Sachs v. Lesser

1 Another company, Capital Growth Partners, was initially a
party to this case but was dismissed after the trial court
granted its motion for summary judgment. Sachs does not appeal
the trial court’s ruling as to this party.
2008 UT 87
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
Ira Sachs, No. 20070472
Plaintiff and Respondent,
v.
Joseph S. Lesser, Loeb Investors
Co. XL, and United Park City F I L E D
Mines Company,
Defendants and Petitioners. December 16, 2008
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Third District, Salt Lake
The Honorable Tyrone E. Medley
No. 040926707
Attorneys: Kathryn Collard, Salt Lake City, for plaintiff
Brandon J. Mark, Anthony C. Kaye, Jason D. Boren,
Laura S. Scott, Shane D. Hillman, Salt Lake City,
for defendants
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On Certiorari to the Utah Court of Appeals
DURHAM, Chief Justice:
INTRODUCTION
¶1 This case comes to us on certiorari from the court of
appeals. Ira Sachs brought this action against United Park City
Mines Company (UPCM), Loeb Investors Company (the majority
shareholder of UPCM), and Joseph Lesser, president of Loeb
Investors and chairman of UPCM, (collectively, Petitioners) to
recover a finder’s fee for locating a buyer for UPCM, which Sachs
claims he did in reliance on a promise made by Lesser.1 The
district court awarded summary judgment to Petitioners, holding
that Sachs is statutorily barred from recovery by the Utah Real
Estate Broker’s Act (UREBA), Utah Code Ann. §§ 61-2-1 to -28

2 Although the Utah Legislature amended UREBA after the
initiation of this action, no substantive changes were made to
the provisions applicable to this case. Therefore, we refer to
the most current codified version.
3 The Utah Legislature amended the Utah Statute of Frauds
after the initiation of this action. However, no substantive
changes were made to the provisions applicable to this case, and
we therefore refer to the most current codified version.
4 The court of appeals ruled on a number of issues; we
granted certiorari on only the two issues stated here.
5 The court of appeals produced a detailed factual summary.
We therefore recount only the facts necessary for this decision.
Sachs, 2007 UT App 169, ¶¶ 2-14.
No. 20070472 2
(2006 & Supp. 2008),2 because he did not have a real estate
license, and by the statute of frauds because the agreement for a
finder’s fee was not made in writing, as required for
transactions involving real estate. Id. §§ 25-5-1 to -9 (2007).3
The court of appeals reversed, holding that Sachs’s claims are
not statutorily barred because the sale of the controlling stock
in UPCM is not considered a real estate transaction within the
meaning of UREBA, which defines real estate as including
“business opportunities involving real property,” Id. § 61-2-2,
or within the meaning of real estate in the Utah Statute of
Frauds. Sachs v. Lesser, 2007 UT App 169, ¶ 54, 163 P.3d 662.
¶2 We granted certiorari to determine whether UREBA and
the Utah Statute of Frauds bar Sachs’s claims for a finder’s
fee.4
BACKGROUND5
¶3 In 1999, Lesser asked Sachs, a business consultant in
Park City, Utah, to help find a buyer for UPCM. UPCM was a
publicly traded company, whose principal business was the
leasing, development, and sale of real property located in or
near Park City, Utah. UPCM’s only asset of significance was its
real property--8,300 acres located in or near Park City. Sachs
was not licensed as a real estate broker in Utah at any relevant
time. During a lunch meeting in New York City, Lesser asked
Sachs to find a purchaser or a joint venturer for UPCM. Lesser
agreed that Sachs would receive a finder’s fee, but no specific
amount was discussed. According to Sachs, Lesser later called
and told Sachs that he was no longer interested in a joint
venture and that he wanted UPCM sold. According to Sachs, he did
not offer or agree to find a buyer for UPCM’s business assets, or
any of its real property assets, but only to find a buyer for the
company.

