Appeals court remands part of summary judgment in dispute over real estate commissions

By Gabriel Neves | Oct 15, 2018

LAKELAND – A group of real estate brokers recently had a summary judgment on two sales appeals affirmed in part and reversed in part.

Judge Matthew Lucas of Florida Second District Court of Appeal issued a six-page ruling Oct. 3 affirming and reversing in part a Collier County Circuit Court decision in a lawsuit filed by SWF Premium Real Estate LLC, doing business as Engel & Volkers, against SGM Building Group Inc. and FL-7.

Engel & Volkers sued SGM and FL-7 in regards to two sales agreements involving the purchase of properties, attempting to recover commissions from those sales.

As stated in the ruling, SGM "attempted to assign its rights and obligations as a purchaser under two sale agreements to FL-7 shortly before closing, and FL-7 subsequently closed on the properties without paying Engel & Volkers' commissions."

The plaintiff alleged that SGM "had breached a contractual provision to pay Engel & Volkers' commissions that SGM had executed as part of the sale agreements," and claimed that FL-7's breach of contract "was not at all clear from the complaint," court filings said. Engel & Volkers also alleged that "the commission provision in the sale agreements (which, again, FL-7 had never executed) had been breached when FL-7 closed on the properties," and that the terms "third-party beneficiary" or "assignee" were "conspicuously absent" from the company's complaint.

Engel & Volkers filed for summary judgment claiming that "the pertinent sale agreements referred generically to the buyer's obligation to pay the brokerage commission and because FL-7 was an assignee of the rights and obligations of the sale agreements, FL-7 became directly liable to Engel & Volkers when it closed on the properties without paying the commission," the ruling said.

Also stated in the ruling, the plaintiffs were "proceeding under the theory that FL-7 stepped into the shoes of SGM's obligation to pay the brokerage commissions as SGM's assignee."

That theory "was not actually pleaded," and "nor was it a stated basis for the trial court's eventual ruling," Lucas said in his ruling. Regarding the lower court's summary judgment, "as it pertains to FL-7, we must reverse the trial court's final judgment and remand the case for further proceedings."

Florida Second District Court of Appeal case number 2D17-2557

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