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Shepard v. MQ Prosper Retail, LLC

Court of Appeals of Texas, Fifth District, Dallas

May 2, 2018

JOHN SHEPARD, Appellant
v.
MQ PROSPER RETAIL, LLC AND GAMBIT REALTY & INVESTMENTS, INC., Appellees

          On Appeal from the 193rd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-16-15823

          Before Justices Francis, Myers, and Stoddart.

          MEMORANDUM OPINION

          LANA MYERS JUSTICE.

         John Shepard appeals the judgment in favor of MQ Prosper Retail, LLC and Gambit Realty & Investments, Inc. The trial court granted appellees' motion for summary judgment on their claim against Shepard and awarded them damages of $380, 000. Shepard brings four issues on appeal contending the trial court erred by granting appellees' motion for summary judgment because there were genuine issues of material fact concerning whether (1) the payments Shepard received were for real estate brokerage services, (2) appellees were aggrieved parties having standing to bring suit, and (3) Shepard acted as a real estate broker or was paid real estate commissions for a real estate transaction. Shepard also contends (4) the trial court erred by granting appellees' objections to Shepard's summary judgment evidence. We reverse the trial court's judgment and remand for further proceedings.

          BACKGROUND

         John Shepard and Donald Silverman are involved in commercial real estate. Shepard is a licensed real estate sales associate in Florida, but he does not have a real estate license in Texas. Silverman is a real estate developer in Texas and Florida. They met at a Florida convention in 2012. In April 2013, Shepard came to Dallas and contacted Silverman to renew his acquaintance with him. They met for drinks and discussed real estate developments in Texas. During the conversation, Silverman mentioned that he was interested in purchasing a large tract of land in Prosper, Texas owned by former Dallas Cowboys football player Deion Sanders. Shepard said he knew Sanders, had his telephone number, and could get in touch with him. Shepard called Sanders, and that phone call led to Sanders agreeing to sell his home.[1]

         On May 13, 2013, Sanders signed a contract to sell his property to "MQ Realty, LLC or assigns" for $19 million. The contract called for Sanders to pay a three-percent commission to "Gambit Realty, " the broker for MQ Realty. When the sale closed, MQ Realty transferred the property to MQ Prosper Retail LLC ("Prosper Retail"). Prosper Retail's manager was MQ Prosper Preston LLC ("Prosper Preston"), whose purpose was to cause Prosper Retail to "operate, improve, develop, " etc. the Sanders property. Shepard was a member of Prosper Preston. At some point, Shepard was made a "Senior Vice President & Director of Acquisitions/Florida & Partner" for MQ Development Partners.

         On September 4, 2014, Shepard and Silverman (as manager of the MQ entities) signed a memorandum agreement. In the agreement, the MQ entities agreed to pay Shepard commissions for the acquisition, sale, and leasing of property. The agreement also provided that Shepard would be paid an "Acquisition Fee" concerning the Sanders property. According to the agreement, at the time of the acquisition of the property, Shepard would be paid "$250, 000 (from the Seller) and $125, 000 (from Buyer)." Silverman stated in his affidavit that Prosper Realty paid Shepard $255, 000 on August 29, 2014 and Gambit Realty paid Shepard $125, 000 on September 9, 2014, "all as real estate commissions related to the Sanders transaction."

         In 2016, appellees brought suit against Shepard alleging he violated the Texas Real Estate License Act by accepting real estate brokerage commissions when he was not a licensed real estate broker in Texas. See Tex. Occ. Code Ann. § 1101.754 (West Supp. 2017). They sought as damages the $380, 000 they paid him plus twice that amount as a statutory penalty under the Act. See id. Appellees also alleged Shepard committed fraud and negligent misrepresentation. Appellees moved for summary judgment on their claim under the Texas Real Estate License Act, which the trial court granted, awarding them $380, 000 actual damages but not awarding the additional penalty amounts. Appellees then nonsuited their remaining claims.

         STANDARD OF REVIEW

         The standard for reviewing a traditional summary judgment is well established. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985); McAfee, Inc. v. Agilysys, Inc., 316 S.W.3d 820, 825 (Tex. App.-Dallas 2010, no pet.). The movant has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). In deciding whether a disputed material fact issue exists precluding summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon, 690 S.W.2d at 549; In re Estate of Berry, 280 S.W.3d 478, 480 (Tex. App.-Dallas 2009, no pet.). Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005). We review a summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. Dickey v. Club Corp., 12 S.W.3d 172, 175 (Tex. App.-Dallas 2000, pet. denied).

          REAL ESTATE BROKERS

         In his first issue, Shepard contends the trial court erred by granting appellees' motion for summary judgment because appellees failed to prove as a matter of law that the payments Shepard received were for real estate brokerage services.

         The Texas Real Estate License Act provides, "A person who receives a commission or other consideration as a result of acting as a broker or sales agent without holding a license or certificate of registration under this chapter is liable to an aggrieved person for a penalty of not less than the amount of money received or more than three times the ...


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