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Daigle v. St. Laurent v. Maloney
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 1999 ME 107
Docket: Cum-98-143
Argued: April 6, 1999
Decided: July 9, 1999
Panel:WATHEN, C.J., and RUDMAN, DANA, SAUFLEY,{1} ALEXANDER, and CALKINS, JJ.
DAIGLE COMMERCIAL GROUP, INC.
v.
RAYMOND ST. LAURENT
v.
J.P. MALONEY AUCTION CO., INC.
DANA, J.
[¶1] Raymond St. Laurent appeals from a judgment of the Superior
Court (Cumberland County, Mills, J.) in favor of Daigle Commercial Group,
Inc., (Daigle, Inc.), a commercial real estate broker, on its action to recover
brokerage fees on the basis of promissory estoppel. St. Laurent also appeals
a summary judgment in favor of J.P. Maloney Auction Co., Inc., (Maloney,
Inc.) on St. Laurent's claim for contribution or indemnity with respect to
damages awarded Daigle, Inc. St. Laurent argues that the court erred (1) in
applying the doctrine of promissory estoppel to allow a commercial broker
to recover a brokerage fee, and (2) in granting a summary judgment for
Maloney, Inc. on St. Laurent's claim for indemnification or contribution. We
affirm the judgment.
[¶2] In May 1995, Roger Daigle, president of Daigle, Inc., signed a
non-exclusive listing agreement with David Green, the owner of
Meadowbrook Village Shopping Center in York. Daigle found a buyer,
St. Laurent, who purchased Meadowbrook from Green with an intention to
"flip," or re-sell, the property. St. Laurent and Daigle then entered an
exclusive right to sell agreement for Meadowbrook on September 14, 1995.
This agreement provided that Daigle, Inc. maintained a right to sell until
March 14, 1996. If Daigle, Inc. provided written notice to St. Laurent by
March 14, 1996, of the persons whom it had contacted and one of those
persons purchased the property before September 14, 1996, then Daigle,
Inc. would be entitled to a commission of $75,000. The agreement further
provided that if St. Laurent in "good faith" listed Meadowbrook by means of
an exclusive right to sell agreement with another real estate brokerage
agency after March 14, 1996, then the requirement to pay a broker's
commission to Daigle, Inc. would be void.
[¶3] In October 1995, Carl Glidden, owner of the anchor tenant at
Meadowbrook, terminated his lease. To find a new tenant, St. Laurent
entered into an exclusive right to lease listing agreement with Commercial
Properties, Inc., a real estate broker, but St. Laurent soon sought to
terminate that lease listing agreement and he asked for Daigle's assistance
in doing so. Daigle convinced Commercial Properties to release St. Laurent
from the lease listing agreement, and the agreement was terminated March
7, 1996. St. Laurent then urged Daigle to continue his attempts to sell the
Meadowbrook and to assist in finding tenants, and before the
Daigle-St. Laurent agreement terminated on March 14, 1996, St. Laurent
indicated to Daigle that he "had nothing to worry about in terms of [his]
commission," and that as long as St. Laurent and Daigle were working
together that St. Laurent "would protect [Daigle's] commission under any
circumstances."
[¶4] On March 11, 1996, just after the termination of the Commercial
Properties lease listing agreement and three days before the termination of
the Daigle-St. Laurent agreement, St. Laurent entered into an exclusive right
to lease listing agreement with The Kane Company, Inc. With respect to the
termination of the Daigle-St.Laurent agreement, Daigle testified that:
I asked Mr. St. Laurent for a new agreement and he indicated
that he was going to bring on Kane . . . to do the leasing and that
typically in the leasing agreements there is a clause for potential
sale and he wanted to keep his options open, that I had nothing
to worry about in terms of my continued work at Meadowbrook,
that I would always be protected and that I didn't have to worry
about a commission, that he would never go around me, and that
he wanted to keep his options open until the leasing took place
so that the shopping center would be leased up and it would be
attractive to buyers.
