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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 863 SEPTEMBER TERM, 1996 ___________________________________

LOYOLA FEDERAL SAVINGS BANK

v.

MARILEE ANN HILL

___________________________________

Murphy, C.J., Cathell, Loney, Michael E. (specially assigned), JJ. ___________________________________ Opinion by Cathell, J. ___________________________________

Filed:

February 28, 1997

Loyola appellee,

Federal

Savings a

Bank

(Loyola), by the

appellant/crossCourt for

appeals

from

judgment

Circuit

Baltimore City (Alpert, J., presiding) that Marilee Ann Hill, appellee/cross-appellant, was the procuring cause of purchase by Richmond American Homes of Maryland, Inc. (Richmond American) of real property owned by Loyola and that Hill was entitled to a commission. Appellant Loyola presents three questions:

1. Did the plaintiff fail to prove that she was the procuring cause of the sale of the property? 2. Did the plaintiff fail to prove a customary commission of ten percent? 3. Did the trial court err in awarding the plaintiff prejudgment interest? Cross-appellant Hill presents three additional questions: [4.] Did the court err in not awarding judgment to Hill for a commission on the entire 66 lots covered by the purchase agreement? [5.] Did the court err or did it abuse its discretion in awarding prejudgment interest? [6.] Did the court err in not awarding prejudgment interest on the entire purchase price from the date the contract of sale was entered into?

- 2 The Facts We include here only those facts that we perceive support the trial judge's decision and that apparently were accepted by him. In the present case, Loyola was attempting to find buyers for sixty-six parcels of property on which it was about to foreclose.

There was evidence that an official of Loyola spoke with appellee for a second time shortly before the foreclosure sale and told her that Loyola had not been able to find a purchaser. Loyola acquired the property through foreclosure. Ultimately, There was

evidence that appellee informed the Loyola official with whom she was dealing that she expected a brokerage agreement that would cover any persons who she produced as potential buyers. faxed information about the property to appellee. Loyola

Appellee then

prepared a summary and a list of potential buyers for the property and began contacting these potential buyers. She produced one

potential buyer, Pulte Homes, but it did not purchase the property. During her discussions with Loyola about Pulte Homes, appellee twice brought up the matter of her commission in order to arrive at an agreed upon commission in the event she procured a buyer, and she proposed a certain commission rate. Loyola, however, never

agreed to that specific rate or any other specific rate. Eventually, appellee contacted Richmond American concerning the property. She furnished it with the information about the

- 3 property that she had received from appellant. Richmond American It first

had no prior knowledge of the property's availability. received this information from appellee. apparent intermediary, to Loyola. faxed The Richmond president

Appellee then, as an American's of Richmond financial American

information

requested that appellee set up a meeting with Loyola because he wanted to make an offer for the property. A meeting among Loyola, Richmond American, and appellee was set up for April 13, 1992. During that meeting, the history of the

property, matters relating to costs, Loyola's request for a cash sale, and site work were discussed. the subject site. All of the parties then toured

At the conclusion, Richmond American renewed its

expression of interest in the property and informed Loyola that it would be making an offer. After this meeting, appellee again Loyola again refused

presented to Loyola a "commission agreement." to accept the agreement.

Richmond American contacted appellee informing her that it was preparing an offer and asked her to whom it should be sent. She

told Richmond American to send it directly to Loyola and faxed Loyola informing it that the offer was en route. Appellee again

attempted to get Loyola to agree to a specific commission agreement. Again, Loyola refused. Richmond American's first offer was

proffered two days after the April 13, 1992, meeting. After this point, Loyola and Richmond American continued purchase negotiations, and Richmond American informed appellee as

- 4 to the status of the negotiations. These subsequent negotiations Ultimately, Loyola and

took place over a three-month period. Richmond American agreed to terms.1

Near the end of the negotia-

tion period, appellee again contacted Loyola's representative about the commission agreement she had submitted. they had not "gotten around to it." She was informed that

Because the agreement she had

proffered was her "rock bottom" offer and because by this time she was concerned that Loyola was trying to avoid paying her a

commission, she withdrew her specific commission offer.

