The opinion of the court was delivered by: COOPER
COOPER, IRVING BEN, D. J.
Plaintiffs, citizens of the Federal Republic of Germany and partners in the law firm of Ackermann & Schultze-Zeu, a partnership organized under the laws of the Federal Republic of Germany with its principal place of business in Berlin, West Germany, bring this action to enforce a judgment entered on December 12, 1980 by the Regional Court of West Berlin in favor of plaintiffs and against defendant, a resident of the City and State of New York, in the amount of Deutsche Marks ("DM") 190,708.49 plus interest at the rate of four percent per annum and costs. The case was tried to the Court on May 7-9, 1984; we reserved decision at the conclusion of the trial.
In 1979 defendant was a general partner in Hudson View Associates, a partnership engaged in developing for sale a piece of real estate located in Edgewater, New Jersey called "Edgewater Towers." (Ex. 1, P2)
The sales price of the "entire project was 20 million. [Mr. Levine] was only interested in selling [his] property [for 6 million]." (Tr. 333) At the time defendant was looking for buyers, a friend of his introduced him to a West German businessman named Gottlieb Bauer-Schlichtegroll ("Bauer"). (Tr. 305) Bauer informed defendant that he knew "many, many people in Germany that would be interested in financing the project [and] in particular, he named a gentleman by the name of Mr. Peter Kuth." (Tr. 306) In pursuit of the opportunity, defendant furnished Mr. Bauer (at a meeting during the spring of 1979 in the Regency Hotel in Manhattan) with financial documents and written specifications of Edgewater Towers (Ex. 1, P5); they agreed that Mr. Bauer would receive a commission of $600,000 if he effectuated a sale. (Tr. 334) Also present at the meeting was a friend of Mr. Bauer's, Walter Pfaeffle, a West German journalist living in New York who spoke both German and English and who Mr. Bauer referred to as his "financial consultant," a status not supported by the proof. (Tr. 463) At the conclusion of the meeting, Mr. Bauer agreed to keep in torch with defendant after he returned to West Germany; the two were to communicate through Mr. Pfaeffle (he possessed a Telex machine). (Tr. 306; 308) It was defendant's understanding that Mr. Pfaeffle would share in the commission. (Tr. 334)
Although Mr. Bauer was not called to testify at trial, there was considerable testimony by other witnesses, including plaintiff, defendant and Mr. Pfaeffle, about Mr. Bauer's role. Our review of all the proof and our considered estimate thereof convinces us that Mr. Bauer was a devious opportunist who told a different story to each interested party (i.e., he led them on) in order to ensure that, as he told Mr. Pfaeffle, "we will all benefit if the deal goes through." (Tr. 475) Consequently, as we shall develop below, the approach of each of those interested in the sale of the property was not comprehended by the others. Each carried in his head a different plan; all the plans were to a very large extent constructed and conveyed by Mr. Bauer.
Approximately at the beginning of May 1979, Mr. Bauer called defendant and stated he had spoken with Mr. Kuth, who defendant believed to be the principal owner of the "Titan Group" investment company in West Berlin; that Mr. Kuth was very interested in the project and urged defendant to go to West Germany to discuss it. (Tr. 310) Mr. Bauer was confirmed to some extent by a telephone call from a Mr. Langsfeld (further identification not revealed) in West Berlin to defendant who said, "Yes, we are very much interested in doing the project ... and we wish you would come as quickly as you can possibly get here to discuss it." (Tr. 311)
Defendant decided to travel to West Germany to meet Mr. Kuth. Before leaving, however, he visited Frederic Coudert, Esq., (a new [New] York attorney to whom he is related) to obtain the names of Berlin attorneys in case a contract was worked out there. Mr. Coudert furnished defendant with the names of three law firms, one of which was plaintiffs' firm. (Tr. 312-14; Ex. 1, 8, 9)
Defendant went to West Germany in late May or early June. Mr. Bauer met him at the airport and transported him to a hotel. He told defendant a meeting would be set up with Mr. Kuth. However, when Mr. Bauer returned to the hotel later that afternoon, he informed defendant that Mr. Kuth would not be available to see him, apparently because Mr. Kuth was then hospitalized. (Tr. 315-16)
Defendant was obviously distressed by this development. Mr. Bauer suggested they talk with plaintiff Peter Ackermann who he claimed was his attorney and friend, and "hopefully maybe we can have someone be helpful to you while you are here." (Tr. 317) Defendant mentioned the coincidence that Mr. Ackermann's firm had been one of those given to him by Mr. Coudert in New York.
