This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. ' 480A.08, subd. 3 (1994).

STATE OF MINNESOTA
IN COURT OF APPEALS
C9-96-58

Sterling Group, Inc.,
Appellant,

vs.
Navarre Corporation,
Respondent.

Filed July 30, 1996
Affirmed
Schultz, Judge*

Hennepin County District Court
File No. 94-17766

Michael Berens, Andrea Carruthers, Kelly & Berens, P.A., 3720 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for Appellant)

Peter J. Gleekel, Matthew T. Boos, Winthrop & Weinstine, P.A., 3200 Minnesota World Trade Center, 30 East Seventh Street, St. Paul, MN 55101 (for Respondent)

Considered and decided by Klaphake, Presiding Judge, Schumacher, Judge, and Schultz, Judge.

U N P U B L I S H E D O P I N I O N

SCHULTZ, Judge

Appellant Sterling Group, Inc. appeals from the district court's dismissal of its complaint for failure to state a claim upon which relief can be granted. We affirm.

FACTS

In July 1993, Sterling and Navarre Corporation entered into an "Agreement of Exclusive Representation." According to this agreement, Sterling was to obtain an office/warehouse by lease or purchase for Navarre. On March 25, 1994, Navarre, on its own initiative and without any assistance from Sterling, entered into an agreement with a third party to build and lease an office/warehouse facility.

Subsequently, Sterling filed this lawsuit for breach of contract, alleging that (1) Navarre should compensate Sterling in accordance with industry standards and practices, and (2) Sterling was entitled to damages under a quantum merit theory. Navarre made a motion to dismiss for failure to state a claim upon which relief can be granted. The district court granted Navarre's motion, and Sterling appeals.

D E C I S I O N

Our review of cases dismissed for failure to state a claim upon which relief can be granted is limited to determining "'whether the complaint sets forth a legally sufficient claim for relief.'" Elzie v. Commissioner of Pub. Safety, 298 N.W.2d 29, 32 (Minn. 1980) (quoting Royal Realty Co. v. Levin, 244 Minn. 288, 290, 69 N.W.2d 667, 670 (1955)). A reviewing court is not bound by and need not give deference to a district court's decision on a purely legal issue. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).

1. Failure to Satisfy Minn. Stat. ' 82.33

Minn. Stat. ' 82.33, subd. 2 (1994), provides that no real estate broker

shall be entitled to or may bring or maintain any action in the courts for any commission, fee or other compensation with respect to the purchase, sale, lease or other disposition or conveyance of real property, or with respect to the negotiation or attempt to negotiate any sale, lease or other disposition or conveyance of real property unless there is a written agreement with the [real estate broker].

In Poser v. Abel, 510 N.W.2d 224, 225 (Minn. App. 1994), review denied (Minn. Feb. 24, 1994), a real estate broker brought an action against vendors seeking a commission for the sale of a building. The vendors argued that pursuant to Minn. Stat. ' 82.33, the real estate broker could not sue them because the commission document was missing an essential term, the name of the party who was to receive the commission. Id. at 227. The Poser court stated:

When the commission document and the counteroffer are construed together, they provide all of the essential terms of the agreement. The commission document supplies the name of the building, the amount and method of payment of the commission, and two of the parties' names.

Id. at 228 (emphasis added). Thus, the Poser court implied that "the amount and method of payment of the commission" is an essential term of a written agreement under Minn. Stat. ' 82.33. Id.

First, Sterling claims that the agreement satisfies the requirements of Minn. Stat. ' 82.33 because the statute only requires that the agreement be written. The Poser court explained, however, that:

Although it is not explicitly stated in the statute, the term "written agreement" must refer to a written agreement to pay a commission, fee or other compensation.

Id. at 227. Here, the only reference to compensation in the agreement states:

It is understood that STERLING will make every effort to obtain compensation from the owner or developer of the leased or purchased building or site. [NAVARRE] agrees to fully support STERLING'S effort to achieve this objective.

The agreement does not provide that Navarre will compensate Sterling, but rather that Navarre will support Sterling's efforts to obtain compensation from a third party. The agreement also does not contain "the amount and method of payment of the commission," which according to Poser is an essential term of a written agreement under Minn. Stat. ' 82.33. Id. at 228. We conclude the district court did not err by dismissing the complaint because the agreement does not satisfy the requirements of Minn. Stat. ' 82.33.

Second, Sterling asserts the district court erred by holding that the agreement had to satisfy both Minn. Stat. ' 82.33 and Minn. Stat. ' 82.195 (1994). While agreements under Minn. Stat. ' 82.33 may not need to satisfy all of the requirements of Minn. Stat. ' 82.195, which concerns listing agreements, the Poser court explained that "similar statutes are instructive as to the terms that must be included in a written agreement to satisfy [Minn. Stat. ' 82.33]." Id. at 227 n.2. As stated previously, the Poser court implied that the amount and method of payment of the commission is an essential term of a written agreement under Minn. Stat. ' 82.33. Id. at 228. Thus, we conclude the district court did not err by looking to Minn. Stat. ' 82.195 to determine what terms should be included in an agreement under Minn. Stat. ' 82.33.

Finally, Sterling contends the complaint alleges three distinct breaches: (1) Navarre dealt directly in violation of the exclusive agency granted to Sterling; (2) Navarre failed to support fully Sterling's efforts to obtain compensation; and (3) Navarre refused to compensate Sterling. Sterling contends the district court erred by dismissing the complaint because even if Minn. Stat. ' 82.33 bars recovery of the third claim, the other two allegations, if proven, would require recovery. We conclude, however, that because the agreement is not in compliance with Minn. Stat. ' 82.33, Sterling cannot bring a claim for a commission no matter what type of breach it alleges.

2. Implying the Missing Commission

Sterling asserts the district court should have implied the missing commission term into the agreement.

Whatever is necessarily implied in a contract is as much a part thereof as if expressly stated therein, but the implication must result from the language employed in the instrument or be indispensable to carrying the intention of the parties into effect.

Closurt v. Mitby, 238 Minn. 274, 282, 56 N.W.2d 428, 432-33 (1953).

In Krogness v. Best Buy Co., 524 N.W.2d 282, 286 (Minn. App. 1994), review denied (Minn. Jan. 25, 1995), this court stated that

to give effect to the provisions of Minn. Stat. ' 82.33, subd. 2, a broker cannot recover a commission or any other compensation under an implied in fact contract theory.

Thus, in accordance with Krogness, we conclude the district court did not err by refusing to imply the missing commission term.

3. Exclusion of Affidavit

Sterling contends the district court erred by excluding the affidavit of Kirt Woodhouse. The district court stated in its order that "the affidavit of Mr. Woodhouse was excluded from consideration and the motion was not treated as one for summary judgment."

Minn. R. Civ. P. 12.02 states:

If, on a motion asserting the defense that the pleading fails to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment * * * .

This rule clearly provides that a district court can exclude matters outside the pleading when ruling on a motion to dismiss for failure to state a claim upon which relief can be granted. Thus, we conclude the district court did not err by excluding the Woodhouse affidavit.

Affirmed.


Footnotes

* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, ' 10.