Holzman v. Fiola Blum, Inc.

HOLLANDER, Judge. This appeal arises from an action instituted in the Circuit Court for Baltimore County by Fióla Blum, Inc. (“Blum” or the “Broker”), appellee and cross-appellant, against Allen Bruce Holzman and his wife, Terry Lee Holzman (the “Holz-mans” or the “Sellers”), appellants and cross-appellees. Blum sought to recover a real estate broker’s commission allegedly owed pursuant to a Listing Agreement executed by the parties for the sale of appellants’ residence. Following a bench trial, the court found appellants liable to the Broker for a commis ⁶⁰⁹ sion of $37,600.

In addition, the court awarded the Broker the sum of $12,408 as a reasonable attorney’s fee. Thereafter, pursuant to appellants’ motion to alter or amend the judgment, the court reduced the judgment of $50,008.00 by the amount of $21,500, which was equal to the commission paid to the Broker in connection with the subsequent sale of the residence. On appeal, appellants present the following questions for our review, which we have reformulated: I. Did the circuit court err in determining that, pursuant to the Agreement, Blum was entitled to a commission even though a contract of sale for the Property did not proceed to settlement?

II

Did the circuit court err in concluding that the contract of sale for the Property, which provided that the buyers were to pay the Broker’s commission, did not relieve the Sellers of their obligation to Blum under the Agreement?

III

Did the circuit court err in concluding that the Broker was entitled to a commission when Blum breached its fiduciary duty and the Broker’s conduct constituted estoppel? IY. Did the circuit court err in its award of attorney’s fees? Pertinent to its cross-appeal, Blum asks the following question, which we have also rephrased: Did the trial court err in reducing the judgment by the amount of the commission earned by the Broker in connection with a subsequent contract of sale for the Property?

For the reasons that follow, we perceive error only with respect to the amount of the attorney’s fees awarded to Blum. Therefore, we shall affirm the portion of the judgment concerning the commission, vacate the portion of the judgment regarding the attorney’s fees, and remand for further proceedings. ⁶¹⁰ Factual Summary Appellants were the owners of 12500 Fellowship Court (the “Property”), an exclusive, three-story brick house containing eight bedrooms, nine full baths, three half baths, and a pool, located on several acres of land in an area of Baltimore County known as Worthington Club Estates. Appellants were interested in selling the Property and, on January 28, 1996, they met with Hope Berman, a real estate agent associated with Blum, and Harry Blum, the president of appellee, at the Property. During that visit, appellee, by Mr. Blum, and appellants executed a Listing Agreement (the “Agreement”) for the residence, which was effective for a six month term.

The Agreement, a standard form “Exclusive Right to Sell Listing Contract,” provided, in pertinent part: Owner agrees to pay Broker a fee for services rendered in the amount set forth below (the “fee”) (a) if during the term of this Contract, or any extension, thereof: (i) Broker produces a customer to purchase the Property at the listing price and on the terms herein or at such other price or on such other terms as shall be accepted by Owner or agreed upon in writing between Owner and Broker (the “authorized price”); or (ii) Owner shall enter into a written agreement to sell, exchange, convey or transfer the Property to any person or entity whether such person or entity shall have been procured by the Broker, by Owner, or by any other person or entity, in which event Owner shall within seventy-two (72) hours thereof furnish Broker a copy of such written agreement procured by anyone other than Broker; or (b) if, during the period of six (6) months following the expiration or termination of this Contract, Owner shall enter into a written agreement to sell, exchange, convey, or transfer the Property to any person or entity which, with the knowledge of Owner or any agent of Owner, inspected or made inquiry about the Property or negotiated to purchase or exchange the Property during the term of this Contract or extension thereof ... except that Owner shall have no obligation to pay the fee to Broker if the Property is sold or exchanged by any other licensed real estate broker following the ⁶¹¹ expiration of this Contract or any extension thereof or following the termination of this Contract as herein provided, unless such termination by Owner shall have been made for the purpose of avoiding the obligation of the Owner to pay the fee to Broker. If Broker prevails in any court action brought to obtain payment of the fee, Broker shall also be entitled to recover in such action his/her reasonable attorney’s fees and court costs. The Property was initially listed for sale on January 23, 1996 at a price of $1.95 million. Later, the price was reduced to $1,650,000.

