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A Louisiana appellate court has considered whether two brokers were required to split a commission.
Real estate brokerage firm R. Alan Bartlett, Inc. ("Listing Broker") served as the listing broker for a certain residential property ("Property"). The Listing Broker placed the Property into a multiple listing service, offering to split its commission with any broker that produced a buyer for the Property.
Robert Steeg ("Buyer") was interested in purchasing the Property. The Buyer began negotiations for the Property on February 3, 1998. At this time, the Buyer was not working with a real estate licensee. On February 4, 1998, the Listing Broker sent the Buyer a purchase contract which listed Prudential Relocation ("Relocation Company") as the seller and also contained language stating that the Property was being sold "as is." The Buyer rejected this purchase contract, and so there was no agreement for the Buyer to purchase the Property.
Following the rejection of the Relocation Company's purchase contract, the Buyer contacted Patricia Stirlin of CMS Realty Services, Inc. ("Buyer's Representative"), in order to receive help with negotiations for the Property. Following this consultation, the Buyer made a revised offer for the Property, now including a provision providing for a home warranty as well as an extensive list of home inspections. The Relocation Company agreed to the revised offer, and the Listing Broker acknowledged in writing that the Buyer was represented in this transaction by the Buyer's Representative.
The transaction closed as scheduled in May 1998. At the closing, half of the commission was paid to the Listing Broker. The Listing Broker objected to the disbursement of any funds to the Buyer's Representative, so half of the commission was placed into the registry of the trial court for resolution. The trial court awarded half of the commission to the Buyer's Representative, and the Listing Broker appealed.
The Court of Appeal of Louisiana, Fourth Circuit, affirmed the trial court's ruling in favor of the Buyer's Representative. The court found that a real estate broker is entitled to receive a commission when it is the procuring cause of a sale. Louisiana defines procuring cause as "a cause originating or setting in motion a series of events which, without break in their continuity, result in the accomplishment of the prime object of the broker, which may variously be a sale or exchange of a principal's property, an ultimate agreement between the principal and a prospective contracting party, or the procurement of a purchaser who is ready, willing, and able to buy on the principal's terms." Based on the evidence before it, the trial court had determined that the Buyer's Representative was the procuring cause of the Property's sale.
The court agreed with the trial court's determination. The court found that this determination was supported by the evidence that this transaction would not have gone forward without the Buyer's Representative's involvement and also by the fact that the Listing Broker had acknowledged the Buyer's Representative's involvement in this transaction. Thus, the court ruled that the Buyer's Representative was entitled to receive half of the commission, pursuant to the offer made by the Listing Broker in the multiple listing service, affirming the ruling of the trial court.
Orleans Title Ins. Agency, L.L.C. v. R. Alan Bartlett, Inc., 811 So. 2d 1126 (La. Ct. App. 2002).