Location Realty, Inc. v. General Financial Services, Inc.
Location Realty, Inc. v. General Financial Services, Inc.
Opinion of the Court
The plaintiff, a corporation licensed as a real estate broker, appeals
The plaintiff, Location Realty, Inc., brought this action against the defendant, General Financial Services, Inc., to recover a real estate commission. The defendant moved for summary judgment and the trial court granted the motion and rendered judgment for the defendant.
The following facts and procedural history are undisputed. The plaintiff brought this action against the defendant to recover a real estate commission that the plaintiff claimed it had earned pursuant to a listing agreement effective November, 1998, in connection with certain land located on the Berlin Turnpike in Berlin. The plaintiff alleged that the listing agreement complied with General Statutes § 20-325a (b),
The listing agreement between the parties covered the period from November, 1998, to December 31, 2000. The defendant and CVS entered into their lease on August 26, 1999. The plaintiff has had a real estate broker’s license, issued pursuant to chapter 392 of the General Statutes; General Statutes §§ 20-311 through 20-329ff; since August 27, 1990,
On the defendant’s motion for summary judgment, the defendant argued that: (1) General Statutes § 20-312 (b)
In this court, the parties reiterated the same statutory contentions that they had presented to the trial court, namely, their arguments relying on the effect of the intersection of §§ 20-312 and 20-325a (a). After oral argument before this court, however, we issued an order to the parties directing them to file supplemental briefs on the following issue: “What effect, if any, does General Statutes (Rev. to 1997) § 20-325a (c) have on the issue presented in this appeal?” General Statutes (Rev. to 1997) § 20-325a (c) provides: “Nothing in subsection (a) of this section or subdivisions (2) to (6), inclusive, of subsection (b) of this section shall prevent any licensee from recovering any commission, compensation or other payment in respect to acts done or services rendered, if such person has substantially complied with subdivisions (2) to (6), inclusive, of subsection (b)
It is useful to begin our inquiry with a general overview of the statutory scheme. That scheme recognizes two types of licensed providers of real estate services: brokers, defined in General Statutes § 20-311 (l),
In addition, licenses for either status may be granted “only to persons who bear a good reputation for honesty, truthfulness and fair dealing and who are competent to transact the business of a real estate broker or real estate salesperson in such manner as to safeguard the interests of the public.” General Statutes § 20-314 (a). Furthermore, there are continuing education requirements for both brokers and salespersons. General Statutes § 20-319 (b). Finally, the department may suspend or revoke any such license for a variety of acts of misconduct, including “a violation of any provision
With this background in mind, we turn to the first particular question involved in this appeal, namely, the applicability of § 20-325a (a). We begin with the language of the statutes involved.
Section 20-312 (a) provides in relevant part: “No person shah act as a real estate broker . . . without a license issued by the commission . . . .” Section 20-312 (b) provides in relevant part: “No . . . corporation shall be granted a real estate broker’s license, unless every . . . officer of such . . . corporation who actively participates in its real estate brokerage business holds a license as a real estate broker . . . .” This language strongly suggests that a corporation’s broker’s license is valid only if every officer of the corporation who actively participates in its brokerage business is licensed as a broker.
Section 20-325a (a), which addresses the question of civil actions brought to recover commissions, provides: “No person who is not licensed under the provisions of this chapter, and who was not so licensed at the time the person performed the acts or rendered the services for which recovery is sought, shall commence or bring any action in any court of this state, after
This analysis brings us back to § 20-312 (b). Just as the entire sentence of § 20-325a (a) must be read as a whole, § 20-325a (a) must be read together with § 20-312 (b). Reading the two provisions together, we conclude that their language strongly suggests that a corporate licensed broker, whose president was actively involved in its brokerage business but was not licensed as a broker, was not duly licensed within the meaning of § 20-325a (a).
This conclusion is supported by the legislative history of chapter 392 of the General Statutes. That history indicates that the primary purpose of the legislation was the protection of the public, and that the legislature considered the requirement that all active members of a corporate or partnership licensee be themselves licensed to be central to that purpose, so as to avoid the possibility that persons not licensed as brokers could nonetheless combine in a partnership or corporation that would be so licensed.
