A real estate agent’s false representation prior to the time of signing an exclusive listing agreement precludes that agent from collecting a commission on the sale.
Jacqueline Geary, the owner of “All For The Pet,” a pet shop specializing in exotic baby birds was contacted by real estate agent, Leonard Berman. Berman has received a call from Leroy Merritt concerning the possible sale of his friend’s pet store.
After months of missed contacts, Berman presented an exclusive listing agreement to Geary. The agreement provided for an exclusive right to sell for 12 months with a commission of 10% of the sales price.
Prior to that meeting, Geary had spoken with Ed. St. John and confirmed his daughter wanted to purchase the pet store. A contract was later entered into with the St. Johns, which was consummated and a sales price of $154,908.24 was paid.
No commission was paid and Berman filed suit.
At trial, the testimony made clear that Berman appeared at the store as Geary was feeding the birds and he asked her to sign a document, explaining that it was necessary to enable him to bring people to see the store.
Before signing, Geary reminded Berman she had told him before of the impending sale to the St. Johns and he responded, “Don’t worry about it. Don’t worry about it.”
The trial court decided for Geary, finding that she was induced to sign the listing contract by virtue of false misrepresentation of a material fact.
The appellate court also said, “We conclude that the statement, ‘don’t worry about it,’ in response to being told about the sale to the St. Johns, supports the trial courts finding that Berman made a false statement.”
Geary contended and the court found that Berman knew the St. Johns sale was to be excluded from the agreement and intentionally misled her such that she signed the listing agreement, without even reading it.
The court reasoned that the false misrepresentation was a valid defense to the breach of contract action commenced to collect the commission.
And the court decided that no real estate commission was due on the sale of the Anne Arundel County pet store.
