Steve Schmidt & Co. v. Berry

In Steve Schmidt & Co. v. Berry (1986) 183 Cal.App.3d 1299, the defendant-seller entered into a listing contract with the plaintiff-broker. (Id. at p. 1303.) The seller contended, inter alia, that the obligation to pay the brokerage commission was conditioned on the closing of escrow. (Id. at p. 1309.) The relevant portion of the listing agreement stated that the owner would pay a commission to the agent "'in full at the close of escrow, whether or not said escrow closes within the term of this Agreement.'" (Ibid.) The appellate court agreed with the broker that the above quoted language did not set forth the condition for entitlement to a commission but a limitation on the time of payment. (Id. at pp. 1309-1310.) The court explained that "the obligation to pay the commission, as distinguished from the timing of the payment, became fixed at the time a ready, willing and able buyer was produced. Referring to the sequence of provisions in the agreement, immediately after fixing the terms of the agent's obligation ( 3 of the listing agreement), the term of the authorization ( 4) and the owner's obligation to accept an offer from a ready, willing and able buyer ( 5 of the listing agreement), section 6 provides for the time of payment of the commission, that is, 'at the close of escrow.' ... 'The promise to pay was not contingent on the escrow's closing.' ... Thus, we conclude that the failure of the escrow to close does not preclude Schmidt & Co. from collecting its commission." (Id. at p. 1310.)