Finally, it is significant that the real estate commission itself has recognized the importance of the requirements of § 20-312 (b). In a declaratory ruling issued on July 19, 2002, the real estate commission interpreted that section as follows: “It is our experience that real estate brokerage firms are managed, directed and controlled by their officers. Accordingly, we apply the unambiguous language of the statute to require that each officer of a brokerage business be individually licensed as a broker, or being the designated broker.
“We further require that each owner who actively engages in the management or control of a brokerage business be individually licensed as a broker or being the designated broker. We recognize that some brokerage firms are publicly traded entities. We believe that a passive investment interest of a shareholder is not
We are not persuaded by the plaintiffs argument that, because the entire statutory scheme of chapter 392 of the General Statutes grants extensive regulatory powers to the real estate commission, the trial court could not go behind the plaintiffs license so as to deny the plaintiff the right to bring this action. We acknowledge the real estate commission’s extensive powers. That grant of authority, however, does not, in our view, trump the language and purpose of §§ 20-312 (b) and 20-325a (a), when read together, particularly when § 20-325a (a) specifically addresses the right to bring an action for compensation for services rendered.
We conclude, therefore, that but for the possible application of General Statutes (Rev. to 1997) § 20-325a (c), the plaintiff would be barred from bringing this action. The “but for,” however, significantly alters the analysis of this case.
General Statutes (Rev. to 1997) § 20-325a (c) provides in relevant part: “Nothing in subsection (a) of this section . . . shall prevent any licensee from recovering any commission, compensation or other payment in respect to any acts done or services rendered, if . . . it would be inequitable to deny such recovery.” The language of this section squarely applies to subsection (a) of § 20-325a, which is the provision that bars an action when the licensee was not duly licensed at the time of the rendering of the services. That language provides, in effect, that, despite the fact that a licensee may not have been duly licensed, it may not be denied the right to recover if it would be inequitable to do so. Furthermore, we note that, in contrast to the language of subsection (a) of § 20-325a, which speaks in terms of
This suggestion is buttressed by the legislative history of § 20-325a (c). That provision was enacted in 1994 by Public Acts 1994, No. 94-240, as part of a legislative proposal drafted by a task force comprised of representatives of the department of consumer protection, the real estate commission and the Connecticut Association of Realtors. Conn. Joint Standing Committee Hearings, Insurance and Real Estate, 1994 Sess., p. 90. The legislative history indicates that the proposal was brought forth in response to certain decisions of this court that strictly construed the requirements of § 20-325a (b), namely, the formal requirements of a listing agreement, and denied brokers the right to recover for failures of strict compliance therewith. See, e.g., M.R. Wachob Co. v. MBM Partnership, 232 Conn. 645, 658-62, 656 A. 2d 1036 (1995); Conn. Joint Standing Committee Hearings, supra, p. 91. That history indicates that the task force that drafted the legislation considered that the strict construction of subsection (b) of § 20-325ahad resulted in some cases of “unjust enrichment.” Conn. Joint Standing Committee Hearings, supra, p. 91. This history, in turn, also suggests that the question of recovery, despite a failure to comply strictly with subsection (a) of § 20-325a, must be determined on the basis of all of the facts and circumstances of the case. See, e.g., Crowell v. Danforth, 222 Conn. 150, 158, 609 A.2d 654 (1992)
It necessarily follows from this discussion that a corporate broker licensee, whose president was not licensed as a broker, may not be denied its right to recover a commission otherwise earned solely because of that licensing failure. Its right to recover must be gauged, instead, under all of the facts and circumstances of the case and whether it would be inequitable, in light of those facts and circumstances, to deny it the right to recover. One of those facts and circumstances is, of course, that the licensee may not have been duly licensed; but that fact alone is not sufficient to deny recovery. It follows, further, that the trial court’s grant of summary judgment in this case was improper.
The judgment is reversed and the case is remanded for further proceedings according to law.
In this opinion KATZ, PALMER and VERTEFEUILLE, Js., concurred.
The plaintiff appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-1.
General Statutes § 20-325a Ob) provides: “No person, licensed under the provisions of this chapter, shall commence or bring any action with respect to any acts done or services rendered after October 1, 1995, as set forth in subsection (a), unless the acts or services were rendered pursuant to a contract or authorization from the person for whom the acts were done or services rendered. To satisfy the requirements of this subsection any contract or authorization shall: (1) Be in writing, (2) contain the names and addresses of the real estate broker performing the services and the name of the person or persons for whom the acts were done or services rendered, (3) show the date on which such contract was entered into or such authorization given, (4) contain the conditions of such contract or authorization, (5) be signed by the real estate broker or the real estate broker’s authorized agent, (6) if such contract or authorization pertains to any real property, include
Although the legislature has amended § 20-325a (b) since the time that the listing agreement here was in effect, the amendments involved technical changes not relevant to this appeal. Accordingly, references herein to § 20-325a (b) are to the current revision of the statute.
