The justice court erred in granting summary judgment for Liberty Realty and denying it for Commission Express in a dispute over an assigned commission. Helen Low, a real estate agent working for Liberty Realty, assigned her right to a $7,180 commission to Commission Express. Commission Express perfected its security interest in the assigned commission by filing financing statements. However, Liberty Realty paid the commission directly to Low instead of Commission Express as required by the assignment. Article 9 of the Uniform Commercial Code, as adopted in Nevada, governs this assignment of an account receivable. Therefore, the justice court should have denied Liberty Realty's motion for summary judgment and granted Commission Express's countermotion.
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Vegas. Ne• 89109
0RIGI AIL
BREF
THOMAS F. KUMMER
Nevada Bar No. 01200
SHERI ANN FORBES
Nevada Bar No. 07337
KUMMER KAEMPFER BONNER & RENSHAW
Seventh Floor
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Telephone: (702) 792-7000
Attorneys for Plaintiff
S&B Associates LLC
dba Commission Express Las Vegas
DISTRICT COURT
CLARK COUNTY, NEVADA
S&B ASSOCIATES, LLC, a limited liability
company, d/b/a COMMISSION EXPRESS
LAS VEGAS,
Plaintiff,
VS.
HELEN LOW, an individual; LIBERTY
REALTY, a Nevada corporation; DOES I
through X, inclusive; and ROE
CORPORATIONS I through X, inclusive,
Defendant.
Case No.
Dept. No.
A466468
X
APPELLANT'S OPENING BRIEF
92552_3 g05.2
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I•at•y
TABLE OF CONTENTS
MEMORANDUM OF POINTS AND AUTHORITIES
I. Statement of the Issue Presented for Review 1
II. Statement of the Case 1
A. Summary
B. Factual Background
III. Argument 4
A. Standard of Review 4
B. Liberty Realty's Motion for Summary Judgment Should Have Been Denied
by the Justice Court Below 4
1. Article 9 Of The UCC Controls In This Case 4
2. The Subject Transaction Between Helen Low and Commission Express Is
Clearly An Assignment Of An Account Receivable 5
3. It Is Legal Under Nevada Revised Statutes For Liberty Realty To Pay
Commission Express The Account Receivable Pursuant To The Account
Receivable Sale And Assignment Agreement 6
4. The Assignment Does Not Increase The Burden Or Risk Of Liberty
Realty, And Does not Violate NRS 645.280 8
a. Liberty Realty's obligations were not enlarged by the Assignment 8
b. The Assignment does not violate NRS 645.280 9
5. Commission Express's Claims For Breach Of The Implied Covenant Of
Good Faith And Fair Dealing, Third Party Breach Of Contract And Unjust
Enrichment Survive Defendant's Summary Judgment Motion 10
6. Bell Acted As Liberty Realty's Agent 12
7. The Assignment Does Not Violate NRS Chapter 104 12
IV. Conclusion 14
ATTORNEY'S CERTIFICATE OF COMPLIANCE 14
92552_3 11705.2 Pagei
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TABLE OF CASES, STATUTES AND OTHER AUTHORITIES CITED
Cases
Alsenz v. Clark County School District, 109 Nev. 1062, 1065 (1993) 8
Bish v. Guaranty Nat'l Ins. Co., 109 Nev. 133, 848 P.2d 1057 (1993) 4
Boland v. Nevada Rock & Sand Co., 111 Nev. 608, 894 P.2d 988 (1995) 4
Cimini v. Nevada Ins. Guar. Ass 'n, 112 Nev. 442, 915 P.2d 279 (1996) 4
Dermody v. City ofReno, 113 Nev. 207, 931 P.2d1354 (1997) 4
Dickenson v. State Dept. of Wildlife, 110 Nev. 934, 877 P.2d 1059 (1994) 6
Dr. Miles Medical Co. v. John D. Park & Sons, Co., 220 U.S. 373, 383 (1911) 13
Great American lns. Co. v. General Builders, lnc., 113 Nev. 346, 934 P.2d 257 (1997) 13
Leaseparmers Corp. v. Robert T. Brooks Trust, 113 Nev. 747, 942 P.2d 182 (1997) 12
Lorenz v. Beltio, Ltd., 114 Nev. 795, 963 P.2d 488 1998) 6
Musserv. Bankof America, 114 Nev. 945, 947, 964 P.2d 51, 52 (1998) 6
Oliver v. Barrick Goldstrike Mines, 111 Nev. 1338, 905 P.2d 168 (1995) 4
Parman v. Petricciani, 70 Nev. 427, 272 P.2d 492 (1954) 12
Pressler v. City of Reno, 50 P.3d 1096 (2002) 4
Statutes
NRS 104. 9101 4
NRS I04.9102(b) 5
NRS 104.9102(c) 5
NRS 645.280(1) 6, 7
NRS chapter 104 1, 11, 12, 14
Other Cited Authorities
97-28 Op. Art 'y Gen. 105, 108 (1997) 7
Black's Law Dictionary 410 (Abridged 6 'h ed. 1991) 6
•_z 1,ros.2 Page ii
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3800 Howl'el Hugh•s
I.•s V•as. N•v•:• 89509
MEMORANDUM OF POINTS AND AUTHORITIES
I. Statement of the Issue Presented for Review
Did the justice court err by granting Defendant/Respondent Liberty Realty's Motion for
Summary Judgment against Plaintiff/Appellant Commission Express on all its claims for relief?.
