The opinion
MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Dec 03 2020, 8:31 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Robert R. Faulkner Max E. Fiester
Evansville, Indiana Terrell, Baugh, Salmon & Born,
LLP
Evansville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Matthew P. Apodaca, December 3, 2020
Appellant-Defendant, Court of Appeals Case No.
20A-SC-505
v. Appeal from the
Warrick Superior Court
ERA First Advantage Realty, The Honorable
Inc., Benjamin R. Aylsworth,
Magistrate
Appellee-Plaintiff.
Trial Court Cause No.
87D02-1907-SC-1365
Kirsch, Judge.
[1] Matthew P. Apodaca (“Apodaca”) appeals the trial court’s ruling that Apodaca
owes a real estate sale commission to ERA First Advantage Realty, Inc. (“ERA
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Realty”) for a purchase of residential real estate that Apodaca negotiated and
closed on his own. On appeal, Apodaca raises three issues, but we reach only
one of those issues, which we restate as follows: whether the trial court erred in
ruling that Apodaca was required to pay a commission to ERA Realty and its
agent because ERA Realty and its agent failed to fulfill conditions precedent
under the contract.
[2] We reverse and remand.
Facts and Procedural History
[3] In early 2019, Apodaca lived in California, and his job as a field engineer for
Siemens Corporation involved significant travel. Tr. Vol. 2 at 25. He searched
the internet for real estate for investment purposes, but once he learned that
housing in Indiana was much cheaper than housing in California, he began to
look for homes in Warrick County as a potential home for him and his fiancée
so he could travel less, and he and his fiancé could settle down and start a
family. Id. at 26-27. At some point “before March” of 2019, Apodaca
discovered a residence in Elberfeld, Indiana (“the Elberfeld residence”) that was
listed as “for sale by owner property.” Id. at 27. Apodaca contacted the owner
of the Elberfeld residence. Id. At this point, Apodaca had not reached out to
any southwestern Indiana realtors about the Elberfeld residence. Id.
[4] On March 6 or 7, 2019, Apodaca contacted Michael Melton (“Melton”), a real
estate agent for ERA Realty. Id. at 6. Beginning on March 7, 2019, Apodaca
began sending text messages to Melton about properties that Apodaca wanted
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to view. Ex. Vol. at 3-6. In none of his communications with Melton did
Apodaca ask Melton about the Elberfeld residence. Tr. Vol. 2 at 19; Ex. Vol. 3 at
3-6. At some point before March 16, 2019, Apodaca contacted the owner of the
Elberfeld residence, and the owner agreed that Apodaca could come view the
residence on March 16, 2019, at 3:00 p.m. Tr. Vol. 2 at 28.
[5] Apodaca and Melton met for the first time on the morning of March 16, 2019,
so they could view several properties in the area later that day. Id. at 10.
Melton presented Apodaca with a contract. Id. at 11, 20, 22. Several hours
after Apodaca and Melton started looking at properties, Apodaca told Melton
for the first time that he had arranged to view the Elberfeld residence on his
own. Id. at 21. Apodaca and his fiancée viewed that property on their own at
3:00 p.m. the same day. Id. at 21, 28, 30.
[6] At some point on March 16, 2019, Apodaca signed a contract with ERA
Realty. Id. at 11. In pertinent parts, the contract, designated as a “Loyalty
Agreement – Buyer’s Exclusive Agency Contract”, provided as follows:
This Contract is entered into and shall commence on 3/16/19 by
[ERA Realty] and [Apodaca] . . . . [Apodaca] employs [ERA
Realty] for the purpose of exclusively assisting [Apodaca] to
locate property described below or other property acceptable to
[Apodaca], and to negotiate terms and conditions acceptable to
[Apodaca] for purchase of property.
....
C. [ERA REALTY’S] COMPENSATION:
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....
2 . Commission: In consideration for the services to be
performed by [ERA Realty], [Apodaca] also agrees to pay [ERA
Realty] a commission of $ Paid by Seller or Paid by Seller % of
the total purchase price; however, the total commission paid to
[ERA Realty] shall not be less than $ Paid by Seller. . . . [ERA
Realty] shall use [ERA Realty’s] best effort to cause the seller or the
seller’s agent to satisfy [Apodaca’s] obligation to [ERA Realty].
The commission shall be due, earned and promptly paid if:
a. [Apodaca or any other person acting for [Apodaca] or on
[Apodaca’s] behalf, acquires any real property or interest as
described herein during the term of this Contract through the
services of [ERA Realty] or otherwise.
....
F. FURTHER CONDITIONS:
[Apodaca] will compensate [ERA Realty] 3% on the purchase price of a
for sale by owner if the seller will not pay [Apodaca’s] agent commission.
[Apodaca] will call [Melton] prior to scheduling appointments
with for sale by owners and let [Melton] schedule the
appointments.
Appellant’s App. Vol. 2 at 18-19 (emphasis added).
[7] Apodaca negotiated the terms of the purchase of the Elberfeld residence on his
own and closed the sale himself. Tr. Vol. 2 at 30. Melton had no role in the
sale. Id. at 21. At some point before May 20, 2019, Apodaca purchased the
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Elberfeld residence for $450.000. Id. at 15-16, 21, 30; Appellant’s App. Vol. 2 at
17; Ex. Vol. 3 at 6. Melton did not receive a commission from Apodaca, which
under the terms of the contract would have been $13,500.00. Tr. Vol. 2 at 16-17.
