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Holden v. Weinschenk
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 1998 ME 185
Docket: Cum-97-715
Submitted
on Briefs: June 15, 1998
Decided: July 24, 1998
Panel: WATHEN, C.J., and ROBERTS, CLIFFORD, RUDMAN, and DANA, JJ.
DONNA HOLDEN et al.
v.
FREDERICK WEINSCHENK et al.
DANA, J
.
[¶1] Third-party defendants Frederick and Amy Weinschenk appeal
from the summary judgment entered in the Superior Court (Cumberland
County, Cole, J.) finding them responsible for the real estate commission
owed on the sale of their residence to third-party plaintiffs Donna and Jeff
Holden. The Weinschenks contend the court exceeded its discretionary
authority when it denied them an opportunity to amend their pleadings and,
in any event, they have raised genuine issues of material fact so as to
preclude the entry of a summary judgment. We disagree and affirm the
judgment.
I.
[¶2] On November 26, 1995, the Holdens entered into an exclusive
buyer agreement with Paul Deshaies, a real estate broker with Properties By
The Sea, that provided they would pay the realtor six percent of the
purchase price of any property they contracted to purchase before May 26,
1996. On the same day, Donna Holden also signed an exclusive right to sell
listing agreement with Properties By The Sea for the sale of her own
residence. On the very next day, November 27, 1995, after Deshaies
showed Donna Holden a house owned by Amy Weinschenk, Donna Holden
and Amy Weinschenk executed a purchase and sale contract for the
property. The contract contemplated a purchase price of $350,000 and was
contingent on the Holdens selling their own house within sixty days of the
contract. The Holdens did not sell their home within the time provided,
and the contract expired by its terms on January 30, 1996. On February 8,
1996, Donna Holden terminated her exclusive listing agreement with
Properties By The Sea. Apparently, the Holdens believed the termination of
the listing agreement also terminated the buyer agreement. Shortly after
the purchase and sale contract was terminated, the Holdens and
Weinschenks engaged in further negotiations regarding the sale of the
Weinschenks' residence, and Donna Holden and Amy Weinschenk entered
into a second purchase and sale contract on February 19, 1996, without any
further involvement by Deshaies. The parties added a handwritten
paragraph to the preprinted contract that stated: "The seller agrees to pay
any and all commissions owed on this transaction." Amy's husband Ric, who
conducted the negotiations with the Holdens, testified in his deposition as
to his understanding of this contract provision: "If any commission were
due Mr. Deshaies on the sale of the Holden house or of my house that I
would pay it, that's what I had agreed to." By a deed dated June 28, 1996,
Amy Weinschenk transferred the property to Donna Holden for $350,000.
[¶3] When the Holdens refused Deshaies's request for the
commission provided for in his exclusive buyer agreement, Deshaies sued
the Holdens, seeking six percent of the $350,000 purchase price. The
Holdens defended the suit by alleging the termination of the listing
agreement relieved them of their obligation to pay any commission, and they
filed a third-party complaint against the Weinschenks, claiming that if any
commission in fact was owed, the purchase and sale agreement required the
Weinschenks to pay it.{1} In their answer to the complaint, the Weinschenks
generally denied any responsibility for the commission. Deshaies and the
Holdens filed motions for a summary judgment. The Weinschenks' response
to the Holdens' motion asserted that because they agreed the Holdens were
entitled to a judgment as a matter of law against Deshaies, judgment should
also be entered in their favor. They further claimed that if a summary
judgment was not entered in favor of the Holdens, "it would be
inappropriate to enter judgment on the Third-Party Complaint" and
reserved the right to supplement their response. They did not defend
against the Holdens' motion directly by filing a statement of material facts,
nor did they file any affidavit contradicting the Holdens' statement of facts.
[¶4] At the hearing on the motions for summary judgment, the
Holdens withdrew their argument that the termination of the exclusive
listing agreement also terminated their exclusive buyer agreement with
Deshaies, but argued that because the closing on the house did not occur
until July 2, 1996, which was after the May 26 expiration of the exclusive
buyer agreement, they were not responsible for payment of the commission.
The court (Saufley J.) disagreed and held that the obligation to pay the
commission was expressly determined by the date the property was
"contracted to be purchased," which in this case was February 19, 1996,
several months before the expiration of the exclusive buyer agreement. The
court accordingly entered judgment in favor of Deshaies against the Holdens.
The court indicated that the clause in the February 19 contract for sale that
provided Amy Weinschenk would pay "any and all commissions owed on this
transaction" would ordinarily entitle the Holdens to a summary judgment
against the Weinschenks, but the court allowed the Weinschenks time to file
a supplemental opposition to the Holdens' motion based on their claim that
they were surprised by the Holdens' withdrawal of their argument that the
exclusive buyer agreement had been terminated before the parties signed
the February 19 sales contract.
