Premier Van Schaack Realty, Inc. v. Sieg

51 P.3d 24 (2002)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

D entered into the Agreement with Coldwell Banker. Coldwell Banker subsequently assigned the Agreement to P. The Listing period was 12 months. In March 1997, P's agent introduced D to Michael Davis, Marion Vaughn, and Jane Johnson (DVJ), who offered to purchase the Property for $1.3 million. D made a counter-offer that DVJ accepted. The sale never closed, and D returned DVJ's earnest money. In June 1997, DVJ proposed that they form a limited liability company (LLC) with D. DVJ and Sieg signed an operating agreement (the Operating Agreement), forming the LLC, MJTM in September of 1997. D would convey the Property to MJTM and D would receive a 40% interest in MJTM and a preferential return of 9% on future profits. D had a beginning balance of $670,000 in his initial capital contribution account and that MJTM assumed $580,000 of D's debt. The other members of MJTM agreed not to encumber the Property without D's approval. The Operating Agreement stated that the agreed value of the Property was $1.3 million. Furthermore, the Operating Agreement provided, 'No Member shall be personally liable to any other Member for the return of any part of the Members' Capital Contributions.' On January 21, 1998, D transferred title to the Property to MJTM by warranty deed. In January 1998, MJTM borrowed $1.413 million from Zions Bank secured by a lien on the Property. All of the members of MJTM personally guaranteed the loan. MJTM paid off a $300,000 loan to D secured by the Property. P discovered the arrangement with MJTM and demanded its commission of 7% of $1.3 million. D claimed that his contribution of the Property was an investment and not a sale or exchange. P sued. On cross-motions for summary judgment, the trial court ruled in favor of D, holding that the transaction between D and MJTM was not a sale or exchange pursuant to the Agreement because it lacked consideration. The trial court awarded attorney fees to D. P appealed.