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contractplaintiffdefendanttrialmotionwill

plaintiffdefendantstatuteappealtrialmotionpartnershipcorporationcase law

Related Cases

Olsen v. Celano, 234 Ill.App.3d 1045, 600 N.E.2d 1257, 175 Ill.Dec. 799

Facts

Harry Olsen, a licensed real estate broker in Illinois, and Draper & Kramer, Inc. sought a commission for facilitating the sale of property located in Wisconsin. They alleged that they had an agreement with the vendors to receive a 6% commission if a sale was completed. However, Olsen was not licensed to operate as a broker in Wisconsin, and the court found that the contract was invalid from its inception due to this lack of licensure.

Plaintiffs filed an amended complaint seeking a commission from defendants for the sale of real estate. They alleged that Olsen was an agent of Draper & Kramer, Inc., an Illinois corporation authorized to transact business involving real estate leasing, management and sales. They further alleged that defendant Prairie Cove Marina was a limited partnership consisting of the remaining defendants and other limited partners. They alleged that the limited partnership was the owner of property located in Wisconsin.

Issue

Did the trial court err in granting the defendants' motion for a directed finding based on the determination that the plaintiffs were barred by Wisconsin law from recovering a commission for the sale of real estate located in Wisconsin?

The sole issue raised by plaintiffs on appeal is whether the trial court erred in granting defendants' motion for a directed finding at the close of plaintiffs' case based on its determination that plaintiffs were barred by Wisconsin law from recovering a commission for the sale of real estate located in Wisconsin.

Rule

Under Wisconsin law, a broker must be licensed in the state to recover a commission for the sale of real estate. If a contract is void under the law of the state where it was made, it will not be enforced in Illinois courts.

Sections 452.03 and 452.20 of the Wisconsin Statutes, relating to real estate practice, provide: 'No person may engage in or follow the business or occupation of, or advertise or hold himself or herself out as, or act temporarily or otherwise as a broker or salesperson without a license.' (Wis.Stat. § 452.03 (1989).) and 'No person engaged in the business or acting in the capacity of a broker, salesperson or time-share salesperson within this state may bring or maintain an action in the courts of this state for the collection of a commission or compensation for the performance of any act mentioned in this chapter without alleging and proving that he or she was a duly licensed broker, salesperson or registered time-share salesperson at the time the alleged cause of action arose.' Wis.Stat. § 452.20 (1989).

Analysis

The court applied Wisconsin law to the case, determining that the contract for the commission was made in Wisconsin and was therefore subject to Wisconsin's licensing requirements. Since Olsen was not licensed in Wisconsin, the court concluded that the contract was invalid and could not be enforced, even in Illinois. The court referenced previous cases that established the principle that a brokerage contract invalid under the law of the state where it was made is unenforceable everywhere.

The court stated: '[I]t's * * * clear from the evidence that this is a Wisconsin transaction. Under all of the case law in so far as applicable law, the law to apply to this case is the law of the State of Wisconsin. Wisconsin has a clear and unequivocal public policy concerning recovery by brokers who are not licensed in the State of Wisconsin. * * * Under the State of Wisconsin law, * * * the plaintiff cannot recover either in quantum meruit or as a broker under any agreement. And to allow recovery under Wisconsin law in quantum meruit would defeat the public policy concerning brokers. And therefore, I find, at the close of the plaintiff's case, I find in favor of the defendant and against the plaintiff.'

Conclusion

The court affirmed the judgment in favor of the defendants, concluding that the plaintiffs could not recover a commission due to the invalidity of the contract under Wisconsin law.

We conclude that the trial court properly entered judgment in favor of defendants.

Who won?

Defendants, James V. Celano, Jr., Marina Enterprises, and Prairie Cove Marina, prevailed because the court found that the plaintiffs were barred from recovering a commission due to the lack of a Wisconsin real estate broker's license.

Defendants have also filed a motion with this court seeking sanctions on appeal pursuant to Supreme Court Rule 375(b) (134 Ill.2d R. 375(b)). They essentially contend that sanctions are warranted on appeal based upon the same arguments they raised to assert that sanctions should have been imposed by the trial court.

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