Under the Agreement, the Broker’s commission was to be calculated in the following way: six percent of the first $300,000 of the selling price, five percent of the second $300,000, and four percent of the balance. On July 19, 1996, the Agreement was extended until September 30, 1996; the Holzmans, Mr. Blum, and Ms. Berman signed the extension. On August 9, 1996, appellants received a letter of intent from Gil Stern and his wife, Ellen (the “Sterns”), offering $600,000 for the Property. On August 12, 1996, Heros Noravian and his wife, Dr. Emma Zargarian (the “Noravians” or the “Buyers”), submitted a letter of intent, offering a purchase price of $715,000 and a deposit of $10,000.

Appellants negotiated with the Noravians, and appellee then prepared the residential contract of sale (“the Noravian contract”). On August 20, 1996, while appellants “were still in negotiation with the Noravians”, the Broker presented appellants with a revised offer from the Sterns in the amount of $850,000. Nevertheless, appellants and the Buyers executed the Noravian contract on August 25, 1996. The record does not reflect why the Holzmans proceeded with the Noravian contract after they learned of the increased offer from the Sterns.

On the advice of their attorney, appellants included a default provision in the Noravian contract which provided that, ⁶¹² in the event of a breach by the Sellers, the Buyers’ sole remedy would be limited to a refund of their deposit. The Noravian contract also contained a handwritten addendum (the “Addendum”) that provided, in part: “2. It is understood and agreed that buyers are to pay [the Broker’s] real estate commission fee and also pay all settlement fees____” Because there was no cooperating agent for the Noravian contract, any commission due under the Agreement was payable solely to appellee. After appellants executed the Noravian contract, they decided to pursue the Sterns’ offer, relying on the advice of counsel.

Accordingly, on August 26,1996, just one day after signing the Noravian contract, appellants canceled it. On the same day, appellants notified appellee and Ms. Berman of their decision, via a signed facsimile letter, which provided: We have decided not to make full settlement of our contract with Emma Zargarian and Hero[s] Noravian (the Buyers) accepted on August 25, 1996, based on the Default paragraph (paragraph number 17). Please inform the Buyers of this action immediately. Please return any and all deposit money which the Buyers have forwarded.

The Holzmans also sent a second letter to appellee, by facsimile, on August 26,1996, which stated: Base[d] on our letter of August 26,1996, faxed to you today, please inform all Brokers and Agents that 12500 Fellowship Court is available for sale. Ms. Berman continued to list the Property for sale after receiving the facsimile letters from appellants. Thereafter, on October 16, 1996, appellants executed a contract of sale with the Stems (the “Stern contract”). It contained a provision to pay the real estate commissions to appellee and Long & Foster, the Stems’ real estate agent, calculated in accordance with the terms of the Agreement.

Consequently, the commission due under the Stern contract was to be divided evenly between appellee and Long & Foster. ⁶¹³ On November 7, 1996, appellee filed a complaint in the circuit court, claiming that appellants defaulted on the Noravi-an contract and owed the Broker the real estate commission. Appellee alleged that appellants had “failed to perform their obligation to pay the ... fee,” and breached “the Exclusive Right to Sell listing contract and/or the Residential Contract of Sale.” The matter proceeded to trial on February 10,1998. At the proceeding, appellee presented testimony from Ms. Berman and Mr. Blum. Ms. Berman testified that, based on the sales price of $715,000 for the Noravian contract, the Broker’s commission was $37,600.