At the

time she withdrew the offer, it had not been accepted by Loyola. After Loyola received her letter withdrawing her specific commission offer, it offered appellee a $15,000 finder's fee that she rejected. Appellee later was informed by Richmond American that

the parties had entered into a purchase agreement and the agreement's terms. Ultimately, Loyola received $981,000 from Richmond

American for some of the lots and, because of an escape clause, could not force Richmond American to purchase any others. American had, however, deposited $150,000 towards Richmond the lots'

purchase that was forfeited to Loyola pursuant to their agreement. Loyola received a total of $1,131,000 in respect to the transaction. We shall first address Loyola's questions. Procuring Cause The actual terms are relatively unimportant to the issues of "procuring cause" and customary fees. Accordingly, we shall only address the final terms as we deem necessary.
1

- 5 Korzendorfer Realty, Inc. v. Bufalo, 264 Md. 293 (1972), was a case involving a salesman's action against Korzendorfer Realty, Inc. (Korzendorfer), the broker for whom the salesmen worked, for a portion of the commissions the broker received on a sale to a buyer procured by the salesman. The Court noted initially that the

broker asserted that the salesman was not the procuring cause of the sale. The Court then discussed the law relative to the broker-

seller relationship as applicable to the salesman-broker-buyer relationship. It stated:

We had occasion to consider the rule of the Maryland cases in Ricker v. Abrams, 263 Md. 509 (1971). While the broker has the burden of proving that he was the procuring cause, Steele v. Seth, 211 Md. 323, 328 (1956), the fact that the negotiations are concluded by others does not necessarily deprive the broker of his right to commissions, Ricker v. Abrams, supra, nor does it matter whether the broker's services are slight or extensive, whether he showed the property, or whether he participated in the execution of the contract if his efforts were the proximate cause of interesting the purchaser, and of the purchaser's ultimate agreement to buy, Cowal v. Marletta, 216 Md. 222, 228 (1958). Bufalo was an employee of Korzendorfer Realty when Mr. Holland telephoned him, inquiring about the property. Bufalo acquainted Holland with the property, discussed it with him on two occasions, gave him such materials as were available, and then took Mr. Holland to Mr. Korzendorfer when discussions commenced regarding price. As was said in Sanders v. Devereux, 231 Md. 224, 231 (1963): "In order for a broker to establish that he is the procuring

- 6 cause of a sale of real estate, in the absence of a specific contract, the evidence must show or permit the inference that the sale was accomplished as the result of his action in discovering the purchaser, acquainting him with the property and referring him to the seller for further negotiations." [citing cases.] 264 Md. at 299-300. In Hampton Park Corp. v. T.D. Burgess Co., 270 Md. 269, 281 (1973), a case also involving whether a broker was the procuring cause of a sale, the Court first discussed several cases and emphasized

certain language contained in its prior case of Cowal v. Marletta, 216 Md. 222 (1958): "The question of whether a broker's efforts are the procuring cause of a sale is not to be determined by whether his services are slight or extensive but rather on the basis of whether the efforts he did make were in fact the proximate cause of interesting the purchaser, and his ultimate agreement to buy. . . ." 216 Md. at 228 (emphasis added). In Bearman v. Roland Park [Realty] Co., 218 Md. 515 (1959), we went on to say: ". . . One satisfies the legal test as a procurer of the purchaser if the testimony permits the inference that the sale was accomplished as a result of his action in discovering the purchaser, acquainting him with the property and referring him to the seller for further negotiations. (citations omitted)." 218 Md. at 518-19 (emphasis added).

- 7 The Court concluded: In our consideration of this case, we have not been unmindful of the application of Rule 886 which provides: "When an action has been tried by the lower court without a jury, this Court will review the case upon both the law and the evidence, but the judgment of the lower court will not be set aside on the evidence unless clearly erroneous and due regard will be given to the opportunity of the lower court to judge the credibility of the witnesses." Hampton Park, 270 Md. at 284-85. The Hampton Park Court, in holding

that no commission was there due, noted that "[t]he meaningless reference to the location of the subject property in the Drake Sheahan study is much too tenuous a link to establish the broker as the `primary, proximate and procuring cause of the sale' made through Godfrey." Id. at 285.