Unbeknownst to defendant, Mr. Bauer had already discussed the Edgewater Towers project with Mr. Ackermann. Specifically, Mr. Ackermann testified:
[About one week before the meeting between myself and Messrs. Levine and Bauer], Mr. Bauer said to me that he had made the acquaintance, passing through New York, of a gentleman who was the general partner in a building project, and that he, Bauer, had said to Mr. Levine that why don't he come to Germany and try to market this project under German tax shelter law. And Mr. Bauer said to me, "Would you be interested in handling the legal and tax ramifications of such a fairly sizable project?", to which I responded, "Yes."
Mr. Bauer then gave me a stack of documents which appeared to be telexes . . . detailing that particular project as well as a stack of papers that mainly referred to the conditions upon which the HUD mortgage was to be paid out to the future investor. And he explained to me that I would have to make myself acquainted with the other papers that there were, of which he understood nothing but trusted that I would read those in order to prepare for the meeting that was forthcoming with the defendant himself.
During the trial Messrs. Ackermann and Levine gave entirely different descriptions of the substance of their meeting with Mr. Bauer in West Germany. Our observation of the witnesses and our careful study of the record convinces us that the two versions emanate from the two almost opposite perspectives that each man brought to the meeting. And so it was throughout the trial with respect to other vital factual occurrences. Mr. Levine's only goal was to sell his property; he preferred selling it to a German purchaser since he had learned through Mr. Bauer that he could get a substantially higher price in Germany than in the United States. (Tr. 353) He travelled to Germany with the expectation that a contract with Mr. Kuth's investment company would ensue (through the aid of Mr. Bauer who was acting as his real estate broker).
Mr. Levine's expectations were quickly diminished while he was still in Germany; before he returned (the next morning) (Tr. 329) to New York, he decided he had nothing to lose by following Mr. Bauer's suggestion of a meeting with Mr. Ackermann (who had been recommended to defendant by Mr. Coudert).
Mr. Ackermann, on the other hand, entertained high hopes of the outcome of the meeting. At that time, it was becoming profitable for Germans to invest in United States property; he testified, "It was the beginning of a certain investment priority, to invest in the United States." (Tr. 58) Therefore, it was clearly in the interest of an attorney to develop a favorable tax shelter scheme, particularly for a multi-million dollar investment. Mr. Bauer, who knew the interests in the venture of both Messrs. Ackermann and Levine, told Mr. Ackermann before all the parties met "that he had been asked by Mr. Levine to find an attorney who could structure the deal . . . in such a manner that the bank would accept it. . . . [T]his was not a building to be looked at and sold at a given price. This was an investment scheme to be developed. The building itself played only part of that total picture. We needed an attorney to structure an investment scheme for $21 million and not a broker to sell a piece of real estate." (Tr. 60) In short, Mr. Ackermann approached the meeting with Messrs. Levine and Bauer believing Mr. Levine wanted him to create a legal tax shelter plan. Only Mr. Bauer knew the differing state of mind of each party during their encounter.
In this light, the two different synopses given by Messrs. Ackermann and Levine of the meeting between them and attended by Mr. Bauer is comprehended. According to defendant, Mr. Bauer outlined defendant's project in very general terms and discussed the unavailability of Mr. Kuth; the meeting lasted for no more than twenty minutes. (Tr. 320-21) In contrast, Mr. Ackermann testified that:
Mr. Levine indicated that he was interested in selling this in West Germany under a tax shelter scheme that would allow the West German investors to write off, in an accelerated manner, the investments they would share in . . . that particular project. . .
He asked me whether I would see a possibility of structuring the sale of this property to be built under the German tax law to the effect that taxation writeoffs would be available to the German investor. And I told him that although I was skeptical about the financial, about the economic merits of that project, not knowing enough of it, I was not outspoken on that! and I told him that legally and from the tax point of view that would be a feasible avenue to entertain. . . .