II, Statement of the Case
A. Summary
Helen Low ("Low"), a licensed real estate agent, earned a commission from Liberty
Realty in connection with Low's representation of the purchasers of real property located in Las
Vegas, Nevada. Low validly sold at a discount to S&B Associates, LLC, dba Commission
Express Las Vegas ("Commission Express") all her rights, title and interest in the commission
she earned from Liberty Realty. Low's assignment of the proceeds of her commission to
Commission Express was made pursuant to Article 9 of the Uniform Commercial Code
("UCC"), codified in Nevada as NRS chapter 104. Commission Express perfected its rights, title
and interest in Low's commission by filing pursuant to Article of the UCC a financing
statement with the Nevada Secretary of State. Liberty Realty executed a Notice of Assignment
putting it on notice that Low had assigned the proceeds of her commission to Commission
Express. Liberty Realty failed to make such payment to Commission Express in direct violation
of the provisions of NRS chapter 104. Liberty Realty was not entitled to summary judgment
against Commission Express and the justice court erred below in granting summary judgment in
Liberty Realty's favor, and Commission Express was entitled to a grant of summary judgment on
its countermotion for summary judgment against Liberty Realty.
B. Factual Background
Defendant Helen Low ("Low") is a licensed Nevada real estate agent, working as an
independent contractor for Liberty Realty. See Defendant's Motion for Summary Judgment at 4.
92552_3 11705.2 Page of14
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Low represented Randall and Donna Whitt who, on March 3, 2002, made an offer to buy the
property at 6369 Lookout Mountain Drive, Las Vegas, Nevada. /d. Under the terms of the offer
and upon settlement of the real estate transaction, Low was entitled to a real estate commission
of $7,180.00 from Defendant Liberty Realty for the services she performed (the "Account
Receivable"). ld.
On March 3, 2002, and then again on March 21, 2002, Low sold, assigned and conveyed
her rights, title and interest to the Account Receivable to Plaintiff Commission Express at a
discount. See Exhibits 1 and 2 of Plaintiff's Opposition And Countermotion for Summary
Judgment. The March 3, 2002 sale and assignment, and the March 21, 2002 sale and
assignment, together assigned to Commission Express all of Low's rights in the total amount of
the Account Receivable. ld.
On March 6, 2002, Low and Commission Express executed a Master Repurchase And
Security Agreement. See Exhibit 7 of Plaintiff's Opposition and Countermotion for Summary
Judgment. On March 11, 2002, Commission Express filed a UCC Financing Statement, pursuant
to UCC-1, with the Nevada Secretary of State. See Exhibit 8 of Plaintiff's Opposition and
Countermotion for Summary Judgment.
