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Justin Winter & Associates LLC v. McIver

United States District Court, D. South Carolina, Anderson/Greenwood Division

December 12, 2017

JUSTIN WINTER & ASSOCIATES, LLC d/b/a Justin Winter Sothebys International Realty, Plaintiff,
v.
DONALD H. MCIVER, and JUDITH S. MCIVER, Defendants DONALD H. MCIVER, AND JUDITH S. MCIVER, Counterclaimants,
v.
JUSTIN WINTER & ASSOCIATES, LLC d/b/a Justin Winter Sothebys International Realty, and JUSTIN WINTER, Counter Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF AND COUNTER DEFENDANTS' MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS

          MARY GEIGER LEWIS UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         This is an action for breach of contract and related claims. Pending before the Court is Plaintiff Justin Winter & Associates, LLC (JWA) and Counter Defendant Justin Winter's (Winter) motion for partial judgment on the pleadings. Having carefully considered the motion, the response, the reply, the record, and the applicable law, it is the judgment of the Court the motion will be granted.

         II. RELEVANT FACTUAL AND PROCEDURAL HISTORY

         JWA is a real estate broker operating in Oconee County, South Carolina. Winter is the president and broker-in-charge of JWA. In October 2014, JWA entered into an Exclusive Right to Sell Listing Agreement (Listing Agreement) with Defendants and Counter Claimants Donald H. McIver and Judith S. McIver (the McIvers) to sell a property located at 311 Knollwood Drive in Salem, South Carolina (Knollwood). Under the Listing Agreement, JWA agreed to use its best efforts to secure a buyer ready, willing, and able to purchase Knollwood on terms acceptable to the McIvers; and the McIvers agreed to pay JWA a commission of five percent of the sales price for its services if JWA represented both the buyers and the McIvers. The commission was “earned, due and payable when an agreement to purchase . . . is signed by [the McIvers].” ECF No. 1-1 at 11. The Listing Agreement also provided: JWA “agrees to defer the commission until the closing date or extension thereof stated in the agreement . . . . Deferral is agreed to solely as an accommodation to [the McIvers] and such deferral shall in no way be construed as a waiver of the brokerage fee.” Id. at 12. The Listing Agreement expired on October 10, 2015. Id. at 11. On October 12, 2015 Donald H. McIver (Mr. McIver) emailed Winter, asking to extend the Listing Agreement for an additional year “under the terms and conditions of the just expired listing.” Id. at 16.

         On July 26, 2016, buyer Rodney R. Smith (Smith) and the McIvers entered into a Designated Agency Agreement with JWA whereby Winter would represent the McIvers and JWA's agent Trip Agerton (Agerton) would represent Smith. Under the terms of the Designated Agency Agreement, JWA was required, through Winter, to supervise Winter and Agerton, and was prohibited from taking action detrimental to the interests of Smith or the McIvers. The same day, the McIvers entered into a Purchase Agreement with Smith for Smith to buy Knollwood. Under the Purchase Agreement, Smith agreed to purchase Knollwood for a price of $1, 080, 000, payable through a combination of cash and financing, but Smith's obligation to purchase Knollwood was not contingent upon obtaining financing. The Purchase Agreement set September 9, 2016 as the closing date.

         On September 2, 2016, Smith sent an email to Agerton, which Agerton forwarded to Winter. Winter then emailed Mr. McIver explaining Smith had “applied for a mortgage to take advantage of low interest rates, and the lender has been delayed in receiving an appraisal.” ECF No. 6-5 at 1. The email noted, though Smith could purchase the Knollwood property by liquidating securities, Smith preferred to purchase the home with financing, and in any case, could not liquidate securities in time to close on September 9, 2016. Smith proposed postponing the closing to September 30, 2016, paying rent to the McIvers, and taking over utilities in the interim. Winter added:

As we do not have any other buyers nor do we have a back up contract I strongly urge you to consent to the extension by signing and returning the attached Addendum. I wish to reassure you that I have no concerns whatsoever of [Smith's] intention to close, and I often see delays in closing when banks are involved.

Id. The same day, the McIvers signed a Purchase Agreement Addendum prepared by Agerton, which extended the closing date to September 30, 2016, and obligated Smith to pay rent and take over utilities and alarm service at Knollwood in the interim.

         On September 22, 2016, Smith requested the closing date be delayed to October 10, 2016. Agerton prepared a second Addendum to the Purchase Agreement, which extended the closing date to October 10, 2016, and obligated Smith to pay rent, utilities, and homeowner's insurance in the interim, as well as reimburse the McIvers for October homeowner's association dues. The McIvers signed the second Addendum on September 27, 2016.

         On October 10, 2016, Smith emailed Agerton indicating he would not be purchasing Knollwood. Agerton forwarded the email to Winter, who forwarded it to Mr. McIver. On October 27, 2016, Mr. McIver instructed Winter and JWA via email to lower the list price on Knollwood, make the listing active again, and extend the listing until the property sold.

         In the meantime, on October 20, 2016, the McIvers filed a lawsuit against Smith for specific performance, breach of contract, and fraud in relation to the July 2016 Purchase Agreement. McIver v. Smith, Civil Action No.: 8:16-cv-03455-MGL, ECF No. 1 (D.S.C. Oct. 20, 2016). In May 2017, that lawsuit settled. As part of the settlement, Smith purchased Knollwood for $1, 100, 000, closing on May 11, 2017. After the closing, JWA received a check for $27, 000 from the closing attorney.

         On June 6, 2017, JWA filed the instant lawsuit against the McIvers in the Court of Common Pleas for Oconee County, South Carolina. ECF No. 1-1. JWA brought claims for: 1) breach of contract, 2) breach of contract accompanied by a fraudulent act, and 3) unjust enrichment. The McIvers removed the action to this Court on June 21, 2017. ECF No. 1. On July 11, 2017, the McIvers filed counterclaims against JWA for breach of contract, and against JWA and Winter for breach of fiduciary duty. ECF No. 6.

         On October 24, 2017, JWA and Winter filed their motion for partial judgment on the pleadings seeking judgment as to JWA's claim for breach of contract and as to Defendants' counterclaims for breach of contract and breach of fiduciary duty. ECF No. 17. Defendants responded, ECF No. 18, and JWA and Winter replied, ECF No. 19. The Court, ...


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