Mr. Levine said that he had directly contacted a bank who handles for their client real estate deals that offer tax advantages. This bank was the Grunt und Renten, which is a mortgage bank in West Berlin. . . . [T] his bank had shown a considerable interest in getting involved with [the Edgewater Towers] project. . . .
[T]he bank needed more detail [regarding] whether or not there was a legal opinion, evidence, to the fact that the bank could, with a good conscience, sell that to their clients, to make it work at the end of the taxing time many years later.
And I replied that inasmuch as this is one of the fields in which our law firm operates, we would study that proposition. . . . I was to go to the bank as soon as I would receive from them an invitation to see them... and explain to them the legal and taxwise ramifications of this structure that I was to develop.
(Tr. 40-42) Mr. Ackermann recollected that the meeting lasted one to one and a half hours. (Tr. 42)
We find, as we have already stated, that the trial testimony of plaintiff and defendant was clouded by reason of the differing information imparted to each by Mr. Bauer and accordingly their respective state of mind upon attending the meeting. For example, the Edgewater Towers project was covered at the meeting in more detail than Mr. Levine recollects and less detail than elaborated upon by Mr. Ackermann. We are convinced by a preponderance of the credible evidence that the parties discussed, in general terms only, tax shelter schemes -- a plan that benefited both Mr. Ackermann, who wanted to develop this approach, and Mr. Levine, who stood to gain financially from a German purchaser. However, we are neither persuaded that the two agreed at that time that Mr. Ackermann would discuss these plans with the Grunt und Renten Bank nor that Mr. Levine had previously talked with representatives of that bank.
Indeed, Mr. Levine testified, and we believe it credible, that at the meeting with Mr. Ackermann, an appointment was scheduled for defendant to go with Mr. Bauer and an accountant to the parent bank of Grunt und Renten called Grundkreditbank. (Tr. 321, 325) The conversation at the bank meeting, held immediately after the encounter at plaintiffs' office, was all in German; Mr. Bauer told Mr. Levine "that they were discussing the possible investment in [the] project in Edgewater, New Jersey" (Tr. 326) and that they spoke about the purchase price, number of units, size of land involved and financing -- all in very general terms. (Tr. 327) Mr. Bauer further told Mr. Levine that "his impression of the meeting was a very favorable one and he thought the bank was very much interested in doing the project." (Tr. 328) Mr. Bauer agreed to keep in touch with Mr. Levine and apprise him of developments pertaining to the bank's involvement. (Tr. 329) In short, at the end of his business trip in West Germany, though disappointed that he had not been able to meet with Mr. Kuth, Mr. Levine believed that the Grundkreditbank might purchase the property.
Upon Mr. Levine's return to New York the next day, he received (several days later) a telephone call or telex (he did not remember which) from Mr. Bauer confirming that the bank was "very much interested in the project [but] they needed some time . . . to go through their proper procedures." (Tr. 330) Mr. Levine informed him that he "was not interested in waiting, that I had many interested parties in this country who wished to buy my property." (Tr. 330) Mr. Bauer responded that the appropriate bank committee would meet within seven to ten days, a period of time to which Mr. Levine agreed on condition that he receive from them a letter setting forth their serious consideration of the project. (Tr. 331) Mr. Bauer suggested that "because of Mr. Ackermann's relationship with the bank, we should utilize Mr. Ackermann to go into the bank and discuss the project." (Tr. 332) Mr. Levine testified that he objected, stating, "'I don't understand at this point why we are involving Peter Ackermann in this situation. . . . You are acting as a broker to sell my property.'" According to defendant, Mr. Bauer responded by stating, "'We need Mr. Ackermann to go into the bank, because of his association with the bank, and he has agreed with us to share in our commission equally.'" (Tr. 334) Evidently, Mr. Levine agreed with Mr. Bauer's reasoning, for on June 8, 1979 defendant mailed a letter to Mr. Ackermann (Ex. A) which stated:
I am very pleased to address this letter to you regarding our real estate project in ...