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COURT OF APPEALS
DECISION
DATED AND FILED
August 27, 2009
David
R. Schanker
Clerk of Court of Appeals
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NOTICE
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This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official
Reports.
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See Wis. Stat. § 808.10 and Rule 809.62.
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Appeal No.
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STATE OF WISCONSIN
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IN COURT OF
APPEALS
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DISTRICT IV
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Restaino Bunbury & Associates, Inc.,
Plaintiff-Appellant,
v.
Assisted Living Concepts, Inc.,
Defendant-Respondent.
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APPEAL
from a judgment of the circuit court for Dane County: maryann
sumi, Judge. Affirmed.
Before
Dykman, P.J., Lundsten and Higginbotham, JJ.
¶1 PER CURIAM. Restaino Bunbury &
Associates appeals from a summary judgment decision that dismissed its breach
of contract and conversion action against Assisted Living Concepts. As we will explain below, we agree with the
trial court that the contract and conversion claims were barred by recent
precedent from this court. Accordingly,
we affirm.
¶2 This court reviews summary judgment decisions de novo, applying the same
methodology and legal standard employed by the circuit court. Brownelli v. McCaughtry, 182 Wis. 2d 367, 372,
514 N.W.2d 48 (Ct. App. 1994).
The summary judgment methodology is well established and need not be
repeated here. See, e.g., Lambrecht
v. Estate of Kaczmarczyk, 2001 WI 25, ¶¶20-23, 241 Wis. 2d 804, 623 N.W.2d 751. The legal standard is whether there are any
material facts in dispute that entitle the opposing party to a trial. Id., ¶24.
¶3 We view summary judgment materials in the light most
favorable to the party opposing the motion.
Id., ¶23. For the purposes of this appeal then, we
accept the following facts. Restaino
Bunbury & Associates is a real estate brokerage company licensed in Wisconsin. Assisted Living Concepts entered into a buyer
agency agreement with Restaino Bunbury & Associates for the purpose of
purchasing a specific property in Iowa.
Both parties were represented by
counsel, and the buyer knew that the broker was not licensed in Iowa. Under the agreement, which used a standard
WB-36 form approved by the Wisconsin Department of Regulation and Licensing,
the buyer was to pay the broker a commission of 1% of the sale price.
¶4 The broker conducted all negotiations for the purchase of the
property from its Wisconsin offices, with the exception of one short trip to
view the property in Iowa.
During the negotiations, the seller of
the property asked the buyer to prepare a listing contract under which the
broker would receive a $10,000 finder’s fee. The broker refused to engage in any dual
representation, however, and never signed any contract with the seller. The buyer subsequently asked the broker to cut
its commission in half because the buyer and seller were having difficulty
agreeing on a price. After the broker
refused to reduce its commission so drastically, the buyer took the position
that it was not obligated to pay the broker any commission due to an alleged
conflict of interest arising from dual representation by the broker.
¶5 The buyer ultimately purchased the property for $24 million
and refused to pay the $240,000 commission which would have been due under the
buyer agency agreement. Instead, the
title company sent the broker a check for $10,000 as the purported agent for
the seller.
¶6 The broker instituted this lawsuit against the buyer to
recover its commission. The trial court
determined that the parties’ contract was unenforceable, however, under Kadlec
v. Kadlec, 2004 WI App 84, 272 Wis.
2d 373, 697 N.W.2d 914. We
agree.
¶7 In Kadlec, this court determined that
an arbitration award requiring the sellers of a property located in Iowa to pay a commission to a Wisconsin real estate
broker who was not licensed in Iowa
violated strong public policy. We
pointed out that the laws of both states prohibited unlicensed persons from
performing and collecting commissions for real estate brokerage services within
their state. Id., ¶¶9-11; Wis. Stat. §§ 452.03 and 452.20 (2007-08);
Iowa Code §§ 543B.1 and 543B.30. Such laws help to ensure that the brokers
rendering services in a particular state are knowledgeable of the applicable
regulations. Id., ¶13. We reasoned that allowing a licensed broker
from one state to provide services in another state notwithstanding the other
state’s requirements would render the other state’s regulations meaningless. Id.,
¶14.
¶8 Restaino Bunbury & Associates attempts to distinguish Kadlec
from the present situation in several ways.
First, it asserts that the Wisconsin
statutes actually permit a broker to perform services within this state to
facilitate the purchase of a property located in another state because they
define brokerage services in relation to activities rather than the location of
the property. Whether that assertion is
true, however, is irrelevant because we look to Iowa law to determine whether Restaino
Bunbury & Associates was improperly operating as a broker in that state
without a license.
¶9 The Iowa definition of a real estate broker includes one who
directly or indirectly purchases, negotiates the purchase, or directs any
transaction intending to result in the purchase of real estate on behalf of
another for a fee. Iowa Code § 543B.3. Restaino Bunbury & Associates points out
that Iowa Code § 543B.4 defines real estate to include property
“wherever situated.” From there, it
argues that the focus of Iowa
law is only on whether the broker performed services such as negotiations
within the state, not whether the property was located within the state. However, we do not see how the actual
purchase of real estate within Iowa does not
fall within Iowa’s
definition of brokerage services, even if additional brokerage services such as
negotiations may have occurred in another state. Ultimately, the real estate transaction would
need to be conducted in accordance with Iowa
law and recorded there, and facilitating it would thus require familiarity with
Iowa
laws. In other words, the fact that
Restaino Bunbury & Associates may have been performing brokerage services
in Wisconsin by conducting negotiations here does not preclude the possibility
that it was also performing brokerage services in Iowa by directly or
indirectly arranging the purchase of real estate there, including arranging an
inspection of the property to facilitate the sale.
¶10 We see nothing in the Iowa law
presented to us by the parties that would relieve a broker from the requirement
of having an Iowa
real estate license to purchase real estate located in that state even if the
broker were also performing negotiation services in another state for which it
might need a separate license. We also
see nothing in the Kadlec decision to suggest that its holding was dependent upon
where negotiations in that case took place, or whether the broker was
representing the buyer or seller. We
conclude that, under Kadlec, the buyer agency agreement
at issue here is unenforceable as against public policy because it purports to
have a broker unlicensed in Iowa
undertake to arrange a real estate purchase there.
By the Court.—Judgment affirmed.
This
opinion will not be published. See Wis.
Stat. Rule 809.23(1)(b)5.