She conceded that she “never told” the Holz-mans that they were liable for payment of the commission under the Noravian contract. Furthermore, she testified that, in her seven years as a real estate agent, she had never received a commission for a sale that did not proceed to settlement. In his testimony, Mr. Blum acknowledged: I had a fiduciary relationship to the Holzmans, my listing contract until that time ran out, I was working for them. We would bring all the offers regardless of whether there was a contract in force or not, we would bring all letters of intent regardless of whether there is a contract or not.

That’s our job. And my relationship was to do the best that we could for Mr. and Mrs. Holzman. (Emphasis added). Nevertheless, Mr. Blum acknowledged that, when the Holzmans decided to pursue the Sterns’ offer, he did not advise them about their obligation to pay the commission under the Noravian contract.

Indeed, Mr. Blum testified that he was “advised by ... [counsel] not to say anything to the Holzmans.” With respect to the terms of the Agreement, Mr. Blum explained that the Agreement was read aloud to appellants before it was signed. Although Mr. Blum could not recall whether the Holzmans asked any questions concerning the Agreement, he maintained that the Agreement “wasn’t unfa ⁶¹⁴ miliar to Mr. Holzman. He had signed one previously.... With another agency.” When appellants’ counsel inquired what form was used by the other agent, Mr. Blum said: “I take for granted they used the same form we did.

I don’t know, I have never seen one.” In the defense case, Mr. Holzman stated that, in connection with the Agreement, Mr. Blum “told [him] that commissions were paid upon settlement.” Moreover, Mr. Holzman disputed Mr. Blum’s contention that the Agreement had been read aloud. Mr. Holzman averred: “He [Mr. Blum] handed it [the Agreement] to me, explained the commissions again were paid upon settlement. And asked me to read it over and sign it.” With regard to the initial offers from the Noravians and the Sterns, Mr. Holzman claimed: They [Ms. Berman and Mr. Blum] basically told us that they were the best offers available. They indicated that they could not provide us with better offers, that that’s the value of the property, that they also discussed prior dealings that they had with the Sterns.

And told us that we had to sign that within, right then and there and without much choice at all. Concerning the Stern contract, Mr. Holzman indicated that the parties were planning to settle “within a week” of trial; he explained that the parties had not yet settled because they were waiting for Mr. Blum to provide the release from the Buyers or the canceled check, showing that they had received the refund for their deposit. 1 At the conclusion of the trial, the court stated: The court finds the following facts have been proven by a preponderance of the evidence. [Appellants] entered into an exclusive right to sell listing contract on January 23,1996 with [appellee]. This contract was extended in July 1996 and was in effect up till sometime in September of 1996. The contract provides that the Holzmans will have to pay a ⁶¹⁵ commission to ... [appellee] in the amount listed in the contract, 6% of the first $300,000, 5% of the next $300,000, and then 4% of above and beyond that.

The contract provides that the Holzman’s [sic] shall have to pay this commission if they enter into a written agreement to sell the property to any person during the term of this exclusive agreement listing agreement. A contract was entered into ... during the time that the exclusive right to sell contract was in effect. The contract selling price was $715,000. Apparently, [appellants] took the time to consult with a lawyer prior to signing this contract [of sale].

And unfortunately they didn’t take the time, or there has been no testimony that they took the time to consult with a lawyer prior to signing the exclusive right to sell listing contract, which they signed. Had they consulted with a lawyer the lawyer would have told them that it’s unambiguous, that this exclusive right to sell listing contract ... which by the way this court recognizes, quite frankly, as the standard listing contract if you deal with a multiple listing agent. The lawyer would have told [appellants] that if you enter into a contract during the term of this listing agreement you are obligated to pay a commission. Now, the contract [of sale] that ... [appellants] signed, because they chose to sign it, provided a provision in it that if they defaulted on the contract between themselves and ... [the] Noravian[s] the only remedy the ...