The facts in Hampton Park, when contrasted with the facts in the case sub judice, perhaps distinguish those types of transactions for which commissions are not due from those in which they are due. In

Hampton Park, the broker, T.D. Burgess Company (Burgess), obtained a listing agreement wherein Hampton Park Corporation (Hampton Park) promised to pay Burgess a six percent commission on any property "sold by" it. Hampton Park also agreed to pay a commission if the

U.S. Post Office bought a specific parcel "as a result of your efforts." The agreement thus appeared to be a nonexclusive

- 8 listing. Subsequently, the broker, an unauthorized member of the

Post Office, and the landowner had a meeting about the availability of the property. Some time later, a different authorized representative of the Post Office made an unannounced visit to Hampton Park's office. Mr. Malloy, the vice-president and secretary of Hampton Park, asked the representative if he had ever heard of the T.D. Burgess Company, and the representative responded that he had not. The

Post Office representative learned of the site and contacted the owner on his own, independent of any knowledge of the realtor or the prior contact between Post Office representatives and the realtor. Mr. Malloy then advised Burgess that he had been independently At all times, Mr.

contacted by some Post Office representative.

Malloy disclaimed any agreement to pay a commission on the sale resulting from the authorized Post Office representative's initial contact and negotiations with him. The realtors made no efforts to It was

effectuate the actual sale that ultimately occurred. completely independent of their efforts.

Hampton Park was one of the few cases in which the Court of Appeals has held that commissions were not due because a broker was not a procuring cause. the case sub judice. Its facts are far different than those in

The case at bar is more akin to Korzendorfer, supra,

Cowal, supra, and Sanders v. Devereux, 231 Md. 224 (1963), where the Court said:

- 9 In order for a broker to establish that he is the procuring cause of a sale of real estate, in the absence of a specific contract, the evidence must show or permit the inference that the sale was accomplished as the result of his action in discovering the purchaser, acquainting him with the property and referring him to the seller for further negotiations. Sanders, 231 Md. at 231. See also Ricker v. Abrams, 263 Md. 509, 517

(1971); Bearman v. Roland Park Realty Co., 218 Md. 515, 518-19 (1959); Steele v. Seth, 211 Md. 323, 331 (1956); Atlantic Richfield Co. v. Sybert, 51 Md. App. 74, 88-89 (1982), aff'd, 295 Md. 347 (1983). The Court of Appeals discussed the broker-seller relationship in respect to commissions in Heslop v. Dieudonne, 209 Md. 201, 206-07 (1956). The Heslop Court stated: [I]t is claimed that there was conduct from which it could be found that a relationship of principal and agent existed . . . . When the appellee requested permission to show the property of the appellants to prospective purchasers, both parties obviously realized the type of relationship which was being created between them. . . . [B]y allowing the appellee to show the property to various people they impliedly contracted to use the appellee as an agent for the purpose of that sale. . . . [U]nder this agency the appellants were obligated to pay the customary commission . . . . Likewise, the Court in Weinberg v. Desser, 243 Md. 347, 354-55 (1966), in response to an owner's assertion that the parties had "not" entered into a "contract of employment," stated:

- 10 The argument is not valid. While there was no written or express oral contract of employment, none was necessary because an employment relationship, as the cases show, may be implied from the conduct of the parties. And although the broker has the burden of proving that he was employed, the determination of such a relationship is ordinarily a question of fact for the jury to decide. . . . . . . . . . . [S]o also the question of whether the broker was the procuring cause of the lease is ordinarily, as it was here, a question of fact for the jury . . . . [Citations omitted.] In Anderson-Stokes, Inc. v. Muslimani, 83 Md. App. 267, cert. denied, 321 Md. 67 (1990), determining that the original broker was the

procurer of the buyer, we distinguished Leimbach v. Nicholson, 219 Md. 440 (1959), on a basis not relevant to the case sub judice. however, opined: We,

- 11 Procuring Cause As the circuit court noted, there have been literally dozens of cases in the Court of Appeals dealing with a broker's entitlement to commissions on the sale of real estate. Where the entitlement hinges on specific contractual language, that language, of course will control. Where, as here, the entitlement depends not on specific contractual terms but more generally on the employment of the broker, the issue ordinarily becomes whether the broker was the procuring cause of the ultimate sale. See Md. Real Prop. Code Ann.

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