Glenlakes Realty Co. v. Norwood

Citations: 721 So. 2d 174; 1998 Ala. LEXIS 144; 1998 WL 272714Docket: 1962119

Court: Supreme Court of Alabama; May 29, 1998; Alabama; State Supreme Court

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Glenlakes Realty Company and its associated defendants appeal a circuit court judgment favoring Thomas Norwood, seeking a reversal and remand for a new trial. Glenlakes Realty, a partnership including three corporations, purchased the Lakeview Golf and Country Club (LGCC) and surrounding residential lots in 1991, totaling approximately 665 acres after previous sales. In November 1991, Glenlakes Realty entered into an exclusive listing agreement with Norwood, which stipulated a commission for sales made within 180 days post-expiration if Norwood produced a willing buyer. In April 1992, the Sycamore Group expressed interest in purchasing the LGCC, leading to Glenlakes Realty initially declining but later entering a separate listing agreement with Sycamore in June 1992. Norwood, believing he held an exclusive listing, was unaware of this new agreement until informed by Watkins, Glenlakes Realty's general manager, who was later terminated. Despite the expiration of Norwood's agreement on January 1, 1993, he continued selling residential lots and received commissions, as contracts for these lots included sales commission provisions.

In January 1993, Sycamore identified Links-Corp as a potential buyer for the LGCC, leading to a facility tour in March. By June 1993, LinksCorp and Glenlakes signed a nonbinding letter of intent for the sale, while Norwood entered a new listing agreement with Glenlakes Realty for the remaining residential lots in Lakeview Estates. In September 1993, a purchase agreement was executed, requiring Glenlakes Realty to perform due diligence, which was carried out by Norwood without compensation. The sale closed in January 1994, resulting in a $232,000 commission paid to Sycamore, but Norwood received no commission. In February 1995, Norwood requested payment, which was refused, prompting him to file a lawsuit in January 1996 for breach of contract, fraudulent misrepresentation, suppression, conspiracy, tortious interference, and quantum meruit, claiming $290,000 in commission, $1,000,000 for mental anguish, and another $1,000,000 in punitive damages. 

The trial court denied the defendants' motion for summary judgment, and the case proceeded to trial, where the jury awarded Norwood $200,000 in compensatory damages. The defendants sought a post-verdict judgment as a matter of law, a new trial, or remittitur, but the court denied these motions and upheld the jury's verdict. The appellate court's review will focus on whether there was sufficient evidence to warrant jury consideration of Norwood's claims, particularly the breach of contract allegation, which stemmed from Norwood's assertion that his listing agreement included the right to sell the LGCC and that the defendants breached this agreement by withholding his commission.

Defendants argue for the trial court to grant a pre-verdict or post-verdict judgment as a matter of law (JML) in their favor regarding Norwood's breach of contract claim. They assert that the property description in the November 1991 listing agreement between Glenlakes Realty and Norwood excludes the LGCC, encompassing only residential lots in Lakeview Estates and undeveloped property, with the LGCC mentioned solely as a reference point. They claim that the reference to 820 acres is misleading, as Glenlakes Realty only purchased 665 acres, indicating that the LGCC was not included.

Defendants maintain that any ambiguity in the agreement should be interpreted against Norwood since he drafted it, and they emphasize that there was no intention to sell the LGCC at the time the agreement was created, citing Norwood’s lack of efforts to find a buyer. They argue that even if the listing agreement were construed to include the LGCC, they did not breach it, as Norwood failed to meet the necessary conditions to earn a commission—specifically, that the LGCC was sold to LinksCorp after the listing agreement expired on January 1, 1993, and he did not list LinksCorp as a prospective buyer.

Defendants contend that the exclusive listing agreement was not implicitly extended past January 1, 1993, despite Norwood receiving commissions for sales after that date, as those payments were governed by separate purchase contracts. They also highlight that a second nonexclusive listing agreement was signed on June 26, 1993, precluding any implied extension of the first agreement since both pertain to the same subject matter and express agreements take precedence over implied ones.