On March 6, 2002, Low and Richard Bell ("Bell"), broker for Liberty Bell, executed a
Notice Of Assignment that informed Liberty Realty of Low's sale and assignment to
Commission Express of Low's rights and interest in the Account Receivable. See Exhibit 4 of
Plaintiff's Opposition and Countermotion for Summary Judgment; Reporter's Transcript ("RT")
at 6-7. Liberty Realty admits in its Motion that Bell is a broker employed by Liberty Bell. See
Defendant's Motion for Summary Judgment at 5. The Notice Of Assignment specifically
•rovided,
Payments due or to become due to [Low] under the above
referenced contract will be made to [Liberty Realty] by the
•2552_3 117052
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KUI•MEII ItA•PFI•R
Se•n• Fl•r
Las Vegas. Nevada 89109
Settlement Agent, and will then be directly paid ONLY to
Commission Express by [Liberty Realty] after deducting any fees
owed to [Liberty Realty] by [Low]. Should the amount paid to
[Commission Express] by [Liberty Realty] be less than the amount
in [paragraph] 1 abo•e, [Low] agrees to immediately pay the
difference to [Commission Express] with Certified or Cashier's
check.
See Exhibit 3 at ¶ 3 of Plaintiff's Opposition and Cotmtermotion for Summary Judgment.
Additionally, the Notice of Assignment provided, "Upon written notice from [Commission
Express] that [Low] is in Default, [Low] authorizes and directs [Liberty Realty] to pay
[Commission Express], after deducting fees as in 4 above, all monies due and payable to [Low]
to fulfill such balance as is due [Commission Express]." ld. at ¶ 6. The Notice of Assignment
released Liberty Realty from liability only if the underlying real estate transaction did not close.
Id. at ¶ 5.
On March 6, 2002, a Reminder of Commission Assignment was sent to Liberty Realty,
and a Reminder of Acknowledgement was sent to the settlement agent. See respectively,
Exhibits 4 and 5 of Plaintiff's Opposition and Countermotion for Summary Judgment. On May
6, 2002, title in 6369 Lookout Mountain Drive, Las Vegas, Nevada, passed to Randall and
Donna Whitt. See Exhibit 6 of Plaintiff's Opposition and Countermotion for Summary
Judgment. In direct contravention of the Notice of Assignment, Liberty Realty paid the proceeds
of the Account Receivable directly to Low. See Defendant's Motion for Summary Judgment at
Liberty Realty has failed and continues to fail to pay the proceeds of the Account
Receivable to Commission Express. See respectively, Exhibits 9 and 10 of Plaintiff's Opposition
and Countermotion for Summary Judgment. On May 0, 2002, a Demand For Payment was sent
to Liberty Realty, and a Notice of Default was sent to Low. ld. On August 9, 2002, Commission
Express filed suit in justice court. See Plaintiff's Complaint. Commission Express brings this
92552_3 $705.2 Page 3 of 14
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KUM•.R K•EMPFER
I•mlNt•R & REN•AW
• H•rd Hu•he•
P•kw'a•
appeal before this Court from the justice's court's error in granting Liberty Realty's Motion For
Summary Judgment and in denying Commission Express's Countermotion For Summary
Judgment.
III. Argument
A. Standard of Review
The Nevada Supreme Court has stated that an appeal from the grant of a motion for
summary judgment is reviewed de novo without deference to the decision of the court below.
Pressler v. City of Reno, 50 P.3d 1096 (2002); Cimini v. Nevada lns. Guar. Ass 'n, 112 Nev. 442,
915 P.2d 279 (1996); 0liver v. Barrick Goldstrike Mines, 111 Nev. 1338, 905 P.2d 168 (1995).
To prevail on a motion for summary judgment, the moving party must show that there are no
genuine issues as to any material fact with regards to the summary judgment issue, and that the
moving party is entitled to judgment as a matter of law on the summary judgment issue. NRCP
56(c). A party may, at any time, move with or without supporting affidavits, for summary
judgment in its favor as to all or any part of the claims made against it. NRCP 56(b). Summary
judgment is appropriate when there are no genuine issues of any material fact with regards to the
summary judgment issue and the moving party is entitled to judgment as a matter of law.
Dermody v. City of Reno, 113 Nev. 207, 931 P.2d 1354 (1997); Bish v. Guaranty Nat7 Ins. Co.,
109 Nev. 133, 848 P.2d 1057 (1993). In order to prevail, the nonmoving party must show
specific facts demonstrating the existence of a genuine issue for trial. Boland v. Nevada Rock &
SandCo., 111 Nev. 608, 894 P.2d 988 (1995).
BQ Liberty Realty's Motion for Summary Judgment Should Have Been Denied
by the Justice Court Below.