General Statutes § 20-312 (b) provides that any corporation holding a real estate broker’s license “shall designate in its application the individual who is to serve as broker under the license.” In the present case, the plaintiffs designated broker at the time of the listing agreement and the plaintiffs alleged services thereunder was Phil Knecht.
The only other officer of the plaintiff was Michael O’Brien’s brother, John O’Brien, who was not licensed as a real estate broker, but who did not actively participate in the plaintiffs real estate brokerage business.
General Statutes § 20-312 provides in relevant part: “(a) No person shall act as a real estate broker or real estate salesperson without a license issued by the commission, unless exempt under this chapter. . . .
“(b) No partnership, association or corporation shall be granted a real estate broker’s license, unless every member or officer of such partnership, association or corporation who actively participates in its real estate brokerage business holds a license as a real estate broker . . . .”
Although the legislature has amended § 20-312 since the time that the listing agreement here was in effect, the amendments involved technical changes not relevant to this appeal. Accordingly, references herein to § 20-312 are to the current revision of the statute.
General Statutes § 20-325a (a) provides: “No person who is not licensed under the provisions of this chapter, and who was not so licensed at the time the person performed the acts or rendered the services for which recovery is sought, shall commence or bring any action in any court of this state, after October 1, 1971, to recover any commission, compensation or other payment with respect to any act done or service rendered by the person, the doing or rendering of which is prohibited under the provisions of this chapter except by persons duly licensed under this chapter.”
Although the legislature has amended § 20-325a (a) since the time that the listing agreement here was in effect, the amendments involved technical changes not relevant to this appeal. Accordingly, references herein to § 20-325a (a) are to the current revision of the statute.
The question of whether the listing agreement substantially complied with subdivisions (2) through (6) of § 20-325a (b) is not at issue in this appeal.
Although the plaintiff did not claim, either in the trial court or initially in this court, that General Statutes (Rev. to 1997) § 20-325a (c) applied, we nonetheless conclude that consideration of the statute is appropriate under the plain error doctrine. “It is plain error for a trial court to fail to apply an applicable statute, even in the absence of the statute having been brought to its attention by the parties.” Genovese v. Gallo Wine Merchants, Inc., 226 Conn. 475, 480 n.6, 628 A.2d 946 (1993). Application of the plain error doctrine is warranted in this case because the statute is plainly applicable and both parties have had the opportunity to address it in their supplemental briefs.
“In State v. Courchesne, [262 Conn. 537, 567-78, 816 A.2d 562 (2003)], this court explained that, as part of the judicial task of statutory interpretation, we would not follow the so-called plain meaning rule, which operates to preclude the court, in certain cases, from considering sources in addition to the statutory text in order to determine its meaning. We are cognizant that, subsequent to our decision in Courchesne, [General Statutes § l-2z] has legislatively overruled that part of Courchesne in which we stated that we would not require a threshold showing of linguistic ambiguity as a precondition to consideration of sources of the meaning of legislative language in addition to its text. State v. Courchesne, supra, 577. [General Statutes § l-2z] provides: The meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered. . . . The present case does not implicate the limitation imposed upon our statutory review by [§ l-2z] because the applicable statutory text is not plain and unambiguous.” (Citations omitted; internal quotation marks omitted.) New Haven v. Bonner, 272 Conn. 489, 493-94 n.5, 863 A.2d 680 (2004).
We consider this claim first because, if the plaintiff is correct in its assertion, there would be no need to consider the application of General Statutes (Rev. to 1997) § 20-325a (c).
We disagree, however, with the trial court’s view that it was obliged to decide whether the plaintiffs license was “automatically void . . . .”