Citing Alabama law, they assert that real estate listing agreements must have a fixed expiration date and prohibit automatic extensions, reinforcing that Norwood's agreement could not extend beyond January 1, 1993, or June 26, 1993. Lastly, even if an implied extension were considered, it could not encompass the LGCC, as Norwood was aware prior to the expiration that Glenlakes Realty did not intend to pay him a commission on it, which negated any meeting of the minds regarding the extension.

Norwood asserts that his exclusive listing agreement with Glenlakes Realty from November 1991 included the LGCC, supported by consistent property descriptions in both the listing and a prior Wall Street Journal advertisement. He emphasizes that a marketing plan created after the listing also identified the property as 820 acres, implying LGCC inclusion. Norwood highlights that Harry Watkins, the general manager of Glenlakes Realty, signed the agreement with authority and confirmed his understanding that it included the LGCC. He disputes the defendants' claims that he solely drafted the property description, noting that it was collaboratively created by him and Watkins, thus arguing it should not be interpreted against him.

Norwood claims entitlement to a commission from the LGCC sale to LinksCorp, as negotiations occurred in June 1993 during his active sales authority. He argues that the original listing agreement was implicitly extended beyond its January 1, 1993 expiration due to continued performance by both parties, suggesting an implied contract existed that warrants consideration in his breach of contract claim. He contends that the necessity for a written extension was waived by the defendants' acceptance of his ongoing performance.

Regarding a second nonexclusive listing agreement from June 1993, Norwood argues it did not terminate the implied extension of the first agreement as they did not cover the same subject matter. In the event it did terminate the first agreement, he claims that the 180-day provision of the first listing would still apply to the LGCC sale. Alternatively, he posits that an additional express contract was formed after January 1, 1993, based on statements made by defendant Murray, asserting that a real estate broker's contract need not be in writing, thus creating a material fact issue regarding the existence of an oral contract post-expiration.

The November 1991 exclusive listing agreement between Glenlakes Realty and Norwood contains an ambiguous property description, particularly regarding the inclusion of the LGCC. Both parties contributed to the drafting, preventing ambiguity from being construed against Norwood. The determination of the contract's meaning is left to the trier of fact. However, even if the LGCC is included, Norwood did not present substantial evidence that he fulfilled the agreement’s requirements to earn a commission on its sale. He failed to list LinksCorp as a prospective purchaser before the January 1, 1993 deadline, and the sale's earliest date was September 1, 1993, after the stipulated period. Thus, as a matter of law, Norwood did not meet the contract conditions for a commission. Furthermore, he did not provide adequate evidence for his claims of implied extensions of the agreement, oral agreements, or fraudulent misrepresentation and interference by the defendants. All claims rely on the breach of contract claim, which has been deemed unviable, leading to the conclusion that the trial court erred in denying the defendants' motions for judgment as a matter of law (JML) both pre- and post-verdict.

Norwood presented substantial evidence supporting his claim for quantum meruit recovery for work performed for Glenlakes Realty following Watkins' termination as manager. Evidence suggested that Norwood was either unpaid or underpaid for this work, despite receiving a residential lot valued at approximately $13,000. Under Alabama law, when one party knowingly accepts the services of another, there is an implied promise to pay for those services. The jury must determine whether Glenlakes Realty owed Norwood compensation for his additional work, whether the lot was provided as compensation, and if so, whether it constituted sufficient payment. The trial court correctly denied the defendants' motions for judgment as a matter of law (JML) regarding this claim. However, the court erred in denying the defendants' JML motions concerning Norwood's claims of breach of contract, fraudulent misrepresentation, fraudulent suppression, tortious interference with contract, and conspiracy, leading to the reversal of the trial court's judgment based on the jury's general verdict. The case is remanded for a new trial on the quantum meruit claim. Additionally, it was noted that the June 1993 letter of intent, which Norwood argued was equivalent to a sales agreement, is unenforceable as it constituted merely an agreement to enter into an agreement, as established in prior Alabama cases.