1. Article 9 Of The UCC Controls In This Case.
The UCC is codified in Nevada as chapter 104 of the Nevada Revised Statutes. NRS
92552_3 117052 Page 4 of 14
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104.9101 et seq. codifies Article 9 of the UCC, Secured Transactions. NRS 104.9109 provides
that the protections of Article 9 apply to "sale of accounts, chattel paper, payment intangibles or
promissory notes." NRS 104.9102(b) defines "account" as "a fight to payment of a monetary
obligation, whether or not earned by performance." Additionally, NRS 104.9102(c) defines
"account debtor" as "a person obligated on an account, chattel paper or general intangible."
Clearly, Low's sale of her Account Receivable to Commission Express is specifically covered by
NRS 104.9109. Because Low had a right to a $7,180.00 payment and Liberty Realty was
obligated to make that payment to Low, Low's Account Receivable is an "account" as defined
by NRS 104.9102(b), and Liberty Realty is an "account debtor" as defined by NRS 104.9102(c).
2. The Subject Transaction Between Helen Low And Commission
Express Is Clearly An Assignment Of An Account Receivable.
Liberty Realty claimed below, "The subject transaction was, in truth, a loan, and not
factoring and did not involve the assignment of an 'account receivable.'" See Defendant's Reply
To Opposition To Motion For Summary Judgment And Opposition To Plaintiff's Countermotion
For Summary Judgment at 6. Liberty Realty makes this illogical assertion, unsupported by any
authority, despite the fact that every document signed by Defendant Helen Low ("Low") and
Liberty Realty clearly states that the subject transaction was an assignment and sale of an
account receivable (the "Assignment"). See Exhibits 1, 2, 3, 4 and 7 of Plaintiff's Opposition to
Defendant's Motion For Summary Judgment And Countermotion For Summary Judgment.
Moreover, the documents signed by Low affirmatively state that the parties acknowledge that the
Assignment is not a loan. Specifically, the Account Receivable Sale And Assignment
Agreement states, "Agent acknowledges that this Agreement is not a loan or a consumer
transaction, but the sale of a business account receivable at a discount for commercial
purposes." See Exhibits and 2 at ¶ 5 of Plaintiff's Opposition to Defendant's Motion For
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1.15 V•li. Nlvi(Ii 8•11•
Summary Judgment And Countermotion For Summary Judgment (emphasis in original). The
Master Repurchase and Security Agreement contains identical language. See Exhibit 7 at ¶ 10 of
Plaintiff's Opposition to Defendant's Motion For Summary Judgment And Countermotion For
Summary Judgment.
Interpretation of a contract is a question of law. Musser v. Bank of America, 114 Nev.
945, 947, 964 P.2d 51, 52 (1998); Lorenz v. Beltio, Ltd., 114 Nev. 795, 963 P.2d 488 1998);
Dickenson v. State Dept. of Wildlife, I0 Nev. 934, 877 P.2d 1059 (1994). Liberty Realty admits
that both Low and Richard Bell of Liberty Realty signed the documents that effectuated the
Assignment. The undisputed evidence clearly shows that the Assignment is in no way a loan,
but is in fact a sale of an account receivable at a discount. In other words, the Assignment is a
factor. See Black's Law Dictionary 410 (Abridged 6 th ed. 1991).
3. It Is Legal Under Nevada Revised Statutes For Liberty Realty To Pay
Commission Express The Account Receivable Pursuant To The
Account Receivable Sale And Assignment Agreement.
Liberty Realty misconstrued Nevada law by claiming in its Motion for Summary
Judgment that NRS 645.280(1) makes it illegal for Liberty Realty to pay the proceeds of the
Account Receivable directly to Commission Express. See Defendant's Motion for Summary
Judgment at 12-I 3. In support of its claim, Liberty Realty quotes only a portion of NRS
645.280(1), leaving out language that is important to interpretation of the statute, ld. NRS
645.280(1) provides in its entirety,
It is unlawful for any licensed real estate broker, or broker-
salesman or salesman to offer, promise, allow, give or pay, directly
or indirectly, any part or share of his commission, compensation or
finder's fee arising or accruing from any real estate transaction to
any person who is not a licensed real estate broker, broker-
salesman or salesman, in consideration of services performed or
to be performed by the unlicensed person. A licensed real estate
broker may pay a commission to a licensed broker of another state.
