CASSEL, J.
Professional Management Midwest, Inc. (PMMI), and two of its officers brought suit against Lund Company (Lund), a brokerage firm, to recover damages that allegedly resulted when the president of PMMI independently engaged Lund's services to locate and lease new office space while PMMI was still liable under a previous lease, which PMMI later breached. The district court granted summary judgment in favor of Lund after concluding, for various reasons, that the brokerage company was not liable to PMMI for engaging in such actions under the theories of inducement, tortious interference, or negligence. Finding no error in the district court's judgment, we affirm.
PMMI is a corporation that provides health care management consulting in Nebraska and neighboring states. At all times relevant to this case, Donald Pedersen, James W. Huntington, and Tony C. Clark were the sole officers and shareholders of PMMI. For several years, Pedersen served as president of the corporation.
In 2005, PMMI leased office space at 4905 South 107th Avenue, Omaha, Nebraska (107th Avenue property), from William and Mary Doucette, the landlords of the 107th Avenue property. Alvin Shipps and Mark Thurber served as real estate agents for PMMI in the transaction. Both Shipps and Thurber were affiliated with Lund. Mark Covert, also an agent at Lund, served as both listing agent and property manager for the Doucettes. Pedersen, as PMMI's president, initially signed a "Standard Intent to Lease Agreement," which set forth the terms of the proposed lease. On behalf of PMMI, Pedersen later signed a business property lease for the 107th Avenue property (107th Avenue lease). The lease was for a term of 5 years 1 month, to begin on September 15, 2005. The lease provided that PMMI would be held in default or breach of the lease if, among other things, it failed to pay rent when due or vacated or abandoned the premises. Upon default, the Doucettes would be allowed to retake the premises, terminate the lease, and recover from the tenant all damages proximately resulting from the breach. Pedersen, Huntington, and Clark signed personal guarantees as part of the 107th Avenue lease.
Sometime in late 2006, PMMI began having trouble making timely rent payments under the 107th Avenue lease. These financial troubles ultimately motivated Pedersen to contact Shipps for help in finding cheaper office space, and on January 17, 2007, Pedersen signed a lease, in his personal capacity, for office space at 11711 Arbor Street, Suite 215, in Omaha (Arbor Street property). Immediately upon signing the lease, Pedersen moved PMMI's equipment and staff from the 107th Avenue property to the Arbor Street property.
Once Covert learned that PMMI had vacated the 107th Avenue property, he sent a letter to Pedersen to "remind" him that PMMI was obligated under the lease until October 15, 2010. Covert, had previously
Soon thereafter, the Doucettes filed a complaint against PMMI, Pedersen, Huntington, and Clark to collect damages for breach of the 107th Avenue lease. In the district court's ultimate ruling on the Doucettes' complaint, it found that PMMI breached the lease and that Pedersen, Huntington, and Clark were joint and several guarantors but entered judgment against Pedersen alone in the amount of $96,971.50. The court dismissed the Doucettes' claim against Huntington and Clark with prejudice. Nevertheless, in April or May 2007, Huntington and Clark each individually paid $20,000 to the Doucettes.
Following the district court's June 2008 finding that PMMI breached the 107th Avenue lease but prior to the judgment against Pedersen in April 2010, PMMI, Huntington, and Clark (collectively appellants) initiated the instant case against Lund for inducement to breach a lease, tortious interference with a business relationship, and negligence.
Lund filed a motion for summary judgment in February 2011, and both parties adduced evidence at a hearing on March 18.
On October 18, 2011, the district court granted the motion for summary judgment. The court made findings related to the scope of Lund's liability, whether there was inducement to breach a lease, whether there was tortious interference, and Lund's duty to appellants for purposes of negligence. We summarize only those findings of the court with which appellants take issue.
The district court first considered whether there was a private right of action for inducement to breach. Appellants alleged that such a right of action was created by Neb.Rev.Stat. § 81-885.24(13) (Reissue 2008), which gives the State Real Estate Commission power to censure, suspend the license of, or impose a civil fine on a licensed broker if he or she has been found guilty of "[i]nducing any party to a contract of sale or lease to break such contract for the purpose of substituting, in lieu thereof, a new contract with another principal." Appellants had argued to the court that a violation of this licensure statute could be used to prove breach in the same manner that violation of a traffic law could be used to establish negligence of the driver. The court did not accept this reasoning. It stated:
Despite having found that there was no private right of action for inducement to breach, the district court engaged in a factual analysis of this claim and concluded that Lund did not engage in any actions which would constitute inducement.