Noravians would have would be the return of the $10,000 deposit, which they made. This is not a contract between [appellants] and [appellee] .... [the Broker] isn’t a part of that contract. They are not parties to that contract. Nowhere in this does it say anything about doing away with the agreement, the contract that they made to pay the ⁶¹⁶ commission.

Nowhere, no mention of it, and as a practical matter this contract ... is not a contract in which they could have written in there about doing away with their obligation to pay the commission unless ... [appellee] was a party to the contract. They are not listed anywhere here. They didn’t sign this. They didn’t have to agree to anything.

They don’t have to keep reminding [appellants], oh, by the way, you know, you signed a contract with us and ... you owe us money. It’s plain. He owes the money. Whether or not this property will ever settle in regard to the ...

Sterns, is a matter of mere speculation.... Apparently, it hasn’t. It’s now February 10, 1998 and it hadn’t settled as of this minute. It will be an interesting question when and if it settles what [appellee] would be entitled to based on the decision that the court will make today.

That’s an interesting legal question. But this is easy. I mean, quite frankly, this isn’t hard legally. The court orders that judgment be entered in favor of [appellee] against [appellant] in the amount of $37,600.

Plus attorney’s fees. The testimony that was given is that it is a one-third contingency. Now, the contract that was entered into calls for reasonable attorney’s fees. Is that a reasonable fee?

One-third of $37,600. That clearly is the price that ... [the Broker] is going to have to pay the attorney. Is that amount $12,408 unreasonable? I can’t say that it’s unreasonable.

I think it’s a reasonable arrangement to make with an attorney. I don’t think that it’s out of the ordinary.... So, the bottom line is, the Clerk is instructed to enter judgment in favor of [appellee] against [appellants] for $50,008____ On February 12, 1998, two days after trial, appellants and the Sterns settled on the Property. As a result, appellee received a commission of $21,500.00.

Accordingly, appellants filed a revisory motion, asking the court to reduce the judg ⁶¹⁷ ment by the amount of the commission that appellee actually recovered. In its opposition, the Broker contended that it was entitled to two commissions. The following colloquy at the motion hearing is pertinent: [APPELLEE’S COUNSEL]: We don’t believe they’re entitled to the credit. The listing contract doesn’t require a fee when the property is sold.

It requires a fee when a contract is entered into. The second contract was covered by the listing agreement and we’re entitled to a fee for both. THE COURT: Under what theory? Let’s say there was a contract for $100,000 and that contract didn’t go through, and the property was then sold for $100,000 to somebody else.

The property is worth $100,000. He gets commissions on both hundred thousand dollars? [APPELLEE’S COUNSEL]: Your Honor, the way that the listing agreement read, it’s a listing producing a buyer. Not on consummation of the settlement, but making the contract itself. It says that settlement is not a condition precedent to compensation due to the broker.

Thereafter, the court determined that appellants were entitled to a credit of $21,500, representing the amount paid to appellee as a commission for the Stem contract. The court said: THE COURT: Okay. The Court rales that ... [appellant] is to be given credit against the judgment that I ordered in the amount of $50,008.... * * * I am not reducing the judgment. I think the judgment I imposed — I’ve not been convinced that I made a mistake in ordering the judgment that I ordered.

I think it was correct. I do think that ... [appellant] gets credit towards that judgment of $21,500 that has been paid as commission to [appellee] for the sale of this property. ⁶¹⁸ We shall include additional facts in our discussion of the issues. Discussion I. The Agreement Appellants contend that settlement on the Noravian contract was a condition precedent to appellee’s entitlement to a commission. Appellants focus on the following language of the Agreement concerning commissions: Owner agrees to pay Broker a fee ... if during the term of this Contract, or any extension thereof ...