92552_3 117O5.2
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•UMMER KAEMPFER
BONNER & RENSHAW
Sevenl• Floor
3600 Howard Hughes
I.as V•Oss. Nev•d• 891•EI
NRS 645.280(1) (emphasis added). NRS 645.280 is unmistakably an attempt to prevent brokers
from paying any portion of a commission to anyone other than a licensed real estate agent fo._Ar
procuring or brokering real estate sales. See 97-28 Op. Att'y Genl05, 108 (1997) ("Only when
an unlicensed person does an act that is defined as one that only a broker or salesperson may do
is there a prohibition in Nevada law."). The statute does not prevent a broker fi:om forwarding a
real estate agent's commission directly to a third party pursuant to a valid assignment. Because
the Account Receivable Sale and Assignment Agreement does not contemplate that Commission
Express perform any service with regard to the real estate transaetion, NRS 645.280 does not
prohibit Liberty Realty from paying the proceeds of an Account Receivable directly to
Commission Express.
In the instant case, Liberty Realty would not be paying the proceeds of the Account
Receivable to Commission Express "in consideration of services performed or to be performed"
by Commission Express. Liberty Realty would simply be forwarding the proceeds of Low's
Account Receivable to Commission Express pursuant to the validly executed Account
Receivable Sale And Assignment Agreement between Low and Commission Express and as
contemplated by UCC Article 9.
The Nevada Supreme Court has repeatedly stated that "statutory interpretation should
avoid absurd or unreasonable results." Alsenz v. Clark County School District, 109 Nev. 1062,
1065 (1993). Liberty Realty's interpretation is an absurd one, and would prevent a broker from
paying any part of his commission from the sale of real estate to anyone who isn't a real estate
agent; ostensibly, a broker would be prevented from purchasing groceries, paying employees or
paying rent with monies received as a commission from a real estate transaction. This Court
should reject Liberty Realty's absurd misreading of NRS 645.280.
Moreover, NRS 104.9406(6) provides that "a rule of law, statute, or regulation, that
92552_3 11705.2
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KUMMER
BOI•IER & REhFJHAW
•wmn• •
• H• H•
V•as, Nevada 89109
prohibits, restricts, or requires the consent of a government, governmental body or official, or
account debtor to the assignment or transfer of, or creation of a security interest in, an account or
chattel paper is ineffective to the extent that the rule of law, statute or regulation: (a) Prohibits,
restricts, or requires the consent of the government, governmental body or official, or account
debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of
a security interest in, the account or chattel paper." Therefore, even if NRS 645.280 could be
construed to prohibit Liberty Realty from paying the proceeds of the Account Receivable
directly to Commission Express, NRS 104.9406(6) renders such an application ineffective
where, as here, a security interest has been established under Article 9 of the Uniform
Commercial Code ("UCC").
4. The Assignment Does Not Increase The Burden Or Risk Of Liberty
Realty, And Does not Violate N]RS 645.280.
a. Liberty Realty's obligations were not enlarged by the Assignment.
Liberty Realty claimed below that the Assignment forced Liberty Realty to monitor and
track (1) the changing status of the real estate transaction, (2) the status of the commission
agreement between Low and her clients, and (3) the status of the amounts owed between
Commission Express and Low. See Defendant's Reply To Opposition To Motion For Summary
Judgment And Opposition To Plaintiff's Countermotion For Summary Judgment at 7. Liberty
Realty's contentions are, once again, belied by the evidence.
The only obligation placed on Liberty Realty by the Assignment is to pay the proceeds of
the Account Receivable directly to Commission Express instead of to Low. The Notice of
Assignment clearly stated, "Payments due or to become due to [Low] under the [Assignment]
will be made to [Liberty Realty] by the Settlement Agent, and will then be directly paid ONLY
to Commission Express by [Liberty Realty] after deducting any fees owed to [Liberty Realty]
by [Low]." See Exhibit 3 at ¶ 4 of Plaintiff's Opposition to Defendant's Motion for Summary
•2•:• .7o•.2 Page 8 of 14
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KUMMER KAEMPFER
BONNER & REN:•HAW
Seventh
3•00 HO•,•d
Vegas. Nevada 89109
Judgment And Countermotion For Summary Judgment (emphasis in original). Whatever Liberty
Realty was required to do in conjunction with paying Low her commission was not changed or
enlarged by requiring instead that Liberty Realty pay the proceeds of the Account Receivable
directly to Commission Express in Low's stead. Moreover, the Notice of Assignment only
requires Liberty Realty to pay to Commission Express "[p]ayments due or to become due" to
Low. See id. Thus, there is no added risk placed on Liberty Realty by the Assignment.
