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Wardley v. Cannon, et al, No. 20010245,A
State: Utah
Court: Supreme Court
Docket No: 20010245
Case Date: 10/11/2002
Plaintiff: Wardley
Defendant: Cannon, et al, No. 20010245,  Filed October 11, 2002, 2002 UT 99
Preview:This opinion is subject to revision before publication in the Pacific Reporter.
OPINION
(For Official Publication)

IN THE UTAH COURT OF APPEALS
----ooOoo----

Wardley Corporation,
Plaintiff, Appellee, and  Cross-appellant,
v.
Grant Welsh,
Defendant, Appellant, and  Cross-appellee.
Case No. 970401-CA
F I L E D
(July 2, 1998)

Third District, Salt Lake Department
The Honorable Robin W. Reese
Attorneys: Vincent C. Rampton, Salt Lake City, for Appellant
Neil R. Sabin and Annette F. Sorensen, Salt Lake City, for Appellee
Before Judges Greenwood, Jackson, and Orme.
JACKSON, Judge:
Grant Welsh appeals both the trial court's entry of partial summary judgment for Wardley Corporation and the trial court's later judgment for Wardley following a trial held on December 16, 1996. Wardley cross-appeals regarding the trial court's denial of its request that Welsh pay its attorney fees. We affirm.
BACKGROUND
Welsh, a developer, owned a parcel of land at about 4800 West and 8400 South in West Jordan, Utah (the parcel). Randy Young, a licensed real estate sales agent, worked for Wardley, a real estate brokerage. Young asked Welsh if he had any property to sell. Welsh replied he wanted to sell the parcel, but would not list it with Young as Young had asked. Welsh stated that he needed to net $18,500 per acre from selling the parcel and that Young could receive a commission for sending Welsh a buyer.
Young introduced Welsh to Leon Peterson. Young was not present when Welsh and Peterson later entered a purchase agreement, in which Peterson agreed to buy the parcel from Welsh. In the purchase agreement, Welsh inserted as item twelve of addendum one the following handwritten language: "While Wardley BH&G has no agency relationship with neither [sic] the Seller nor [sic] the Buyer, the Seller agrees to pay $500.00 per acre to Wardley BH&G[] at settlement."
Welsh paid the five-hundred-dollar-per-acre commission to Wardley on the first set of lots he sold to Peterson under the purchase agreement. Welsh and Peterson then had a dispute about some of the purchase agreement's terms. Young became involved in their negotiations to some degree. During this time, Welsh sent Young a letter, stating, "I would like to remind you that you do not represent me in any way whatsoever, nor do you maintain any kind of an agency relationship with me, whatsoever." Welsh and Peterson later resolved their dispute through another written agreement. When Welsh then conveyed the remaining two sets of lots to Peterson, he refused to pay Wardley a commission.
Wardley sued Welsh for the five-hundred-dollar-per-acre commission described in the purchase agreement. Wardley further asserted a claim for attorney fees based upon the following term in the purchase agreement: "In any action arising out of this Contract the prevailing party shall be entitled to costs and reasonable attorney's fees." Welsh responded that he need not pay a commission to Wardley because he alleged Wardley, as his purported agent, breached fiduciary duties toward him, Wardley did not disclose a purported agency relationship with Welsh or a
purported dual agency relationship with Welsh and Peterson, as required by statute and rule,(1) and Wardley's claim for commission was the result of an illegal "net listing."(2)
On Wardley's motion, the trial court granted partial summary judgment to Wardley, ruling that (1) Wardley had no agency relationship with Welsh; (2) Wardley owed Welsh no fiduciary duties; (3) Young was a "coordinating agent," or finder, not a dual agent with disclosure duties; and (4) a question of material fact existed as to whether Young had taken a "net listing" in violation of the administrative rules.
After trial on the single issue of whether a net listing existed, the court determined that Welsh never listed the parcel with Young and, without a listing, there could be no net listing. The trial court thus awarded Wardley the commission it sought. The trial court then denied Wardley attorney fees under the contract, reasoning that the contract was ambiguous as to attorney fees for nonsignatories, and Wardley had not presented extrinsic evidence about Welsh's and Peterson's intent to make the provision applicable to Wardley as a third-party beneficiary.
Welsh appeals the trial court's judgment against him for Wardley's commission. Wardley cross-appeals the trial court's denial of its request for attorney fees.
ANALYSIS
I. Appeal
A. Partial Summary Judgment
Summary judgment is proper when no genuine issues of material fact exist, and the movant qualifies for judgment as a matter of law. See Wardley Corp. Better Homes & Gardens v. Burgess, 810 P.2d 476, 477 (Utah Ct. App. 1991). Thus, an appeal from a summary judgment contests only legal conclusions, which we review for correctness, with no deference to the trial court. See id. We must appraise the evidence in a light most favorable to Welsh, the losing party, and will affirm only if no genuine dispute of material fact exists or if, even based on the facts as argued by Welsh, Wardley wins as a matter of law. See id.
Welsh contends that Wardley through Young must have been either his agent or a dual agent of Welsh and Peterson, and thus owed him statutorily required fiduciary duties(3) and written disclosures about their agency relationship(s). According to Welsh, these requirements were not met, and he therefore may refuse to pay Wardley's commission. Wardley rejoins that under the undisputed facts it was not Welsh's agent, but merely found Welsh a buyer and therefore owed Welsh no fiduciary or disclosure duties. We agree with Wardley.
The key relationship between a real estate broker and a client is agency, and the universal laws applying to principals and agents control their rights and responsibilities. See Beech Acceptance Corp. v. Connell, Nos. 88-1080-C, 88-1575-C, 1990 U.S. Dist. LEXIS 16309, at *14 (D. Kan. Nov. 8, 1990). Agency is "the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act." Restatement (Second) of Agency 1(1) (1958). Thus, for Welsh to show Wardley was his agent, he must prove that (1) he manifested that Wardley could act for him, (2) Wardley accepted the proposed undertaking, and (3) both Welsh and Wardley understood that Welsh was to be in charge of the undertaking. See id.
1(1) cmt. b (1958). In other words, "an agency is created and authority is actually conferred very much as a contract is made": a meeting of the minds must exist between the parties. 3 Am. Jur. 2d Agency 17 (1986). Moreover, and critical in this case, "[a]n agency relationship can arise only at the will and by the act of the principal." Id.
These principles doom Welsh's arguments. He presented no facts showing he consented to or created an agency relationship with Wardley. First and foremost, he twice clearly disclaimed in writing that Wardley acted as his agent-
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