Broker produces a customer to purchase the Property at the listing price and on the terms herein or at such other price or on such other terms as shall be accepted by Owner or agreed upon in writing between Owner and Broker____ Appellants posit that the Noravian offer was for a purchase price substantially below the listed sales price, and the Noravi-an contract was not finalized. Therefore, they claim it was not a contract “at such other price or on such other terms as shall be accepted by the owner.” Moreover, appellants point out that, if we were to construe the Agreement in accordance with appellee’s position, the Broker would theoretically be entitled to an unlimited number of commissions, so long as the sale was not consummated; the mere signing of a contract of sale would generate the right to the commission. Appellants also contend that it is unfair to base liability upon the mere execution of the Noravian contract, because a number of contingencies might have led to cancellation of the Noravian contract, including the Buyers’ inability to obtain financing or their dissatisfaction with the inspection of the Property. Although the Noravian contract included certain contingencies, none of them are implicated here.

For example,. the Buyers’ performance was conditioned upon their satisfaction with the level of radon gas, the quality of the sewage disposal system, and the well water yield. But the Buyers never terminated the contract. Therefore, we need not decide here whether appellants would have been liable to ⁶¹⁹ the Broker for the fee if the Buyers had canceled the contract pursuant to a contractual contingency. Appellee maintains that the Agreement is clear and unambiguous and, therefore, its provisions control.

Under the terms of the Agreement, appellee asserts that appellants’ obligation to pay the commission was triggered when the Holzmans signed the Noravian contract; the right to the commission was not dependent upon consummation of the sale. Moreover, the Broker argues that the Holzmans may not elect to default on the Noravian contract and “then use their breach offensively as a weapon against [appellee’s] contractual right.” Preliminarily, we observe that because the Agreement addressed how commissions are earned, the provisions of Md.Code (1974,1996 Repl. Vol.), § 14-105 of the Real Property Article (“R.P.”), do not apply. 2 See DeFranceaux Realty Group, Inc. v. Elizabeth Thomas Leeth, 283 Md. 611, 614 , 391 A.2d 1209 (1978); Berman v. Hall, 275 Md. 434, 437 , 340 A.2d 251 (1975); Casey v. Jones, 275 Md. 203, 205 , 339 A.2d 33 (1975); W.C. Pinkard & Co., Inc. v. Castlewood Realty Co., Inc., 271 Md. 598, 601 , 319 A.2d 123 (1974). Rather, to determine whether the Broker was entitled to a commission in connection with the Noravian contract, we must focus on the terms of the Agreement.

DeFranceaux, 283 Md. at 614 , 391 A.2d 1209 (looking to the contract between the parties to determine “the right of the broker to receive commissions”); W.C. Pinkard & Co., Inc., 271 Md. at 601 , 319 A.2d 123 (noting ⁶²⁰ that because the parties entered into a brokerage agreement, the terms of the agreement were “controlling”). See also Loyola Federal Sav. Bank v. Hill, 114 Md.App. 289, 299 , 689 A.2d 1268 (1997); Anderson-Stokes, Inc. v. Muslimani, 83 Md.App. 267, 272 , 574 A.2d 320 , cert. denied, 321 Md. 67 , 580 A.2d 1077 (1990). Maryland law requires that we give legal effect to the unambiguous provisions of a contract.

Calomiris v. Woods, 353 Md. 425, 432 , 727 A.2d 358 (1999). Moreover, “[t]he interpretation of a written contract is ordinarily a question of law for the court.” JBG/Twinbrook Metro Ltd. Partnership v. Wheeler, 346 Md. 601, 625 , 697 A.2d 898 (1997); see Calomiris, 353 Md. at 434 , 727 A.2d 358 ; State Highway Admin. v. David A. Bramble, Inc., 351 Md. 226, 239 , 717 A.2d 943 (1998); Suburban Hosp. Inc. v. Dwiggins, 324 Md. 294, 306 , 596 A.2d 1069 (1991); Nicholson Air Services, Inc. v. Board of County Com’rs of Allegany County, 120 Md.App. 47, 63 , 706 A.2d 124 (1998); Hartford Accident & Indem. Co. v. Scarlett Harbor Assocs.