[¶5] Daigle received further assurances from St. Laurent after Daigle,
pursuant to a separate agreement with St. Laurent, attempted to sell
St. Laurent's mobile home park, Duck-A-Way. Daigle produced a potential
purchaser of Duck-A-Way, but St. Laurent rejected the offer and found a
buyer himself. Daigle, as the exclusive broker for the sale of Duck-A-Way,
contended that St. Laurent owed him a $35,000 commission on the sale. To
settle the dispute, Daigle and St. Laurent reached an agreement:
(1) St. Laurent would pay Daigle a commission of $15,000, (2) Daigle, at
St. Laurent's urging, would continue to attempt to sell Meadowbrook even
though the brokerage contract had expired, and (3) St. Laurent would
"make up the difference" in the Meadowbrook transaction.
[¶6] On March 28, 1996, after the termination of the
Daigle-St. Laurent agreement, Daigle and David Andrews, the eventual
purchaser of Meadowbrook, entered into a non-disclosure agreement for
Meadowbrook. In April, pursuant to that agreement, Daigle sent information
to Andrews, including financial information about Meadowbrook and a
professional summary appraisal. He engaged in discussions with Andrews,
exchanged phone calls, and attempted to schedule a showing and meeting
between St. Laurent and Andrews. Andrews drove by Meadowbrook on his
own to view the property. According to Daigle, however, St. Laurent did not
seem interested in pursuing Andrews as a potential purchaser.
[¶7] On April 22, 1996, St. Laurent entered into an exclusive right to
sell listing agreement with Kane. Daigle was unaware of this agreement --
he was only aware of the Kane lease agreement -- and he therefore
continued to ask St. Laurent to enter into a brokerage agreement.
St. Laurent refused, but he did offer to exclude Daigle's prospects from the
Kane lease agreement and Daigle therefore prepared a letter to St. Laurent
listing Andrews as a potential buyer. St. Laurent then listed Andrews as an
exclusion to Kane's exclusive right to sell agreement (not the lease
agreement) providing that if St. Laurent sold Meadowbrook to Andrews,
St. Laurent would not owe Kane a sales brokerage commission.
[¶8] On July 17, 1996, Daigle met with St. Laurent and again asked
him to renew the exclusive right to sell agreement, but St. Laurent refused.
Daigle testified that after he met with St. Laurent he was "being reassured
. . . by Mr. St. Laurent that I did not have a thing to worry about on my
commission, that he would never go around me, we had worked together for
too long for him to consider doing anything like that." Daigle testified that
after July 17, 1996, the level of contact between him and St. Laurent
"wane[d] off" because he was "discouraged and disappointed" that
St. Laurent was unwilling to sign an exclusive right to sell agreement.
[¶9] In late June or early July 1996, Andrews came in contact with
Joseph Maloney of Maloney, Inc., a commercial broker, and they discussed a
possible purchase of Meadowbrook. According to St. Laurent, Maloney then
contacted St. Laurent with information that he had engaged in discussions
with a "potential buyer," but he did not reveal the potential buyer's name.
On July 18, 1996, St. Laurent -- after terminating the Kane exclusive sales
listing agreement on July 10 -- entered into an exclusive sales listing
agreement with Maloney, Inc. Maloney testified that he told St. Laurent that
Andrews was the potential purchaser only after the listing agreement was
signed.
[¶10] On July 23, 1996, St. Laurent and Andrews signed a purchase
and sale agreement for Meadowbrook. Maloney received a $72,000
commission. St. Laurent did not pay Daigle a commission.{1}
[¶11] In March 1997, Daigle, Inc. filed a complaint against St. Laurent
alleging three counts: breach of contract, unjust enrichment, and
promissory estoppel. St. Laurent answered the complaint and filed a
third-party complaint against Maloney, Inc. for contribution and indemnity.
In December 1997, the court granted a summary judgment in St. Laurent's
favor on Daigle, Inc.'s breach of contract claim. In March 1998, the court
entered a summary judgment in favor of Maloney, Inc. on St. Laurent's
third-party claim for contribution or indemnity.
[¶12] Following a bench trial, the court rejected Daigle, Inc.'s claims
for breach of an oral contract and unjust enrichment, but entered judgment
in favor of Daigle, Inc. on its promissory estoppel claim. The court
concluded:
[Daigle, Inc.] has proved by a preponderance of the evidence that
[St. Laurent] continually told Roger Daigle that he should
continue his efforts to market and lease Meadowbrook and that
if he were successful in finding a buyer, he would receive a
commission. [St. Laurent] reasonably expected that Roger Daigle
would continue his efforts on behalf of [St. Laurent] and, in fact,
Roger Daigle did continue those efforts. [St. Laurent's] promise
should be enforced.
