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Keywords

contractdamagestrialtrustleaseexemplary damagesconstructive trust
damagesleaseexemplary damages

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Warner Communications, Inc. v. Keller, 888 S.W.2d 586

Facts

Texas Builders leased a commercial property to Atari, Inc., which was later acquired by Warner Communications, Inc. and became Atari Holdings, Inc. Atari Holdings entered into a listing agreement with James A. Keller Realtors to find a subtenant. During this time, Texas Builders attempted to negotiate directly with potential tenants while misleading Keller about their intentions, ultimately leading to a lease with Quickie Manufacturing without compensating Keller.

In 1984, Texas Builders leased one of its commercial real estate properties located at 12058 Rojas, El Paso Texas, to Atari, Inc. Atari was a manufacturer of video games, and intended to use the property for that purpose.

Issue

Did the broker have a valid claim for a commission on the lease despite the lack of a formal written agreement, and were exemplary damages appropriate against the lessee?

Did the broker have a valid claim for a commission on the lease despite the lack of a formal written agreement, and were exemplary damages appropriate against the lessee?

Rule

Under the Real Estate License Act, a commission agreement must be in writing and signed by the party to be charged. However, informal communications can satisfy this requirement if they contain essential elements of a contract.

Under the Real Estate License Act, a commission agreement must be in writing and signed by the party to be charged.

Analysis

The court found that the letters sent by Texas Builders to brokers, which stated a 6% commission for signed leases, constituted sufficient written evidence to support the broker's claim. The court also determined that Texas Builders had misled Keller about their negotiations with Quickie, which supported the finding of fraud. However, the court reversed the exemplary damages against the lessee, concluding that the lessee was not liable for the actions of Texas Builders.

The court found that the letters sent by Texas Builders to brokers, which stated a 6% commission for signed leases, constituted sufficient written evidence to support the broker's claim.

Conclusion

The court affirmed the trial court's judgment in favor of the broker for the commission and the constructive trust but reversed the award of exemplary damages against the lessee.

Affirmed in part and reversed and rendered in part.

Who won?

James A. Keller Realtors, Inc. prevailed in part because the court found sufficient evidence to support their claim for a commission based on the letters from Texas Builders.

James A. Keller Realtors, Inc. prevailed in part because the court found sufficient evidence to support their claim for a commission based on the letters from Texas Builders.

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