Ltd. Partnership, 109 Md.App. 217, 290-91 , 674 A.2d 106 (1996), aff'd, 346 Md. 122 , 695 A.2d 153 (1997); Shapiro v. Massengill, 105 Md.App. 743, 754 , 661 A.2d 202 , cert. denied, 341 Md. 28 , 668 A.2d 36 (1995). Our primary concern in interpreting a contract is to effectuate the parties’ intention. Nicholson Air, 120 Md.App. at 63 , 706 A.2d 124 ; Scarlett Harbor, 109 Md.App. at 290 , 674 A.2d 106 ; McIntyre v. Guild, Inc., 105 Md.App. 332, 355 , 659 A.2d 398 (1995). To ascertain the parties’ intention, we look to the language of the contract.

General Motors Acceptance Corp. v. Daniels, 303 Md. 254, 261 , 492 A.2d 1306 (1985); Nicholson Air, 120 Md.App. at 63 , 706 A.2d 124 ; Scarlett Harbor, 109 Md.App. at 291 , 674 A.2d 106 ; Faw, Casson & Co. v. Everngam, 94 Md.App. 129, 134-35 , 616 A.2d 426 (1992), cert. denied, 330 Md. 155 , 622 A.2d 1195 (1992). If the terms of the contract are clear, we presume “the parties intended what they expressed, even if the expression differs from the ⁶²¹ parties’ intentions at the time they created the contract.” Nicholson Air, 120 Md.App. at 63 , 706 A.2d 124 ; see Roged, Inc. v. Paglee, 280 Md. 248, 254 , 372 A.2d 1059 (1977); Scarlett Harbor, 109 Md.App. at 291 , 674 A.2d 106 ; McIntyre, 105 Md.App. at 355 , 659 A.2d 398 ; Bernstein v. Kapneck, 46 Md.App. 231, 244 , 417 A.2d 456 , aff'd, 290 Md. 452 , 430 A.2d 602 (1981). Of particular significance here, we may not “rewrite the terms of the contract or draw a new one ... merely to avoid hardship or because one party has become dissatisfied with its provisions.” Fultz v. Shaffer, 111 Md.App. 278, 298 , 681 A.2d 568 (1996) (citations omitted); see Scarlett Harbor, 109 Md.App. at 253 , 674 A.2d 106 . The trial court determined that the Agreement was unambiguous, and that it obligated the Holzmans to pay the fee because they entered into a written agreement to sell the Property during the term of the Agreement.

The “determination of ambiguity is one of law, not fact, and that determination is subject to de novo review by an appellate court.” Calomiris, 353 Md. at 434 , 727 A.2d 358 . In our view, the trial court was legally correct. The terms of the Agreement and the provisions of the Noravian contract refute appellants’ argument that settlement was a condition precedent to the Broker’s contractual right to a commission. See generally Chirichella v. Erwin, 270 Md. 178, 182, 310 A.2d 555 (1973) (recognizing that the determination of what constitutes a condition precedent if a question of “construction dependent on the intent of the parties to be gathered from the words they have employed”).

Of significance to us, the Noravian contract expressly provided that appellee’s commission was not contingent upon settlement. Indeed, paragraph 25 stated: “All parties irrevocably instruct the settlement agent to collect a fee or compensation and disburse same according to the terms and conditions provided in the listing agreement---- Settlement shall not be a condition precedent to payment of compensation.” (Emphasis added). To be sure, appellants could have negotiated for a provision in the Agreement that conditioned pay ⁶²² ment of the commission upon settlement. But, it is not our function to rewrite the Agreement between parties who had ample ability to bargain for contract terms that would have been more favorable to their respective interests.

