Jones Lang LaSalle Americas, I v. The Hoffman Family, LLC

Filing

UNPUBLISHED AUTHORED OPINION filed. Originating case number: 1:13-cv-01011-AJT-JFA. Copies to all parties and the district court/agency. [999561121]. [14-1454]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1454

JONES LANG LASALLE AMERICAS, INC., a Maryland corporation,
Plaintiff - Appellant,
v.
THE HOFFMAN FAMILY, LLC, a
company; HOFFMAN BUILDINGS,
partnership,

Virginia
L.P., a

limited liability
Virginia limited

Defendants - Appellees.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.
Anthony J. Trenga,
District Judge. (1:13-cv-01011-AJT-JFA)

Argued:

January 28, 2015

Decided:

April 8, 2015

Before SHEDD, DUNCAN, and KEENAN, Circuit Judges.

Reversed and remanded by unpublished opinion.
Judge Duncan
wrote the opinion, in which Judge Shedd and Judge Keenan joined.

ARGUED: Stephen Michael Sayers, HUNTON & WILLIAMS LLP, McLean,
Virginia, for Appellant.
John Donley Adams, MCGUIREWOODS LLP,
Richmond, Virginia, for Appellees. ON BRIEF: Thomas J. Cawley,
Julie M. Peters, HUNTON & WILLIAMS LLP, McLean, Virginia, for
Appellant.
Jodie N. Herrmann, Charlotte, North Carolina, Brian
D. Schmalzbach, MCGUIREWOODS LLP, Richmond, Virginia, for
Appellees.

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Unpublished opinions are not binding precedent in this circuit.

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DUNCAN, Circuit Judge:
Plaintiff-Appellant

Jones

Lang

LaSalle

Americas,

Inc.

(“JLL”), appeals the district court’s entry of summary judgment
in favor of Defendants-Appellees The Hoffman Family, LLC, and
Hoffman

Buildings,

L.P.

(collectively,

breach of contract claim.

“Hoffman”),

on

JLL’s

JLL claims that Hoffman owes it $6.62

million in commission payments under a contract in which JLL
agreed

to

help

Hoffman

secure

a

federal

government

exchange for a percentage of the tenant’s base rent.

lease

in

On appeal,

JLL argues that the district court erred in concluding that a
JLL employee involved in the leasing efforts was required to
have a Virginia real estate salesperson’s license, and that the
consequence of the employee’s failure to be so licensed was a
total

forfeiture

of

JLL’s

commission.

For

the

reasons

that

follow, we reverse the district court’s determination that, as a
matter of law, JLL was precluded from recovering any commission
under the lease agreement, and remand for further proceedings.

I.
A.
JLL is a real estate business that, at all times relevant
here, had a firm license issued by the Virginia Real Estate
Board.
Virginia.

Hoffman

owns

tracts

of

real

property

in

Alexandria,

In August 2007, Hoffman and JLL signed a leasing
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agreement (the “Agreement”).

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In the Agreement, Hoffman retained

JLL to act as the exclusive leasing agent for landholdings that
included property located at 2401 Eisenhower Avenue, Alexandria,
Virginia
addressed

(the

“Property”).

JLL’s

Section

services

directed

Government leases for Hoffman.
inter

alia,

strategy

“[a]ssist

for

with

positioning

4.12

of

towards

the

Agreement

obtaining

U.S.

This section required JLL to,
the

the

development
Property

for

of

an

overall

site/building

selection by the Government” and “[a]ssist in the negotiation of
the

[Government]

lease

award

to

[Hoffman].”

J.A.

39.

The

Agreement also provided that, if JLL’s efforts resulted in the
lease of any of these properties, JLL would be entitled to a
commission equal to 2% of the lease’s base rent.
JLL assembled a Government Investor Services (“GIS”) group
to

identify

Hoffman.

and

pursue

federal

leasing

opportunities

for

As a part of that effort, JLL hired Arthur M. Turowski

after he retired from the U.S. General Services Administration
(“GSA”) in or around October 2007.

J.A. 483-85.

JLL hired

Turowski to advise JLL’s GIS team on matters related to the GSA
and the federal lease procurement process.

