Facts: Two real estate agents employed by the same broker enter into oral and written agreements to share fees earned by either party on the sale of real estate within two years of the signed agreement. No signature from their broker is on the agreement. Before the end of the two-year period following the agreement, the first agent finds employment with a new broker and closes a sale on a property, receiving compensation without the partnering agent’s knowledge.
Claim: The partnering agent seeks half of the first agent’s earned fees on the sale, claiming the first agent breached their fee sharing agreement since the sale occurred within the two-year period specified in the written agreement.
Counter claim: The first agent claims the fee sharing agreement is unenforceable since a broker is required to be a party to any fee sharing agreement as agents may only receive compensation from their broker, and only the agents signed the agreement.
Holding: A California court of appeals holds the fee sharing agreement is enforceable and the partnering agent is entitled to half of the fee earned on the sale since agents are permitted to enter into an agreement to share earned fees after initial compensation by a broker. [Sanowicz v. Bacal (2015) 234 CA4th 1027]