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The Contemporaneous Document Doctrine; HLH Consulting, LLC v. Burd Automotive, Inc.

This case teaches that the contemporaneous document doctrine may have implications that extend far beyond providing guidance for contract interpretation.

In 2009 Christine Burd Tanner assumed all assets associated with the Burd Ford dealership on Pendleton Pike after her husband died. Wanting to sell these assets, Christine signed two letter agreements in 2011 with HLH Consulting: (1) an Asset Retention Agreement for sale of the dealership assets; and (2) a Real Estate Retention Agreement for sale or lease of the real estate used in the dealership’s business.

Through HLH’s efforts, a buyer, Wyler, was found in 2012 and an Asset Purchase Agreement, Consulting Agreement and Lease were executed. Ford, however, exercised a right of first refusal and entered into a similar asset, lease and consulting agreement. HLH was paid a commission of $68,025 for the asset sale and began receiving $1,440 per month for its commission on the lease agreement.

A few years later, Christine stopped making these monthly payments and HLH sued, alleging breach of the Retention Agreements and unjust enrichment. Defendants responded by asserting a counterclaim for return of the commissions that were paid and moved for summary judgment on grounds that the Retention Agreements were void because HLH did not have a real estate broker’s license at the time of the transaction.

The trial court granted the Defendants’ motion for summary judgment, dismissed HLH’s claims and ordered HLH to repay the commissions previously received. On appeal, HLH conceded that the Real Estate Retention Agreement was void but argued that it was entitled to its commission under the Asset Retention Agreement. The Court of Appeals rejected that argument by applying the contemporaneous document doctrine.

The contemporaneous document doctrine provides that “[i]n the absence of anything to indicate a contrary intention, writings executed at the same time and relating to the same transaction will be construed together in determining the contract.’” In addition to being executed at the same time, the writings must relate ‘to the same transaction or subject-matter’ to be construed together as a contract.”

Here, the undisputed designated evidence reveals that Hurst and Christine met on July 18, 2011 and executed the Asset Retention Agreement and the Real Estate Retention Agreement at the same time, between the same parties, and relating to the same subject matter, namely the negotiation and sale of the dealership’s personal property/assets and the real estate upon which the dealership was located....Under these circumstances, we agree with the trial court’s interpretation that the Asset Retention Agreement and Real Estate Retention Agreement constitute a single agreement.

HLH was required to have a real estate broker’s license when it entered into the Retention Agreement for the lease of the property. By law, it cannot recover a commission for this work since a contract made in violation of a statute is generally presumed void as against public policy.

Having decided to treat the two retention agreements as one, the Asset Retention Agreement was also void. Since the statute for enforcement of the licensing requirement calls for forfeiture of the commission, it also precluded equitable relief that might otherwise be available for unjust enrichment. Judgment for defendants is affirmed.

Lessons:
1. The contemporaneous document doctrine is not merely a rule of contract interpretation but may be used to treat multiple documents as one.
2. If one of the contemporaneous documents is void, it may taint related documents.
3. Anyone seeking a commission for a real estate transaction should be sure to get the proper real estate license first.