Leeth, 283 Md. at 617 , 391 A.2d 1209 . Moreover, the authorities upon which appellants rely to support their position are inapposite. For example, in De-Franceaux Realty Group, Inc., supra, 283 Md. 611 , 391 A.2d 1209 , the contract of sale provided that the brokers would receive their commission “from the proceeds of the sale.” Leeth, 283 Md. at 613 , 391 A.2d 1209 . Because the sale never occurred, the sellers sued for specific performance.

Id. Thereafter, the seller and buyer settled the suit for specific performance. Id. Subsequently, the brokers brought an action against the sellers, claiming that they were entitled to their commission because the sellers’ suit wrongfully interfered with the brokers’ right to a commission.

Id. The Court noted that, because there was an agreement concerning the brokers’ entitlement to a commission, the agreement controlled. Id. at 614 , 391 A.2d 1209 . Under the terms of the agreement, settlement was a condition precedent to the brokers’s right to a commission.

Id. at 617-18 , 391 A.2d 1209 . As the condition precedent was not satisfied, the Court concluded that “the brokers ... had no contractual right to a commission.” Id. at 618 , 391 A.2d 1209 . Appellants ground their entire argument on one sentence in Leeth , which provides: “We have consistently held that when the term ‘sale’ is used in a contract of this type, it refers to a completed settlement.” Id. at 617 , 391 A.2d 1209 (citations omitted). This pronouncement was derived, in part, from Wyand v. Patterson Agency, Inc., 271 Md. 617, 620 , 319 A.2d 308 (1974), in which the Court observed: Long ago this Court decided that where one employed a real estate broker under an agreement that the broker would be entitled to a commission if there were a “sale” of the property, or if the property were “sold,” or if the broker “procured a purchaser,” or similar language, and the agreement did not more specifically set forth when or at what ⁶²³ stage in the sale process the right to a commission accrued, a fully consummated sale had to take place before the broker was entitled to a commission.

(Emphasis added). In this case, the Agreement did not state that the commission was to be paid from the “proceeds of the sale.” Rather, it required payment of the fee if the Sellers executed “a written agreement to sell” the Property. Berman v. Hall, supra, 275 Md. 434 , 340 A.2d 251 (1975), is also readily distinguishable from the present case, because the contract of sale at issue there expressly conditioned the broker’s right to a commission on settlement. Specifically, the contract provided that the commission was “due and payable upon the settlement of ... [the] Contract.” Berman, 275 Md. at 435 , 340 A.2d 251 .

Settlement never occurred because, after executing the contract of sale, the sellers and buyers released each other from any obligations arising out of the contract. Id. at 435-36 , 340 A.2d 251 . The broker, who was not a party to the release, then sought to recover his full commission. Id. at 436 , 340 A.2d 251 .

Relying on R.P. § 14-105, he claimed that his commission was due upon the execution of the contract of sale. Id. at 436-37, 340 A.2d 251 . The Court rejected the broker’s argument, noting that because the parties’ contract addressed the entitlement to a commission, the agreement controlled. Id. at 437 , 340 A.2d 251 .

Moreover, the operative language of the contract provided that the broker’s right to the commission was contingent upon settlement. Id. at 440 , 340 A.2d 251 . As that condition was not met, the Court concluded that no commission was due. Id. at 441 , 340 A.2d 251 .

See also Chasanow v. Willcox, 220 Md. 171, 176 , 151 A.2d 748 (1959)(stating that when the parties’ agreement addresses “the time of payment, source and amount of compensation ... [due the broker], the statute has no bearing on the decision of ... [the] ease.”). County Investment Corp. v. Hollander, 265 Md. 448 , 290 A.2d 517 (1972), also is of no help to appellants. In that case, two real estate brokers filed suit to recover their commission ⁶²⁴ when they located a tenant who entered into a binding lease agreement for a twenty year term. Id. at 448-49 , 290 A.2d 517 .

Pursuant to the commission agreement, the brokers were given the option to receive an immediate commission of 3% of the total amount of the lease payments, or 5% of the total amount of the lease, payable in monthly installments. Id. at 449 , 290 A.2d 517 . The brokers opted for the monthly commission payments and regularly received their commission for a period of eleven years. Id. at 450-51 , 290 A.2d 517 .

