The University Corporation, A California Nonprofit Corporation v. Bruce Wring

This case involves an agreement between the Appellee, a nonprofit corporation, and the Appellant, a real estate agent, whereby the Appellant would acquire foreclosed properties, oversee all necessary repairs and renovations of the properties, and ultimately sell them for the benefit of the Appellee. The Appellee’s executive director was given the authority to act on its behalf in all dealings with the Appellant. As compensation, the Appellant received commissions on the purchase and sale of each property, and a percentage of the repair costs for his oversight of the repairs and renovations of each property. After operating pursuant to the oral agreement for over a year, the parties executed a written agreement for the same purpose. Throughout their relationship, the Appellant acquired approximately eighty-four (84) properties for the Appellee. Subsequently, after discovering that their records did not contain documentation of actual repair costs which the Appellant was required to submit under the written agreement, the Appellee filed a complaint for an accounting. The trial court appointed a Special Master to conduct an accounting. Following an evidentiary hearing, the Special Master filed a report in which he ordered that the Appellant be disgorged of all funds received by virtue of the agreements with the Appellee based on his failure to provide documentation of actual repair costs, and further suggested an award of attorney’s fees and costs in favor of the Appellee. Thereafter, the trial court entered a final order adopting and confirming the Special Master’s findings, and denied the Appellant’s objections to the Special Master’s report. After thoroughly reviewing the record, we conclude that the Appellant was not required to submit documentation of actual repair costs on the properties acquired pursuant to the oral agreement. We further conclude that the course of conduct between the Appellant and the Appellee’s executive director modified the written agreement, such that the Appellant was not required to submit documentation of actual repair costs. As a result, we reverse the judgment of the trial court and remand for further proceedings.