreement with Jeffrey D. Adams.
As part of the agreement with the broker, Rinker agreed to pay $14,000 in commission upon signing of the contract on Oct. 5, 2016, and additional amounts of $14,000 on Oct. 5, 2017, and $28,000 on Oct. 5, 2018. Rinker made the first $14,000 payment but made none of the remaining payments, according to the appeals court's opinion.
Casual Lifestyles Realty filed the breach-of-contract complaint against Rinker on Feb. 10, 2020, alleging he owed $42,000 in commission fees, plus interest, attorney fees and costs.
Rinker, in turn, filed the defense that Adams had paid nothing toward the purchase beyond $500 in earnest money. Rinker also filed a counter-claim against the real estate broker, alleging negligence in suggesting sale of the property to Adams and failing to properly investigate his financial condition to determine his ability to buy the golf course, which had been unused for several years.
On July 13, 2020, Casual Lifestyles Realty moved for summary judgment on its claim and Rinker's counter-claim. On Sept. 14, Rinker responded to the broker's motions and filed a cross-motion for summary judgment.
On Oct. 12, 2020, Dudley issued an order granting Casual Lifestyles Realty's motions for summary judgment on the grounds that Rinker breached the commission agreement and denied Rinker's motion for summary judgment. However, Dudley also denied the broker's motion for attorney's fees.
The appeals court started its review by determining whether there were any ambiguities in the listing contract.
"Contrary to the trial court's conclusion, the language in the Listing Contract is unambiguous," the appeals court ruled.
Though the contract was specific about the terms under which the property could be sold, Rinker accepted a conditional sales contract.
The appeals court disagreed with Rinker's contention that the remaining $42,000 was due only if Adams paid the full purchase price as he had agreed. Additionally, the court said the broker had earned its commission as a matter of law, based upon the provisions of the agreement.
"That argument is contrary to the plain and ordinary meaning of the words of the contract itself," the appeals court said. "The Listing Contract states in relevant part in section B that Broker's commission 'is solely a matter of negotiation between Broker and Seller,' and 'is not fixed [or] controlled ... by ... any person not a party to the contact.' Obviously, the Buyer was not a party to the Listing Contract; therefore, what the Buyer did or did not do is irrelevant to Broker's entitlement to is commission under the listing contract."
According to the appeals court, though the broker has a duty to share information, such as the buyer's financial situation if it's known, Rinker provided no evidence that Casual Lifestyles Realty's officials had any knowledge of Adams' financial situation.
The appeals court also said Casual Lifestyles Realty clearly prevailed in the trial court and is due attorneys fees from Rinker, reversing Dudley's initial decision.
Follow Rebecca R. Bibbs on Twitter at @RebeccaB_THB, or call 765-640-4883.