There was no evidence that Melton, or anyone else on behalf of ERA Realty,
ever attempted to collect any commission from the seller of the Elberfeld
residence or that the seller refused to pay the commission.
[8] On July 17, 2019, ERA Realty sued Apodaca by filing a “Statement of Claim.”
Appellant’s App. Vol. 2 at 10. Even though ERA Realty alleged damages for lost
commissions of $13,500.00, it agreed to the jurisdictional limit of $6,000.00 by
filing the claim in the Small Claims Division of Warrick Superior Court. Id.
On January 30, 2020, the trial court conducted a hearing on ERA Realty’s
claim. Tr. Vol. 2 at 2. On February 3, 2020, the trial court entered judgment
against Apodaca, finding and concluding as follows:
The Court FINDS that the contract executed by . . . [Melton] and
[Apodaca] on the morning of March 16, 2019 is valid and
enforceable. [Melton] had performed work in preparation prior
to that date for [Apodaca’s] benefit and [Apodaca] testified about
thoughtful discussion and consideration with his spouse prior to
ultimately deciding to enter into the binding contractual
agreement and without being subject to duress. As a result of the
foregoing reasons, the Court ORDERS that the Plaintiff shall
possess a Judgment against [Apodaca] in the full amount being
requested, $6,000.00, plus court costs.
Appellant’s App. Vol. 2 at 8. Apodaca now appeals.
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Discussion and Decision
[9] Apodaca argues that the trial court erred in finding that he was liable under the
contract to pay a commission to Melton because he maintains that Melton was
entitled to a commission under the contract only if Melton fulfilled conditions
precedent in the contract. In addressing Apodaca’s claim, we will assume
without deciding that Apodaca would owe Melton the commission if Melton
fulfilled the conditions precedent in the contract.
[10] When a trial court enters findings of fact and conclusions of law, findings
control only as to the issues they cover, and a general judgment standard
controls as to issues upon which there were no findings. Jernas v. Gumz, 53
N.E.3d 434, 443 (Ind. Ct. App. 2016), trans. denied. A general judgment entered
with findings will be affirmed if it can be sustained on any legal theory
supported by the evidence. Id. We review facts from a bench trial under the
clearly erroneous standard and thus defer to the trial court’s opportunity to
assess witness credibility. Branham v. Varble, 952 N.E.2d 744, 746 (Ind. 2011).
This deference is “particularly important in small claims actions, where trials
are informal, ‘with the sole objective of dispensing speedy justice’ between
parties according to the rules of substantive law.” Id. (quoting City of Dunkirk
Water & Sewage Dep’t v. Hall, 657 N.E.2d 115, 116 (Ind. 1995)). “Interpretation
of a contract presents a question of law.” Jernas, 53 N.E.3d at 443. “We review
questions of law de novo and owe no deference to the trial court’s legal
conclusions.” Id.
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[11] In arguing the contract required Melton to fulfill conditions precedent before
being entitled to a commission, Apodaca points to section C2 and section F of
the contract. In pertinent part, section C2 provides:
Commission: In consideration for the services to be performed
by [ERA Realty], [Apodaca] also agrees to pay [ERA Realty] a
commission of $ Paid by Seller or Paid by Seller % of the total
purchase price; however, the total commission paid to [ERA
Realty] shall not be less than $ Paid by Seller. . . . [ERA Realty]
shall use [ERA Realty’s] best effort to cause the seller or the seller’s agent
to satisfy [Apodaca’s] obligation to [ERA Realty].
Appellant’s App. Vol. 2 at 18 (emphasis added). Section F provides:
[Apodaca] will compensate ERA Realty 3% on the purchase price of a for
sale by owner if the seller will not pay [Apodaca’s] agent commission.
[Apodaca] will call [Melton] prior to scheduling appointments
with for sale by owners and let [Melton] schedule the
appointments.
Id. at 19 (emphasis added).
[12] Apodaca contends that there was no evidence before the trial court that Melton
made any effort to cause the seller to pay any obligation for a commission that
Apodaca may have owed Melton. Apodaca also claims there is no evidence
that the seller refused to pay the commission. Thus, he claims the trial court
erred as a matter of law in ruling that Apodaca was required to pay a
commission to Melton.
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[13] We agree with Apodaca. “Under contract law, a condition precedent is a
condition that must be performed before the agreement of the parties becomes a
binding contract or that must be fulfilled before the duty to perform a specific
obligation arises.” Ind. State Highway Comm’n v. Curtis, 704 N.E.2d 1015, 1018
(Ind. 1998). “As a general rule, an express condition must be fulfilled or no
liability can arise on the promise that the condition qualifies.” Id. Here, the
contract required Melton to make “best effort to cause the Seller . . . to satisfy
[Apodaca’s] obligation to [Melton].” Appellant’s App. Vol. 2 at 18. Under the
contract, Apodaca was not liable for the commission unless the seller “[would]
not pay the . . . commission.” Id. at 19. There is no evidence that Melton or
any other person on behalf of ERA Realty made such efforts or that the seller
refused to pay the commission. Therefore, the evidence is undisputed that
Melton and ERA Realty failed to fulfill conditions precedent to collection of the
commission. Thus, the trial court erred as a matter of law in finding that
Apodaca was required to pay the commission to Melton for Apodaca’s
purchase of the Elberfeld residence. Accordingly, we reverse the trial court and
direct it on remand to enter judgment for Apodaca on ERA Realty’s Statement
of Claim.
[14] Reversed and remanded.
Pyle, J., and Tavitas, J., concur.
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