A legal dispute between a wealthy Phoenix couple and a real estate agent is providing interesting new case law in Arizona. The Court of Appeals recently ruled in Young v. Rose that an electronic agreement via e-mail is not the same as physically signing a paper contract. In this case, married couple Jason and Jordan Rose, were sued by real estate agent Julie Young. According to court records, the Rose?s and Young entered into three agreements, beginning in 2006, naming her as their ?exclusive real estate agent.? The last agreement expired in October 2007.
In January of 2009, Young sent an e-mail to Jordan Rose about four multi-million-dollar properties asked if she wanted to see them. Jordanresponded by e-mail asking Young to ?keep us posted? regarding two of the properties ?if the prices drop.? Later that same day, Young e-mailed Jordanto say one owner would consider offers of less than $4 million (the maximum they told Young they would want to spend). She also asked Jordanto sign a new buyer-broker agreement because they were ?back in the exploration mode.?
Young attached a PDF version of the agreement.Jordan forwarded that to her assistant to have it printed out.Jordan eventually sent back an e-mail with a Buyer-Broker Agreement, signed by both her and her husband, as an attachment.Jordan?s assistant sent an e-mail back to Young, attaching ?the signed agreement.?? Young responded by saying ?Thank you.?
Both Roses signed the document that was scanned and e-mailed to Young, but she did not hand sign the document. During the term of the agreement, the Roses bought a home using a different agent. Young sued for breach to recover the commission on the sale.? The Roses moved to dismiss, arguing that Young did not sign the agreement as required by?A.R.S. ? 32-2151.02(A)(4), and that Young?s ?thank you? e-mail was not an electronic signature.? The superior court dismissed Young?s claim and she appealed.
A.R.S. ? 32-2151.02(A) requires ?real estate employment agreements? to ?[b]e signed by all parties to the agreement.? The Court of Appeals said it is clear that real estate contracts are enforceable only when signed by both parties. In this case, they said, there was no signature on any form signed by the agent.
The Honorable Margaret Downie, the judge who wrote the ruling for the court, said the question of whether an e-mail from the agent thanking the couple for their business (essentially an acknowledgement of the signed agreement) is the legal equivalent of the agent?s signature on the contract. ?For an agent to sue for a commission, there must be a written agreement that complies with both A.R.S. ?? 44-101(7) and 32-2151.02(A),? the ruling said.
Judge Downie also added ?Arizonaplaces strict requirements on real estate professionals who seek to recover commissions, and that means a real estate agent can sue to collect a commission only if there is a written agreement that complies with the law.?
?The result in this case may appear harsh, especially because the parties to be charged ? the Roses ? signed the 2009 agreement,? Judge Downie wrote, adding that it is up to the Legislature to decide what is required in Arizona. ?We leave for another day the task of determining when an e-mail communication qualifies as an electronic signature.? That topic has generated significant discussion and diverging viewpoints among courts and commentators.?
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