Ben Farmer Realty, Inc. v. Owens

Citations: 649 S.E.2d 771; 286 Ga. App. 678; 2007 Fulton County D. Rep. 2181; 2007 Ga. App. LEXIS 768Docket: A07A0807

Court: Court of Appeals of Georgia; July 5, 2007; Georgia; State Appellate Court

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Ben Farmer Realty, Inc. appealed the trial court's denial of its motion for summary judgment and the grant of Darren Owens's motion for summary judgment regarding an "Exclusive Seller Listing Agreement" for selling Owens's house. The Agreement, effective from September 26, 2004, to April 15, 2005, granted Farmer Realty exclusive rights to market the property and entailed a six percent commission upon sale. Owens later decided to withdraw his property from the market, claiming it was underpriced, and notified Farmer Realty in October 2004. Despite removing the "for sale" sign, Farmer Realty asserted that the Agreement remained in effect. In March 2005, Farmer Realty presented a cash offer for the house at the agreed price, which Owens rejected, leading to the lawsuit for the commission of $28,794.

Owens contended that he had rescinded the Agreement prior to the buyer's procurement, prompting both parties to file cross-motions for summary judgment. The trial court ruled in favor of Owens, determining that the Agreement lacked termination clauses and was governed by the Brokerage Relationships in Real Estate Transactions Act (BRRETA). The court concluded that this Act allowed for "authorized termination" under general agency law, permitting the principal to revoke agency at will. Farmer Realty's appeal raised several issues, including allegations of legal errors in the trial court's interpretations and rulings regarding the applicability of BRRETA, the right to terminate the Agreement, and the calculation of damages, as well as asserting that its summary judgment motion should have been granted.

The case involves the interpretation of a real estate contract between Farmer Realty and Owens. The court emphasizes its role in construing and enforcing contracts as they are written, rather than creating new terms. Farmer Realty and the Georgia Association of Realtors argue that the contract was for a definite term, running from September 26, 2004, to April 15, 2005, and therefore Owens could not terminate it early. The court agrees, stating that the contract’s language is clear and unambiguous, negating the trial court's finding of ambiguity regarding termination rights.

The court outlines a three-step analysis for contract construction: first, determining if the contract language is clear; second, enforcing the contract as written if unambiguous; and third, resolving any ambiguity through rules of construction or factfinder if necessary. As the Agreement does not allow for early termination, the trial court's summary judgment favoring Owens is deemed erroneous.

Farmer Realty claims entitlement to damages equivalent to its commission, asserting it fulfilled its contractual obligations by procuring a buyer. The court supports this position, noting that in contracts for a specific term without early termination provisions, a broker is entitled to their commission if they meet their obligations. Since Farmer Realty procured a buyer willing to meet the contract conditions, it is entitled to the commission specified in the Agreement. Consequently, the court reverses the prior judgment.

Contract interpretation by courts is limited to construing the terms as written, without alteration. Established case law reinforces this principle, such as in Thornton v. Kumar and other cited cases, indicating that neither trial courts nor appellate courts can rewrite contracts. The excerpt also underscores general agency law, stating that agents are entitled to commissions once they fulfill their duties. Specifically, a property broker earns a commission by finding a purchaser who meets the stipulated conditions of the owner, as outlined in Georgia statutes OCGA 10-6-31 and 10-6-32.