Additionally, the Notice of Assignment clearly shows that both Low and Liberty Realty
agreed that "[u]pon written notice from [Commission Express] that [Low] is in Default, [Low]
authorizes and directs [Liberty Realty] to pay [Commission Express], after deducting fees as in
4. above, all monies due and payable to [Low] to fulfill such balance as is due [Commission
Express]." See Exhibit 3 of Plaintiff's Opposition To Defendant's Motion For Summary
Judgment And Countermotion For Summary Judgment. By the terms of the Notice of
Assignment, Liberty Realty is not required to "monitor" anything beyond what it would have
done had the Assignment not occurred. See Exhibit 3 of Plaintiff's Opposition to Defendant's
Motion for Summary Judgment And Countermotion For Summary Judgment.
b. The Assignment does not violate NRS 645.280.
Liberty Realty argued below that the Assignment violates NRS 645.280, and that to
honor the Notice of Assignment would cause Liberty Realty to "ignore the advice and dictates of
the Nevada Real Estate Division." See Defendant's Reply To Opposition To Motion For
Summary Judgment And Opposition To Plaintiff's Countermotion For Summary Judgment at 8.
First, there is no evidence that the Nevada Real Estate Division has ever dictated that an
agent cannot assign the proceeds of her commission to a third party. The Nevada Real Estate
Division letter that Liberty Realty provided in Exhibit A of Defendant's Motion For Summary
Judgment answers only the question of whether a commission may be paid directly to a loan
•2552._3 117•.2 Page 9 of I4
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KUMMER KAEII• PFI:R
I•ON•ER & REN"HAW
Seven• Floor
381• H•ra
La•Vegas, Nev'• •1109
company. As discussed above, the Assigrmaent is no___!t a loan. Exhibit A of Defendant's Motion
For Summary Judgment is inapplicable to the instant case.
Next, as discussed in Plaintiff's Opposition To Defendant's Motion For Summary
Judgment Atzd Countermotion For Summary Judgment at 6-8, the Assignment does not violate
NtLS 645.280. The title of NRS 645.280 reads, "Association with or compensation of
unlicensed broker, broker-salesman or salesman unlawful; payment of commission other
than through broker or owner-developer unlawful." NRS 645.280 clearly contemplates
compensation of unlicensed real estate salesmen. Commission Express has not performed, or
promised to perform, any services as an unlicensed real estate salesman or broker. The statute
prohibits only payments made "in consideration of services performed or to be performed" by an
unlicensed real estate salesman or broker. NRS 645.280 does not prevent an agent from
assigning the proceeds of commission he has earned as a licensed real estate salesman.
5. Commission Express's Claims For Breach Of The Implied Covenant
Of Good Faith And Fair Dealing, Third Party Breach Of Contract
And Unjust Enrichment Survive Defendant's Summary Judgment
Motion.
Liberty Realty argued below that (i) because it was not a party to any contract with
Commission Express, it cannot be liable for breach of the covenant of good faith and fair
dealing; and (ii) because it was not a party to any contract with Low that was intended to benefit
Commission Express, it cannot be liable for third party breach of contract. See Defendant's
Motion for Summary Judgment at 8, 10. Liberty Realty further claimed that the Notice of
Assignment is nothing more than an informational document that does not create any duty owed
by Liberty Realty to Commission Express. See id. at 8.
As discussed above, however, NRS chapter 104 controls the instant case. NRS 104.9406
provides,
92552_3 117•5.2 Page 10 of 14
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KUM• •PFER
3800 How•
Parkv•
L•s Vegas. Ne•cle •lOg
[A]n account debtor on an account, chattel paper or a payment
intangible may discharge its obligation by paying the assignor
until, but not after, the account debtor receives a notification,
authenticated by the assignor or the assignee, that the amount due
or to become due has been assigned and that payment is to be
made to the assignee. After receipt of the notification, the account
debtor may discharge its obligation by paying the assignee and
may not discharge the obligation by paying the assignor.
(Emphasis added). "Authenticate" is defined as "to sign" or "to execute." NRS 104.9102(g).
