Opinion
No. HHD CV-08-5020258S
July 15, 2009
MEMORANDUM OF DECISION ACTION IN DAMAGES
I STATEMENT OF CASE
This is an action to recover damages for breach of contract regarding the payment of a broker's commission pursuant to an exclusive right to sell/exchange/lease agreement (listing agreement). The matter was tried on April 2, 2009. The last posttrial brief was filed on June 1, 2009.
II FINDINGS OF FACT
The plaintiff, Dow Condon, Inc., d/b/a Colliers, Dow Condon (broker) is a real estate brokerage firm licensed in Connecticut. The broker employs Michael Hickey and Robert McBain as commercial real estate brokers.
In November 2006, the defendant, Garden Main Street, LLC (seller), was the owner of the property located at 121-131 Main Street, New Britain, Connecticut (property). Sam Halperin and Jay Nelkin are the seller's managers and owners. In 2006, the seller acquired the property by paying approximately $275,000 for the property and $250,000 for tax liens.
In September 2006, the seller contacted the broker and expressed an interest in listing the property with Dow Condon. Hickey and McBain went to the property and met with Halperin and Nelkin. The property included two buildings with 65,000 to 70,000 square feet. There was some retail on the ground floor and vacant office space on the second floor. The property needed significant renovation and was difficult to value. The seller indicated an interest in leasing or selling the property. The broker was not aware of any specific interest in the property by potential buyers or lessees. During October 2006, the broker spent time evaluating the property and preparing a marketing program, which included landscaping and repairs to the outside.
On November 8, 2006, the seller and broker entered into a nine-month exclusive right agreement. The term of the agreement was November 1, 2006, to August 1, 2007. The agreement provided that the broker would be paid a commission of 6 percent of the sales price upon the sale of the property.
When the agreement was being signed, Halperin, on behalf of the seller, filled in Article 4 ("Sale/Lease Price"), and wrote in "TBD" for the sales price and the per square foot lease rent. The value of the property at that time was uncertain because of the need for renovations. Halperin wrote in "TBD" to reflect the possibility of rehabilitation of the buildings. "TBD" was the only estimate that made economic sense based on the seller's intention to renovate the property.
From the beginning, the value of the property was difficult to estimate due to the need for substantial renovations. The property, however, had some unique attributes, including its location. The seller learned at some point that there was a previous offer for the property in the range of $1.4 to $1.5 million. The seller believed that the property was worth substantially more if properly rehabilitated. After the listing agreement was signed, the seller discussed construction financing with a lender. The seller eventually took the position that the value of the property exceeded $2 million based on comparable properties in the surrounding area and appraisals. The broker eventually estimated the value at $1.5 to $1.7 million.
In early November 2006, McBain, who had substantial contacts with the city of New Britain (city), met with city officials to discuss the development of the property. During the meeting, one of the city officials left the room. When the official returned a few minutes later, McBain was told that he should set up a meeting with the mayor of the city of New Britain (mayor). The broker and seller were not previously aware of the mayor's interest in the property.
The broker arranged a meeting between the seller and mayor for November 21, 2006. It was an opportunity to introduce the city to the seller and determine the city's interest in the property. The meeting was attended by the mayor, Halperin, Nelkin, Hickey and McBain. From the start, the mayor was very confrontational. He indicated that he had plans to build a new police station on the property as part of an urban redevelopment plan. The mayor made an offer of only $430,000 for the property and reportedly indicated that the seller would have problems if the offer was not accepted. The meeting ended with the parties far apart on the sale price.
Although the meeting with the mayor did not go well, McBain knew that the mayor had a reputation for being a hard bargainer and believed that the mayor's confrontational approach was a negotiating ploy. The seller was still expecting the broker to do whatever possible to present the seller's position to the city and to work out a deal. The seller's position was reflected in Halperin's letter to McBain, dated November 27, 2006. See Exhibit No. 4.
After the meeting, city health and building inspectors visited the property and issued citations for several code violations. The seller immediately appealed the violations, and no subsequent enforcement action was taken. Later, the city pulled the seller's building permits, but eventually reinstated them.
The broker put a great deal of effort in marketing the property but ran into difficulties marketing the property because it needed to be renovated and potential tenants, including the local chamber of commerce, were reluctant to consider the property after hearing about the mayor's position.
