U.L. COLEMAN COMPANY, LTD Plaintiff-Appellant
KEITHA DICKSON GOSSLEE Defendant-Appellee
from the First Judicial District Court for the Parish of
Caddo, Louisiana Trial Court No. 480, 581 Honorable Michael
McMICHAEL, MEDLIN, D'ANNA, WEDGEWORTH & LAFARGUE, LLC
By: James C. McMichael, Jr. Anna Brown Priestley Counsel for
STROUD, CARMOUCHE & BUCKLE, P.L.L.C. By: Nichole M.
Buckle, Counsel for Appellee.
BLEICH, ARHAM & WARNER, L.L.C. By: Vicki C. Warner.
BROWN, WILLIAMS, MOORE, STONE, and BLEICH (Pro Tempore), JJ.
sides appeal aspects of judgments that divided, between a
real estate broker and its former agent, real estate sale
commissions on two large sales, awarded the former agent
lease commissions, and assessed penalty wages and an attorney
fee against the broker. For the reasons expressed, we affirm
in part, reverse in part, and render.
Coleman Co. ("ULCC") is a real estate broker in
Shreveport with a large business in commercial sales, leases
and property management. In July 1994, it hired Keitha
Gosslee as a leasing agent and sales associate. ULCC
designated her as an employee and paid her a monthly salary
(initially $2, 000) plus commissions on her leases and sales.
Apparently, Ms. Gosslee was an energetic and successful
agent, although ULCC's principal, Linc Coleman
("Coleman"), felt she was always angling for higher
salary and bigger commissions.
signed an employment agreement, December 1, 1995, which
divided all commissions according to an attached schedule and
recited that lease commissions were either paid monthly over
the term of the lease or up front (most were monthly). Ms.
Gosslee's lease commission was 37½%; in October
1997, ULCC increased this to 47¼%. By letter agreement
in December 1999, ULCC added a 15% bonus commission if she
exceeded a sale and lease volume of $137, 500 in a given
year; she exceeded the threshold every year and qualified for
the bonus. None of these agreements included a covenant not
August 22, 1997, Tom Bradshaw, a developer for Walgreens,
called ULCC and came in to discuss his company's plans to
expand to north Louisiana and east Texas. This was an
enormous deal, as Walgreens was looking to build perhaps 10
stores in the area. Coleman chose Ms. Gosslee to join the
meeting, and they persuaded Bradshaw to sign an exclusive
representation agreement with ULCC to identify and develop
locations for new Walgreens stores. This agreement had a
stated a term of one year, but Coleman testified he
considered it to be in force as long as ULCC was still
providing services to Bradshaw. Coleman gave Ms. Gosslee the
assignment, and she dove in energetically, as it was a career
relevance to this case, she worked to get suitable sites at
the intersections of Pines Road and W. 70th St., in
Shreveport; Shed Road at Airline Dr., in Bossier City; and
Lamy Lane and Louisville Ave., in Monroe. Through July 23,
2001, she negotiated Bradshaw's purchase of five sites
for new Walgreens locations. She and Coleman testified that
in these transactions, the sale commission was divided
62½% to ULCC and 32½% to Ms.
2001, Ms. Gosslee resigned from ULCC. She left because she
felt Coleman had reneged on a lucrative commission involving
the Chase Bank building. Coincidentally, she had just
obtained her own real estate broker's license, and could
open her own real estate company.
leaving ULCC, Ms. Gosslee made a list of pending projects,
including the Shed Rd. Walgreens. Coleman agreed she could
complete these deals on ULCC's behalf. She closed on Shed
Road in December 2001, at a price of $1.325 million, subject
to a 5% commission, or $66, 250, of which she remitted to
ULCC only 47½%, feeling she was entitled to the 15%
bonus for exceeding her threshold. She also had three pending
commercial leases generating monthly lease commissions.
Sometime after her departure, Coleman and his staff
discovered that she had carried off a number of active files,
including Walgreens files.
leaving ULCC, Ms. Gosslee formed her own company, Keitha
Gosslee & Associates ("KGA"). On August 21,
2001, she signed an exclusive representation agreement with
Bradshaw for the Walgreens account. She then got back to work
on the Pines Road and Lamy Lane projects. She closed a sale
on Pines Road in November 2002, at a sale price of $1.16
million and 6% commission, and retained the whole commission,
or $69, 600. She closed a sale on Lamy Lane in May 2004, at a
sale price of $1.225 million and 6.857% commission, and
retained the whole commission, $84, 000. There was much
testimony regarding what (if anything) ULCC did to work these
sales after Ms. Gosslee left.
filed this petition in November 2003 demanding the return of
all active files Ms. Gosslee had taken from the office in
2001. It also alleged that ULCC was entitled to a share of
the commission she earned on any Walgreens file that she
closed after she left. By subsequent brief, ULCC argued that
Ms. Gosslee wrongly withheld sale commissions of $105, 937,
and conceded that it (ULCC) had withheld her lease
commissions of $27, 875. It demanded the balance, $78, 062.
