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Mark Six Realty Associates, Inc. v. Drake

Court of Appeals of Georgia

October 27, 1995


Reconsideration Denied Nov. 9, 1995.

Certiorari Denied Feb. 2, 1996.

Page 918

[219 Ga.App. 63] Minkin & Snyder, Michael J. King, G. Brian Raley, Atlanta, for appellant (case no. A95A1775).

Frederick G. Boynton, Atlanta, for appellant (case no. A95A1777).

Arnall, Golden & Gregory, James W. Butler III, Charles T. Huddleston, Atlanta, for appellee.

SMITH, Judge.

Lynn A. Drake brought this action against Mark Six Realty Associates, Inc. (formerly known as Northside Realty Associates, Inc.), Northside Realty, Inc., and five other defendants, alleging fraud, violation of the Fair Business Practices Act, breach of contract, negligence, and breach of warranty. Drake purchased a home in a subdivision development marketed by two real estate agents, Matsis and Rumble, whom Drake contends were employees of Mark Six or Northside.

Page 919

Drake alleged that the realtors, the individual agents, and a builder sold the home to her with knowledge of substantial construction defects and concealed that knowledge from her. [1] She also sued a home inspection service for breach of contract and negligent inspection. The jury returned a verdict in favor of Drake against all defendants except Rumble. The motions of Mark Six and Northside for judgment notwithstanding the verdict were denied, and they appeal.

[219 Ga.App. 58] 1. In Case No. A95A1775, Mark Six contends its motion for j.n.o.v. should have been granted because Matsis was an independent contractor rather than an agent or employee of Mark Six. Under OCGA § 9-11-50(b), a j.n.o.v. can properly be granted only when the evidence demands a verdict contrary to that returned by the jury. Only if no evidence supports the jury's verdict is a grant of j.n.o.v. proper. Davis v. Glaze, 182 Ga.App. 18, 19(1), 354 S.E.2d 845 (1987). The standard of review is whether any evidence supports the jury's verdict, and we must construe the evidence in the light most favorable to the party who prevailed before the jury. Sims v. Sims, 265 Ga. 55, 56, 452 S.E.2d 761 (1995). A careful review of the transcript of this lengthy trial shows at least some evidence from which a jury could conclude that Matsis was not a typical real estate independent contractor, but had become an employee of Mark Six through the unusual circumstances surrounding the sale of this property.

In determining whether an individual's status is that of an employee, as opposed to an independent contractor, the analysis must focus on "whether the contract gives, or the employer assumes, the right to control the time, manner, and method of executing the work." (Citations and punctuation omitted.) Ross v. Ninety-Two West, Ltd., 201 Ga.App. 887, 891, 412 S.E.2d 876 (1991). In a more typical business arrangement with a realtor or broker, a real estate salesperson clearly occupies the position of an independent contractor. Agreements with such individual salespersons denominate them as "independent contractors." Ordinarily, great care is taken by the realtor to refrain from exercising control over the manner in which individual salespersons conduct their work. No particular working hours are set. The salespersons exercise personal initiative to obtain "listings," or the opportunity to sell existing houses, from individual owners. Duties that could be considered "control" by the realtor, such as attending sales meetings or assisting in the broker's office, are clearly designated as "optional." Items such as form contracts, telephones, and office supplies are either paid for by the salesperson or provided as a convenience with no requirement that they be used. See, e.g., Bartlett v. Northside Realty Associates, Inc., 191 Ga.App. 10, 11-12, 380 S.E.2d 744 (1989); Ross, supra, 201 Ga.App. at 892, 412 S.E.2d 876.

In this case, evidence was presented that Matsis was by no means a "typical" real estate salesperson. Matsis' form agreement with Mark Six denominated her as an "independent contractor." While the existence of such a contract creates a presumption that the relationship between the realtor and salesperson is that of independent contractor, such a presumption may be rebutted by a showing that the realtor in fact assumed control over the time, manner, and method of the salesperson's work performance. Bartlett, supra, 191 Ga.App. at 10, 380 S.E.2d 744. Some evidence was presented that Mark Six exercised such control over [219 Ga.App. 59] Matsis.

Mark Six obtained an exclusive right to preconstruction sales of homes in a subdivision development, and executed a detailed "exclusive marketing agreement" with the owner. In accordance with the terms of that agreement, Mark Six conducted interviews, selected Matsis, and assigned her to work in

Page 920

the subdivision as her sole and exclusive employment during certain specified business hours or "staff duty schedule." She was required to be "on duty" during these hours by "my manager and my boss." A second agent, Rumble, was designated as an "ambassador" or assistant agent for those hours when Matsis was unavailable. Matsis was required to use certain procedures formulated by Mark Six when negotiating the sale of a lot in the subdivision. She was required to use standard forms provided by Mark Six and the builder. Mark Six also provided an "account executive" to coordinate the activities of the "on-site sales staff and the marketing department." Moreover, Matsis was subject to quarterly performance reviews by a "sales manager" provided by Mark Six, who was to select and supervise the staff agents, and "make changes as deemed necessary."

Under these circumstances, despite the existence of a form contract denominating Matsis as an independent contractor, some evidence exists that Mark Six retained the right to and did, in fact, exercise control over the time, manner, and method of Matsis' performance of her duties. Therefore, the trial court did not err in denying Mark Six's motion for j.n.o.v.

2. In Case No. A95A1777, Northside Realty, Inc. contends its motion for j.n.o.v. should have been granted because it was a separate and distinct corporation from Mark Six. It claims Drake did not present sufficient evidence to "pierce the corporate veil" or show that Mark Six and Northside disregarded their separate corporate entities and engaged in a common business enterprise.

(a) After the time of the events giving rise to this action, the corporate name of "Northside Realty Associates, Inc." was changed to "Mark Six Realty Associates, Inc." Northside Realty, Inc. was a separate corporation with the same address at its creation, although its address later changed. There was some duplication but not complete identity of corporate officers and agents. The father of the president of Northside Realty Associates, Inc., now deceased, owned all the stock of Northside Realty, Inc. at the time of the events in question.

The president of Northside Realty Associates, Inc., who was also the executive vice president of Northside Realty, Inc., testified that Northside Realty, Inc. was created in the early 1980s "specifically to hold the active licenses of agents who were not active as agents for the status purpose of the Georgia Real Estate Commission." Northside Realty, Inc. was "set up solely to meet the real estate commission [219 Ga.App. 60] requirements for an active licensee" (emphasis supplied) for Northside Realty Associates, Inc. agents who were retired or temporarily inactive. This arrangement avoided a Georgia Real Estate Commission requirement that such agents retake the real estate license examination or bear the financial burden of keeping their licenses active for purposes of the Commission's rules on status. Agents whose licenses were assigned to ...

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