Legal Question in Real Estate Law in California
Procuring Cause
What legal stance can a Broker take under the following situation?
Broker spent 3 years with a developer on sub division development and financing. Private Lender has now decided that the broker whom they have paid at different stages, does not deserve any more compensation. They told the broker that it is ''Thier deal'' now and have said take it or leave it. The compensation and the way it was to be distributed was spelled out in writing up front when all the parties were at the table, and the developer agreed to all of the terms along with the lender. He still does, but the lender is now stating that they feel the broker shouldn't be paid. The Broker has all the documentation,and is the one who introduced the client to the private party lender. The lender is charging the buyer points and interest and has decided that they were going to renig on thier agreement to the buyer and now instead of the buyer buying back his own lots at $80k per lot (agreed in writing) the lender has now stated he has to buy them back at $150K or loose his sub division. I would be interested in speaking with someone who specializes in this area. Please feel free to call me or email me@ (530) 722-9142 office
(530) 510-0242 Cell
1 Answer from Attorneys
Re: Procuring Cause
I can imagine at least two possible theories upon which to prevent a "commissiondectomy" being performed on you. The first is that your rights may be established by contract. There is a legal principle that all of the agreements and related writings between the parties to a transaction or arrangement can be construed together to determine whether a written or partially written contract exists, and also to deduce the terms of such contract. Here, I think if there were a single, fully integrated agreement between the parties that clearly was being breached, you wouldn't have to ask this question, or you would ask it differently. You may have a case for breach of contract based on an understanding of the parties that can be found by taking the documentation as a whole.
The second possibly-viable concept that comes to mind is partnership law. Sometimes it is possible to show that parties working together on a deal are partners, notwithstanding that no really specific contract between them has been made and breached. Further, the duties owed by partners to each other are of a higher order than those arising under an ordinary contract. Partners are fiduciaries of one another and of the partnership.
Other theories of recovery may also exist, e.g. theories based upon business torts such as interference with contract and interference with prospective business advantage; misappropriation of trade secrets; or possibly even conversion and fraud.
I will try to reach you at one or the other of the numbers given within a day or two, after you have had a chance to read my response and any others you may receive. Note my contact in the footer and links provided. I practice mainly in the North Bay area, but also have clients as far away as Portola, Santa Cruz and Monterey.
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