Opinion
Argued and Submitted May 11, 2001.
NOT FOR PUBLICATION. (See Federal Rule of Appellate Procedure Rule 36-3)
Brokers arranging sales transaction sued sellers, who were bankruptcy debtors, seeking commissions after original transaction was terminated and sale was made to another buyer. The bankruptcy court entered summary judgment for sellers/debtors, and the Bankruptcy Appellate Panel (BAP) affirmed. Appeal was taken. The Court of Appeals held that: (1) brokers were not entitled to commissions, under California law, when original transaction did not close, and (2) doctrine of equitable estoppel was inapplicable.
Affirmed.
Appeal from the United States Bankruptcy Appellate Panel Elizabeth L. Perris, J.E. Ryan, and James M. Marlar, Judges Presiding.
Before RYMER, HAWKINS, and GOULD, Circuit Judges.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.
We affirm the bankruptcy court's grant of summary judgment to the debtors for the reasons set forth in the opinion of the Bankruptcy Appellate Panel ("BAP"). Paragraph G of the letter of intent between the debtors and Starwood Capital Group, LLC ("Starwood") satisfied California's Statute of Frauds. Under California law, when the only writing evidencing a commission is contained in a sale agreement between the seller and buyer, to which the broker is not a party, the commission is contingent upon the completion of that particular sale. Lawrence Block Co. v. Palston, 123 Cal.App.2d 300, 306, 266 P.2d 856 (1954).
In some instances, a broker may be able to recover even when the specific sale
Page 669.
is not consummated, if the seller is the sole cause of the loss of the sale. See Collins v. Vickter Manor, Inc., 47 Cal.2d 875, 881, 306 P.2d 783 (1957); Coulter v. Howard, 203 Cal. 17, 23-25, 262 P. 751 (1927). In this case, the sale to Starwood was expressly contingent on an overbid process and bankruptcy court approval. Even though the debtors ultimately settled with another buyer, the brokers cannot bear their burden of proving the sale to Starwood would have closed but for the debtors' actions.
The brokers' reliance on the doctrine of equitable estoppel is misplaced, since equitable estoppel is used to defeat a Statute of Frauds defense. In re Eastview Estates II, 713 F.2d 443, 450 (9th Cir.1983). In this case, both the bankruptcy court and BAP found that the Starwood letter satisfied the Statute of Frauds. In any event, although the brokers contend the debtors committed fraud by assuring them their commission was protected, "[b]rokers are presumed to know the requirements of the Statute of Frauds and thus cannot be said to justifiably rely on oral promises." Id. at 451.
AFFIRMED.