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Thomas J. Hayes & Associates, LLC v. Brodsky

Supreme Court of New York, Third Department

December 27, 2012

MARK E. BRODSKY, Appellant.

Calendar Date: November 16, 2012

Corbally, Gartland & Rappleyea, LLP, Poughkeepsie (Allan B. Rappleyea of counsel), for appellant.

Tarshis, Catania, Liberth, Mahon & Milligram, PLLC, Newburgh (Rebecca Baldwin Mantello of counsel), for respondent.

Before: Mercure, J.P., Spain, Malone Jr., Stein and McCarthy, JJ.


Spain, J.

Appeal from an amended judgment of the Supreme Court (Gilpatric, J.), entered September 20, 2011 in Ulster County, upon a decision of the court in favor of plaintiff.

In this action, plaintiff seeks compensation for brokering the sale of real property purchased by defendant. Plaintiff's principal, Thomas Hayes, a licensed automobile dealership broker from Connecticut, contracted with Charles Saber to represent him in the sale of his Ford and Chevrolet car dealerships in the Town of Lloyd, Ulster County. Hayes contacted defendant's business partner who had previously informed plaintiff he was looking to purchase a dealership. Defendant was interested in buying the dealerships on the condition that he could also purchase the land on which the dealerships were located; Saber did not own the land but leased it from Perry Realty Company. The land was not for sale, but Hayes approached Michael Sylvester, a general partner of Perry Realty. Sylvester was initially reluctant, but eventually decided to sell. He was adamant, however, that he would not pay a brokerage fee. It is undisputed that, in the course of negotiating the purchase of the real estate from Sylvester, defendant agreed to accept financial responsibility for paying plaintiff's commission. It is also clear, however, that Hayes and defendant never reached an agreement as to the amount of the commission.

The real property was conveyed to defendant in June 2006 [1] for $3, 021, 497 and, after refusing defendant's offer to pay a one percent commission, plaintiff commenced this action against defendant alleging causes of action in breach of contract and quantum meruit for the failure to pay a broker's commission fee. Defendant moved for partial summary judgment dismissing plaintiff's quantum meruit claim. Plaintiff opposed the motion and cross-moved for summary judgment on the same cause of action. Supreme Court (Cahill, J.) denied defendant's motion and granted plaintiff partial summary judgment on the issue of liability under the theory of quantum meruit. The matter then proceeded to a nonjury trial, at the conclusion of which Supreme Court (Gilpatric, J.) found that no enforceable contract existed between the parties and, on the quantum meruit claim, that the reasonable value of plaintiff's services was five percent of the purchase price, amounting to $151, 074.85, together with interest in the amount of $70, 477 computed from the date of closing, for a total judgment in the amount of $221, 551.85. Defendant now appeals, and we affirm.

While in his brief defendant asserts that he was entitled to summary judgment dismissing plaintiff's quantum meruit cause of action and that partial summary judgment to plaintiff on that cause of action was precluded by unresolved issues of fact, at oral argument defendant conceded liability on the quantum meruit cause of action [2]. Hence, as the first three elements of a claim for quantum meruit have been established, i.e., "'(1) performance of services in good faith, (2) acceptance of the services by the person for whom they were rendered [and] (3) an expectation of compensation'" (Precision Founds. v Ives, 4 A.D.3d 589, 591 [2004], quoting Clark v Torian, 214 A.D.2d 938, 938 [1995]), we need only review Supreme Court's determination of "'the reasonable value of the services performed'" (id.), the fourth and final element. When reviewing a judgment rendered after a nonjury trial, such as this, we "'independently review[] the weight of the evidence and may grant the judgment warranted by the record, while according due deference to the trial judge's factual findings particularly where... they rest largely upon credibility assessments'" (Brightman v Hackett, 81 A.D.3d 1200, 1200 [2011], quoting Cotton v Beames, 74 A.D.3d 1620, 1622 [2010]).

Here, Supreme Court credited plaintiff's expert, Joseph Bellavia, an experienced business and real estate broker specializing in the automotive industry. Bellavia testified that a broker's compensation in the automobile industry is based primarily on commission, with the major objective being the completion of the transaction, as compared to the actual time expended by the broker, and that the customary rate of commission for the sale of real estate on which an automotive dealership is situated is five percent to six percent of the sale price. Hayes also testified that his company received a five percent commission from Saber for the sale of the dealerships and that he had never received a commission of less than five percent.

In contrast, defendant's expert, real estate broker and bank president George Whalen, opined that it would not be reasonable to apply a fixed percentage commission unless the parties made an agreement on that percentage but, "[i]nstead, the actual efforts of the broker should be evaluated and, if an agreement was [reached] and the broker was the cause of the sale, those efforts should be considered to award a commission commensurate with the broker's actual efforts." Relying on this opinion, defendant argues that Hayes did not spend any significant amount of time talking to defendant regarding the sale of the real estate and that defendant principally dealt directly with Sylvester in working out the details of the transaction. Supreme Court declined to credit Whalen's testimony, however, finding that as he had no experience in the brokerage of automobile dealerships or real property connected with a dealership, he "lacked the actual experience and or knowledge to render an expert opinion in this specialized transaction." Defendant does not directly challenge this determination, and we find no basis upon which to conclude that Supreme Court abused its discretion in not crediting defendant's expert (see Jackson v Nutmeg Tech., Inc., 43 A.D.3d 599, 599-602 [2007]; McGillvery v City of New York, 22 A.D.3d 537, 538 [2005]).

We conclude that it was appropriate in determining the reasonable value of the services performed by plaintiff to consider the commission it would have received had an agreement been in place at the customary rate in the community during the time in which the services were rendered (see Comvest Consulting v W.R.S.B. Dev. Co., 266 A.D.2d 890, 891 [1999]; Curtis Props. Corp. v Greif Cos., 212 A.D.2d 259, 265 [1995]; Nye Agency v Newman, 15 A.D.2d 728, 728 [1962]; Baer v Koch, 2 Misc. 334, 335 [1893]; see also Abrams Realty Corp. v Elo, 279 A.D.2d 261, 261 [2001], lv denied 96 N.Y.2d 715 [2001]). On appeal, defendant focuses heavily on the argument that he should not be bound to the customary rate of commission in the industry because no evidence exists that he was aware of that rate. Although this argument would be relevant to a contractual claim as to whether the court should supply a reasonable term omitted from an otherwise enforceable contract (compare Matter of De Graff, Foy, Conway & Holt-Harris v McKessson & Robbins, 31 N.Y.2d 862, 871 [1972]), the basis for liability here is premised on quantum meruit and, accordingly, defendant's knowledge is immaterial as he is bound to pay plaintiff the reasonable amount of plaintiff's services, as determined by the trier of fact. [3] After carefully considering the record evidence and deferring to Supreme Court's credibility determinations, we concur that plaintiff is entitled to five percent of the purchase price. In real estate transactions, the value of the services rendered are routinely measured as a percentage of the sale price, as opposed to the number of hours expended to broker the deal. It is undisputed that Sylvester was not planning on selling the property before he was approached by Hayes and that Hayes brought the parties together. Hayes also testified that when several problems arose with the sale, he encouraged and convinced Sylvester to complete the transaction. Under these circumstances, we conclude that the reasonable value of plaintiff's services was appropriately calculated (see Comvest Consulting v W.R.S.B Dev. Co., 266 A.D.2d at 890).

Mercure, J.P., Malone Jr., Stein and McCarthy, JJ., ...

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