Clearly, once Liberty Realty signed the Notice of Assignment, it could not discharge its
obligation to pay on the Account Receivable by paying Low. Low validly assigned all her rights
against Liberty Realty exclusively to Commission Express. Exhibit 3 at ¶ 2 of Plaintiff's
Opposition and Countermotion for Summary Judgment ("THIS ASSIGNMENT IS
IRREVOCABLE AND EXCLUSIVE."). Therefore, all benefits that accrued to Low through her
dealings with Liberty Realty were assigned to Commission Express, and Commission Express
had the exclusive right to stand in the shoes of Low as against Liberty Realty. In the absence of
any subsequent agreement to the contrary between Liberty Realty and Commission Express, the
only way that Liberty Realty could discharge its obligation to pay on the Account Receivable
was to pay the proceeds of the Account Receivable to Commission Express directly, in
accordance with the provisions of the Notice of Assignment. See NRS 104.9406; Exhibit 3 at ¶ 4
of Plaintiff's Opposition and Countermotion for Summary Judgment.
Liberty Realty's arguments below for summary judgment on Commission Express's
claims for breach of the implied covenant of good faith and fair dealing and for third party
breach of contract fail because under NRS chapter 104, the Notice of Assignment was sufficient
to obligate Liberty Realty to pay the proceeds of the Account Receivable directly to Commission
Express. Therefore, Liberty Realty's Motion for Summary Judgment against Commission
Express on its claims for breach of the implied covenant of good faith and fair dealing and for
third party breach of contract should be denied.
92•,2_3 11705.2 Page of 14
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8ONNE8 & Rr•R,•
LasVegas, Nev• 8g109
Liberty Realty also argued that because Commission Express did not confer any benefit
on Liberty Realty, Liberty Realty cannot be liable for unjust enrichment. See Defendant's
Motion for Summary Judgment at 14. Liberty Realty cited the Nevada Supreme Court ease of
Leasepartners Corp. v. Robert T. Brooks Trust, 113 Nev. 747, 942 P.2d 182 (1997), in support of
its position. Id. In Leasepartners, the Court stated that unjust enrichment occurs whenever a
person has and retains a benefit that in equity and good conscience belongs to another. Id.
Liberty Realty, by refusing to pay the proceeds of the Account Receivable, has retained a benefit
that in equity belongs to Commission Express. Construing the facts in the light most favorable
to the non-moving party, summary judgment cannot be granted to Liberty Realty against
Commission Express on its claim for unjust enrichment. See Parman v. Petricciani, 70 Nev.
427, 272 P.2d 492 (1954).
6. Bell Acted As Liberty Realty's Agent.
Liberty Realty also made the argument that Bell did not have authority to bind it on the
Notice of Assignment. See Defendant's Motion for Summary Judgment at 9. However,
Nevada's laws of agency belie this argument. NRS 104.1103 provides, "Unless displaced by the
particular provisions of this chapter, the principles of law and equity, including.., principal and
agent, estoppel, fraud, misrepresentation or other validating or invalidating cause shall
supplement its provisions." In the instant ease, Bell had apparent authority to sign the Notice of
Assignment on behalf of Liberty Realty. See Great American Ins. Co. v. General Builders, Inc.,
113 Nev. 346, 934 P.2d 257 (1997).
7. The Assignment Does Not Violate NRS Chapter 104.
Liberty Realty asserted below that the Assignment violates the terms of the Independent
Contractor Agreement ("ICA") between Low and Liberty Realty. See Defendant's Reply To
Opposition To Motion For Summary Judgment And Opposition To Plaintiff's Countermotion
92552_3 11705.• Page 12 of 14
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L•u•V•I•, N•'•d• 8•109
For Summary Judgment at 9. Specifically, Liberty Realty first argued that Low violated the term
of the ICA that states, "Agent shall not have authority to bind the Broker by any promises or
representations, nor commit Broker to any expense whatsoever." See id.
However, Low has not bound Liberty Realty in any additional ways by selling her right
to receive the proceeds of her Account Receivable to which Low was already entitled. Liberty
Realty was already bound to pay a commission to Low; Low is entitled to sell her rights, title and
interests in property that she has a right to receive. See Dr. Miles Medical Co. v. John D. Park &
Sons, Co., 220 U.S. 373,383 (1911) ("The right of alienation is one of the essential incidents of a
right of general property in movables, and restraints upon alienation have been generally
regarded as obnoxious to public policy, which is best subserved by great freedom of traffic in
such things as pass from hand to hand."); 8A Anderson On The Uniform Commercial Code § 9-
102:1.5, PEB Commentary No. 14 (stating that no provision of Article 9 is intended to prevent
the transfer of ownership of accounts or chattel paper). The Assignment does nothing except to
direct Liberty Realty to pay the proceeds of the Account Receivable, which it already owed, to
Low's assignor. Therefore, Low has not violated the ICA.
