The Sanowicz vs. Bacal Court Appeal Case

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I would like to appeal to the decision made by the Court that has concluded that a referral fee must be paid despite the lack of the necessary agreement. I will attempt to provide evidence from a similar case that suggests that the lack of a referral fee agreement is a sufficient reason for my appeal. There are two distinct sections of the Business and Professions Code that bear the utmost importance to the case that I will present within the scope of Sanowicz v. Bacal.

The case shares many similarities with the one being appealed, in which two real estate agents from different broker agencies were unable to agree on compensation. I would like to present a court decision from Sanowicz v. Bacal to support my claim. While the plaintiff’s allegations were initially considered to be sufficient for the action, it was reversed after a better examination of the fact that two brokers or broker agencies must enter such an agreement (Los Angeles County Superior Court). Moreover, the Court decided that Sanowicz’s agreement with Bacal was illegal due to section 10137 prohibiting such a deal without a supervising broker involved (Los Angeles County Superior Court). Thus, the Court’s decision stood with the appellant, accepting the strict limitations of the B&P Code.

In my case, the residential purchase agreement, while it did contain the name of the plaintiff, did not include any references to any referral fees. Referral fees may be paid only through a broker who has entered an agreement to perform such a transfer (“California Code, Business and Professions Code – BPC § 10137”). Based on section 10137, I am unable to provide compensation “to any real estate licensee except through the broker under whom he or she is at the time licensed” (“California Code, Business and Professions Code – BPC § 10137”). Therefore, there was no Procedural Fairness of Due Process, making it necessary to review the Court decision on the basis of the insufficient evidence of any agreement for sharing the disclosed payment.

Referral fee agreements are to be made between the two broker agencies in written form. Following the explanation of section 10176 by Wayne Bell, “all compensation, including any lawful referral fee(s), paid to or claimed by a licensee, must be fully disclosed to his or her principal in writing” (8). Otherwise, such payments are considered to be undisclosed, creating a violation of the Real Estate Law (Bell). Without full disclosure of any payments that are included by the contract to their respective brokers, real estate agents are unable to perform such transactions. The relationship between a broker and a real estate agent is hierarchical, making such dependency mandatory. Such an agreement must have been made by broker agencies of the real estate agents involved in the deal.

In conclusion, no broker has expressed their consent to share payments or signed a referral fee agreement. The decision made by the Court in the Sanowicz v. Bacal reflects the fact that section 10137 stands for this interpretation. The plaintiff nor I had the right to create such an agreement without notifying our respective broker agencies. Therefore, I am unable to fulfill the agreement due to the lack of the necessary contract. The supervising brokers must be kept aware of the shared fees, which did not occur in my case.