Cengage Advantage Books: Fundamentals of Business Law 9th Edition by Roger LeRoy Miller

Exercise 12

Scheerer v. Fisher
Court of Appeals of North Carolina, 688 S.E.2d 472 (2010).
www.nccourts.org
FACTS In January 2007, David Scheerer, a licensed real estate agent, told Jack Fisher, the manager of Renaissance Ventures, LLC, that two parcels of property were for sale. Fisher asked Scheerer to investigate the costs of developing the properties, which he did. After Scheerer had negotiated the terms of the sale with the property owners, Fisher executed purchase contracts for a combined price of $20 million. The contracts stated that the sellers would pay Scheerer a 2 percent commission. Fisher, who had previously dealt with Scheerer, orally promised to pay Scheerer a 2 percent commission for his role as Fisher's buying agent. In April 2007, through no fault of Scheerer or the sellers, Fisher and Renaissance rescinded (canceled) the offers to buy the properties. Shortly thereafter, Fisher arranged for Anthony Antonio to purchase the same properties for substantially less than $20 million and then assign (transfer the rights under a contract to someone else - see Chapter 11) the new purchase contracts to Fisher. Scheerer and the property sellers had no knowledge of the relationship mbetween Fisher and Antonio. Indeed, during this time, Fisher continued to discuss with Scheerer the amount he would subsequently offer the original sellers for the properties. After Antonio bought the properties, he assigned the contracts to Fisher, at which point Scheerer learned of the relationship. Scheerer, who had received a commission from the sellers only, sued Fisher for breach of implied contract and to recover in quantum meruit for his services. The trial court dismissed the complaint for failure to state a claim, and Scheerer appealed.
ISSUE Could Scheerer recover in quantum meruit for the amount of the commission that he would have received under the original contract, which was cancelled by Fisher?
DECISION Yes. The North Carolina appellate court reversed the trial court's decision and reinstated the case. Scheerer had stated a valid claim for recovery in quantum meruit.
REASON The reviewing court accepted the plaintiffs' allegations that "(1) plaintiffs provided services to defendants; (2) defendants knowingly and voluntarily accepted the services; (3) plaintiffs did not perform these services gratuitously; (4) defendants were ready, willing, and able buyers and in fact closed on the properties after rescinding the first contract and arranging for Antonio to purchase and assign the properties." Moreover, defendant Fisher continued to mislead the plaintiffs by discussing with them the possibility of subsequent offers to purchase the properties. Fisher took action to deny Scheerer compensation that Scheerer had earned for services rendered. "Although the original contract he [Scheerer] negotiated failed to close, the law implies a promise to pay some reasonable compensation for services rendered."
WHAT IF THE FACTS WERE DIFFERENT? Suppose that Fisher had not ultimately obtained the properties (through Antonio and the assignment) and had shown no further interest in the properties after he rescinded the first contract. Would Scheerer still have had a valid claim against Fisher for recovery in quantum meruit ? Why or why not?