Liberty Realty next argued below that Low violated the term of the ICA that states,
"Agent shall abide by the code of Ethics and By-Laws of the Greater Las Vegas Association of
Realtors, and will not violate any statute, ordinance or regulation applicable to the conduct of the
real estate brokerage business." See id. Liberty Realty did not explain how the Assignment
potentially violates "the code of Ethics and By-Laws of the Greater Las Vegas Association of
Realtors." As discussed above and in Plaintiff's Opposition To Defendant's Motion For
Summary Judgment And Countermotion For Summary Judgment, the Assignment does not
violate any statutes.
Lastly, Liberty Realty argued that the Assignment violated NRS 104.9406 because the
Page 13 of 14
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BON.•[R & RENSHAW
Las Vegas, Nev'• 891(•e
Notice of Assignment did not reasonably identify the rights assigned. The Notice of Assignment
is perfectly clear on this point and states,
PLEASE TAKE NOTICE that the Agent is entitled to a
commission (account receivable) of $7,180 without effect of
deduction at this point in time under the above referenced ratified
contract [sale agreement of 6369 Lookout Mountain Dr. between
Randall & Donna Whitt and Katherine & David Rose] pursuant to
Agent's Independent Contract Agreement which account
receivable has been irrevocably sold and assigned solely to:
COMMISSION EXPRESS (CE).
See Exhibit 3
Countermotion For Summary Judgment.
104.9406.
IV.
of Plaintiff's Opposition To Defendant's Motion For Summary Judgment And
Therefore, the Assignment does not violate NRS
Conclusion
UCC Article 9, codified in Nevada as NRS chapter 104, is the controlling law. Liberty
Realty owed an obligation to pay Low $7,180.00 in commission for settlement of the underlying
real estate. Commission Express validly purchased all rights and interests in Low's Account
Receivable at a discount. Commission Express perfected its rights by filing the appropriate
financing papers under UCC Article 1. Liberty Realty authenticated a Notice of Assignment,
directing it to make all payments due to Low directly to Commission Express. Liberty Realty
has failed to fulfill its obligations to pay on the Account Receivable and the Notice of
Assignment. Therefore, the justice court erred as a matter of law by granting Liberty Realty's
Motion for Summary Judgment. Commission Express respectfully requests that this Court
reverse the decision of the justice court below.
92552_3 '•705.2
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Ku •MPFER
BeNNI-'R & REh•H•W
3800 I-I¢•¢a•11-h•l•s
Patl•y
La$ Vegas. •m 8910•
ATTORNEY'S CERTIFICATE OF COMPLIANCE
I certify that have read this appellate brief, and to the best of my knowledge,
information, and belief, it is not frivolous or interposed for any improper purpose. I further
certify that this Brief complies with all applicable Nevada Rules of Appellate Procedure. I
understand may be subject to sanctions in the event that the accompanying Brief is not in
conformity with the requirements of the Nevada Rules of Appellate Procedure.
DATED this
• "•'day of June, 2003.
KUMMER KAEMPFER BONNER & RENSHAW
BY:
THOMAS F. KUMMER"
Nevada Bar No. 01200
SHERI ANN FORBES
Nevada Bar No. 07337
Seventh Floor
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attorneys for Plaintiff
S&B Associates LLC dba
Commission Express
92552_3 •705.2 Page 15 of 14
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K•I•R
CERTIFICATE OF MAILING
Pursuant to NRCP 5(b), I hereby certify that service of the foregoing APPELLANT'S
OPENING BRIEF was made this date by depositing a tree copy of the same for mailing at Las
Vegas, Nevada, addressed to:
Deborah L. Elsasser, Esq.
THORNDAL, ARMSTRONG, DELK,
BALKENBUSH & EISINGER
1100 E. Bridger Avenue
P.O. Drawer 2070
Las Vega.s, NV 89125-2070
Attorneys for Defendant
Liberty Realty
DATED this
•day of June, 2003.
ompfo Z'
92552_3 11705.2 Page 16 of 14
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