In December 2006, the mayor increased the city's offer to purchase the property to $750,000. In an email to the seller, dated December 26, 2006, the mayor indicated that the city would take legal action if the seller did not accept the latest offer from the city. At some point, Hickey became aware that the mayor did not want to meet with Halperin because the parties were too far apart on price. The broker had discussions with the city regarding the property through the end of January 2007.
The seller eventually decided to hire an attorney. On January 31, 2007, the seller's attorney sent a letter to the mayor regarding the property. The letter read: "Please be advised that we represent Garden Main Street, LLC, in connection with its ownership of the above-referenced property. My understanding is that there have been informal discussions about the prospect of the City of New Britain either negotiating to buy the property from our client or potentially exercising eminent domain authority to condemn title to the property. I would ask that any further discussions relating to these issues be conducted through our office. Thank you for your cooperation."
The letter referenced "informal discussions" that had taken place regarding the city buying the property or acquiring the property through eminent domain. The seller's attorney made it clear that that all further discussions relating to the property had to be conducted through the seller's attorney, not with the broker. After receiving a copy of the letter, the broker had no further contact with the city regarding the property. The seller, however, continued to discuss the property with the broker and kept the broker informed of the negotiations with the city. Ultimately, the property was sold to the city for $1.6 million, which was within the range estimated by the broker.
In February 2007, the city's corporation counsel became involved in the negotiations. On February 23, 2007, the corporation counsel sent a letter to the seller's attorney indicating that if the parties were unable to reach agreement regarding a sales price, the mayor was going to recommend that the city acquire the property for municipal purposes via eminent domain. The letter formalized the city's most recent offer of $750,000.
On March 30, 2007, the seller's attorney sent a letter to the city rejecting the latest offer and explaining the basis for the seller's higher valuation of the property. The letter expressed a willingness to be creative. The seller and city, however, were unable to agree on a price.
On May 23, 2007, the Common Council of the city of New Britain (common council) passed a resolution authorizing the mayor to proceed with eminent domain and condemnation proceedings. On that date, the seller brought an action against the city alleging that the city had failed to make reasonable efforts to negotiate with the seller for the purchase of the property. See Garden Main Street, L.L.C v. New Britain, Superior Court, judicial district of New Britain, Docket No. CV 07 4014064. The seller sought injunctive relief to prevent the city from filing a notice of taking and a statement of compensation. The injunction request was never acted on by the court.
On June 29, 2007, the city notified the seller that it was proceeding with eminent domain and condemnation to acquire the property and that there were mediation services available through the newly-created office of the Connecticut ombudsmen for property rights (ombudsman).
After a judicial status conference on September 4, 2007, the parties agreed to the following procedure until the next status conference, which was scheduled for October 17, 2007. The city could commence eminent domain proceedings, but the city agreed not to record the certificate of taking for the time being. Title would not pass to the city until the certificate of taking was filed. The seller agreed not to proceed further with its lawsuit at that time.
On September 26, 2007, the common council authorized the filing of a statement of compensation in the amount of $1.02 million. On September 28, 2007, the city brought an eminent domain action to acquire the property and filed the statement of compensation in the amount of $1.02 million. At that point, there were two actions pending: the city's eminent domain action and the seller's lawsuit.
The mediation with the ombudsman eventually took place. During the mediation, the city increased its offer to $1.3 million. The seller and city, however, were unable to reach an agreement on price.
After the failure of the mediation with the ombudsman, the seller and city did not engage in any substantive negotiations regarding the sale of the property for several months. On October 22, 2007, the seller appealed the statement of compensation and also amended its complaint in the injunction action to include additional claims against the city.
In January 2008, negotiations between the seller and city restarted around the time depositions were scheduled in the seller's lawsuit. During this period, the broker became aware that a sale of the property to the city was imminent and sent an invoice to the seller for 6 percent of the publicized sale price, which the seller refused to pay. On January 29, 2008, the broker filed a lien on the property in the amount of the estimated commission in accordance with the listing contract agreement.