General Statutes § 20-311 (1) defines “ ‘[r]eal estate broker’ ” or “ ‘broker’ ” as “(A) any person, partnership, association, limited liability company or corporation which acts for another person or entity and for a fee, commission or other valuable consideration, lists for sale, sells, exchanges, buys or rents, or offers or attempts to negotiate a sale, exchange, purchase or rental of, an estate or interest in real estate, or a resale of a mobile manufactured home, as defined in subdivision (1) of section 21-64, or collects or offers or attempts to collect rent for the use of real estate, and (B) any person, partnership, association, limited liability company or corporation employed by or on behalf of the owner or owners of lots or other parcels of real estate, at a stated salary, upon commission, upon a salary and commission basis or otherwise to sell such real estate, or any parts thereof, in lots or other parcels, and who sells or exchanges, or offers, attempts or agrees to negotiate the sale or exchange of, any such lot or parcel of real estate . . . .”
Although the legislature has amended § 20-311 (1) since the time that the listing agreement here was in effect, the amendments involved technical changes not relevant to this appeal. Accordingly, references herein to § 20-311 (1) are to the current revision of the statute.
General Statutes § 20-311 (2) defines “ ‘[r]eal estate salesperson’ ” or “ ‘salesperson’ ” as “a person affiliated with any real estate broker as an independent contractor or employed by a real estate broker to list for sale, sell or offer for sale, to buy or offer to buy or to negotiate the purchase or sale or exchange of real estate, or to offer for resale, a mobile manufactured
Although the legislature has amended § 20-311 (2) since the time that the listing agreement here was in effect, the amendments involved technical changes not relevant to this appeal. Accordingly, references herein to § 20-311 (2) are to the current revision of the statute.
General Statutes (Rev. to 1997) § 20-314 (d) provides: “(1) Each applicant for a real estate broker’s license shall, before being admitted to such examination, prove to the satisfaction of the Real Estate Commission: (A) (i) That he has been actively engaged for at least two years as a licensed real estate salesperson under the supervision of a licensed real estate broker in this state, (ii) that he has successfully completed a course approved by the commission in real estate principles and practices of at least thirty classroom hours of study, (iii) that he has successfully completed a course approved by the commission in real estate appraisal consisting of at least thirty classroom hours of study, and (iv) that he has successfully completed a course approved by the commission consisting of at least thirty classroom hours as prescribed by the commission, or (B) that he has equivalent experience or education as determined by the commission.
“(2) Each applicant for a real estate salesperson’s license shall, before being admitted to such examination, prove to the satisfaction of the Real Estate Commission (A) that he has successfully completed a course approved by the commission in real estate principles and practices consisting of at least thirty classroom hours of study, or (B) that he has equivalent experience or education as determined by the commission.”
The real estate commission has the authority to waive these four requirements if it determines that the applicant “has equivalent experience or education . . . General Statutes (Rev. to 1997) § 20-314 (d) (1) (B).
General Statutes § 20-320 provides in relevant part: “The [real estate] commission may temporarily suspend or permanently revoke any license issued under the provisions of this chapter and, in addition to or in lieu of such suspension or revocation, may, in its discretion, impose a fine of not more than two thousand dollars at any time when, after proceedings as provided in section 20-321, the commission finds that the licensee has by false or fraudulent misrepresentation obtained a license or that the licensee is guilty of any of the following . . . (13) a violation of any provision of this chapter or any regulation adopted under this chapter. . . .”
Although the legislature has amended § 20-320 since the time that the listing agreement here was in effect, the amendments involved technical changes not relevant to this appeal. Accordingly, references herein to § 20-320 are to the current revision of the statute.
