Facts

This case concerns a 54,000-square foot medical office building in Marina del Rey, owned by defendants/cross-complainants. Defendants signed a lease listing agreement and a sale listing agreement with plaintiff Wayne Pridgen as agent for ReMax Commercial and Hilton & Hyland, respectively. Pridgen leased suites in the office building to various tenants. Defendants paid commissions on those suites it contended were subject to the listing agreement and did not pay commissions on the leases for those suites it contended were not subject to the listing agreement. The lease listing agreement was with ReMax Commercial. Pridgen left ReMax and then worked for Hilton & Hyland. Hilton & Hyland assigned its rights under the lease commission agreement to Pridgen, who brought the action for lease commissions in his own name. Hilton & Hyland also assigned any right it had to a commission under the sale listing agreement to Pridgen, who brought the action for the sale commission in his own name.

The medical office building was owned by a California general partnership with two general partners. During the term of the sale listing agreement, Pridgen brought Defendants an offer. The signatures of both general partners were required since the sale of the office building was not in the ordinary course of the partnership's business, which was to hold and operate the office building. Pridgen also produced a long-form purchase agreement for the purchase of the office building. Pridgen obtained the signature of one of the two general partners, a retired litigation lawyer over 80 years old. Pridgen then deposited the purchase agreement into escrow with only one signature.

The prospective purchaser sued the partnership for specific performance under the purchase agreement, which it contended was enforceable with the signature of one general partner. Defendants were successful in negotiating a walk-away settlement with the prospective purchaser after filing a motion to expunge the lis pendens and cross-complaints against Pridgen and Hilton & Hyland and its principals. Defendants dismissed said cross-complaint against Hilton and Hyland with prejudice, and against Pridgen without prejudice. Defendant incurred approximately $70,000 in fees in the case brought by the prospective purchaser and sought to recover those fees as damages against Pridgen in this case.

PLAINTIFF'S CONTENTIONS:
Pridgen contended that he was owed commissions under the lease listing agreement because all leases fell within the ambit of the lease listing agreement and a sale commission of $750,000 under the sale listing agreement because he had brought to Defendants an offer with price and terms acceptable to Defendants.

DEFENDANT'S CONTENTIONS:
Defendants contended that the lease listing agreement included only empty suites at the time the lease listing agreement was signed, that Hilton & Hyland was never the lease listing broker (the lease listing agreement was signed with ReMax Commercial and was never assigned to Hilton & Hyland. For that reason, there was no writing entitling Hilton & Hyland to lease commissions. As assignee of Hilton & Hyland's rights, Pridgen was not entitled to lease commissions after he left ReMax), and that Pridgen breached his fiduciary duty and his duty to exercise reasonable care, skill, and diligence in the drafting of the lease listing agreement.

Defendants contended that no commission was owed under the sale listing agreement because the offer contained material variations from the listing agreement which were never accepted by or agreeable to Defendants and because Pridgen breached his fiduciary duty and his duty to exercise reasonable skill, care, and diligence under the sale listing agreement.

Defendants, as Cross-Complainants, contended that they were entitled to recover damages of $70,000 from Pridgen for the attorney's fees they incurred in defending against the lawsuit by the prospective purchaser.

Settlement Discussions

Before the arbitration, Plaintiff demanded $600,000, which was reduced to $485,000. Defendants offered $100,000. During the arbitration, Defendants withdrew all offers to settle. Pridgen made no offer on the cross-complaint against him.

Result

Plaintiff recovered no damages on his claim for two real estate commissions. Cross-Complainants recovered no damages on their claim against Pridgen on their cross-complaint seeking attorney's fees and other damages. Defendants received an arbitration award of $223,667 as recovery of their attorney's fees and costs in defense of Pridgen's breach of contract claim.

Other Information

Defendants made a motion to have the arbitration award confirmed. Prior to the hearing on that motion, the parties settled, and Pridgen paid Defendants $220,000. Plaintiff took nothing against Defendants. The arbitrator agreed with Defendants' contentions concerning the lease listing agreement and the sale listing agreement. Cross-complainants took nothing on their claim for the $70,000. The parties participated in a full-day mediation with Judge Robert W. Thomas, which was unsuccessful. EXPERT TESTIMONY: Alan D. Wallace, testified on behalf of the Defendants/Cross-Complainants that Plaintiff breached his fiduciary duty to Defendants/Cross-Complainants and his duty to exercise reasonable skill, care, and diligence in the performance of his services under both a sale listing agreement and a lease listing agreement. FILING DATE: Oct. 9, 2009.