Court: California Court of Appeal; December 22, 1952; California; State Appellate Court
LeRoy D. Owen appealed a judgment of dismissal following the sustaining of a demurrer by National Container Corporation of California to his third amended complaint without leave to amend. Owen, a real estate broker, sought $15,000 for services rendered under an express contract and for the alleged value of those services. The action against National Container's parent company was dismissed after service of summons was quashed. The demurrer was based on the assertion that the contract for Owen's services, related to the purchase of real estate, was not in writing, violating California Code of Civil Procedure § 1973 and Civil Code § 1624.
Owen's complaint included 37 attached communications between him and the defendant corporations, detailing his efforts over three years to find a suitable factory site. He submitted a specific 5.5-acre parcel along with plans and cost estimates, and he made alterations as requested by the defendants. Owen claimed that the defendants used his suggestions in constructing a building on the site, which he alleged cost $300,000. He limited his claim to a commission of 5 percent based on the building's cost, without seeking compensation for negotiating the property sale.
Owen contended that the agreement did not require a written form and that his compliance entitled him to compensation. The defendant, however, argued that Owen's role was merely that of a broker and that a written contract was necessary for the services he provided, asserting that the communications did not establish a formal employment or compensation agreement.
The writings presented by the plaintiff are deemed insufficient to establish a formal employment agreement or to warrant compensation for services rendered. The trial court determined that the correspondence primarily outlined the nature of the services rather than constituting an enforceable agreement. The plaintiff's claim depended on a broader interpretation of the complaint, suggesting that compensation was contingent upon the successful construction of a building on a site he identified. However, the assertion that the defendants confirmed this agreement in writing lacks substance, as it does not demonstrate that the writings formed a contract.
Legal precedents indicate that an employment agreement to negotiate property purchases requires written documentation to be valid. While a valid oral agreement for specific services could exist, merely providing information about available factory sites does not necessitate a written form. The complaint did not allege an agreement that required writing, nor did the attached correspondence indicate any distinct employment arrangement. Although the plaintiff engaged in negotiations regarding a specific site, there was no indication in the complaint that he acted as the defendants' agent in the property acquisition. Therefore, absent an express agreement, there can be no implied obligation for the defendants to compensate the plaintiff for his services, which appear to have been aimed at earning a commission from the property owner rather than representing the defendants.
Plaintiff alleges an agreement to locate a site and provide additional services related to the construction of a building, which was claimed to have been established around August 15, 1946. Defendant argues it is unusual for a broker to earn a commission solely for identifying a property. The court finds that the agreement is not subject to the statute of frauds, suggesting that even if the correspondence indicates more extensive efforts by plaintiff, it does not constitute a written agreement necessary for an employer-employee relationship. The correspondence does not supersede any prior agreements, and plaintiff's actions do not contradict the alleged agreement. The trial court may determine the existence and nature of the agreement based on evidence presented. If a written agreement is deemed necessary for certain services but not others, questions regarding severability and compensation could arise. The court references the case of Marks v. Walter G. McCarty Corp., where a broker was allowed to recover a commission for certain services despite a lack of written agreement for others. Ultimately, if it is found that plaintiff's services were merely incidental and there was no express payment agreement, plaintiff's claims will fail. The appeal against various orders sustaining demurrers and quashing service against National Container Corporation is dismissed as nonappealable.
Appellant has waived the right to contest the order quashing service of process. The judgment is reversed regarding National Container Corporation of California but affirmed for National Container Corporation. From August 15, 1946, to February 17, 1950, the plaintiff fulfilled all obligations under the agreement with defendants, detailed in attached exhibits. As a result of the plaintiff's services, defendants purchased a 5.5-acre parcel for their Los Angeles factory around February 8, 1950, subsequently constructing a factory building and making improvements at a cost of $300,000. The defendants utilized many of the plaintiff's suggestions and plans developed under their agreement. According to Exhibit A, the plaintiff is entitled to a 5% commission on the improvements, amounting to $15,000, which is now due since the real estate purchase and construction were completed. The plaintiff's engagement began with a contract on August 15, 1946, to locate an industrial site, including conducting surveys and negotiating with Central Manufacturing District, Inc. for the factory. Compensation was agreed at 5% of the improvement costs, as confirmed by the written agreements identified as Exhibits A to LL. Dan D. Froehle is identified as the agent and employee of the plaintiff throughout the relevant period.