Finally, the district court discussed whether Lund owed a duty to appellants at the time of PMMI's breach in 2007. The court determined that Lund owed no duty to Huntington or Clark, because they were guarantors. Neither did Lund owe a duty to PMMI, according to the court, because "the agency relationship between PMMI and Lund terminated when the 107th Avenue Lease began" in 2005. As such, "[t]hat Pedersen chose to contact Lund to secure the Arbor Street property in 2007 and negotiate a lease that Pedersen signed in his personal capacity, not on behalf of PMMI, is clearly not a breach of duty, if such a duty even exists, that Lund may have to PMMI."
Despite this conclusion, the district court again undertook a factual analysis of appellants' negligence claim. It reasoned that "expert testimony is necessary to support a claim of breach of the standard of care in this case because the alleged negligence cannot be presumed to be within the comprehension of laypersons." Appellants had not offered any expert testimony, so the court concluded that "[e]ven if, arguendo, such a duty did exist, there is absolutely no evidence in the record as to the standard of care that is owed by a real estate agent to PMMI, Clark or Huntington." (Emphasis in original.)
Because the district court found that appellants' claims of inducement to breach a lease, tortious interference, and negligence had no merit, it granted summary judgment in favor of Lund.
Appellants timely appealed, and pursuant to statutory authority,
Appellants allege, restated and reordered, that the district court erred in (1) concluding that (a) there is no private cause of action under § 81-885.24(13) against a real estate broker for inducement to breach a contract of sale or lease and (b) there was insufficient evidence to find that Lund induced a breach of the 107th Avenue lease, (2) concluding that there was insufficient evidence to find that Lund tortiously interfered with PMMI's lease agreement with the Doucettes, (3) concluding that PMMI's agency relationship with Lund terminated when the 107th Avenue lease began, (4) concluding that there was insufficient evidence to find that Lund breached its fiduciary duties, (5) concluding that appellants needed expert testimony to establish the standard of care owed by Lund, and (6) granting Lund's motion for summary judgment because there were no material issues of fact.
An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law.
In reviewing a summary judgment, an appellate court views' the evidence in
Appellants argue that the district court erred both in determining that § 81-885.24(13) did not create a private cause of action for inducement to breach a lease and in finding that even if there were a private cause of action, there was insufficient evidence to find inducement. We discuss each of these assignments of error in turn.
Appellants assign error to the district court's conclusion that § 81-885.24(13) did not create a private right of action against a real estate broker for inducement to breach a contract of sale or lease. Section 81-885.24(13) is part of the Nebraska Real Estate License Act
Before the district court and on appeal, appellants' argument for this private right of action is based in negligence. They argue that a violation of § 81-885.24(13) could be used to prove breach of a duty for purposes of negligence in the same manner as "violations [of a traffic law] can be utilized to establish negligence [of] a driver."
But as the Restatement (Third) of Torts explains, "[t]he body of law addressing [whether an implied right of action should be found in a statute] is robust, is distinct from tort law, and entails an assessment of legislative action."
In their reply brief, appellants seem to acknowledge that legislative purpose and intent are the sole factors relevant to the implied right of action inquiry, but push the burden of presenting evidence of such intent or purpose onto Lund. In effect, appellants argue that Lund has the burden on appeal of proving that the district court ruled correctly. Such an argument is wholly incorrect and ignores the basic proposition that the party appealing "must point out the factual and legal bases that show the error" in the lower court's decision.
Because appellants fail to address the factors relevant to deciding whether a private right of action exists, we do not reach this assignment of error,
Given that we do not reach the previous assignment of error regarding § 81-885.24(13), we need not review the district court's finding that appellants adduced insufficient evidence to find that Lund induced a breach of the 107th Avenue lease. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.
Appellants allege that the district court erred in concluding that there was insufficient evidence to find tortious interference with the 107th Avenue lease, arguing that on this issue and others, the court's order was "drafted as if the [c]ourt reviewed evidence, made factual determinations and entered an [o]rder after a trial."
First, appellants' argument that the district court erred in concluding that there was insufficient evidence misconstrues the court's finding. The court neither employed the phrase "insufficient evidence" nor spoke in terms of sufficiency of evidence. Rather, the court stated that it "can find no evidence to support this allegation" of tortious interference. In making this finding, the court was not weighing conflicting evidence. As the court's subsequent analysis revealed, it was addressing whether appellants' evidence was satisfactory legal proof of tortious interference. In other words, the court was weighing the sufficiency of the evidence as a matter of law.
Second, the district court's analysis was proper because consideration of a motion for summary judgment also requires a court to consider the quantitative sufficiency of the evidence. The party moving for summary judgment has the burden to show that no genuine issue of material fact exists and must produce sufficient evidence to demonstrate that the moving party is entitled to judgment as a matter of law.