The court granted a judgment of $75,000 for Daigle, Inc. St. Laurent
appealed the judgment and the court's order granting a summary judgment
in favor of Maloney, Inc.
I. PROMISSORY ESTOPPEL
[¶13] We review the court's findings of fact for clear error. See
Northeast Harbor Golf Club, Inc. v. Harris, 1999 ME 38, ¶ 24, 725 A.2d
1018, 1025. The application of the law to the facts as found by the court is
reviewed de novo. See Paffhausen v. Balano, 1998 ME 47, ¶ 5, 708 A.2d
269, 270-71.
[¶14] We have adopted the Restatement formulation of the doctrine of
promissory estoppel:
A promise which the promisor should reasonably expect to
induce action or forbearance on the part of the promisee or a
third person and which does induce such action or forbearance
is binding if injustice can be avoided only by enforcement of the
promise. The remedy granted for breach may be limited as
justice requires.
See Panasonic Communications & Sys. Co. v. State of Maine, 1997 ME 43,
¶ 17, 691 A.2d 190, 195-96; Restatement (Second) of Contracts § 90(1)
(1981). Promissory estoppel applies to promises that are "otherwise
unenforceable." See Panasonic Communications, 1997 ME 43, ¶ 17, 691
A.2d 190, 196. Promissory estoppel, however, cannot be applied to avoid
the statute of frauds requirement that all employment contracts for more
than one year must be in writing. See Popanz v. Peregrine Corp., 1998 ME
95, ¶ 6, 710 A.2d 250, 252; Stearns v. Emery-Waterhouse Co., 596 A.2d 72,
74-75 (Me. 1991).
[¶15] Here, St. Laurent argues that Daigle, Inc. cannot assert the
doctrine of promissory estoppel to avoid the statutory requirement that
certain brokerage contracts be in writing. See 32 M.R.S.A. § 13177 (1999).
Title 32 M.R.S.A. § 13177 provides in relevant part:
All exclusive right-to-sell contracts, exclusive agency contracts
and any nonexclusive contract relating to one to 4 family
residential properties shall be in writing, signed by the person
to be charged and shall specifically identify the date upon which
the contract will expire. If the parties to the contract desire to
continue the contract, a new contract must be executed.
St. Laurent argues that this statute applies because if his promises to Daigle,
Inc. created an agreement, it was an "exclusive agency" agreement or a
continuation of a contract that requires a writing, and promissory estoppel
cannot be asserted to avoid this statutory requirement. Because St.
Laurent's promise did not require a writing pursuant to section 13177, we
conclude that the court did not err when it applied the doctrine of
promissory estoppel.
[¶16] An exclusive right to sell is when an owner "promises, in effect,
that during the life of the contract he will not sell the property to any
purchaser not procured by the listing broker." Paul G. Creteau, Maine Real
Estate Law 353 (1969). An exclusive right to sell makes the broker the sole
agent for the sale of the property, id., and it "forbids the owner from selling
his property without liability while the property is listed with the broker
even if the latter cannot find a buyer," Bourgoin v. Fortier, 310 A.2d 618,
620 (Me. 1973). On the other hand, a nonexclusive right, commonly
referred to as an open listing, is characterized as follows:
[A]n open listing merely amounts to an invitation to the broker
to attempt to find a buyer. It is a "hiring" to be sure, but it is of
the most flimsy type; it does not create a contractual
relationship but approximates, rather, an offer by the owner
which may be withdrawn by him at any time. And it leaves the
owner free to list the property with other brokers, or to make a
sale himself. In fact the very reason an owner gives an open
listing is usually to afford himself the opportunity of selling the
property through his own efforts, while at the same time
keeping the sale "open" to the efforts of other brokers.
Creteau, Maine Real Estate Law 350. Here, the court did not expressly
determine the type of listing agreement that St. Laurent's promises to
Daigle, Inc. created.
[¶17] Because St. Laurent's promises created an "open" or
nonexclusive listing that does not require a writing, section 13177 does not
apply. A real estate expert testified that St. Laurent's promise created an
"open listing," which is common in commercial real estate transactions
where brokers often operate on verbal agreements. See 32 M.R.S.A.
