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Julien J. Studley Inc. v. Gulf Oil Corp.

decided: December 5, 1967.

JULIEN J. STUDLEY, INC., PLAINTIFF-APPELLANT,
v.
GULF OIL CORPORATION, DEFENDANT-APPELLEE



Friendly, Hays and Anderson, Circuit Judges.

Author: Anderson

ANDERSON, Circuit Judge:

This is an action by Julien J. Studley, Inc., the plaintiff-appellant, a real estate broker, against Gulf Oil Corporation, the defendant-appellee, to recover the amount of a commission which, except for certain conduct on the part of Gulf, it allegedly had a reasonable expectation and opportunity to receive from Rock-Uris upon the consummation of a lease for office space in the Sperry Rand Building, between Gulf as the tenant and Rock-Uris as the landlord. At the end of the defendant's case the district court directed a verdict in favor of the defendant and entered judgment dismissing the complaint. It is from that judgment that the plaintiff appeals; we reverse and remand for a new trial.

The plaintiff's amended complaint contains three counts. The first of these claims a breach of contract based upon the defendant's employment of the plaintiff as its agent to locate office space in New York City with the understanding that, if the plaintiff procured an acceptable lease for it, "defendant would enter into a lease * * * and * * * plaintiff would be the broker in the transaction," and thereby become eligible for payment of a commission. The plaintiff charges that the defendant breached its agreement by entering into a lease with Rock-Uris for the space found by the plaintiff without designating it as the broker.

The second count alleges malicious interference. The plaintiff asserts that Rock-Uris generally solicited brokers, including the plaintiff, to find tenants for the Sperry Rand Building for which, if successful, the broker would be paid a commission. The plaintiff complains that Gulf maliciously interfered with its reasonable expectancy and opportunity to get the commission by representing "that plaintiff was not the broker and rendered no services in the transaction." The third count alleges a "conspiracy with others to deprive plaintiff of the commission it had earned."

Because this appeal comes to us as a result of the district judge's ruling that the plaintiff presented insufficient evidence to warrant submitting the case to the jury, it is necessary to refer to the evidence in some detail and, viewing it in the light most favorable to the plaintiff-appellant, to state the facts which the jury might reasonably find from it. In determining whether, as a matter of law, there is not sufficient evidence to warrant submitting a case to the jury, the trial judge must apply the measure usually stated in these terms: "Only if reasonable men could not reach differing conclusions on the issue may the question be taken from the jury." Baker v. Texas & Pacific Railway Co., 359 U.S. 227, 228, 79 S. Ct. 664, 665, 3 L. Ed. 2d 756 (1959); Diapulse Corporation of America v. Birtcher Corp., 362 F.2d 736, 743 (2 Cir. 1966).

At the time of the negotiations in dispute Walter Burkhiser was manager of the Building Services Department in Gulf's Pittsburgh office and, as Secretary, sole member of Gulf's Executive Committee for Office Standards. In 1960 Julien Studley, president of plaintiff corporation, wrote to Gulf, soliciting its interest in available office space in New York City. The president of Gulf referred the letter to Burkhiser for a reply but no action was taken at that time. Two years later, in 1962, the Executive of Gulf (composed of the chairman of the board, the president, and four executive vice presidents) requested Burkhiser to review Gulf's New York City office space situation, which then consisted of three suites of offices in widely separated locations. In compliance with that request Burkhiser made a study and submitted a report on the existing arrangements in a memorandum dated September 5, 1962. Shortly thereafter, he was sent to New York to investigate the availability of office space in the Rockefeller Center area with a view towards consolidation of the offices. Before leaving, he called Studley and told him that he wanted to talk to him about the problem Gulf was having with office space in New York but that the matter was confidential and should not even be disclosed to Gulf's representatives or employees in New York. Burkhiser requested Studley to prepare a report and made an appointment to see him in New York. They met there on September 25th and Studley gave Burkhiser the report describing fifteen different buildings in New York City, any one of which might meet Gulf's office space requirements.

