L. A. CASTILLE, APPELLANT,
v.
EUGENIA A. STARR, APPELLEE
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This case involves a real estate broker seeking a commission from a purchaser after the purchaser defaulted on a contract. The appellate court affirmed the trial court's denial of the commission, finding the broker had materially misrepresented his commission rate to the purchaser.
Yes, the broker committed a material misrepresentation by stating a 4.5% commission to the purchaser while having an agreement for only 3% with the sellers. This misrepresentation forfeits the broker's right to a commission.
[1] A real estate broker's right to a commission may be forfeited by the concealment of known material facts.
[2] A broker's intentional misrepresentation of a material fact to a purchaser can preclude recovery of a commission.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“In the event the purchaser defaults, purchaser agrees to pay broker the aforesaid fee, together with all attorneys’ fees and all costs in collecting same.”
This quote establishes the contractual basis for the broker's claim against the defaulting purchaser.
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Join FLexlaw to unlock all legal intelligenceA real estate broker presented a Deposit Receipt Contract to a purchaser, which included a provision for the purchaser to pay the broker's fee if the …
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BERANEK, Judge.
Plaintiff appeals a final judgment which denied his claim for a broker’s commission in a real estate transaction. We affirm. Plaintiff was a real estate broker and defendant was the prospective purchaser of the property. The defendant signed a Deposit Receipt Contract for the purchase of certain property. The contract provided for payment of the broker’s fee by the seller if the sale was completed. The last sentence of the brokerage provision stated, “In the event the purchaser defaults, purchaser agrees to pay broker the aforesaid fee, together with all attorneys’ fees and all costs in collecting same.” The “aforesaid fee” was recited in the same paragraph to be four and one-half per cent of the purchase price of $89,000.
The broker testified that he specifically read this brokerage provision to purchaser and that they discussed it. Purchaser denied that broker told her about the provision. Purchaser said she had been a legal secretary for 24 years and knew that generally such Deposit Receipt Contracts did not contain such a brokerage provision and that she therefore did not bother to read the provision.
The contract was signed by the sellers, the broker, and the purchaser on the same evening. At 7:00 a. m. the next morning the purchaser changed her mind and decided she wanted to withdraw from the contract. She immediately advised the broker that she had changed her mind and stopped payment on her deposit check which pursuant to another contractual provision would have been split between sellers and broker as liquidated damages.
The broker filed a complaint for recovery of his commission under the aforementioned brokerage provision. The complaint was based on the theory of a direct contractual relationship. The purchaser denied the existence of the contract between herself and the broker. Purchaser raised numerous affirmative defenses but it appears the trial centered on the question of whether or not broker materially misrepresented the facts to purchaser when the contract was signed. The trial court found against the broker and simply denied any relief without stating facts or legal conclusions. The evidence was conflicting on all issues and we therefore assume the trial court chose to believe those facts supporting purchaser’s theory of the case. Carolina Lumber Co. v. Daniel, 97 So. 2d 156 (Fla. 1st DCA 1957).
The broker had an agreement with the sellers of the real estate that he would receive a three per cent commission on the sale of the property. This was specifically stated in a separate written agreement between broker and sellers signed the same night that purchaser signed the contract. The broker included the figure of four and one-half per cent as his commission in the contract which he, the sellers, and the purchaser signed. Both broker and purchaser agreed that a conversation occurred in which broker specifically told purchaser that he had an agreement to a four and one-half per cent commission with the sellers. Sellers testified they noticed the four and one-half per cent figure in the unsigned contract and that they complained to broker about it and had it changed to three per cent in a separate document which reflected their prior agreement with broker. The trial court thus apparently found the broker intentionally misrepresented this material fact to the purchaser. As the contract finally turned out, it would have been in the broker’s interest for the purchaser to default rather than to have the sale consummated. If the sale went through, broker would have received a three per cent commission; whereas, if buyer defaulted, the broker would have re ceived a four and one-half per cent commission. This was a material misrepresentation and ample authority exists for the general proposition that concealment of known material facts will forfeit the broker’s right to a commission. See 7 Fla.Jur.2d, Brokers, Section 65; and 12 Am.Jur.2d, Brokers, Section 108.
Under these circumstances, we conclude error has not been shown in the trial court’s denial of enforcement of the four and one-half per cent broker’s commission against the defaulting purchaser. It should be noted that this controversy is not between the sellers and the purchaser. Apparently the sellers have never chosen to enforce what may well be a valid contract right against the defaulting purchaser. This decision goes only to the agreement regarding the commission between the broker and purchaser. The final judgment appealed from is hereby affirmed.
AFFIRMED.
LETTS, J., and SCHWARTZ, ALAN R., Associate Judge, concur.
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Sheldon Greene & Assocs., Inc. v. Rosinda Invs., N.V., 475 So. 2d 925 (Fla. 3d DCA 1985)…2d 13 (Fla.1976); Crain & Crouse, Inc. v. Palm Bay Towers Corp., 326 So. 2d 182 (Fla.1976); Turner v. Lorber, 360 So. 2d 101, 103-04 (Fla. 3d DCA 1978); Cuna Mut. Ins. Society v. Adamides, 334 So. 2d 75, 76 (Fla. 3d DCA 1976); see Castille v. Starr, 376 So. 2d 935, 936 (Fla. 4th DCA 1979); Heard v. Mathis, 344 So. 2d 651, 654-55 (Fla. 1st DCA 1977); Jacquin-Florida Distilling Co. v. Reynolds, Smith & Hills, Architects-Engineers-Planners, Inc., 319 So. 2d 604, 607 (Fla. 1st DCA 1975). . We are, of course, spe…
Authorities Cited
- Carolina Lumber Co. v. Daniel, 97 So. 2d 156 (Fla. 1st DCA 1957)