Turowski was not a

licensed Virginia real estate salesperson when he joined the GIS
team,

and

he

did

employed by JLL.

not

obtain

a

J.A. 486-87.

4

salesperson’s

license

while

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On April 7, 2011, the GSA solicited Expressions of Interest
(“EOI”)

for

a

lease

for

a

site

to

house

the

new

national

headquarters of the National Science Foundation (“NSF”).

JLL

identified the Property as a candidate for the NSF lease and
assisted Hoffman in presenting the Property to the GSA.
The GSA selected Hoffman for the award of the NSF lease on
May 15, 2013.

On May 23, 2013, Hoffman signed the NSF lease,

and on June 7, 2013, the GSA delivered the signed NSF lease to
Hoffman and issued a public announcement of the award.

Hoffman

will receive a total base rent of more than $330 million over
the 15-year term of the NSF lease.

J.A. 19.

B.
The parties began disagreeing over JLL’s commission shortly
after the NSF lease was signed.

JLL claimed that, under the

Agreement, Hoffman owed JLL a commission equal to 2% of the NSF
lease’s
million.

base

rent,

an

amount

totaling

approximately

$6.62

Hoffman asserted that it owed JLL a total commission

of $1 million, based on what it claimed were oral agreements
reflected in written submissions made to the GSA and elsewhere.
The parties were unable to resolve this dispute, and JLL filed
an action for breach of contract on August 16, 2013, seeking
$6.62

million

in

commission

payments.

During

the

course

of

discovery, Hoffman learned that Turowski was not a licensed real
estate salesperson.
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Both parties moved for summary judgment.
it

was

entitled

to

recover

the

commission

JLL claimed that
set

forth

in

the

Agreement because JLL procured the NSF lease and the Agreement
was

in

effect

during

the

course

of

JLL’s

leasing

efforts.

Hoffman argued in relevant part that, as a matter of public
policy, JLL could not recover any commission that might have
been payable under the Agreement because Turowski, an unlicensed
real

estate

salesperson,

was

critical

to

JLL’s

NSF

leasing

motion

for

summary

efforts.
The

district

judgment.
to

have

court

granted

Hoffman’s

The court first concluded that Turowski was required
a

centrally

real

estate

involved

in

salesperson’s
the

activities

successful bid for the NSF lease.

license
that

because

led

to

he

was

Hoffman’s

As to the consequences of

that requirement, the district court concluded “based on public
policy declared by the Virginia courts” that “Turowski’s failure
to have a license preclude[d] JLL[], as well as Turowski, from
receiving any commission with respect to the NSF lease.”
193.

J.A.

JLL timely appealed.

II.
We review de novo a district court’s grant of a motion for
summary judgment, construing all facts and making all reasonable
inferences

in

favor

of

the

non-moving
6

party.

Millennium

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Inorganic Chems. Ltd. v. Nat’l Union Fire Ins. Co., 744 F.3d
279, 285 (4th Cir. 2014).

Summary judgment is appropriate only

when the moving party shows that “there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a
matter of law.”

Fed. R. Civ. P. 56(a).

III.
JLL

argues

concluding

on

that

appeal

that

Turowski’s

the

district

participation

in

court
the

erred

NSF

in

leasing

efforts rendered the Agreement unenforceable on public policy
grounds,

and

prohibited

consequently,

from

receiving

in

any

Agreement as a matter of law.
Neither

JLL

nor

valid when formed.
its

contractual

real

estate

Agreement

determining
commission

that

JLL

was

under

the

Agreement

was

payable

We agree.

Hoffman

dispute

that

the

Instead, Hoffman contends that JLL performed

obligations

licensing

in

contravention

scheme--and

unenforceable--when

of

therefore

Turowski,

who

did

the

Virginia

rendered
not

have

salesperson’s license, became involved with the transaction. 1

the
a
We

find this argument unpersuasive because it is unsupported in

1

Hoffman so argues because it submits that “Turowski’s
extensive participation in the NSF lease transaction rendered
him a ‘real estate salesperson’ in Virginia,” and therefore
required him to be licensed as such. Appellee’s Br. at 17.

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Virginia law.