Studley testified that when he met with Burkhiser he said to him that "we were very pleased to have been called by Gulf and to be the broker in this situation, if it were to develop * *" After discussing the alternatives open to Gulf, Burkhiser and Studley inspected the Pan American Building and the Sperry Rand Building, which were among those described in the report. While walking from the former to the latter, Studley asked Burkhiser "whether there was a chance of moving Gulf altogether from Pittsburgh, and * * * [Burkhiser replied] 'You should be satisfied with the commission you will make on this, if we make a deal. Don't look for a bigger deal.'" After they arrived at the Sperry Rand Building, Burkhiser told Studley that "he wanted to make sure that he had all the information on both of these buildings" and Studley delivered additional material the next day.*fn1 After Burkhiser had returned to Pittsburgh, Studley called him from New York, at which time Burkhiser told Studley that he had received all the information he needed, that he was preparing a report, and that Studley should "keep in touch and to let him know of any changes or developments in connection with any of the buildings, particularly in connection with Sperry Rand * * *."

In his memorandum to the executive vice president dated September 28 and marked "Private and Confidential," Burkhiser summarized Gulf's existing office arrangements in New York City and suggested that the "best possibility" for consolidation was in the Sperry Rand Building. Burkhiser testified that Studley was the source of "rental rate information" contained in that memorandum. In letters to Burkhiser dated October 1, 9, and 30, Studley informed Burkhiser of developments in connection with the Sperry Rand Building. Studley also testified to telephone conversations between Burkhiser and himself, including a call from Burkhiser to him asking him to check on the date when Gulf could take possession.

Denys Cadman, executive representative of Gulf in New York City, had his office in Canada House and he wanted it to remain there. When he learned on or about October 22, 1962, that Gulf would not continue to lease offices in Canada House, he contacted Jacques Juncker, a real estate broker associated with the firm of Cushman & Wakefield, Inc., which was in charge of Canada House. Juncker then prepared a letter, dated October 22, to Cadman, as the representative of Gulf, presenting various buildings for the consideration of Gulf, including the Sperry Rand Building. On the same day, Cadman called Juncker and told him that Gulf was interested in the Sperry Rand Building. Cadman's office also notified Burkhiser that "all future negotiations regarding the Sperry Rand Building were to be conducted with Cushman & Wakefield." Burkhiser acknowledged receipt of this message in a memorandum to Cadman stating that Studley, Inc. was the broker which had first proposed the Sperry Rand Building and had rendered services in that regard, and that "Mr. Studley's firm would no doubt be entitled to some consideration." Also on October 22, Juncker wrote to Rock-Uris, claiming authorization by Gulf to offer, on its behalf, to lease one floor in the Sperry Rand Building.

On October 30th, Burkhiser met with Bernard Friedman, then Vice President and Director of Rock-Uris and in charge of the renting of the Sperry Rand Building, and with Cadman and Juncker. During the course of the day, Burkhiser, Cadman and Juncker discussed the nature of the services provided by Studley, Inc. and the fact that Studley, Inc. would expect a commission on the consummation of the transaction. Juncker told Burkhiser that he had first shown Cadman the Sperry Rand Building but subsequently gave Rock-Uris a letter of indemnification against any claim by Studley, Inc. for a brokerage commission.

On November 2, Friedman wrote Juncker, attaching an outline of the terms of the proposed lease which had been discussed on October 30th. The terms were essentially accepted by Gulf on November 6th*fn2 and were eventually incorporated in the lease between Gulf and Rock-Uris. Friedman did not learn of any services on the part of Studley, Inc. until November 7th.

On that day Burkhiser telephoned Studley and informed him that although Gulf was going into the Sperry Rand Building, it was doing it through another broker and that Gulf would appreciate it if his firm would withdraw as broker. Studley returned the call later that day and said that his firm would not withdraw. In a letter written to Burkhiser dated November 7, Studley indicated that he had spoken to Friedman and the latter gave him "every assurance that if my position is clearly established by Gulf, our company shall be recognized for its role in this transaction. And, in the event a lease is concluded, that commissions will be paid us."

Cadman had introduced Juncker to Friedman as Gulf's broker at the meeting on October 30th. He was thereafter so regarded and ultimately received the commission. Cadman testified that he had never discussed the services rendered by Studley, Inc. with Friedman, and Friedman testified to the same effect. But Cadman told Burkhiser that he had discussed the entire situation with Friedman and that Friedman did not want to discuss it with Burkhiser at all. The jury could well find that Burkhiser would have apprised ...


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