Courts also speak in terms of "sufficiency" when considering whether the nonmoving party met this burden. In fact, this court has defined the decisive question on appeal from summary judgment as "whether [the nonmoving party] produced sufficient evidence to present a genuine issue of material fact."
In the instant case, appellants were in the position of the nonmoving party, and thus, once Lund adduced sufficient evidence to show that it was entitled to judgment as a matter of law if Lund's evidence remained uncontroverted at trial, they had the burden of showing the existence of material issues of fact that would have precluded judgment as a matter of law in favor of Lund, the moving party. Because appellants had a burden of proof in the summary judgment hearing, the district court did not err in considering whether appellants produced sufficient evidence to meet that burden of proof.
Lund was the moving party and carried the initial burden of showing its entitlement to judgment on the tortious interference claim. As the original plaintiffs, appellants would have had the burden of proving the elements of tortious interference at trial. Failure to meet this burden
To succeed on a claim for tortious interference with a business relationship or expectancy, a plaintiff must prove (1) the existence of a valid business relationship or expectancy, (2) knowledge by the interferer of the relationship or expectancy, (3) an unjustified intentional act of interference on the part of the interferer, (4) proof that the interference caused the harm sustained, and (5) damage to the party whose relationship or expectancy was disrupted.
Although the procedural history is slightly different from that of the instant appeal, the case of Aon Consulting v. Midlands Fin. Benefits
For purposes of the instant appeal, it is important to note that Aon's case for tortious interference failed because of the existence of three facts: (1) Pearson established contact with Midlands, the party who allegedly interfered with Aon's contractual relationship with Pearson; (2) Pearson represented to Midlands that the nonsolicitation agreement was not enforceable, which agreement was the contract with which Midlands supposedly interfered; and (3) Midlands did not require Pearson to engage in the actions which ultimately breached the agreement. Together, these three facts combined to show that there was no unjustified, intentional act of interference on the part of Midlands.
Because Pedersen initiated contact with Shipps and represented to him that liability under the 107th Avenue lease was terminated and because the new lease negotiated by Shipps did not require Pedersen to breach the 107th Avenue lease, we find that Lund adduced sufficient evidence to disprove that it engaged in an unjustified intentional act of interference. Thus, Lund established a prima facie case for summary judgment.
At this point in the summary judgment proceedings, the burden shifted to appellants to produce sufficient evidence to establish the existence of a material issue of fact that prevented judgment for Lund.
In reviewing the record, we find no evidence to contradict that Pedersen established contact with Shipps, that Pedersen told Shipps that he had made arrangements with the Doucettes to prevent liability
Three of appellants' assignments of error relate to their negligence claim against Lund. The first challenges the district court's finding that the agency relationship arising from Lund's representation of PMMI in leasing the 107th Avenue property terminated prior to Lund's supposed breach of its duties under that relationship. The second addresses the sufficiency of appellants' evidence of breach. And the third finds error with the court's holding that appellants were required to adduce expert testimony to establish the appropriate standard of care. Because of the result we reach, we discuss only the first of these assignments of error,
Appellants' negligence claim against Lund depended upon a finding that Lund owed fiduciary duties to PMMI at the time of the alleged breach. The relationship between Lund and PMMI began when Pedersen engaged Lund's services to find new office space in 2005. The district court determined that this relationship concluded when the 107th Avenue lease was signed and that Lund owed no continuing duties to PMMI when Pedersen signed the Arbor Street lease in 2007. Appellants argue that the relationship with Lund and the resulting fiduciary duties continued until at least that latter point in time. As such, this assignment of error requires us to define and delimit the agency relationship between a real estate broker and the lessee he or she represents. We need not determine whether Lund's actions breached the fiduciary duties owed within that relationship, because we find that the agency relationship between Lund and PMMI ended no later than October 4, 2005, when Lund received its commission.
In 1994, the Legislature passed a series of statutes "to codify in statute the relationships between real estate brokers or salespersons and persons who are sellers, landlords, buyers, or tenants of rights and interests in real property."
Before we can define the relationship between Lund and PMMI, it is first necessary to understand the terminology used in the statutes and to identify the parties according to those terms.
Neb.Rev.Stat. §§ 76-2401 to 76-2430 (Reissue 2009) govern the agency relationships between what we commonly refer to as a "broker" and his or her clients.
Within the context of a brokerage relationship, the broker is categorized as either a designated broker or an affiliated licensee of the designated broker. A designated broker is "an individual holding a broker's license who has full authority to conduct the real estate activities of a real estate business."
