## Facts

- F. R. Michals, Sr. owned an apartment complex in Lincoln, Nebraska.
- Michals and Nebraska Real Estate Corporation (a corporation associated with Michals and holding the listing) entered into a Multiple Listing Service (MLS) listing contract to sell the complex.
- The listing provided for a 6% commission if a broker produced a purchaser “ready, willing and able” to buy before the listing expired.
- The MLS listing sheet included income and expense estimates, including stated apartment and garage rents.
- Douglas J. Dworak, a licensed real estate broker and MLS member, received the listing and contacted prospective purchasers Michael Johanns and A. J. Swanson, business partners seeking investment property.
- Dworak gave the purchasers the listing sheet and showed them the property.
- Johanns and Swanson used the MLS income/expense information to calculate projected cash flow and relied on that information in deciding the property met their investment goals.
- Johanns and Swanson entered into a written purchase agreement with Michals and made a $500 earnest-money deposit.
- Before closing, Johanns and Swanson learned that rents were scheduled to increase sharply and that many tenants were threatening to move out, creating concerns about occupancy and projected income.
- The purchasers raised these concerns with Michals, and Michals allowed them to rescind the purchase agreement.
- Dworak demanded the 6% commission (claimed as $5,376). Michals and Nebraska Real Estate Corporation refused to pay it.
- Dworak sued Michals and Nebraska Real Estate Corporation in district court for the commission.
- After a bench trial, the district court held Dworak was not entitled to the commission but awarded him $250 (one-half of the earnest-money deposit) against both defendants.
- Dworak appealed to the Nebraska Supreme Court.

## Issues

1. Whether a broker earns a commission under a “ready, willing, and able” listing when the broker produces buyers who sign a purchase agreement, but the buyers later rescind with the seller’s consent after learning facts that affect the property’s rental income and the sale does not close.
2. Whether the trial court properly awarded the broker $250 from the $500 earnest-money deposit despite denying the broker’s commission claim.

## Decision

- The Nebraska Supreme Court affirmed the district court’s judgment.
- The court held Dworak was not entitled to the claimed 6% commission.
- The court upheld the $250 award to Dworak representing one-half of the $500 earnest-money deposit, entered against both Michals and Nebraska Real Estate Corporation.

## Legal Principles

- In Nebraska, a broker earns a commission only by producing a buyer who is ready, able, and willing to purchase on terms satisfactory to the seller.
- Execution of a purchase agreement does not, by itself, establish the broker’s right to a commission if the evidence shows the buyers were not genuinely ready and willing to complete the purchase once significant facts bearing on the transaction became known and the parties rescinded in good faith.
- When a transaction fails before closing because purchasers withdraw after learning information that changes the economic basis of the deal, a court may find the broker has not met the “ready, willing, and able” requirement.
- Even when a commission is denied, a court may permit a broker to recover a portion of earnest money where the circumstances support that limited recovery.

## Conclusion

The Nebraska Supreme Court affirmed the denial of Dworak’s claimed commission because the buyers’ later, good-faith rescission after learning facts affecting rental income showed the broker had not produced purchasers who were truly ready, willing, and able to buy on the seller’s terms; the court also affirmed awarding Dworak $250 from the earnest-money deposit.


Dworak v. Michals, 320 N.W.2d 485 (1982)