## Facts

- G.C. Timmis & Company (Timmis) was a registered investment adviser and broker-dealer that provided merger-and-acquisition services, but it was not licensed as a Michigan real estate broker.
- Timmis contacted Guardian Alarm Company (Guardian) to offer assistance with acquiring other companies.
- Timmis asserted the parties formed an oral agreement under which Timmis would earn a “success fee” if Guardian acquired a target company Timmis contacted within two years after termination; Guardian denied any compensation agreement.
- Timmis identified MetroCell Security (a subsidiary of Rao Corporation) as a potential acquisition target and facilitated contact between MetroCell and Guardian.
- Guardian ultimately purchased MetroCell’s assets, described as security monitoring agreements, for $1.4 million.
- After the acquisition, Timmis demanded the success fee; Guardian refused, arguing Timmis acted as an unlicensed “real estate broker” under the real estate brokers act (REBA) and therefore could not sue for compensation.

## Issues

1. Whether Timmis’s finder/investment-banking activities fell within REBA’s definition of “real estate broker,” triggering the statutory bar to suing for compensation without a license.
2. Whether the MetroCell asset acquisition constituted a “real estate” transaction for purposes of applying REBA’s licensing and compensation-bar provisions.

## Decision

- The Michigan Supreme Court reversed the Court of Appeals.
- The Court rejected the conclusion that acting as a “finder,” standing alone, makes a party a “real estate broker” under REBA as a matter of law.
- The Court remanded to the trial court to determine whether the transaction at issue constituted a “real estate” transaction for REBA purposes, which would control whether the licensing bar applies.

## Legal Principles

- Statutory definitions must be read in context and consistent with the statute’s overall subject matter; REBA targets real estate brokerage activities, not business transactions in general.
- The REBA provision covering negotiation of the purchase or sale of a “business, business opportunity, or goodwill” is not applied categorically to all business acquisitions; the transaction must fall within REBA’s real-estate-related scope.
- A per se rule equating a “finder” or investment banker with a “real estate broker” is improper; applicability depends on the nature of the acts performed and the character of the underlying transaction.
- REBA’s compensation bar for unlicensed persons applies only if the person was required to be licensed for the acts at issue, which turns on whether the underlying deal is a REBA-covered real estate transaction.

## Conclusion

The Michigan Supreme Court held that REBA does not automatically bar an unlicensed finder’s fee claim based solely on the plaintiff’s role in connecting parties to a business acquisition; the trial court must determine whether the specific acquisition was, in substance, a real estate transaction subject to REBA before applying the licensing bar.


G.C. Timmis & Co. v. Guardian Alarm Co., 468 Mich. 416, 662 N.W.2d 710 (Mich. 2003)