Dissenting Opinion
dissenting. The majority concludes that the plaintiff, Location Realty, Inc., was not duly licensed as a real estate broker and, therefore, would be barred by General Statutes § 20-325a (a)
General Statutes (Rev. to 1997) § 20-325a (c) provides: “Nothing in subsection (a) of this section or subdivisions (2) to (6), inclusive, of subsection (b) of this section shall prevent any licensee from recovering any commission, compensation or other payment in respect to any acts done or services rendered, if such person has substantially complied with subdivisions (2) to (6), inclusive, of subsection (b) of this section and it would be inequitable to deny such recovery.” The majority recognizes that § 20-325a (a) bars a person who is not “licensed,” i.e., is not duly licensed, from bringing an action for a commission, but argues that a licensee who is not duly licensed may, nevertheless, recover a commission under § 20-325a (c) if, under the “facts and circumstances” of the case, it would be inequitable to preclude recovery, because § 20-325a (c) specifically
I would conclude that, by including the reference to § 20-325a (a) in § 20-325a (c), the legislature merely intended to underscore that, by its very terms, § 20-325a (a) does not bar a licensee, i.e., a person who is duly licensed, from recovering a commission. I recognize that, under this interpretation, the reference to subsection (a) in subsection (c) is gratuitous because nothing in § 20-325a (a) suggests that a licensee is
This conclusion is supported by the legislative history of § 20-325a (c). During joint committee hearings on the proposed legislation, Larry Hannafin, representing the department of consumer protection and the Connecticut real estate commission, specifically stated that “the proposed changes expand [£ 20-325a (b)] so that if a broker in a real estate transaction has substantially complied with the provisions of this chapter, or this section, the broker will be permitted to pursue their claims for payment of the licensee[’s] fees in our court system.” (Emphasis added.) Conn. Joint Standing Committee Hearings, Insurance and Real Estate, 1994 Sess., p. 91. Thus, immediately after referring to “this chapter,” Hannafin corrected himself by saying “or this section” to clarify that the new legislation affected only “this section,” meaning § 20-325a (b). He did not suggest that the legislation expanded the right to bring an action when the licensing requirements of chapter 392 had not been met. Hannafin also stated that “[r]ight now under [§ 20-325a (b)], if as much as a date [in] the listing contract or authorization to ask for another is deleted from that listing agreement [the broker is barred] from going to court to seek payment of the commission and often this has resulted in unjust enrichment to various sellers of properties.” Id. In my view, this legislative
Indeed, the majority recognizes that § 20-325a (c) was enacted in response to judicial decisions holding that the failure to comply strictly with § 20-325a (b) barred the right to recover a commission and that the “the task force that drafted the legislation considered that the strict construction of [,§' 20-325a (b)] had resulted in some cases of ‘unjust enrichment.’ ” (Emphasis added.) It then concludes that this fact “suggests that the question of recovery, despite a failure to comply strictly with subsection (a) of § 20-325a, must be determined on the basis of all of the facts and circumstances of the case.” (Emphasis added.) The fact that the legislature intended that a person should not automatically be deprived of a commission for failure to comply strictly with the formal requirements for a listing agreement set forth in § 20-325a (b) does not mean that the legislature intended that a person should not automatically be deprived of a commission for failure to comply with the basic statutory licensing requirements.
In summary, I do not agree with the majority’s conclusion that, under § 20-325a (c), a person who has failed to comply with the licensing provisions of chapter 392
General Statutes § 20-325a (a) provides: “No person who is not licensed under the provisions of this chapter, and who was not so licensed at the time the person performed the acts or rendered the services for which recovery is sought, shall commence or bring any action in any court of this state, after October 1, 1971, to recover any commission, compensation or other payment with respect to any act done or service rendered by the person, the doing or rendering of which is prohibited under the provisions of this chapter except by persons duly licensed under this chapter.”
I also agree with the majority’s implicit determination that this court has jurisdiction to determine that the plaintiff was not duly licensed for purposes of § 20-325a (a), even though the real estate commission has original jurisdiction over “licensure and issuance, renewal, suspension or revocation of licenses concerning the real estate business.” General Statutes § 20-311b (b) (2). I do not believe, as the trial court found, that the effect of the court’s determination that the plaintiff was not duly licensed for purposes of § 20-325a (a) was to void the plaintiffs license for the relevant annual periods. The effect was simply to bar the plaintiff from bringing an action to recover a commission. Any determination that the license was void, which, as the plaintiff points out, would have consequences beyond barring an action for a commission pursuant to § 20-325a (a); see, e.g., General Statutes § 20-325 (engaging in business of real estate broker without license is punishable by fine and imprisonment); must, in my view, be made by the real estate commission.
I am peiplexed by the majority’s argument that the linguistic distinction between “bringing or commencing” an action for a commission in § 20-325a (a) and “recovering” a commission in § 20-325a (c) “strongly suggests] that the right of a plaintiff who is not duly licensed nonetheless to recover must be determined based on all of the facts and circumstances of the case.” The recovery allowed by § 20-325a (c) is clearly recovery in an action commenced or brought in a court of law. While § 20-325a (a) and (b) bar commencement of such an action and, therefore, recovery, under specified facts and circumstances, § 20-325a (c) permits recovery and, necessarily, the commencement of an action, under specified facts and circumstances. Thus, I cannot perceive the significance of the linguistic distinction relied on by the majority.
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