[¶5] The Weinschenks subsequently filed an opposition to the
Holdens' motion for a summary judgment and moved to amend their answer
to include the defenses of misrepresentation and mistake. In addition, the
Weinschenks claimed for the first time that the February 19, 1996,
purchase and sale agreement was superseded by a July 2, 1996, agreement
that did not include a provision for the Weinschenks' payment of
commission costs. The court (Cole, J.) ruled that the Weinschenks' motion
to amend their answer was untimely and denied their attempt to introduce
the July 2 agreement as "newly discovered" evidence pursuant to M.R. Civ.
P. 60(b)(2). Accordingly, the court determined there was no genuine
dispute as to any material fact and entered a judgment in favor of the
Holdens. This appeal followed.
II.
[¶6] The Weinschenks first argue that the court abused its discretion
when it denied their motion to amend their answer because the motion was
not brought in bad faith or for delay, and the amendment would not cause
prejudice to the Holdens. "Whether to allow a pleading amendment rests
with the court's sound discretion." Diversified Foods, Inc. v. First Nat'l Bank
of Boston, 605 A.2d 609, 616 (Me. 1992). M.R. Civ. P. 15(a) provides that
leave to amend should be freely given "when justice so requires." "If the
moving party is not acting in bad faith or for delay, the motion will be
granted in the absence of undue prejudice to the opponent." 1 Field,
McKusick & Wroth, Maine Civil Practice § 15.4 (2d ed. 1970).
Nevertheless, "when summary judgment has been entered, the court should
be reluctant to allow the addition of a new cause of action, particularly when
the delay is unexplained." Diversified Foods, 605 A.2d at 616.
[¶7] Although the Weinschenks denied generally any obligation to pay
the commission on the sale of their house in their answer to the Holdens'
third-party complaint, they did not raise the defenses of misrepresentation
and mistake until after the hearing on the motions for summary judgment.
Furthermore, they initially asserted no opposition to the Holdens' motion
for a summary judgment as required by Rules 56(e) and 7(d) despite the
Holdens' clear intent throughout this litigation to seek indemnification from
them based on the terms of the February 19 contract. The Weinschenks
relied instead on the likelihood of the Holdens prevailing against Deshaies in
the underlying claim to collect the commission. Although Rule 15(a)
requires that leave to amend be liberally granted, see, e.g., Barkley v. Good
Will Home Ass'n, 495 A.2d 1238, 1240 (Me. 1985), "'undue delay' removes
any presumption in favor of allowing amendment." Diversified Foods, 605
A.2d at 616.
[¶8] In Diversified Foods the plaintiffs attempted to add a number of
federal claims, already pending in the federal district court, to their state
court complaint more than a month after a summary judgment was entered.
Id. We held that the plaintiffs' knowledge of the defendants' objection to
bringing some claims in state court and some in federal court, together with
the plaintiffs' refusal to incorporate the federal claims in a previous motion
to amend, supported the Superior Court's decision to deny leave to amend
the complaint based on undue delay. Id. Similarly, the Weinschenks knew
the Holdens would seek indemnification should the court find in favor of
Deshaies, yet eschewed the opportunity to defend the lawsuit in a timely
manner. In these circumstances, the denial of the Weinschenks' motion to
amend was an appropriate exercise of the court's discretionary authority.
III.
[¶9] The Weinschenks next contend that even if the motion to amend
was properly denied, genuine issues of material fact remain to be tried. In
particular, the Weinschenks argue that they would not have consented to the
provision requiring them to be responsible for the realtor commission but
for the Holdens' misrepresentation that the buyer broker agreement had
been terminated.{2}
[¶10] We review the entry of a summary judgment for errors of law,
viewing the evidence in a light most favorable to the party against whom the
judgment was entered. Kandlis v. Huotari, 678 A.2d 41, 42 (Me. 1996). A
party is entitled to summary judgment if there is no genuine issue of
material fact and the party on the undisputed facts is entitled to judgment as
a matter of law. M.R. Civ. P. 56(c); Chadwick BaRoss, Inc. v. T. Buck Constr.,
Inc., 627 A.2d 532, 534 (Me. 1993).
