Session November 22, 2016
from the Chancery Court for Sevier County No. 14-10-333
Telford E. Forgety, Jr., Chancellor
case involves a dispute over the commission earned from a
real estate transaction. The parties disagree as to whether
the plaintiff, Clay Harris Dalton, is entitled to a part of
the commission on the transaction. Jerry Sandifer is a
principal real estate broker licensed in Tennessee. He is the
sole proprietor of Tennessee Realty Pros, LLC (TRP), a
Tennessee limited liability company. Dalton is an affiliate
real estate broker licensed in Tennessee. On September 6,
2013, Dalton registered his real estate license with Sandifer
and TRP (collectively the Brokerage). On November 1, 2013,
TRP secured a commercial exclusive right to sell listing
agreement from a seller. The agreement encompasses the real
estate sold in the transaction at issue. Eventually, TRP
procured a buyer, and on March 23, 2014, the buyer executed a
commercial purchase and sales agreement. That agreement
listed Dalton as the Buyer's Designated Agent and selling
licensee. It listed Sandifer as the Seller's Designated
Agent and listing licensee. On September 30, 2014, the real
estate closing took place, resulting in a total broker's
commission of $97, 400. Because only one brokerage was
involved in the transaction, the entire commission was paid
to TRP. Dalton claims that he is entitled to a share of the
commission. He further asserts that he had an agreement with
Sandifer that Dalton would be paid a share of the commission
on the buyer's side of the transaction. Because the
Brokerage refused to disburse any of the commission to
Dalton, he filed a complaint seeking his share of the
commission. The trial court found that, based on the
customary and contractual commission split at TRP, Dalton is
entitled to $34, 090 for acting as the buyer's agent. The
court also found that Dalton was entitled to $2, 000 for his
efforts in listing real property for the Brokerage.
Accordingly, the trial court awarded Dalton a total judgment
of $36, 090. The Brokerage appeals. We affirm.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Court Affirmed; Case Remanded
Nicholas Black, Maryville, Tennessee, for the appellants,
Jerry Sandifer and Tennessee Realty Pros, LLC.
D. Hall, Sevierville, Tennessee, for the appellee, Clay
Charles D. Susano, Jr., J., delivered the opinion of the
court, in which D. Michael Swiney, C.J., and JOHN W.
McCLARTY, J., joined.
CHARLES D. SUSANO, JR. JUDGE
Sandifer is the founder and sole owner of TRP, which is
involved in the sale and purchase of real estate. Sandifer
has served as the principal broker for the company since he
founded it. Clay Dalton is an affiliate broker licensed in
Tennessee. Dalton registered his license as an affiliate
broker with the Brokerage in September 2013.
the customary practice is that an affiliate broker who closes
a transaction splits the commission earned with TRP. Dalton
and Eric McPeake, another affiliate broker at TRP, testified
regarding the customary commission split at TRP. Both
testified that when an affiliate broker makes a sale, the
customary practice is that the affiliate broker earns seventy
percent of the commission and TRP receives thirty percent of
the commission. Sandifer did not dispute that this is the
customary commission split at TRP.
November 1, 2013, in the transaction at issue, TRP secured a
listing agreement from the seller. This agreement gave TRP
the right to sell a thirty-three acre tract of land. The
transaction that is the subject of this case involves a 2.5
acre parcel of the larger tract. The listing agreement
indicates that the "Firm shall practice Designated
Agen[cy] ... in this transaction." The agreement did not
establish a dual agency relationship in which the licensee
would serve as the agent for more than one party in the
transaction. Under the terms of the agreement, dual agency
"status may only be employed upon full disclosure to
each party and with each party's informed consent."
The listing agreement designates Sandifer as the designated
agent for the seller.
addition to the listing agreement, Sandifer and the seller
executed a confirmation of agency status form. That form
indicated that Sandifer was serving as "Designated Agent
for the Seller" rather than a dual agent requiring the
consent of both the seller and the buyer.
February 2014, TRP obtained a commercial letter of intent to
purchase the property from the buyer. This letter indicates
that Sandifer represents the seller in the transaction. The
letter, however, does not indicate a representative for the
buyer and is not signed by the buyer.
following month, the buyer executed a commercial purchase and
sales agreement for the property with a purchase price of $1,
790, 000. This agreement defines the agency relationship
among the parties. The agreement indicates that the broker
representing the seller, the listing company, is TRP. The
designated agent for the seller and independent licensee for
the listing company is Jerry Sandifer. In addition, the
broker representing the buyer, the selling company, is TRP.
The designated agent for the buyer and independent licensee
for the selling company is Clay Dalton. Thus, TRP is the
broker for both the listing company and the selling company,
but a different independent licensee is assigned to each
the same broker represents both the buyer and seller,
paragraph 12(A)(5) of the purchase and sales agreement
applies to the transaction. That provision contains the
If Buyer and Seller are both being represented by the
same Broker, a relationship of either [ ]
designated agency, OR, [ ] Facilitator OR [ ] dual agency
(Bracketing in original; emphasis added.) On the executed
document, however, none of the boxes are selected to indicate
the relationship that exists.
(a) of this paragraph reads as follows:
Designated Agency Assignment. [Applicable only if
designated agency has been selected above]
The Broker has assigned affiliate Licensee Clay
Dalton to work exclusively with the Buyer as Buyer's
Designated Agent and affiliate licensee Jerry
Sandifer to work exclusively with Seller as Seller's
Designated Agent. Each Designated Agent shall ... not
represent in ...