IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON CRYE LEIKE REALTORS INC Shelby County Chancery Court A Tennessee Corporation No 104720 3 R D Plaintiff Appellant VS C A No 02A01 9711 CH 00287 WDM INC a subsidiary of DERLAN INDUSTRIES LIMITED and GEORGE C RICHERT TRAMMELL CROW SE INC and SCOTT September 23 1998 PAHLOW Cecil Crowson Jr Defendants Appellees Appellate C ourt Clerk FILED From the Chancery Court of Shelby County at Memphis Honorable D J Alissandratos Chancellor Roger A Stone STONE HIGGS DREXLER Memphis Tennessee Attorney for Plaintiff Appellant Anthony Sammons BRANSON BEARMAN PLLC Memphis Tennessee Attorney for Defendants Appellees WDM Inc and George C Richert William L Hendricks Jr GLANKLER BROWN PLLC Memphis Tennessee Attorney for Defendant Appellee Trammell Crow SE Inc OPINION FILED REVERSED AND REMANDED FARMER J CRAWFORD P J W S Concurs LILLARD J Concurs In this action for breach of contract and procurement of breach of contract Plaintiff Crye Leike Realtors Inc appeals the trial court s final order entering summary judgment in favor of Defendants Appellees WDM Inc George C Richert Trammell Crow SE Inc and Scott Pahlow We reverse the trial court s judgment because we conclude that the record reveals the existence of genuine issues of material fact which preclude summary judgment on these claims On November 10 1993 George C Richert and Colman Borowsky executed a Buyer s Tenant s Agreement under which Richert appointed Borowsky a real estate broker with Crye Leike Realtors Inc as his sole and exclusive real estate broker to aid him in the leasing and or acquisition of industrial property In executing the agreement Richert agreed to inform Borowsky of any property of which he became aware in order for Borowsky to contact the owner or the owner s broker Richert also agreed that if he entered into any lease or purchase agreement within twentyfour months after the period of the agreement Richert would recognize and provide for Borowsky as the broker in the transaction The agreement provided for an initial term of twelve months but could be terminated by either party upon thirty days written notice At the time they executed the agreement the parties understood that Richert was representing a company called Derlan Industries and that they would be relying on Derlan s credit report to secure a lease They also understood however that Richert would be forming a new corporation which would actually acquire the property Richert informed Borowsky that the newlyformed company would use the space to assemble and distribute pumps To this end the agreement provided that the purpose of the industrial property was to manufacture test and distribute pumping equipment Richert represented that he would be the chief executive officer of the new company and that he would have the authority to execute agreements on its behalf Because the corporation was not yet in existence however Richert signed the agreement in his individual capacity Borowsky signed the agreement on behalf of Crye Leike In accordance with the agreement Borowsky began attempting to locate suitable space for Richert s business Based upon specifications provided by Richert Borowsky prepared some sketches of the type of space Richert desired Borowsky then sent out a request for proposals to prospective bidders Borowsky kept a list of about fifty to sixty commercial real estate industrial brokers whom he regularly contacted and he contacted many of these brokers by telephone to discuss Richert s space needs In late November or early December 1993 Borowsky learned that the name of Richert s new company would be WDM Inc On December 7 1993 Richert formed WDM Inc Initially Richert and two other people owned all of WDM s stock They later sold the stock to E G Corporacion The principal stockholder of E G Corporacion was Derlan Industries Richert became WDM s president and chief executive officer Sometime in December 1993 Borowsky showed Richert a potential space at Interstate Industrial Park off of Brooks Road in Memphis Borowsky subsequently prepared a written offer to lease the space and submitted it to Belz Enterprises The offer was made on behalf of WDM Inc and Richert signed the offer as WDM s president Borowsky and Belz employees proceeded to negotiate the terms of the proposed lease agreement Borowsky believed that a lease agreement with Belz was a done deal When the deal was not consummated as planned however Borowsky became concerned that Richert and WDM were bailing out on him At some point Borowsky began to suspect that Richert was instead dealing with Trammell Crow SE Inc Accordingly Borowsky telephoned his contact at Trammell Crow Brad Kornagey and reminded him that Crye Leike had an exclusive agreement with Richert Borowsky previously had contacted Kornagey in an effort to find suitable space for Richert and WDM Richert indeed had contacted Trammell Crow to inquire about space in a facility named Bellbrook Business Park Borowsky had suggested showing this space to Richert in early December 1993 but Richert claimed not to be interested in the space at that time When he contacted Trammell Crow Richert informed its leasing agent Scott Pahlow that Richert and WDM were being represented by Borowsky and Crye Leike Pahlow did not inquire as to the details of Borowsky s representation however and specifically he did not ask if a contract existed between Richert and Borowsky although he knew that brokers attempted to get their clients to sign such contracts Pahlow also was not informed by his coworker Brad Kornagey about the existence of such a contract despite the fact that they both attended weekly sales meetings at which agents discussed what deals they were working on On February 22 1994 Richert on behalf of WDM executed a lease agreement with Memphis Zane May Associates for space in the Bellbrook Business Park on Fleetbrook Drive The lease agreement described WDM as a wholly owned subsidiary of Derlan Industries Neither Borowsky nor Crye Leike received a commission from the lease transaction According to Richert Pahlow advised him that Borowsky did not need to be involved in the transaction because Borowsky neither had shown Richert the Bellbrook property nor had contacted Pahlow about the property By letter dated February 23 1994 Richert terminated his agreement with Crye Leike and Borowsky Richert wrote the letter on WDM stationary and he signed the letter on behalf of WDM as its president and chief executive officer
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