Legal Question in Real Estate Law in California
Our brokerage has a signed listing agreement that states we get paid a brokerage commission should we find a buyer who is ready, willing, and able to purchase the property on the terms on the listing agreement. The Sellers told us to do a price reduction in an email signed by all parties to the trust but coming from an email address of only one member of the trust. We also have a saved voicemail from a member of the trust saying they would sell at that price. We have now given them three full price offers on the reduced price. They now are saying they do not want to sell. My team and I spent a ton of time, money, and effort on this. The offers are in the 7-8 million range. The total fee would be somewhere in the $200,000 range. 1) Do we have a case to collect commission? 2) Will the emailed reduction/voicemail suffice for the reduction on terms? 3) Will an attorney take this on a contingency? (There is an attorney�s fees provision in the agreement). 4) If we obtain a judgment can we put a lien on their properties? Any other advice is appreciated.
2 Answers from Attorneys
1) You certainly have the bare outline of a case. As you may imagine, whether it is an actual winning case depends on the details and available evidence that is admissible in court. 2) Maybe. Again, the devil is in the details, as well as the overall picture. 3) Maybe again. See 1) and 2) as to why. Attorneys go broke if they take long-shots on contingency; so the #1 factor in whether I or any attorney will take your case on contingency is the strength of the case. #1.01 is the defendant's ability to pay. In a commercial case like this, with an attorneys fees clause, it is common these days to agree on some form of hybrid hourly/contingency fee arrangement. With a very strong case and a defendant with adequate assets, however, I and other attorneys will take this kind of case on straight contingency. 4) Anyone who obtains a money judgment can record an abstract of judgment in the county recorder's office of any county in which the judgment debtor owns real property. That abstract is a form of lien. Depending on the equity in the property, homestead law applicability and certain exemptions, the creditor may be able to have the property sold under a writ of execution to satisfy the judgment. Although my main office is in San Francisco, I have practiced regularly in Napa County for over 20 years, and have family in Napa. So I am well prepared to assist clients in your area. If I can be of further assistance please let me know.
I disagree with Mr. McCormick, because I see problems with your post. You don't have the price reduction terms in a writing signed by the parties to be bound. You mention a trust, but it is not clear whether the e-mail is from beneficiary (who would not likely have any authority) or the trustee, or only one of the trustees. You also mention that you have a voicemail, but that does not satisfy the writing requirement.
A court looking at this is most likely going to point out the problem with the statute of frauds. (Civ. Code, sect. 1624, subd. (a)(4)) Real Estate brokers and agents are held to a higher standard than lay people, and are expected to know and comply with the statute of frauds.
The reason that I mention this, is that your listing agreement most likely contains terms with a specific listing price. You then modified that with the seller, or someone for the sellers, without modifying it in writing. With lay people, the doctrine of equitable estoppel would save a statute of frauds problem, but courts have held that real estate brokers are not entitled to use "equitable estoppel."
Secondly, I see a problem in that most listing agreements also contain a clause that condition payment of a broker's payment upon actual consummation of the transaction. That is usually described as the close of escrow. Again, this depends on the language of your listing agreement that is written and signed by the parties to be bound, not some magical oral promises somewhere floating out in the atmosphere.
As it stands right now, I see you as having no case at all, and running into danger of losing in court and paying a lot of attorney's fees to some clever attorney on behalf of whoever you sue.