§ 13177; Comm. Amend. A to L.D. 1200, No. S-224 (109th Legis. 1979). In
this case, St. Laurent sought and utilized multiple brokers to sell
Meadowbrook, consistent with an "open listing" which generally provides
that the owner and multiple brokers -- not just one broker -- will pursue
sales opportunities. See Creteau, Maine Real Estate Law 350. For example,
St. Laurent told Daigle that he wanted the option to sell Meadowbrook
through Kane if the opportunity arose, and St. Laurent later listed Andrews
as an exclusion to Kane's exclusive right to sell agreement. Because
St. Laurent's promises were consistent with an open listing, a written
contract was not required under section 13177 and the court's application
of promissory estoppel did not frustrate the writing requirement. See 32
M.R.S.A. § 13177.
[¶18] Given that section 13177 does not preclude the application of
promissory estoppel, the court did not err when it applied promissory
estoppel to enforce St. Laurent's promise. St. Laurent made promises which
he should have reasonably expected to induce action by Daigle, Inc. See
Panasonic Communications, 1997 ME 43, ¶ 17, 691 A.2d 190, 195-96;
Restatement (Second) of Contracts § 90(1) (1981). For example, the court
found that in mid-March 1996 -- around the time the Daigle-St.Laurent
agreement terminated -- St. Laurent told Daigle to continue his efforts to
sell Meadowbrook and to lease the space vacated by the anchor tenant. In
April 1996, St. Laurent told Daigle that he would continue to use Daigle to
sell Meadowbrook and that Daigle "would realize on the sale of
Meadowbrook anything that he lost on the sale of Duck-A-Way." The court
further found that St. Laurent assured Daigle that he would be "protected"
regarding any sale of Meadowbrook and that St. Laurent "would not go
around" Daigle. Daigle reasonably relied on these promises to his detriment
-- he pursued Andrews as a potential purchaser, exchanged telephone calls
and had several discussions with Andrews, showed the property to several
prospects and attempted to arrange a showing of Meadowbrook to Andrews,
and provided Andrews with financial information and a professional
summary appraisal. See Nappi v. Nappi Distrib., 1997 ME 54, ¶ 9, 691 A.2d
1198, 1200 (promise enforceable on theory of promissory estoppel where
promisee made substantial improvement on land in reliance on promise to
convey the land). Consequently, the court did not err when it concluded
that promissory estoppel required the enforcement of St. Laurent's
promise.{2}
II. DAIGLE'S PERFORMANCE AS BROKER
[¶19] The court characterized the promise as follows: "St. Laurent
continually told Roger Daigle that he should continue his efforts to market
and lease Meadowbrook and that if he were successful in finding a buyer, he
would receive a commission." St. Laurent argues that even if this promise is
enforceable based on a theory of promissory estoppel, Daigle was not the
"effective and producing cause" of the sale to Andrews and he therefore
failed to "find a buyer" as contemplated by St. Laurent's promise. We
disagree.
[¶20] The court never explicitly determined if either Daigle or
Maloney was the effective and producing cause of the sale. Because
St. Laurent failed to move for further findings of fact pursuant to M.R. Civ.
P. 52 on this issue, we may assume that the court found that Daigle was, in
fact, the effective and producing cause of the sale and we review the record
to determine whether this finding is supported by the evidence in the
record. See Estate of Saliba v. Dunning, 682 A.2d 224, 226 (Me. 1996);
Smile, Inc. v. Moosehead Sanitary Dist., 649 A.2d 1103, 1106 (Me. 1994).
[¶21] The court's implied finding that Daigle was the effective and
producing cause of the sale was not clearly erroneous. See Bedard v. Pellon,
606 A.2d 205, 207 (Me. 1992). Daigle introduced Andrews to the
Meadowbrook property in March 1996 and entered into an non-disclosure
agreement for its sale. In April 1996, Daigle sent information regarding
Meadowbrook to Andrews, including financial information and a professional
summary appraisal. Daigle engaged in numerous discussions with Andrews,
exchanged a number of phone calls with him to discuss Meadowbrook, and
communicated Andrews's interest to St. Laurent. In May 1996, when
St. Laurent expressed doubts about Andrews's ability to make a purchase,
Daigle investigated Andrews's financial background, communicated that to
St. Laurent, and convinced St. Laurent that Andrews was a viable candidate
to purchase Meadowbrook. During this time, Andrews viewed the property
on his own even though Daigle offered to show it to him. About two months
later, Andrews purchased Meadowbrook. We conclude that the court did
not err in its assumed finding of fact that Daigle was the effective and
producing cause of the sale.
