Delacy Investments, Inc. v. Thurman & Re/Max Real Estate Guide, Inc.

693 N.W.2d 479 (2005)

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Nature of the Case

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Facts

D, a licensed real-estate agent, entered into a master repurchase and security agreement (MRSA) with P. The MRSA 'granted to P a security interest under the UCC in all of D's right, title and interest in and to D's current and future accounts receivable . . . .' D then entered into an agreement with RE/MAX. That agreement stated that the portion of commissions which does not exceed past-due financial obligations shall be deemed to belong to RE/MAX and shall be used by RE/MAX first to offset arrearages owed by D. Re/Max executed an acknowledgement of P's security interest in D's account receivable from the sale of a home on Javelin Avenue and directed that D's commission from that sale be paid directly to P. On June 7, Re/Max terminated D as a real-estate agent for poor performance, failure to deposit earnest-money payments in a timely manner, and customer complaints. D had accumulated $11,126.38 in overhead debts owed to Re/Max. Re/Max refused to pay the assigned receivable and 'applied the commission to D's balance in accordance with [the independent-contractor agreement],' claiming a right of setoff based on the overhead expenses that Thurman owed. P filed a complaint in district court. The court granted Re/Max summary judgment, finding that 'P's ability to receive a commission from Re/Max is based upon D's assignment of a contractual right to receive a commission from Re/Max.' D was not entitled to a commission at the time of the Keller Lake property closing.' As a result, it was 'impossible for P to obtain a greater right in the commission than D had in the commission.' P appealed.