Thursday, May 28, 2009

Real estate broker entitled to commissions from developer despite contractual misnomer

(Tenn. Ct. App. December 30, 2008).

This is a breach of contract case in which the plaintiff, reflected as "Realty Center New Homes Division, LLC" ("Realty Center"), a real estate broker, sued Dowlen Construction, LLC ("Dowlen"), a builder and developer, for unpaid commissions on sales of real estate. Realty Center signed the contracts at issue in a name slightly different from the name on its real estate broker's license. The trial court held that Realty Center is entitled to commissions, prejudgment interest, and discretionary costs. Dowlen appeals. We hold, in accord with the general rule, that the misnomer in the contracts did not render those documents invalid or inoperative where there was evidence that Dowlen knew the identity of the real party and, in this circumstance, Dowlen was estopped to deny the existence of the entity with which it contracted. We further hold that the Tennessee Real Estate Broker License Act of 1973, Tenn. Code Ann. section 62-13-101 et seq. ("the Act") does not expressly require a real estate broker to sign contracts in its licensed name, and we decline Dowlen's invitation to construe the Act to find this requirement. We affirm the trial court's judgment.

Opinion may be found at the TBA website:

"It has long been the law in Tennessee that a misnomer in 'a grant or obligation does not
destroy or defeat the grant or obligation, nor prevent a recovery upon it in the true name, if the
same be shown by proper and apt averments and proof...' . From our review of the record de novo, we have determined that Realty Center has shown through documentary proof and testimony by affidavit and deposition that it was the entity with which Dowlen was doing business. Further, Michael Dowlen admitted in his deposition that Realty Center did the work necessary to bring all of the closed sales contracts to closing. Mr. Dowlen also acknowledged in his deposition testimony that the company does not claim any fraud or intentional or willful misrepresentations on Realty Center’s part. It is quite clear from the record that Dowlen was not misled, nor was it confused, as to the entity it was dealing with. In the circumstances of this case, Dowlen cannot avoid its contracts by raising the issue that the contracts were signed in a name slightly different from the name in which the party was licensed." Id.