The case involves Pollard. Bagby, Inc. v. Pierce Arrow, L.L.C. III, regarding the obligation of a new property owner to pay commissions to a leasing agent for tenants procured by a previous owner. Pollard acted as the leasing agent for Willard R. Simmons, who owned an apartment building and entered into lease agreements with tenants that included a provision for a 6% monthly commission to Pollard for the duration of the leases, including any renewals or new leases. Importantly, the agreement stated that any sale or transfer would not affect Pollard's right to commissions unless the new owner assumed the obligation through a signed agreement.
After Simmons sold the property to Pierce Arrow, he did not secure a release from Pollard as required by the agreement. Pierce continued to pay Pollard commissions until the expiration of each original lease but ceased payments after entering into new leases with the same tenants. Pollard filed a declaratory judgment action asserting entitlement to commissions for these new leases based on the original procurement of the tenants.
The trial court ruled against Pollard, stating that the obligation to pay commissions only applied to leases between the tenants and Simmons and not to any new leases with Pierce. It concluded that the term "new lease" in the contract did not encompass leases signed between the tenants and a new lessor, thus denying Pollard's claim. Pollard appealed, arguing that Simmons had assigned the leases to Pierce and that Pierce assumed Simmons's obligations, thereby extending the commission payments to the new leases. Pollard also maintained that Simmons remained jointly liable for commissions due to the lack of a release.
Pierce and Simmons argue that the lease terms do not permit Pollard to receive commissions after a new lease is executed with an existing tenant. Alternatively, they claim the lease provisions are ambiguous and should be interpreted against Pollard. The trial court previously ruled that Simmons assigned the leases to Pierce when he sold the property, a ruling not contested by Pierce and Simmons, thus establishing it as law for this case. An assignee inherits the rights and obligations of the assignor, meaning Pierce assumed Simmons's responsibilities under the leases.
The analysis focuses on the clear language of the contracts. Since the terms are unambiguous, their interpretation is a legal question. Paragraph 15(A) explicitly requires the lessor to pay commissions on all rental payments from tenants procured by Pollard, extending through any renewals or new leases. It also states that Pollard's right to commissions remains intact despite property sales or transfers. Therefore, Simmons is obligated to pay commissions for tenants he secured, and this obligation persists even if a tenant signs a new lease. Simmons did not secure a release from this obligation upon selling the property, maintaining his liability, which also extends to Pierce as the assignee.
Pierce and Simmons further argue that lease provisions for commissions ended with the property sale, citing a purchase agreement stating the property would be conveyed free of management agreements. This argument is rejected as the leases specify that commissions are for Pollard's services in securing leases, not for management services. Consequently, the court reverses the trial court's judgment in favor of Simmons and Pierce, ruling in favor of Pollard, and remands the case to determine owed damages and attorney's fees.