3 No. 20070472
¶4 After the lunch meeting with Lesser, Sachs spoke with
Gerald Jackson, a real estate developer in Park City, Utah about
UPCM. Jackson subsequently formed a company, Capital Growth
Partners, LLC, that eventually acquired UPCM by purchasing the
controlling stock in a complex merger transaction. After the
merger, UPCM was the surviving company and retained all of its
assets.
¶5 Following the merger, Sachs repeatedly attempted to
recover a finder’s fee from Lesser. Lesser refused to pay Sachs
any fee. After failing to obtain payment from UPCM and Lesser,
Sachs filed suit to recover the alleged finder’s fee owed to him.
In his suit, Sachs asserted various claims, including one based
on an alleged contract with Petitioners.
PROCEDURAL HISTORY
¶6 Sachs filed his Complaint in January 2004. Petitioners
subsequently filed motions for summary judgment based on numerous
grounds. First, Petitioners argued that UREBA barred Sachs’s
claims because Sachs did not have a real estate license at the
time of the alleged agreement to find a buyer for UPCM.
Petitioners also argued that the statute of frauds barred Sachs’s
claims, as the alleged contract was not in writing. Petitioners
argued that UREBA’s definition of real estate should apply under
the statute of frauds. In February 2006, the district court
entered an Order of Final Judgment granting summary judgment to
Petitioners and dismissing Sachs’s claims based on express and
implied contracts and quantum meruit. The trial court held that
Sachs’s claims were barred by UREBA as a matter of law because
Utah law requires a real estate license to recover a finder’s fee
in connection with the sale of real estate, which UREBA defines
to include “business opportunities involving real estate.” The
trial court found that because UPCM’s only asset of significance
was its real property, it fell under the definition of real
estate, and because Sachs did not have a real estate license, he
could not pursue a claim for a finder’s fee under Utah Code
section 61-2-18. The trial court also ruled that Sachs’s claims
were barred by the Utah Statute of Frauds because “the alleged
finder’s fee agreement relate[d] to the sale or purchase of real
estate as the only significant asset owned by [UPCM]. . . [and]
no writing exist[ed] that would satisfy the requirements of the
Utah Statute of Frauds.”
¶7 Sachs appealed the trial court’s ruling to the Utah
Supreme Court, which transferred the case to the Utah Court of
Appeals. The court of appeals affirmed in part and reversed and
remanded in part. Sachs, 2007 UT App 169, ¶¶ 54-55. Of concern
to our review, the court of appeals reversed the district court’s

No. 20070472 4
holdings regarding UREBA and the statute of frauds as to Sachs’s
implied contract and quantum meruit claims. First, the court of
appeals held that UREBA did not bar Sachs’s claims. Id. ¶ 33.
In particular, the court of appeals held that UREBA only required
licensing for brokers who find buyers for “business opportunities
involving real estate” and that business opportunities was no
longer defined as existing businesses. Id. ¶ 39. Thus, to
determine whether an opportunity involved real estate, the court
of appeals held that courts must consider the specific character
of the opportunity. Id. Applying the facts presented, the court
of appeals held that the UPCM transaction was not a business
opportunity involving real estate because the transaction
involved a transfer of corporate stock, rather than corporate
assets, which undoubtedly were solely real estate interests. Id.
¶¶ 41-42. With these holdings, the court of appeals determined
that “summary judgment was improperly granted with respect to
Sachs’s claim . . . because the Act does not require a real
estate license to engage in transactions dealing exclusively in
corporate stock.” Id. ¶ 54. Second, the court of appeals held
that the statute of frauds does not bar Sachs’s claims because
the transaction involved personal property, not real property, as
explained above. Id. ¶ 53. We granted certiorari to review
whether UREBA and the Utah Statute of Frauds bar Sachs’s claims.
¶8 We have jurisdiction over this appeal pursuant to Utah
Code section 78A-3-102(3)(a) (Supp. 2008).
STANDARD OF REVIEW
¶9 “On certiorari, we review the decision of the court of
appeals, not that of the district court.” State v. Ireland, 2006
UT 82, ¶ 6, 150 P.3d 532. Determining whether Sachs’s claims are
barred by either UREBA and the statute of frauds are “legal
question[s] of statutory interpretation,” which we review for
correctness. State v. Smith, 2005 UT 57, ¶ 6, 122 P.3d 615.
ANALYSIS
¶10 Petitioners contend that under UREBA, UPCM should be
considered a business opportunity involving real estate, and as a
result, Sachs should be barred from recovering a finder’s fee
because UREBA prohibits the recovery of a finder’s fee for
finding a buyer of real estate without a real estate license. In
contrast, Sachs argues that the term “business opportunity” under
UREBA does not include existing businesses. Furthermore, Sachs
argues that the court of appeals correctly determined that he is
not barred from recovery because he found a purchaser for one
hundred percent of UPCM’s company stock, which is not real estate
under UREBA or the statute of frauds. We conclude that an
existing business may constitute a “business opportunity” within