Gosslee filed a denial, asserting that she and ULCC had no
noncompetition agreement. She also reconvened, alleging that
she was entitled to lease commissions that ULCC had either
not paid at all, or had paid without the 15% bonus commission
to which she was entitled. She also alleged that commissions
are deemed to be "wages" under the Payment of
Employees Law, La. R.S. 23:631-634, and ULCC's failure to
remit them entitled her to the unpaid wages, 90 days'
wages as a penalty, and reasonable attorney fees. By
subsequent brief, she claimed she was due salary and
commissions of $48, 377, with penalty wages to be calculated.
matter languished in discovery for several years. Trial began
over two days in June 2012, before Judge Leon Emanuel. Over
the first day, and half of the second, Coleman offered
his interpretation of Ms. Gosslee's commission
scheme and of the relationship with Bradshaw after Ms.
Gosslee left ULCC. On the second day, Bradshaw testified, out
of order, saying that after Ms. Gosslee left ULCC, he never
heard another word out of Coleman or anybody else at ULCC. He
bluntly described his exclusive representation agreement with
ULCC as "dead" before he signed with KGA.
trial recessed until June 26, but another (unspecified) delay
intervened, and then Judge Emanuel retired (in December
2013). The trial finally resumed in April 2015, when it was
heard over two days by Judge Mike Pitman, who stated for the
record that he had read the transcript from 2012. The parties
announced that in the interim, an important witness,
Bradshaw, had died, and the court would have to rely on the
transcript of his earlier testimony.
called its controller, David Lester, to describe in detail
the different ways the company treated commissions for sales
and for leases of managed and nonmanaged properties. ULCC
spent some time trying to qualify a Benjamin Dowis III as an
expert in real estate broker-agent relations, but the court
refused to accept him.
Gosslee called Daniel Hutchinson, one of the owners of the
Pines Road property. He admitted that in 2000, Ms. Gosslee
had negotiated with him and his co-owner about buying their
old Goodyear store, but the co-owner refused to sell at
Bradshaw's price. By late fall 2001, however, Ms. Gosslee
contacted them again about the same property, but this time
she said Bradshaw would pay a $50, 000 relocation fee, with
an extra $50, 000 on the purchase price; remarkably, the
co-owner agreed, and the deal closed in November 2002.
Hutchinson admitted that Ms. Gosslee had identified the
property, negotiated and reached a purchase price before July
2001, but he felt that she had closed the deal on KGA's
behalf, not ULCC's.
Gosslee then testified, giving her understanding of
ULCC's commission structure. When she left, she was
earning a commission of 31½% on nonmanaged and
47¼% on managed lease properties; however, after she
left, ULCC paid her only 31½%, on all leases,
including managed ones. She gave her account of the Pines
Road deal, largely agreeing with Hutchinson. On the Lamy Lane
deal, she testified that she had identified the southwest
corner of the intersection and negotiated, unsuccessfully,
with the owners in 2000. After she left ULCC, she identified
the northeast corner and negotiated with those
owners, closing the deal in May 2004. She felt she did not
owe ULCC any portion of the commission on either of these
deals. On cross-examination, she described in great detail
the three commercial leases on which she had been receiving
monthly commissions when she left ULCC. She felt that by
securing those tenants and getting them to sign leases, she
had earned her full commission, and it should not be reduced
simply because she was now off ULCC's payroll.
rebuttal, Coleman described the culture and history of his
company, largely repeating his testimony from 2012. He
insisted that after Ms. Gosslee left, he still considered
Bradshaw to be "his" client, but was "not
sure" if he even talked to him until long after he
signed with KGA. Also, Coleman strongly felt that only a
"licensed employee" was entitled to receive the 15%
bonus commission; after Ms. Gosslee left, he had every right
to quit paying it. He also admitted "crediting"
some of her lease commissions against the sale commissions he
felt she owed ULCC for Pines Road and Lamy Lane.
