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Paulson v. Shapiro

decided: December 4, 1973.

EDWARD PAULSON, PLAINTIFF-APPELLANT
v.
MICHAEL SHAPIRO, INTERNATIONAL TRADING CO., A WISCONSIN CORPORATION, AND MILLROAD ENTERPRISES, A PARTNERSHIP, DEFENDANT-APPELLEES



On Appeal from the United States District Court for the Eastern District of Wisconsin. No. 71 C 241 MYRON L. GORDON, Judge.

Pell and Stevens, Circuit Judges and Campbell, Senior District Judge.*fn*

Author: Campbell

CAMPBELL, Senior District Judge.

Edward Paulson appeals from orders granting defendants' motion for summary judgment and denying plaintiff's motion to vacate said judgment pursuant to Rule 60 (b) of the Federal Rules of Civil Procedure. The record below consists of the pleadings, affidavits filed by the parties and their attorneys in support of their respective motions, and portions of the deposition of plaintiff-appellant, Edward Paulson. We reverse.

Plaintiff Edward Paulson (PLAINTIFF) is a resident of Illinois. He is a real estate broker and consultant, licensed as such in Illinois, with offices located in Chicago. He is not licensed as a real estate broker in Wisconsin.

Defendant Michael Shapiro (SHAPIRO) is a resident of Wisconsin. He is the president of defendant International Trading Co. and a partner in defendant Millroad Enterprises. Defendant International Trading Co. (I T C) is a Wisconsin corporation with its principal offices in Milwaukee, and is alleged to have been the owner of a certain parcel of real estate located at North Sixth Street and Wisconsin Avenue, Milwaukee, Wisconsin. Defendant Millroad Enterprises (MILLROAD) is a partnership, the principal offices of which are located in Milwaukee, Wisconsin. Millroad is alleged to have been the owner of a certain parcel of real estate located at North Seventh Street and Wisconsin Avenue, Milwaukee, Wisconsin.

The complaint alleges that in 1966 plaintiff was retained by Shapiro to develop a certain parcel of real estate located at North Seventh Street and Wisconsin Avenue (hereafter "Seventh Street Property") for use as a motor -inn; that plaintiff was to negotiate a lease therefore with some nationally reputed motel operator; that Shapiro had previously contacted an organization known as The Downtowner Corporation for this purpose, but negotiations had been unsuccessful; and that an alleged oral agreement for the retention of plaintiff's services regarding the Seventh Street Property was confirmed by letter from Shapiro to plaintiff dated August 17, 1966.

The complaint further alleges that, with the knowledge and approval of Shapiro, plaintiff thereafter engaged in various negotiations with The Downtowner Corporation, and advised Shapiro regarding methods, procedures and strategy directed toward the successful negotiation of a lease. During the course of these negotiations, The Downtowner Corporation is alleged to have indicated a preference for the property located at North Sixth Street and Wisconsin Avenue (hereafter "Sixth Street Property") which was then owned by I T C. Plaintiff contends that Shapiro thereafter orally authorized him to negotiate a lease for the Sixth Street Property and that a Letter of Intent was subsequently executed by The Downtowner Corporation regarding the Sixth Street Property. The Downtowner Corporation later signed a lease for occupancy of a motel to be constructed on the Sixth Street Property.

Plaintiff's complaint sets forth a claim in the amount of $180,000.00 for services rendered in connection with the negotiation of the lease.

After deposing plaintiff, defendants moved for summary judgment, supporting their motion with an attorney's affidavit, setting forth portions of plaintiff's deposition, and the affidavit of Shapiro, which is limited to statements of "opinion and belief" that there exists no dispute or issue respecting material facts. Plaintiff responded by filing an attorney's affidavit, setting forth portions of the Paulson deposition, and an affidavit executed by plaintiff. The district court granted defendants' motion, and entered an order for summary judgment. Plaintiff's motion to vacate, supported by further affidavits, was subsequently denied.

The court granted defendants' motion for summary judgment on three separate grounds:

(1) Plaintiff's action was held to be barred by Wisconsin Statutes § 452.13, which prohibits the maintenance of any action in the courts of Wisconsin for the collection of a brokerage commission by any person acting in the capacity of a real estate broker within the State of Wisconsin, unless such person is a duly licensed real estate broker or salesman.

(2) The alleged oral agreement relating to the Sixth Street Property was held to be void, pursuant to Wisconsin Statutes § 240.10 (2), which provides that a contract to pay a commission to a real estate broker for leasing real estate for a term exceeding three years shall be void unless such contract is in writing and describes the real estate, the rent to be paid, the length of the lease, the commission to be paid and the period during which the broker shall procure the tenant.

(3) Plaintiff's claim was held to be barred by Wisconsin Statutes § 893.21 (5) which provides that any action to recover salary, wages or other compensation for personal services, except fees for professional services, must be brought within two years of the completion of such services.

The court held that the afforementioned statutes were applicable to the instant case, that the plaintiff was not a duly licensed broker in the State of Wisconsin, that there existed no written agreement respecting the Sixth Street Property, and that plaintiff had last rendered services in connection with negotiating a lease for the Sixth Street Property more than two years prior to the commencement of this action.

I

§ 452.13

§ 452.13 provides as follows:

"No person engaged in the business or acting in the capacity of a real estate broker or salesman within this State shall bring or maintain an action in the courts of this State for the collection of a commission or compensation for the performance of any act mentioned in this chapter without alleging and proving that he was a duly licensed broker or salesman at the time the alleged cause of action arose."

Plaintiff contends that the court below erred in applying § 452.13 in the instant case as a bar to the maintenance of this action because the record fails to disclose any instance in which plaintiff acted "in the capacity of a real estate broker" in Wisconsin. Alternatively, plaintiff argues that application of the statute to the facts appearing in this record would be violative of the Commerce Clause of the United States Constitution, since plaintiff has averred in his various affidavits that all meetings, discussions and negotiations between the plaintiff and The Downtowner Corporation occurred outside the State of Wisconsin. Since we find that the record before us does not present facts warranting application of § 452.13, we do not reach the issue regarding the statute's constitutionality as applied to the facts contained in this record, or as applied to facts involving mere peripheral conduct which, although occurring in Wisconsin, is incidental to the actual negotiation of a lease.

The record does not demonstrate that plaintiff acted "in the capacity of a broker" within the State of Wisconsin, and in fact, contains affidavits of plaintiff stating that he engaged in no meetings, conversations, discussions or negotiations in Wisconsin with any representative of The Downtowner Corporation. At the very least, the record reflects a genuine issue of fact precluding summary judgment.

Defendants urge that because plaintiff met with Shapiro on several occasions and inspected the property in question, he acted in the capacity of a real estate broker in Wisconsin. They argue that plaintiff's reports and conferences with Shapiro were actually part of the process of negotiating the lease.

To discern what conduct constitutes acting "in the capacity of a real estate broker", we need look no further than the statute in question. § 452.01 (2) ...


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