5 No. 20070472
the meaning of UREBA. We also conclude that when the transfer of
real property is the dominant part of the sale of a business, it
falls under UREBA. Accordingly, we hold that UPCM is a “business
opportunit[y] involving real estate” within the meaning of UREBA,
and therefore reverse the court of appeals’ holding. Because
UREBA alone bars Mr. Sachs’s claims, we do not reach the statute
of frauds issue.
I. UREBA
¶11 Pursuant to UREBA,
[n]o person may bring or maintain an action
in any court . . . for the recovery of a
commission, fee, or compensation for any act
done or service rendered . . . which is
prohibited under this chapter . . . unless
the person was duly licensed as a principal
broker at the time of the doing of the act or
rendering the service.
Utah Code Ann. § 61-2-18(1) (2006). UREBA further prohibits an
unlicensed person from acting in the capacity of a “principal
real estate broker,” id. § 61-2-1, which includes any person “who
sells or lists for sale, buys, exchanges, or auctions real estate
. . . with the expectation of receiving valuable consideration.”
Id. § 61-2-2(12)(a) (2006). The term “principal real estate
broker” includes finders. See generally Diversified Gen. Corp.
v. White Barn Golf Course, 584 P.2d 848, 849-51 (Utah 1978)
(holding that a person who finds a purchaser for a property
“fall[s] precisely within the statutory definition of a real
estate broker”).
¶12 It is clear from the plain language of the statute that
if UPCM qualifies as real estate under UREBA, Sachs is barred
from pursuing his claim for a finder’s fee. UREBA defines real
estate as “includ[ing] leaseholds and business opportunities
involving real property.” Utah Code Ann. § 61-2-2(14).
A. Business Opportunities May Include Existing Businesses
¶13 Sachs argues that construing business opportunities to
include an existing business would render the term
“opportunities” meaningless. We disagree. UREBA defines real
estate as “includ[ing] business opportunities involving real
property.” Id. § 61-2-2(14). A plain meaning analysis shows
that “opportunity” expands on the word “business.” For example,
the term “job opportunity” would include existing jobs, as well
as opportunities to develop a job. Although we need go no

No. 20070472 6
further in our analysis of business opportunities, the history of
UREBA provides support for this finding.
¶14 Prior to 1985, UREBA contained the following specific
definition of business opportunity: “‘Business opportunity’
means an existing business, a business and its good will, a
business franchise, or any combination of them.” See Utah Code
Ann. § 61-2-2 (Supp. 1983). In 1985, the legislature made
changes to UREBA, adding the term “involving real property” to
the definition of “real estate,” and removing the foregoing
definition of “business opportunity.” Compare Utah Code Ann.
§ 61-2-2 (Supp. 1983) with Utah Code Ann. § 61-2-2 (Supp. 1985).
In the floor debate transcripts of the Utah House of
Representatives, Representative Bradford was the only
representative to comment on the 1985 changes to UREBA. He
explained that the changes were being made to “clarify and to
clean up the language in the statute.” H.B. 284, 46th Leg., Gen.
Sess. (Utah Feb. 22, 1985) (statements of Rep. Bradford) (House
audiograph discs nos. 8 & 9). In the Senate, Senator Overson
made a comment similar to Representative Bradford’s statement--
“[t]he current statute is quite ambiguous and this cleans up that
quite a bit.” H.B. 284, 46th Leg., Gen. Sess. (Utah Feb. 27,
1985) (statements of Sen. Overson) (Senate recording disc no.
124).
¶15 Thus there is no indication in the legislative history
that the legislature intended to exempt existing businesses from
the definition of real estate. Instead, the legislature intended
only to clean up and clarify what it found to be an ambiguous
statute. See id. In the statute at issue, the legislature
consolidated the definition of real estate with the definition of
business opportunity and narrowed it only by clarifying that
business opportunities are only classified as real estate when
they involve real property. This statutory change shifted the
focus of the definition from the status of the business to the
services or products provided by the business. We therefore hold
that “business opportunity” as used in UREBA may include existing
businesses that involve real estate.
B. The Sale of a Business Opportunity Where the
Exchange of Real Property is a Dominant Feature of the
Transaction is a Sale of Real Estate Under UREBA
¶16 Sachs points out that UPCM’s real property was titled
to UPCM both before and after the merger. Therefore, Sachs
argues, no real estate changed hands; the only thing transferred
was stock and thus the transaction did not involv[e] real
property under UREBA.