[¶11] Viewing the evidence in the light most favorable to the
Weinschenks, we conclude that it is simply illogical to maintain that the
Holdens and Weinschenks were acting under a mutual mistake that no
commission would be due on the sale of the Weinschenk residence. If such
was the case, there would have been no necessity to include the handwritten
provision governing the payment of any commission in the purchase and sale
contract. At the very least, the addition of the provision demonstrates that
the parties must have had some uncertainty about whether a commission
would be due. Moreover, Ric Weinschenk's deposition testimony plainly
reveals that he contemplated the possibility of being responsible for the
commission:
Q. Did you have any discussion with Mr. Holden about the
buyers agreement he entered into with Mr. Deshaies?
A. I did at some point in time, yes.
Q. Did you have any discussion in that regard prior to the
second contract being signed?
A. Yes.
Q. What was that discussion?
A. Mr. Holden was -- had asked me if I thought that there was
a commission due to the buyer's broker, and I said that I never
had a relationship with the buyer's broker. I didn't know the
terms of the agreement between the buyer and his broker. I
didn't know whether I was ever obligated to pay anything from
the sale of our house or not. I had no doubt in my mind that I
did not have any obligation to pay him as part of this contract.
And he said then if for some quirk of fate there was a
commission due as a result of his having come to the house with
a buyer's broker at some point in time would I mind paying him,
and I said no, I wouldn't mind paying him, I'm quite sure no
commission is due. I do this every day, I've been doing it most
of my adult life, and no doubt in my mind.
Q. Your agreement with Mr. Holden was that if any
commission was due Mr. Deshaies you would pay it; is that
correct?
A. If any commission were due Mr. Deshaies on the sale of
the Holden house or of my house that I would pay it, that's what
I had agreed to.
(Emphasis added).
[¶12] Although Ric Weinschenk's testimony indicated he firmly
believed no commission would be owed to Deshaies, it also makes clear that
his belief was not based on any misrepresentation by the Holdens, who
expressed their concern that Deshaies might in fact be owed a commission.
Nor can Weinschenk's subsequent affidavit, which asserts that he and his
wife "specifically relied on Mr. Holden's representations that the Holdens'
buyer broker agreement with Mr. Deshaies had been terminated or had
expired," be used to create a genuine issue of material fact. See Zip Lube,
Inc. v. Coastal Sav. Bank, 1998 ME 81, ¶ 10, 709 A.2d 733, 735 (party
cannot create an issue of fact by submitting an affidavit that contradicts his
own prior sworn testimony). Because the February 19 purchase and sale
agreement unambiguously makes Amy Weinschenk responsible for any
commission owed on the sale of her property and the Weinschenks have
failed to assert any material fact that is at issue, the court committed no
error by entering a summary judgment in favor of the Holdens.
The entry is:
Judgment affirmed.
Attorneys for plaintiffs:
David J. Perkins, Esq.
Pamela J. Smith, Esq.
Perkins & Perkins, P.A.
P O Box 449
Portland, ME 04112-0449
Attorney for defendants:
Marshall J. Tinkle, Esq.
Tompkins, Clough, Hirshon & Langer, P.A.
P O Box 15060
Portland, ME 04112-5060
FOOTNOTES******************************** {1}. Although the contracts involved
in this litigation were entered into by Donna Holden and Amy Weinschenk
individually, it is clear that their spouses were actively involved in the
proceedings and are named parties to the action. Jeff Holden and Ric Weinschenk
negotiated for the handwritten commission provision at issue in this case,
and Amy Weinschenk testified that she deferred to her husband on all matters
concerning the sale of the property and merely signed the documents Ric
presented for her signature. {2}. The Weinschenks also contend the February
19 sales contract was superseded by a contract entered into by Amy Weinschenk
and Donna Holden on July 2, 1996. The July 2 contract was virtually identical
to the February 19 agreement except that the paragraph addressing broker
commissions was crossed out. Under the terms of the latter contract, no
commission would have been owed Deshaies because the contract for sale was
entered into after the expiration of the exclusive buyer agreement he had
with the Holdens. The July 2 contract was not produced by either the Holdens
or the Weinschenks during discovery and was not introduced into the case
until the Weinschenks included it with their supplemental opposition to
the Holdens' motion. The court ruled the contract was not "newly discovered"
evidence within the meaning of M.R. Civ. P. 60(b)(2) ("On motion and
upon such terms as are just, the court may relieve a party or the party's
legal representative from a final judgment, order, or proceeding for the
following reasons: . . . newly discovered evidence which by due diligence
could not have been discovered in time to move for a new trial under Rule
59(b)." (emphasis added)) presumably because the document had at all
times been in the Weinschenks' possession. The Weinschenks do not argue
on appeal that the court erred by disregarding the contract and therefore
are precluded from arguing that the contract relieves them of their obligation
to pay the commission.
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