Opinion
File No. 414357
The plaintiff real estate broker sought to recover a commission allegedly due him under an oral listing agreement he had entered into with the defendant sellers for the sale of their real property and business. The only writing evidencing the agreement was a provision in the sales agreement between the sellers and the buyer who had been procured by the plaintiff. On the basis of that provision the plaintiff had obtained an attachment on the real estate in question. The named defendant moved to strike the complaint because there was no formal written agreement between the plaintiff and the defendants concerning the listing of the property, as required by statute (§ 20-325a [b]), and because it allegedly failed to state a cause of action. The plaintiff claimed that § 20-325a (b), notwithstanding its applicability to the sale of the real estate, did not affect the sale of the business, which was personalty. Because the legislature, in enacting § 20-325a (b), made no distinction between straight real estate sales and those integrated with commercial transactions and because the plaintiff, having failed to satisfy the requirements of § 20-325a (b), did not meet its burden of proving the probable validity of its underlying claim, the named defendant's motion to strike was granted and the prejudgment attachment was dissolved.
Memorandum filed October 27, 1983
Memorandum of decision on the named defendant's motion to strike the plaintiff's complaint. Motion granted.
Nassau Borowy, for the plaintiff.
William J. Melley III, for the named defendant et al.
The plaintiff is a real estate broker suing to recover a commission. Its claim is based on an oral listing agreement it entered into with the defendants for the sale of the defendants' business and real property.
The plaintiff procured a buyer who thereafter entered into a written sales agreement with the defendant sellers. The only writing evidencing the listing contract is a provision in the sales agreement establishing the plaintiff as the exclusive real estate broker. On the basis of this provision, the plaintiff obtained an attachment on realty owned by the named defendant and the defendant Paulette R. Lamoureux and instituted this action for collection of the brokerage fee. The named defendant now moves to strike the complaint because there is no written agreement as required by General Statutes § 20-325a (b).
Section 20-325a (b) requires that any brokerage contract between a seller and a realtor for the sale of real property must be in writing, signed by both parties, and include the names and addresses of each party, the date the contract was entered into, and all of the terms and conditions of the agreement. William Pitt, Inc. v. Taylor, 186 Conn. 82, 83, 438 A.2d 1206 (1982); Hossan v. Hudiakoff, 178 Conn. 381, 382, 423 A.2d 108 (1979). The statute is to be strictly construed. Seaman v. King Arthur Court, Inc., 35 Conn. Sup. 220, 223, 404 A.2d 908 (1979).
The statute requires that the agreement shall be made in accordance with the provisions of subsection (b). Thornton Real Estate, Inc. v. Lobdell, 184 Conn. 228, 229, 439 A.2d 947 (1981). "The use of the word `shall' in the statute connotes that the performance of the statutory requirements is mandatory rather than permissive." Hossan v. Hudiakoff, supra, 383. In fact, § 20-325a (b) contemplates an existing agreement. The writing must precipitate the service. Seaman v. King Arthur Court, Inc., supra, 223.
The courts have strictly adhered to the language of this statute. See Thornton Real Estate, Inc. v. Lobdell, supra (court found that absence of a signature of one of the parties was fatal to the brokerage contract). The rationale is that "[i]f a real estate broker fails to obtain a written contract of employment from his customer, he proceeds at his own peril." Good v. Paine Furniture Co., 35 Conn. Sup. 24, 28, 391 A.2d 741 (1978). The courts cannot, by construction, read into legislation provisions not clearly stated. Thornton Real Estate, Inc. v. Lobdell, supra, 230.
A broker may establish the existence of a valid listing contract where there are several writings which, taken together, would satisfy the statute. Jay Realty, Inc. v. Ahearn Development Corporation, 189 Conn. 52, 53, 453 A.2d 771 (1983). In this way § 20-325a (b) resembles the Statute of Frauds (General Statutes § 52-550) in that a written memorandum need not consist of a single document. Good v. Paine Furniture Co., supra, 26. The burden of establishing the agreement this way is great, however, and must consist of more than a reference to the contract in the sales agreement between the seller and the buyer. Id. All of the documents together must clearly and explicitly relate to the same agreement. Jay Realty, Inc v. Ahearn Development Corporation, supra, 55. In the present case, the plaintiff has only presented a copy of the sales agreement containing the provision naming him as exclusive broker.
The plaintiff argues that notwithstanding the applicability of § 20-325a (b) to the sale of the real estate, it does not affect the sale of the business, which would be considered personalty.
The Second Circuit Court of Appeals has adopted, as have a majority of states, the "New Jersey Rule," which denies a commission to a broker under an oral listing contract even where sale of a business is involved. Marina Management Co. v. Brewer, 572 F.2d 43 (2d Cir. 1978). The legislature, in enacting § 20-325a (b) made no distinction between straight real estate sales and those integrated with commercial transactions.
The court is obligated to dissolve a prejudgment remedy on realty if there is no probable cause to sustain the validity of the plaintiff's underlying claim. Good v. Paine Furniture Co., supra, 25. The plaintiff here has not sustained its burden in that it has violated § 20-325a (b).
The named defendant has also properly moved to strike the plaintiff's complaint for failure to state a cause of action. The motion to strike is used to test the legal sufficiency of a pleading. Alarm Applications Co. v. Simsbury Volunteer Fire Co., 179 Conn. 541, 545, 427 A.2d 822 (1980). The pleading party cannot merely make conclusions of law without alleging facts which would bring the case within any of the recognized grounds for that particular cause of action. Cavallo v. Derby Savings Bank, 188 Conn. 281, 283, 285, 449 A.2d 986 (1982).