7 No. 20070472
¶17 In our review, we conclude that the phrase “involving
real property” in UREBA is ambiguous. A statute is ambiguous
“when it may reasonably ‘be understood to have two or more
plausible meanings.’” Utah Pub. Employees Ass’n v. State, 2006
UT 9, ¶ 60, 131 P.3d 208 (quoting Alf v. State Farm Fire and Cas.
Co., 850 P.2d 1272, 1274 (Utah 1993)). Because “involving real
property” could plausibly be interpreted to be so broad as to
include a single share of stock in a corporation that owns real
property, or so narrow as to only include the transfer of a
business’s real property assets, we agree with the court of
appeals that “consider[ing] the plain language of the Act in its
entirety . . . it is unclear . . . whether Sachs was required to
comply with UREBA when finding a buyer for all of UPCM’s stock.”
Sachs, 2007 UT App 169, ¶ 38. Because the plain language of the
definition of real estate in UREBA is ambiguous, we “look to
other interpretive tools,” Utah State Tax Comm’n v. Stevenson,
2006 UT 84, ¶ 32, 150 P.3d 521 (internal quotation marks
omitted), including the legislative history of UREBA and the
treatment of similar statutes in other states.
¶18 As noted above, the legislative history of the 1985
amendments only indicates that by adding the phrase “involving
real property,” the legislature was clarifying the law, and thus
the history provides us with no assistance on the meaning of this
phrase. We disagree with Sachs’s argument that the sale of only
UPCM’s stock and not its real property assets automatically
places this transaction outside the reach of UREBA. Despite the
fact that stocks or shares in a corporation are generally
considered personal property, there are occasions when their
transfer is entirely secondary to the transfer of real property
assets. See J.I. Kislak v. Carol Mgmt. Corp., 184 N.Y.S.2d 315,
318 (N.Y. App. Div. 1959) (“A sale of all of the stock of a
corporation has been held to be a sale of its assets.”) (internal
quotation marks omitted). A number of jurisdictions analyze such
transactions in terms of their substance rather than their form.
See, e.g., Cooney v. Ritter, 939 F.2d 81, 86-89 (3d Cir. 1991)
(holding that the New Jersey real estate licensing act is
applicable to the sale of a company through a stock sale);
Shochet Sec., Inc. v. First Union Corp., 663 F. Supp. 1035, 1037
(S.D. Fla. 1987) (finding that the sale of the entire business of
a company through a stock sale is within Florida’s real estate
licensing laws); All Points Traders, Inc. v. Barrington Assocs.,
259 Cal. Rptr. 780, 786-87 (Cal. Ct. App. 1989) (finding that a
real estate license is required when the sale of the company is
entirely through a stock sale); J.I. Kislak, 184 N.Y.S.2d at 318
(“Looking at substance, rather than mere form, of the [stock]
transaction herein there can be no question that the parties
contemplated a sale of an interest in real estate.”); Schmitt v.
Coad, 604 P.2d 507, 510 (Wash. Ct. App. 1979) (concluding that

