Contract – Commission for Real Estate Transactions – Exclusive Representation Agreement

Exclusive Representation Agreement did not require Elior to pay commissions to real estate firm Mohr Partners for transactions in which Elior engaged in self-servicing.

Motions are denied in part, granted in part, and deferred in part.

The Court had to determine whether an agreement entitled a broker to receive a commission for real estate transactions handled solely by the client; and whether the unique circumstances concerning two discrete transactions in which the broker performed services justified the client’s refusal to pay a commission to the broker.

Plaintiff Mohr Partners, Inc. is a real estate firm. Defendant Elior, Inc. is a hospitality company that provides contract catering and frozen pre-packaged meals to educational institutions, hospitals, senior care facilities, correctional institutions, and other governmental units.

In 2020, Elior’s leadership team recognized that shutdowns associated with the COVID-19 pandemic would likely result in Elior having a significant amount of empty, unused commercial office space for which it would be responsible for paying rent. As a result, Elior’s executives decided to retain a real estate broker to handle transactions involving Elior’s leases and owned properties. Elior requested that Mohr provide real estate services for Elior. In June 2020, Mohr prepared and sent a draft written contract to Elior. The parties negotiated the terms of the contract for the real estate services to be provided by Mohr. In August 2020, Elior and Mohr executed an “Exclusive Representation Agreement” (ERA).

Mohr subsequently initiated this action by filing a complaint for, among other things, breach of contract against Elior based on unpaid commissions. Elior asserted counterclaims for breach of contract, recoupment, and breach of fiduciary duty.

Mohr sought offensive summary judgment on the issue of whether the ERA required Elior to pay Mohr commissions for the real estate transactions that Elior self-serviced. In addition, Mohr sought summary judgment defensively in connection with Elior’s counterclaims for breach of contract and breach of fiduciary duty. Elior, in turn, requested that the Court enter summary judgment in its favor defensively on Mohr’s claim for breach of contract in its entirety.

The issue of whether Elior was required to pay Mohr commissions for transactions that were self-serviced by Elior hinged on whether the ERA is properly found to be an “exclusive right to sell” agreement (as Mohr contended) or, alternatively, an “exclusive agency” agreement (as Elior asserted). Mohr argued the ERA is an exclusive right to sell contract and that, as a result, Elior had no ability to self-service any real estate transactions (with the exception of those transactions that fell within the exemptions expressly set forth in Exhibit B to the ERA). Mohr contended the only carve-outs under the ERA that allowed Elior to either self-service or use another broker in connection with its North American real estate transactions are those set out in Exhibit B. Mohr argued the language in the ERA requiring Elior to refer to Mohr all communications regarding its real estate portfolio satisfies the requirement that a property owner “specifically negative” its right to self-service. Mohr further noted that this provision is preceded by the word “shall,” which, Mohr contended, serves to eliminate all discretion that Elior would otherwise possess to handle its own transactions, thereby avoiding an obligation to pay a commission to a broker.

Elior, conversely, argued that the ERA is instead an exclusive agency agreement—most basically, because the ERA fails to contain language expressly excluding Elior’s right to self-service its own real estate transactions. Based on the absence of such explicit language, Elior contended, the ERA only requires that Mohr be paid a commission for all transactions in which (i) Elior chooses to engage a broker; and (ii) the exclusions contained in Exhibit B are inapplicable. Elior contended that it was entitled to self-service its own transactions any time it desired and that, in such circumstances, Mohr was not entitled to be paid a commission. The Court agreed with Elior on this issue.

North Carolina law requires express language relinquishing an owner’s right to sell its own property for a brokerage agreement to be deemed an exclusive right to sell agreement. Not only is there no such language expressly relinquishing this right, there is no reference to self-servicing in the ERA at all. Moreover, Exhibit B is most logically read as simply setting out specific properties (or categories of properties) that are not subject to the ERA at all—meaning that Elior would be permitted to retain a different broker for those transactions. The language in the ERA relied upon by Mohr falls short of expressly waiving Elior’s self-service rights. In essence, Mohr is asking the Court to discern an implied relinquishment of such rights. The Court declined that invitation because such an approach is not permitted under North Carolina law.

Denied in part, granted in part, deferred in part.

Mohr Partners Inc. v. Elior Inc. (Lawyers’ Weekly No. 020-024-25, 46 pp.) (Mark A. Davis, J.) 2025 NCBC 24. Maynard Nexsen PC by David A. Luzum and James C. Smith, and C. Kyle Pugh, P.C., by Kyle Pugh for Plaintiff Mohr Partners, Inc.; Williams Mullen, by Killian Wyatt and Camden R. Webb for Defendant Elior, Inc. North Carolina Business Court