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An Iowa court has considered whether a broker could appeal a lower court decision ordering the commission dispute between two brokers to a REALTOR® arbitration.
Steve Bassman d/b/a Bassman Real Estate (“Bassman”) learned about a commercial property which was about to be placed on the market for sale. Bassman contacted his son-in-law, Scott Remsburg (“Remsburg”) of Iowa Realty (“Brokerage”), about the property, and Remsburg told Bassman that Bob Knapp, II (“Knapp”), another salesperson at the Brokerage, might be interested in the property.
Bassman met with Knapp and Remsburg to present the property to them. Bassman required both of them to sign a “Confidentiality/Non Circumvention Agreement[s]”, where they agreed to not exclude Bassman from any transaction involving the property and the parties would share all commissions equally.
Despite the above agreement, Knapp allegedly excluded Bassman from the sale of the property and the resulting commission. Bassman filed a lawsuit against Knapp, seeking his portion of the commission. Knapp moved to compel arbitration, arguing that both Knapp and Bassman were REALTORS® and therefore had agreed to arbitrate all contractual disputes, pursuant to Article 17 of the NAR Code of Ethics. The trial court ordered the dispute to arbitration, and Bassman appealed.
The Court of Appeals of Iowa rejected Bassman’s appeal, ruling that Bassman could not appeal an order compelling arbitration. Iowa courts have determined that an order compelling arbitration is not a final judgment because it does not determine the rights of either party.
Since a final judgment is needed in order to have an appeal heard by the appellate courts, the court ruled that it had no jurisdiction to hear the appeal. The court further stated that such a ruling supported the judicial precedent favoring arbitration as a way for parties to agree to resolve disputes. Thus, the court dismissed the appeal.
Bassman d/b/a Bassman Real Estate, 771 N.W.2d 651 (Iowa Ct. App. 2009)