In February 2008, the seller and city negotiated the sale of the property. Drafts of the purchase and sales agreement were exchanged. The final draft of the purchase and sale agreement included Section 17, which addressed broker involvement. Section 17 was included in the sales agreement with the city at the seller's request and provides: " Broker It is represented and agreed by the parties hereto that no one is recognized as the Broker and Agent who made the sale of the Premises herein described, and the Seller is not obligated to pay any commission. Furthermore, the Purchaser shall hold the Seller harmless from all claims, losses and demands that the Seller may incur if any Broker or Agent makes a claim for a commission, said claim being based upon said broker or agent's relationship with the Purchaser for purposes of procuring real property for the Purchaser. Furthermore, the Seller shall hold the Purchaser harmless from all claims, losses, and demands that the Seller may incur if any Broker or Agent makes a claim for a commission, said claim being based upon said broker or agent's relationship with the Seller for purposes of procuring a sale of its property. Seller specifically agrees to obtain a Release of the Notice of Intent to Claim Broker's Lien which has been filed by Dow Condon, Inc. d/b/a Colliers, Dow and Condon in the New Britain Land Records. The Purchaser specifically represents that it was not introduced to the Premises by Colliers, Dow and Condon. The parties agree that the negotiations leading to this settlement have not taken place in a continuous manner but rather off and on, over a period of many months, often with interruptions spanning many weeks and months." (Emphasis added.)
On March 28, 2008, the seller and city entered into an agreement of purchase and sale. The seller sold the property to the city for a purchase price of $1,600,000. The sale occurred in conjunction with the settlement of the pending lawsuits. The city did not take the property by eminent domain. After the sale, the broker demanded payment, but the seller refused to pay any commission to the broker.
III DISCUSSION
Pursuant to the listing agreement, the broker claims a 6 percent commission on the sale of the property to the city, which amounts to $96,000. The broker also seeks attorneys fees pursuant to paragraph 11, which provides that the seller is obligated to pay to the broker all costs of collection including a reasonable attorneys fee in the event that the broker is successful in an action to collect its commission. The seller disputes that any commission is due pursuant to the terms of the agreement.
The issue to be decided is whether the seller, in fact, breached the agreement by not paying the broker the commission due based on the sale of the property. "[T]he elements of a cause of action founded on breach of contract [are] (1) the formation of an agreement, (2) performance by one party, (3) breach of the agreement by the opposing party and (4) damages . . . [and] causation." (Citation omitted; internal quotation marks omitted.) McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 503-04, 890 A.2d 140, cert. denied, 277 Conn. 928, 895 A.2d 798 (2006).
"The general rule in breach of contract cases is that the award of damages is designed to place the injured party, so far as can be done by money, in the same position as he would have been in had the contract been performed. Damages for breach of contract are to be determined as of the time of the occurrence of the breach." (Citations omitted; internal quotation marks omitted.) West Haven Sound Development Corp. v. West Haven, 207 Conn. 308, 317, 541 A.2d 858 (1988). "As a general rule, contract damages are awarded to place the injured party in the same position as he would have been in had the contract been fully performed." (Internal quotation marks omitted.) Fuessenich v. DiNardo, 195 Conn. 144, 153, 487 A.2d 514 (1985). "Damages are recoverable only to the extent that the evidence affords a sufficient basis for estimating their amount in money with reasonable certainty." (Internal quotation marks omitted.) Dent v. Lovejoy, 85 Conn.App. 455, 470, 857 A.2d 952 (2004), cert. denied, 272 Conn. 912, 866 A.2d 1283 (2005), quoting Lawson v. Whitey's Frame Shop, 241 Conn. 678, 689-90, 697 A.2d 1137 (1997). See also Expressway Associates II v. Friendly Ice Cream Corp. of Connecticut, 218 Conn. 474, 477, 590 A.2d 431 (1991). "Courts have traditionally held that a party may recover `general' contract damages for any loss that may fairly and reasonably be considered [as] arising naturally, i.e., according to the usual course of things, from such breach of contract itself." (Internal quotation marks omitted.) Jacob v. Thomas, 26 Conn.App. 305, 314, 600 A.2d 1378 (1991), cert. denied, 221 Conn. 914 (1992). "Proof of damages should be established with reasonable certainty and not speculatively and problematically." (Citations omitted; internal quotation marks omitted.) Leisure Resort Technology, Inc. v. Trading Cove Associates, 277 Conn. 21, 35, 889 A.2d 785 (2006). Moreover, "[i]t is axiomatic that the burden of proving damages is on the party claiming them." (Internal quotation marks omitted.) 24 Leggett Street Ltd. Partnership v. Beacon Industries, Inc., 239 Conn. 284, 308, 685 A.2d 305 (1996).