OF THE TRIAL COURT
court rendered an opinion in September 2015, finding: (1)
ULCC was the "procuring cause" of the Pines Road
deal and thus entitled to a portion of that commission; (2)
ULCC was not the procuring cause of the Lamy Lane
deal, and thus not entitled to a portion of that
commission; (3) Ms. Gosslee was entitled to the 15% bonus on
lease commissions withheld by ULCC from August to December
2001 (as well as a 15% bonus on the Shed Road deal); (4) she
was not entitled to "higher commissions" for
managed properties; and (5) she was not entitled to future
renewal commissions. The court asked for supplemental briefs
February 2016, the court issued a supplemental opinion and
rendered a judgment awarding Ms. Gosslee (1) unpaid lease
commissions of $27, 875, plus judicial interest from the date
each commission was earned; (2) unpaid bonus commission of
$3, 653, plus interest from the date it was earned; (3)
penalty wages of $64, 336, plus interest from date of
judicial demand; and (4) an attorney fee of $16, 084, plus
interest from date of judicial demand.
final judgment, April 2016, the court incorporated the prior
judgment and awarded ULCC 62½% of the commission
received by Ms. Gosslee on Pine Road, or $43, 500, with
interest from date of judgment.
appealed, raising five assignments of error. Ms. Gosslee
answered the appeal, raising seven.
Cause - Lamy Lane and Pines Road
first assignment of error, ULCC urges that it was the
procuring cause of the Lamy Lane deal, and should get a share
($52, 500) of Ms. Gosslee's commission; by her second
assignment, Ms. Gosslee responds that the court correctly
analyzed Lamy Lane. By her first assignment, Ms. Gosslee
urges the court erred in awarding ULCC a portion ($43, 500)
of her commission on Pines Road; by reply brief, ULCC submits
the court correctly analyzed Pines Road. Both sides concede
the issue is factual and governed by manifest error.
ULCC had no contract with the buyer or the seller, the issue
in these sales is "procuring cause." A realtor is
entitled to a commission when he is a third-party beneficiary
to a valid contract between a seller and a buyer. Creely
v. Leisure Living Inc., 437 So.2d 816 (La. 1983). A
realtor can win a commission dispute if he is the procuring
cause of the sale, or if the principal would otherwise enjoy
an unjust enrichment at the broker's expense.
Id. The concept is applied even where the term of
the broker's listing agreement has expired. TEC
Realtors Inc. v. D & L Fairway Prop. Mgmt.
LLC, 2009-2145 (La.App. 1 Cir. 7/9/10), 42 So.3d 1116,
writ denied, 2010-1841 (La. 10/29/10), 48
So.3d 1092. Procuring cause is defined as follows:
A cause originating or setting in motion a series of events
which, without break in their continuity, result in the
accomplishment of the prime object of the employment of the
broker, which may variously be a sale or exchange of the
principal's property, an ultimate agreement between the
principal and a prospective contracting party, or the
procurement of a purchaser who is ready, willing and able to
buy on the principal's terms. Sleet v. Harding,
383 So.2d 122 at 124 (La.App. 3 Cir. 1980); Cramer v.
Guercio, 331 So.2d 550 at 552 (La.App. 1 Cir. 1976);
Sleet v. Williams, 291 So.2d 495 at 498 (La.App. 3
Creely v. Leisure Living, supra; TEC
Realtors v. D & L Fairway, supra.
courts look to various factors to determine whether a broker
has or has not been the procuring cause of a sale: whether
the prospect who ultimately purchased the property knew about
the property before being contacted by the broker; the
relative success or failure of the negotiations conducted by
the broker, including the continuity or discontinuity of the
original and final negotiations, the length of time elapsing
between the broker's negotiations and the final sales
agreement; and the development of a new, different, or
independent motive for the prospect to purchase; whether or
not the broker abandoned efforts to negotiate the transaction
with a particular prospect; and, finally, the good or bad
faith of the principal and the broker. Farnsworth Samuel
Ltd. v. Grant, 470 So.2d 253 (La.App. 4 Cir. 1985),
citing Lora C. Sykora, "The Law of Real Estate
Brokerage Contracts: The Broker's Commission, " 41
La. L. Rev. 857 (1981).
closely examined the record evidence and find no manifest
error in the district court's ruling as to Lamy Lane.
ULCC correctly shows that it paid her monthly salary while
Ms. Gosslee identified the intersection of Lamy Lane and
Louisville Ave. as a potential Walgreens location, it paid a
landman to find the owners, and Ms. Gosslee negotiated with
them to buy the southwest corner. However, one of the owners
was unwilling to break a sublease on the property, and
negotiations ended sometime in 2000. Ms. Gosslee then
identified the northeast corner as a potential location in
February 2002, some seven months after she left ULCC. At this
time, she found the owners, engaged them in fairly long
negotiations, and closed a sale in May 2004. There is not one