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Wagener v. U.S. Bank

June 30, 1998

OWEN WAGENER & CO., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,
v.
U.S. BANK, A BANKING CORPORATION, DEFENDANT-APPELLEE.



The opinion of the court was delivered by: Justice Wolfson

APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY.

HONORABLE LEE PRESTON, JUDGE PRESIDING.

Real estate brokers earn commissions by bringing together a willing buyer and a willing seller. But there is more to it than that, as this case demonstrates.

Owen Wagener & Co. (Wagener) appeals the trial court's dismissal of its third amended complaint against U.S. Bank (the Bank) with prejudice under section 2-615 of the Civil Practice Law. Wagener contends it sufficiently pleaded claims for breach of express contract, breach of implied contract, and quantum meruit. We affirm the trial court.

FACTS

Lewis Kaplan (Kaplan) owned commercial property in the Village of Crestwood. Kaplan fell behind on his mortgage with U.S. Bank, and the Bank initiated foreclosure proceedings. Kaplan decided to sell his property and signed a listing agreement with Wagener, a brokerage firm, on June 29, 1994. Under this listing agreement, Kaplan agreed to pay Wagener 6% of the sales price if Wagener found a buyer for the property. (The record does not contain a copy of the listing agreement.)

Wagener found Roderick and Judith Johnson (the Johnsons), who expressed interest in buying the property. The Johnsons began negotiations with Kaplan. On December 9, 1994, they entered into a contract to buy Kaplan's property.

This contract provided: "Seller [Kaplan] agrees to pay a broker's commission to [Wagener] in the amount set forth in the broker's listing contract or as follows: per separate agreement." The contract included a rider, which provided:

"Purchaser [the Johnsons] acknowledges that this Agreement is expressly subject to the approval of U.S. Bank. If U.S. Bank does not approve this transaction on or before April 14, 1995, this Agreement shall automatically become null and void and the Earnest Money together with all interest thereon shall be returned to Purchaser."

Kaplan signed this contract on March 28, 1995.

On March 17, 1995, Edward Freud, an attorney for U.S. Bank, wrote a letter to Kaplan's attorney. After mentioning he received a copy of the contract, Freud wrote:

"[A]ssuming the buyer and seller agree upon a sales price, which they apparently have not yet done, U.S. Bank will agree to allow the property to be sold and its [mortgage] lien released only if Mr. Kaplan and his partners have a cashiers check at the closing sufficient to pay the remaining amounts due and owing the Bank after application of the net proceeds of sale."

Freud also expressed some concern over other lease provisions and noted the Bank would "hold off on the foreclosure" for only 45 days after execution of the contract.

Kaplan attempted to renegotiate Wagener's commission, hoping to increase the sale proceeds, in that way decreasing the amount he would owe after closing. These negotiations failed, and on May 17, 1995, Freud wrote another letter to Kaplan's attorney:

"It *** is transparent [sic] to me at this juncture that the funds required to satisfy the shortfall at closing will not be available, and it has therefore been determined to proceed with the foreclosure action.

*** You may also want to advise the buyer that the Bank will shortly be the owner of the property, and in all likelihood it can be purchased from the Bank."

In August 1995, U.S. Bank obtained title to the property. On January 18, 1996, the Johnsons bought the property directly from the Bank, depriving Wagener of its commission. Wagener filed a complaint against the Bank.

After several initial pleading attempts, Wagener filed its third amended complaint. This complaint included a prefatory "STATEMENT OF FACTS," which summarized the parties' dispute. Wagener alleged it had a commission agreement with Kaplan; this agreement was incorporated into the December 9, 1994, contract between Kaplan and the Johnsons. Wagener acknowledged the contract between Kaplan and the Johnsons was specifically contingent on U.S. Bank's approval, but alleged the Bank "ratified and approved" the contract, including Wagener's commission, in Freud's March 17, 1995, letter.

Wagener also alleged the Bank knew "Wagener procured the Johnson's [sic] and expected to be paid a commission" because the Bank had reviewed the December 9, 1994, contract. After stating the Bank, "knowing that Wagener had a listing agreement with Kaplan," had requested information about the Johnsons, Wagener conceded, "At or about that same time the Johnson's [sic] contacted [Wagener] and requested to be put in contact with U.S. Bank."

Count I, entitled "BREACH OF CONTRACT," alleged in part:

"The actions of U.S. BANK in approving the contract for sale of the Premises and approving [Wagener's] commission constitute a ratification and express contract agreeing to pay Wagener a commission of 6% of the sales price.

*** U.S. BANK breached its agreement to pay [Wagener] its commission when it sold the Premises to the Johnson's [sic] on January 18, 1996, but ...


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