In all real estate operations other than sole proprietorships, the designated broker retains associate brokers or salespersons to assist with the work of serving clients. An associate broker is "a person who has a broker's license and who is employed by another broker to participate in any activity [in which a broker engages]."
Within the context of a brokerage relationship, which, we recall, is an agency relationship, a licensee is the limited agent of the client.
A single agent "represents only one party in a real estate transaction."
A dual agent "has entered into a brokerage relationship with and therefor[e] represents both the seller and buyer or both the landlord and tenant."
A subagent is "a designated broker, together with his or her affiliated licensees, engaged by another designated broker to act as a limited agent for a client."
Having thus outlined the various terms used in the statutory scheme, we turn to the case at hand. Recall that we are concerned only with the relationship between Lund and PMMI in 2005. While Lund did enter into a second brokerage relationship with PMMI, or at least Pedersen, in late 2006 or early 2007, it is that second relationship that appellants allege breached the continuing duties arising under the first brokerage relationship in 2005. As such, the brokerage relationship with which we are concerned is that arising from the leasing transaction in 2005.
In that brokerage relationship, the client was PMMI. Shipps and Thurber together were licensees, specifically tenant's agents. Shipps and Thurber were also affiliated licensees, whose designated broker was John Lund.
Although outside the specific brokerage relationship between Lund and PMMI, we note that Covert was also an affiliated licensee of John Lund and served as a licensee to the Doucettes for lease of the 107th Avenue property. Dual agency was argued before the district court:, but appellants did not assign error to the court's finding that Lund was not engaged in dual agency. Therefore, we need not address this finding.
As tenant's agents, Shipps and Thurber undoubtedly owed fiduciary duties to PMMI for the duration of the brokerage relationship.
Appellants urge us to characterize the relationship between PMMI and Lund as almost unlimited, arguing that Lund owed a "continuing duty"
A brokerage relationship is a limited agency relationship,
In the instant case, PMMI engaged Lund to provide two of the brokerage services defined by statute: "procuring prospects... for the ... renting [or] leasing... of any real estate" and "negotiat[ing] or attempting] to negotiate the ... rent [or] lease ... for any real estate."
Based on these statutory provisions, Lund's representation of PMMI had three purposes: (1) to identify acceptable rental property, (2) to negotiate the lease, and (3) to execute the leasing transaction. Once these three things were accomplished, the representation was fully performed and any fiduciary duties owed by Lund to PMMI ceased. Following our rules of statutory interpretation, we give the undefined terms in these provisions their plain, ordinary meaning.
Our case law does not define when a leasing transaction terminates. Under Neb.Rev.Stat. § 36-105 (Reissue 2008), it is clear that a lease contract for longer than 1 year becomes enforceable only once it is "signed by the party by whom the lease or sale is to be made." But there is no corresponding statutory provision or proposition in case law defining when the leasing transaction, as opposed to the lease contract, is terminated.
We are, however, able to ascertain that the leasing transaction in the instant case — and, by consequence, Lund's representation of PMMI — was terminated long before Lund's alleged breach in 2007. A broker's commission generally "becomes payable on completion of the transaction which the broker was employed to negotiate, unless there is a stipulation in the contract of employment to the contrary."
Because we find that any duties owed by Lund to PMMI by virtue of their brokerage relationship terminated prior to the alleged breach of those duties in 2007, we need not reach appellants' assignment that the district court erred in finding that there was insufficient evidence of breach.
Finally, appellants generally allege that the district court erred in granting summary judgment in favor of Lund. In the separate argument section for this assignment, appellants make mostly factual arguments as to why the court should not have granted summary judgment in favor of Lund, attempting to show that there were material issues of fact. Appellants' only legal argument under this assignment of error asserts that Lund was liable for the negligent acts of its agents, a legal conclusion with which the district court agreed. Otherwise, appellants do not advance any legal arguments distinct from those we have already dismissed as lacking merit.
Given our previous findings that there was no tortious interference and that Lund owed no duty to PMMI in 2007, which prevents a finding of negligence,
Because appellants' purely factual arguments are of no avail in challenging these legal bars to relief or in raising material issues of fact, we find no merit to this assignment of error. The district court did not err in granting summary judgment in favor of Lund.
We hold that Lund, as a real estate broker, cannot be held liable to PMMI for inducement, tortious interference, or negligence for assisting Pedersen to enter into a new lease while knowing that PMMI remained liable under a previous lease. From our conclusion that the limited brokerage relationship between Lund and PMMI was terminated, at the very latest,
AFFIRMED.
McCORMACK and MILLER-LERMAN, JJ., not participating.