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As an initial matter, the district court imposed

a total forfeiture of JLL’s commission “based on public policy
declared by the Virginia courts” despite the fact that “[t]here
is

no

impose[]

explicit
[a

Virginia law.”

statute

total

or

judicial

prohibition

J.A. 193.

of

decision

JLL’s

that

commission]

[would]
under

Likewise, Hoffman can point to no

authority under Virginia law that would compel a forfeiture of
JLL’s commission under the circumstances presented here.

Absent

Virginia cases addressing this issue, we decline to speculate
whether Virginia courts would so hold.
While the Supreme Court of Virginia has not addressed the
enforceability of validly formed contracts performed contrary to
Virginia’s real estate licensing scheme, Virginia law is clear
on two points.

First, “a contract made in violation of the real

estate licensing statutes is illegal” and unenforceable. 2
2

Grenco

The Supreme Court of Virginia first addressed the issue of
commission payments to unlicensed brokers and salespersons in
Massie v. Dudley, refusing to enforce an agreement “made by an
unlicensed person” because “its substance [was] unlawful.”
3
S.E.2d 176, 180-81 (Va. 1939).
The court has consistently
reiterated this principle following Massie.
In Harrison &
Bates, Inc., v. LSR Corp., for example, the court held
unenforceable a contract to split commissions made between a
licensed corporation and an unlicensed firm.
385 S.E.2d 624
(Va. 1989); see also Hancock, Co. v. Stephens, 14 S.E.2d 332,
334 (Va. 1941) (holding unenforceable a contract for real estate
commissions formed by an unlicensed corporation); State Realty
Co. v. Wood, 57 S.E.2d 102 (Va. 1950) (holding unenforceable a
real estate contract that provided for the payment of brokerage
fees to an unlicensed corporation).

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Real

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Estate

S.E.2d

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Inv.

107,

109

Trust
(Va.

v.

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Nathaniel

1977)

Greene

(emphasis

Dev.

added).

Corp.,
And

237

second,

Virginia “courts are averse to holding contracts unenforceable
on the ground of public policy unless their illegality is clear
and

certain.”

1954).

Wallihan

v.

Hughes,

82

S.E.2d

553,

558

(Va.

On this latter point, the Supreme Court of Virginia has

reasoned that, though “[p]ublic policy has its place in the law
of contracts, . . . that will-o’-the-wisp of the law varies and
changes

with

the

interests,

habits,

need,

sentiments

and

fashions of the day,” id., and courts are thus wary of employing
it to invalidate contracts that were valid when formed.

In the

absence of clear Virginia law standing for the proposition that
a validly formed contract for real estate commissions can later
become unenforceable through unlawful performance, we decline to
hold the validly formed Agreement unenforceable as a matter of
law on the grounds of public policy. 3

3

In light of this determination, and because the parties
agree that Turowski’s involvement in the NSF leasing efforts
began over a month after the Agreement’s valid formation, we
need not decide whether Turowski was required to have a
salesperson’s license.
Moreover, Virginia’s General Assembly
has delegated the authority to regulate the real estate
profession to the Virginia Real Estate Board. See Va. Code Ann.
§ 54.1-2105. Pursuant to this authority, the Board is empowered
to police unlicensed real estate activity by, inter alia,
issuing cease and desist orders and imposing civil penalties.
Id. § 54.1-2105.2(A), (C).
Thus, if Turowski was required to
have a salesperson’s license in order to participate in JLL’s
(continued)
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To
whether

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be
JLL

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clear,
is

our

in

the

NSF

conclusion

entitled

payments it seeks.

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to

the

does
$6.62

not

purport

million

in

to

decide

commission

leasing

We hold only that Turowski’s participation
efforts

did

not

render

unenforceable as a matter of public policy.

the

Agreement

With this question

of law resolved, we return the matter to the district court to
resolve the legal and factual issues that remain in dispute,
including whether “the parties agreed to a $1 million commission
with respect to the NSF lease” in an oral agreement.

J.A. 178

n.3.

IV.
For the foregoing reasons, the judgment of the district
court is reversed and this matter is remanded to the district
court.
REVERSED AND REMANDED

NSF leasing efforts, it is within the Board’s discretion
determine the consequences of that unlicensed activity.

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