Real estate broker’s licenses, Insurance

by Stephen on June 27, 2010

GreenLake Capital LLC v. Bingo Investments LLC:  GreenLake sued Bingo to recover a commission earned pursuant to a contract GreenLake had with Bingo to help Bingo raise money.  GreenLake had arranged a $275 million secured line of credit for Bingo.  Bingo defended on the ground that GreenLake was not a licensed real estate broker and therefore could not legally earn a commission on the transaction.   The Court of Appeals overturned the trial court’s order of summary judgment dismissing GreenLake’s case, holding that there were issues of fact which deserved a trial arising out of the nature of the services rendered by GreenLake and the collateral for the line of credit.  If the collateral was actually real estate, and GreenLake had brokered a loan, then GreenLake would have been required to hold a real estate broker’s license.  However, the transaction arranged by GreenLake was a line of credit rather than a loan, GreenLake’s contract called for it to provide “advisory services” rather than act as a broker, and the record on appeal suggested that the collateral might be ownership interests in a corporation or LLC that owned real estate, rather than real estate itself.  Summary judgment was therefore inappropriate.  The Court of Appeals held that the trial court should look at the transaction to determine if the services provided by GreenLake could be severed into services which did not require a broker’s license and those which did, stating that GreenLake could be compensated for those services provided which did not require a broker’s license.

Legacy Vulcan Corp. v. Superior Court (Transport Insurance Company):

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