Case Citation
Legal Case Name

Steve Schmidt & Co. v. Berry Case Brief

California Court of Appeal1986Docket #2026044
183 Cal. App. 3d 1299 228 Cal. Rptr. 689 1986 Cal. App. LEXIS 1880 Contracts Agency Property

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: A cooperating real estate broker sued a seller for a commission after producing a buyer—its own president—who accepted the exact terms of the listing agreement. The court affirmed judgment for the broker, holding the commission was earned despite the seller’s subsequent refusal to sell.

Legal Significance: Establishes that a cooperating broker, authorized by a listing agreement, can directly sue the seller for a commission as a subagent or third-party beneficiary when a “ready, willing, and able” buyer is produced, even if the sale does not close due to the seller’s fault.

Steve Schmidt & Co. v. Berry Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

Defendant Berry (owner) executed an exclusive listing agreement with Tingey (listing broker) to sell an apartment building for a specified price and terms. The agreement expressly authorized Tingey to cooperate with other brokers and divide the commission. Pursuant to this authorization, Tingey entered into a written agreement with plaintiff Schmidt & Co. (cooperating broker) to split the commission if Schmidt & Co. procured a qualified buyer. Steve Schmidt, the president of Schmidt & Co., made an offer to purchase the property individually. After Berry responded with a counteroffer containing several new terms not included in the original listing agreement, Schmidt rejected the counteroffer. Schmidt then sent a letter unequivocally accepting the “exact terms” of the original listing agreement. Berry refused to proceed with the sale unless his new terms were incorporated. The sale never closed. Schmidt & Co. sued Berry directly for its share of the commission, alleging it had fully performed by producing a ready, willing, and able buyer. The trial court granted summary judgment in favor of Schmidt & Co.

Court Holding & Legal Precedent

Issue: Does a cooperating broker earn its commission and have standing to sue the seller directly when it produces a ready, willing, and able buyer who accepts the precise terms of the listing agreement, even if the seller then refuses to complete the sale and the contract makes payment due “at the close of escrow”?

Yes. The court affirmed summary judgment for the cooperating broker. The commission Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo c

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IRAC Legal Analysis

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Legal Issue

Does a cooperating broker earn its commission and have standing to sue the seller directly when it produces a ready, willing, and able buyer who accepts the precise terms of the listing agreement, even if the seller then refuses to complete the sale and the contract makes payment due “at the close of escrow”?

Conclusion

This case solidifies the "ready, willing, and able" buyer rule and provides Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation

Legal Rule

A broker's commission is earned upon producing a buyer who is ready, Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud ex

Legal Analysis

The court's analysis treated the listing agreement as a contract of employment, Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proid

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Flash Summary

  • A broker earns a commission by producing a buyer who accepts
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint

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