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Harris v. Clancy

Supreme Court of New York, Second Department

January 27, 2014

Joshua Harris Doing Business as JOSHUA'S REALTY, Appellant,
v.
Ronald Clancy, Respondent.

PRESENT:: TOLBERT, J.P., NICOLAI and IANNACCI, JJ

Appeal from a decision of the City Court of Poughkeepsie, Dutchess County (Katherine A. Moloney, J.), dated September 1, 2011, deemed from a judgment of the same court entered September 2, 2011 (see CPLR 5512 [a]). The judgment, after a nonjury trial, dismissed the complaint.

ORDERED that the judgment is reversed, without costs, and the matter is remitted to the City Court for a new trial.

In this action, plaintiff seeks to recover a $14, 100 commission for real estate brokerage services he rendered in connection with defendant's sale of property. At a nonjury trial, it was uncontested that plaintiff is a licensed real estate broker, and that he had been the procuring cause of the sale of the property (see Greene v Hellman, 51 N.Y.2d 197 [1980]; Sibbald v Bethlehem Iron Co., 83 NY 378 [1881]; Dagar Group, Ltd. v Hannaford Bros. Co., 295 A.D.2d 554, 555 [2002]; Buck v Cimino, 243 A.D.2d 681 [1997]). The parties differed, however, as to whether defendant owed plaintiff a commission.

The evidence showed that defendant had previously offered the property for sale through a different brokerage company for $295, 000. Defendant, with knowledge that plaintiff was a licensed real estate broker but without entering into a listing agreement with plaintiff, consented to plaintiff showing the property to a potential buyer. While the potential buyer was at the property site, following negotiations, defendant agreed to sell the property to her for $240, 000. An individual, who was a former partner of defendant's and a social acquaintance of both parties, was in the vicinity at the time the deal was reached, and produced a blank form for an agreement to sell real estate (the Agreement). After filling in the blank spaces on the form in handwriting, the buyer and defendant, as seller, signed the agreement, and plaintiff and the individual who had produced the form for the agreement signed as "witnesses." While the buyer, plaintiff and defendant were still at the property, defendant took the executed agreement elsewhere to make photocopies, and returned to the site. The sale was subsequently consummated.

The agreement form included the following printed provision:

"COMMISSION TO BROKER: The Seller hereby recognizes as the Broker in this transaction, and agrees to pay as commission % of the gross sales price, the sum of ($) or one-half of the deposit in case same is forfeited by the Buyer through failure to perform, as compensation for services rendered, provided same does not exceed the full amount of the commission."

The printed form of the agreement also stated:

"OTHER AGREEMENTS: No other agreements or representations, unless incorporated in this contract, shall be binding upon any of the parties."

In handwriting, Joshua's Realty was named as the broker, and the following terms, underscored here but not in the original, were added to the agreement: "agrees to pay as commission 0 % of the gross sales price, the sum of ZERO Dollars ($ 5, 000)..."

At trial, plaintiff testified that when defendant went to make photocopies following the execution of the agreement, defendant had written in both the numeral "0" and the word "zero." Defendant agreed that he had added the word "zero" when he went to make copies, but denied that he had written in a "0, " and claimed rather that he had not agreed to pay anything to plaintiff and had written the word "zero" to prevent plaintiff from falsifying the document by adding another numeral in front of the "0%" that had been agreed upon.

The City Court concluded that plaintiff had proven that he was a licensed real estate broker and that he had procured the sale of the property, but dismissed the complaint upon a finding that, based on the inherent ambiguity of the agreement's commissions provision, and its clause which prohibited the consideration of extrinsic evidence, plaintiff had failed to establish that he had "either an express or implied contract with the defendant wherein the parties clearly agreed upon a commission rate." This appeal ensued.

There was no evidence at trial that plaintiff had signed the agreement in any capacity other than as "witness"; nor was there evidence of any other basis for enforcement of the agreement against plaintiff (compare May v U.S. HIFU, LLC, 98 A.D.3d 1004, 1007 [2012]). The agreement nevertheless included defendant's clear acknowledgment that plaintiff had acted as the broker for defendant, but contained contradictory, irreconcilable terms as to the amount of commission, if any, due from defendant to plaintiff.

Plaintiff testified that, from the outset, he had brokered the deal with an expectation that defendant, as seller, would pay him a commission. He claimed that defendant had orally promised at different times to perform work for him in lieu of paying a monetary commission, or to pay him a monetary commission after the buyer's check cleared. Defendant testified that when he had agreed to reduce the price of the property, he told plaintiff that he would not pay a commission, and that if plaintiff wanted to be paid he should get his commission from the buyer.

Absent an agreement not to pay a commission, where a broker has performed as a broker and the seller has accepted the broker's services, an agreement to pay a commission will be implied even in the absence of an agreement regarding a commission (see Henri-Lyn Realty, Inc. v Huang, 159 A.D.2d 486 [1990]; see also 11 NY Jur 2d, Brokers § 113), and the court will be charged with determining the amount of the commission (see Halstead Brooklyn, LLC v 96-98 Baltic, LLC, 49 A.D.3d 602 [2008]; Eileen A. Green Realty Corp. v Polidori, 224 A.D.2d 384 [1996]; see also Zere Real Estate Servs., Inc. v Parr Gen. Contr. Co., Inc., 102 A.D.3d 770, 772 [2013]; Tesser v Allboro Equip. Co., 73 A.D.3d 1023, 1026 [2010]; Curtis Props. Corp. v Greif Cos., 212 A.D.2d 259, 260 [1995]). At trial, plaintiff proved his prima facie case for an award of a commission by establishing that he was a duly licensed real estate broker and that he was the procuring cause of the sale of the property.

Defendant testified that he had informed plaintiff that he would not pay a commission because he had agreed to accept $240, 000 for the sale of the property instead of the asking price of $295, 000. While defendant had no obligation to sell the property for a lower price than originally asked, his acceptance of a lower price, without more, is no defense to plaintiff's claim (see 11 NY Jur 2d, Brokers § 155). However, the trial testimony was inconclusive as to whether defendant had made the nonpayment of a commission a condition of the $240, 000 sale, and as to whether plaintiff had acquiesced in defendant's insistence on such a condition, and the City Court's decision does not include any findings with respect to such a possible condition. Accordingly, we conclude that a new trial is required to determine whether plaintiff agreed to forgo a commission and, in the event that he did not, to determine the amount of the commission to which plaintiff is entitled.

We reach no other issue.

Accordingly, the judgment dismissing the complaint is reversed and the matter is remitted to the City Court for a new trial.

Tolbert, J.P., Nicolai and Iannacci, JJ., concur.


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