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Maas v. Merrell Associates, Inc.
Citations: 13 Ark. App. 240; 682 S.W.2d 769; 1985 Ark. App. LEXIS 1737Docket: CA 84-18
Court: Court of Appeals of Arkansas; January 16, 1985; Arkansas; State Appellate Court
Melvin Mayfield, Judge, presided over an appeal concerning the dismissal of a real estate broker's suit to recover a commission split from another broker for the sale of a motel in Morrilton, Arkansas. The initial complaint was filed on October 16, 1980, with the appellee denying the claims. As the case approached trial on June 22, 1983, the appellant amended the complaint to state he was licensed as a real estate broker in Arkansas. According to Ark. Stat. Ann. 71-1502 (Repl. 1979), brokers must be licensed and state this in their complaints to recover commissions. The appellee motioned to strike the amendment due to its untimeliness, which was granted, leading to the dismissal of the case. On appeal, the appellant contended that the licensing requirement should not apply since the case involved a nonresident broker seeking a commission from an Arkansas broker for property sold in Arkansas. The court noted the legal clarity but found issues with the factual application. Citing Folsom v. Young, the court explained that merely referring a buyer did not qualify as engaging in real estate business in Georgia, thus not necessitating a license in that state. Supporting cases, including Bell v. United Farm Agency and others, reinforced this principle. The distinction was made between cases requiring licensed brokerage services in a state, like Meadows of Beautiful Bronson, and those involving out-of-state brokers assisting licensed brokers, as in Pokress v. Tisch Florida Properties, Inc. The court acknowledged that the appellant's cited cases supported his argument but ultimately focused on the specifics of the licensing requirement in the context of the appeal. In Circle Realty Co. v. Gottlieb, the Arkansas Supreme Court addressed the validity of a commission-sharing agreement between two licensed brokers, where one broker's involvement was questioned due to an out-of-state broker's participation. The court upheld that an out-of-state broker does not need an Arkansas license to enforce a contract, provided it doesn't require them to perform brokerage services in Arkansas. The relevant Arkansas statute prohibits unlicensed brokerage activities but allows for exceptions based on the specifics of the case. The appellant claimed to be an out-of-state broker during a motel sale, while also alleging residency and licensure in Arkansas. Confusion arose around these claims, particularly during a pre-trial hearing where the appellee's attorney indicated both brokers operated under the NBAA Association's guidelines for commission splitting. The court determined that factual ambiguities warranted further examination rather than dismissal of the case. It noted that the trial court erred by dismissing the appellant's complaint without resolving these factual disputes, thus reversing the dismissal and remanding the case for further proceedings. The issue of the setoff and counterclaim was deemed unnecessary for discussion at this stage.