Plaintiffs are not licensed as brokers in Illinois, but they are seeking compensation for brokerage services. Plaintiffs respond, however, that para. 5807 prohibits the institution of suit only to recover compensation for acts " the doing or performing of which is prohibited by this Act to other than licensed brokers" and that the acts for which they seek compensation are not prohibited by the Act because para. 5803 specifically states that, "nothing in this Act shall prohibit the cooperation of or a division of commission between a duly licensed broker of this State and a nonresident of this State, licensed as a real estate broker in his resident state, having no office in this State." Plaintiffs argue that para. 5803 applies to their situation and renders para. 5807 inapplicable to them. We agree.
The complaint alleges that Myers engaged the services of plaintiffs to assist Myers and McKenzie, an Illinois licensed real estate broker, to find a buyer for some real estate, and that the commissions were to be divided between Dollar and McKenzie. Complaint, paras. 8, 9. It also alleges that plaintiffs reside in Texas and are Texas licensed real estate brokers. Complaint, paras. 1, 2. The complaint further alleges that McKenzie and Dollar worked together to find a buyer for the second property. Complaint, para. 16.
We find these allegations clearly sufficient to show that para. 5803 applies to plaintiffs. They are licensed in their resident state, have no office in Illinois, and cooperated and split fees with a duly licensed broker of Illinois. Such cooperation and fee splitting is specifically permitted by the Act under para. 5803.
We turn then to para. 5807, prohibiting the bringing of a suit to recover compensation "for any act done or service performed, the doing or performing of which is prohibited by this Act to other than licensed brokers or salespersons . . . ." Our reading of this provision, based on its plain language, is that it prohibits the institution of a suit to recover compensation for acts prohibited by the statute. However, plaintiffs' acts are specifically permitted by the statute, under para. 5803, because plaintiffs are licensed real estate brokers in their state of residence and acted in cooperation with McKenzie, a duly licensed Illinois broker. Hence, para. 5807 is inapplicable.
Defendants have cited no law contrary to our interpretation of the statute. None of their cases involve out-of-state licensed brokers working in cooperation with Illinois licensees. Rather, the cases they cite involve suits for recovery of compensation by individuals who are not licensed as real estate brokers in any state. See The John Buck Co. v. Atlantic Richfield Co., slip op., No. 85 C 10450 (N.D. Ill. Sept. 17, 1986) (suit could not be brought because employee of a partnership who was not licensed as a real estate broker performed brokerage services); Rabin v. Prenzler, 116 Ill. App. 3d 523, 451 N.E.2d 1331, 72 Ill. Dec. 8, 12-15 (1983) (unlicensed broker could not recover for "introducing" prospective tenants because such actions were within the definition of "broker"); Rubenson v. MSI Real Estate, 108 Ill. App. 3d 546, 438 N.E.2d 1202, 63 Ill. Dec. 839, 840-41 (1982) (broker who was not licensed at the time she offered to perform leasing services could not recover for services). Thus, all these cases hold is that no suit may lie when the plaintiff is unlicensed and thus doing acts prohibited by the statute.
We believe our reading of the statute comports with common sense. Illinois has a legitimate interest in protecting its citizens from suits by finders or others who are not licensed as brokers in this state. It has no interest in preventing out-of-state brokers from suing Illinois sellers if they are working with licensed in-state brokers. To prevent the plaintiffs' suit would effectively interfere with Illinois residents' ability to obtain the services of out-of-state brokers because those brokers might refuse the employment if they were unable to sue to protect their commissions.
Therefore, we hold that plaintiffs may maintain their action in this court. Defendants' motion for judgment on the pleadings is denied.
We further find that this action is related to another pending action, McKenzie v. Myers, No. 89 C 1167, and that the second action should be reassigned in the interest of judicial economy. McKenzie involves the same parcel of real estate, the same sales transaction, and concerns disputes over brokerage fees resulting from this transaction.
Defendants' motion for judgment on the pleadings is denied. Plaintiffs' motion for a finding of relatedness to McKenzie v. Myers, No. 89 C 1176, is granted.
Dated: September 5, 1989
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