III. DAMAGES
[¶22] St. Laurent argues that the judgment for Daigle, Inc. is
excessive. The court awarded damages of $75,000, the amount of the
brokerage fee set forth in the written agreement. We conclude that the
court did not err in awarding damages.
[¶23] The court's award of expectation damages is reasonable. "A
promise binding under [promissory estoppel] is a contract, and full-scale
enforcement by normal remedies is often appropriate." Restatement
(Second) of Contracts § 90 cmt. d (1981). Here, the court's award of the
$75,000 brokerage fee represented Daigle's expectation damages, and this
measure of damages was not error.
IV. CONTRIBUTION AND INDEMNIFICATION
[¶24] St. Laurent argues that the court erred in granting a summary
judgment on St. Laurent's claim in favor of Maloney, Inc. for equitable
indemnification or contribution with respect to any brokerage fee owed
Daigle, Inc. We disagree.
[¶25] Both the Maloney-St. Laurent agreement and the
Daigle-St. Laurent agreement provided that the broker could enter into a
co-brokerage agreement. In his opposition to the summary judgment,
St. Laurent alleged, inter alia, that (1) when the Daigle-St. Laurent
agreement was in force, Roger Daigle informed Maloney that Daigle, Inc. was
listing Meadowbrook and encouraged a "co-brokerage agreement,"
(2) St. Laurent listed the property with Maloney after the Daigle-St. Laurent
agreement expired, and (3) Maloney failed to identify Andrews's identity to
St. Laurent even though Maloney knew that Andrews was already familiar
with Meadowbrook. Although St. Laurent conceded that Maloney did not
have any fault or commit misconduct, he alleges that Maloney "was on notice
of facts suggesting that Daigle might have and assert a competing claim for a
commission, which facts include . . . the existence of Daigle's prior listing,
Daigle's invitation for Maloney to co-broke, and Mr. Andrews' preexisting
familiarity with Meadowbrook." On these facts, the court granted a
summary judgment for Maloney, Inc.{3}
[¶26] The doctrine of equitable contribution requires that when
parties assume a common obligation, those parties must share equally that
obligation and burden. See Bragdon v. Worthley, 155 Me. 284, 288-89, 153
A.2d 627, 629-30 (1959). Indemnity is appropriate "to do justice within
the law so that one guilty of an active or affirmative act of negligence or
intentional act will not escape liability, while another whose fault was only
technical or passive assumes complete liability." Northeast Bank of Lewiston
& Auburn v. Murphy, 512 A.2d 344, 351 (Me. 1986) (quoting 41 Am. Jur. 2d
Indemnity § 20, at 706 (1968)).
[¶27] The court did not err in entering a summary judgment on
St. Laurent's claims against Maloney, Inc. First, with respect to the claim
for contribution, no common obligation existed between St. Laurent and
Maloney, Inc. to require Maloney, Inc. to share any burden or liability arising
to Daigle. See Bragdon, 155 Me. at 288-89, 153 A.2d at 629-30. To the
extent that St. Laurent alleges that a common obligation existed between
Maloney, Inc. and Daigle, such a common obligation would not give rise to a
claim for contribution by St. Laurent. Second, with respect the claim for
indemnity, Maloney did not commit an affirmative act of negligence that
gives rise to a duty to indemnify -- Maloney's knowledge that St. Laurent and
Daigle once had a listing agreement and Maloney's failure to reconcile the
possible conflict did not create such a duty. See Northeast Bank of Lewiston
& Auburn, 512 A.2d at 351. Moreover, the co-brokerage provisions in the
contracts here only permit the broker to arrange a co-brokerage agreement,
these provisions do not require the broker to indemnify another broker.
See id. Consequently, the court did not err when it granted a summary
judgment in favor of Maloney, Inc.
The entry is:
Judgment affirmed.
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