Then, the lessee defaulted and the lessor failed to make the remaining commission payments. As a result, the brokers filed suit. The Court held that they were entitled to recover their commission because all the conditions precedent were satisfied, notwithstanding the lessee’s subsequent default. Looking to the language of the commission agreement, the Court reasoned: Once ... [the brokers] procured a tenant for ... [the lessor] and a lease was entered into, the total commission was then earned by the brokers.

The documents which discuss the commission in no way alter this fact; instead they simply set out the time for effectuating payment. We hold that appellees are entitled to the commission for the remainder of the twenty year lease term. Id. at 453 , 290 A.2d 517 . In this case, on August 20, 1996, the Broker presented the Holzmans with the Stems’ revised offer, for a purchase price higher than the Noravians’ offer.

Nevertheless, on August 25, 1996, the Holzmans executed the Noravian contract. In contrast to Leeth and Berman, the liability for the commission was not contingent upon settlement. Thus, when the Holz-mans and the Noravians signed the contract of sale on August 25, 1996, appellants became obligated under the Agreement to pay the Broker’s fee. What the Court said in Borowski v. Meyers, 195 Md. 226 , 72 A.2d 701 (1950), resonates here: [ W]e hold that where a broker is employed ... the broker is entitled to his commission on performing the service [in ⁶²⁵ accordance with the parties’ agreement] even though there is a voluntary failure of the owner to complete the transaction. ... [W]here the broker has fully performed his part of the contract ... he cannot be deprived of his commission by the fact that the sale has failed ... on account of the inability or unwarranted refusal of the principal to consummate the sale according to the prescribed terms.

Id. at 231 , 72 A.2d 701 (citation omitted).

II

The Addendum Appellants contend that, based on the Addendum to the Noravian contract, the Buyers are responsible for the unpaid commission. Therefore, appellants argue that the action against them should have been dismissed, as appellee failed to sue the offending party. Appellants’ argument is premised on their contention that the Addendum constituted a modification to the Agreement. They insist that appellee’s knowledge of the Addendum, together with the fact that the provision was intended to benefit the Broker, was sufficient to bind appellee as a third party beneficiary.

Moreover, the Holzmans posit that if appellee’s claim of entitlement to the commission is based upon the Noravian contract, then appellee must acknowledge the entire contract, including the Addendum. Consequently, they maintain that the Noravians, not appellants, are responsible for the Broker’s fee. 3 We disagree. Ordinarily, a third party beneficiary contract arises when two parties enter into an agreement with the intent to confer a direct benefit on a third party, allowing the third party to sue on the contract despite the lack of privity. Flaherty v. Weinberg, 303 Md. 116, 125 , 492 A.2d 618 (1985).

Appellee may well have been a third party beneficiary of the ⁶²⁶ Addendum, because the performance by the Noravians of the promise to pay the commission would have satisfied appellants’ obligation to the Broker. See Restatement (Second) of Contracts § 302(1) (1979). Nevertheless, under the facts attendant here, appellee was not required to pursue the Buyers for the commission. Although the Noravian contract provided that the Noravians would pay appellee’s fee, the Holzmans promised to pay the Broker’s commission under the terms of the Agreement.

See Homa v. Friendly Mobile Manor, Inc., 93 Md.App. 337, 353 , 612 A.2d 322 , cert. granted, 329 Md. 168 , 617 A.2d 1085 (1992), cert. denied, 330 Md. 318 , 624 A.2d 490 (1993)(observ-ing that an assignment alone does not relieve the assignor of “his obligations or liabilities under the original contract”); see also E. Allan Farnsworth, Contracts § 11.10 at 824 (2d ed.l990)(noting that a delegation “does not relieve the delegating party ... of its duty.”). Appellants have not