6 The holding in Weingast is now reflected in New York’s
real estate statute, which states that an “‘interest in real
estate’ shall include the sale of a business wherein the value of
the real estate transferred as part of the business is not merely
incidental to the transaction . . . .” N.Y. Real Property Law
§ 440 (McKinney 2006 & Supp. 2008).
No. 20070472 8
Washington’s real estate act applied to the sale of a
corporation).
¶19 Among the approaches of our sister states, we find the
discussion in Weingast v. Rialto Pastry Shop, Inc., 152 N.E. 693
(N.Y. 1926) particularly helpful in our interpretation of UREBA.
In Weingast, the plaintiff acted as a finder for a buyer of a
restaurant business. Id. at 694. “The sale included the store,
the lease, the good will, tables and everything that went with
the place.” Id. In 1926, New York defined a real estate broker
as someone who “lists for sale, sells, exchanges, buys or rents,
or offers or attempts to negotiate a sale, exchange, purchase or
rental of an estate or interest in real estate.” Id. (emphasis
added). The court found that the term “interest in real estate”
was not “broad enough to cover, [n]or was [it] intended to cover,
every transaction in which an interest in real estate may be part
of the subject of transfer.” Id. The court thus held that a
finder of purchasers for a business where real estate is merely
incidental to that business, such as where the business procures
a lease, is not a real estate broker and therefore is not
required to be licensed as one.6 Id.
¶20 Similarly in Dodge v. Richmond, 173 N.Y.S.2d 786 (N.Y.
App. Div. 1958), the court, in holding that transfering real
property was not the dominant feature of the sale of a steel
corporation, stated that “[i]f an item of real estate, or an
interest in real estate, is a mere incident or incidental feature
of the transaction . . . the statute should not apply . . . even
though such item may be a significant though not a dominant
feature of the transaction.” Id. at 788.
¶21 In contrast, the court in Sorice v. Du Bois found that
the dominant feature of a sale of a hotel was real property,
reasoning that “[i]t is quite apparent that the business of
operating a hotel is one that exploits the real estate and the
sale involved is really the sale of real estate.” 267 N.Y.S.2d
227, 229 (N.Y. App. Div. 1966). In J.I. Kislak, the court again
focused on the nature rather than the form of a transaction in
which all of a corporation’s stock was sold. 184 N.Y.S.2d at
318. Noting that the only asset held by the corporation was real
property, the court held that it was evident that by selling the
corporate stock, the “parties contemplated a sale of an interest
in real estate.” Id.

9 No. 20070472
¶22 After review, we hold that the phrase “involving real
property” found in UREBA includes exchanges where the transfer of
real property is the main or dominant feature of the transaction
and is not merely incidental to it. In this case, focusing on
the substance of the sale and not its form, the real property
held by UPCM was not just a significant item involved in the
transaction, but instead the dominant feature. Like the
corporation in Sorice, the operation of UPCM exploits its real
estate holdings. Furthermore just as in J.I. Kislak, the
district court in its Minute Entry Decision found that “it is
. . . undisputed that defendant [UPCM]’s principal business was
the leasing, development and sale of real property, and that
[UPCM]’s only asset of significance was its real property.” We
therefore conclude that the transfer of UPCM’s real property was
the dominant characteristic of the sale and was not merely
incidental to a transfer of stock. The transfer was a sale of
real estate covered by UREBA, and Sachs is barred from
recovering a finder’s fee under the statute.
II. STATUTE OF FRAUDS
¶23 In light of our holding that UREBA precludes Sachs’s
claim for a finder’s fee, we need not reach the statute of frauds
issue.
CONCLUSION
¶24 A transaction in which the transfer of real estate is
the dominant feature of the exchange, and not merely incidental
to the sale of a business, is a sale of real estate governed by
the provisions of UREBA. In this case, the transfer of real
property was the dominant feature of this transaction. We
therefore reverse the decision of the court of appeals, and
affirm the summary judgment entered by the district court.
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¶25 Associate Chief Justice Durrant, Justice Wilkins, and
Justice Parrish concur in Chief Justice Durham’s opinion.
¶26 Justice Nehring does not participate herein.