This case raises issues of contract interpretation. "A contract must be construed to effectuate the intent of the parties, which is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction . . . [T]he intent of the parties [to a contract] is to be ascertained by a fair and reasonable construction of the written words and . . . the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract . . . Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity . . . [C]ourts do not unmake bargains unwisely made. Absent other infirmities, bargains moved on calculated considerations, and whether provident or improvident, are entitled nevertheless to sanctions of the law . . . Although parties might prefer to have the court decide the plain effect of their contract contrary to the agreement, it is not within its power to make a new and different agreement . . . As stated by our Supreme Court, a presumption that the language used is definitive arises when . . . the contract at issue is between sophisticated parties and is commercial in nature." (Citations omitted; internal quotation marks omitted.) William Raveis Real Estate, Inc. v. Newtown Group Properties Ltd. Partnership, 95 Conn.App. 772, 776-77, 898 A.2d 265 (2006). "A firmly established principle of contract construction is that [t]he individual clauses of a contract . . . cannot be construed by taking them out of context and giving them an interpretation apart from the contract of which they are a part . . . A contract should be construed so as to give full meaning and effect to all of its provisions . . ." (Internal quotation marks omitted.) Id., 779.
A Actions to Recover Commissions Arising Out of Real Estate Transactions Pursuant to General Statutes § 20-325a
The threshold issue to be determined is whether this is a valid action for recovery of a broker's commission. The seller argues that the listing agreement is invalid as a matter of law because it does not comply with the statutory requirements under General Statutes § 20-325a. Specifically, the seller claims that the listing agreement is not enforceable because the purchase price set forth in the agreement is "TBD." The plaintiff contends that the agreement is valid and complies with the statutory requirements.
"General Statutes (Rev. to 1999) § 20-325a(a) through (d), as amended by Public Acts 2000, No. 00-160, § 2 ( P.A. 00-160) . . . dictate[s] the conditions under which real estate commissions may be recovered . . ." Location Realty, Inc. v. Colaccino, 287 Conn. 706, 709-10, 949 A.2d 1189 (2008). In this case, the listing agreement was signed by the parties on November 8, 2006. "Thus, the relevant version of the statute is General Statutes (Rev. to 1999) § 20-325a as amended by P.A. 00-160." Location Realty, Inc. v. Colaccino, supra, 287 Conn. 717.
In Location Realty, Inc. v. Colaccino, supra, 287 Conn. 717-19, the court reviewed the different statutory requirements for an enforceable commercial real estate listing agreement described in § 20-325a. First, "[s]ubsection (b) . . . sets forth seven specific requirements for any agreement for a real estate commission." Id., 718. "To satisfy the requirements of this subsection any contract or authorization shall: (1) Be in writing, (2) contain the names and addresses of the real estate broker performing the services and the name of the person or persons for whom the acts were done or services rendered, (3) show the date on which such contract was entered into or such authorization given, (4) contain the conditions of such contract or authorization, (5) be signed by the real estate broker or the real estate broker's authorized agent, (6) if such contract or authorization pertains to any real property, include the following statement: `THE REAL ESTATE BROKER MAY BE ENTITLED TO CERTAIN LIEN RIGHTS PURSUANT TO SECTION 20-325a OF THE CONNECTICUT GENERAL STATUTES,' and (7) be signed by the person or persons for whom the acts were done or services rendered or by an agent authorized to act on behalf of such person or persons . . ." General Statutes § 20-325a(b).
Second, under "§ 20-325a(c) . . . there is a more flexible standard for a writing in commercial real estate transactions than that which applies to noncommercial transactions." Location Realty, Inc. v. Colaccino, supra, 287 Conn. 718. An action for recovery may be based on "a memorandum, letter or other writing stating for whom the licensee will act or has acted, signed by the party for whom the licensee will act or has acted in the commercial real estate transaction, the duration of the authorization and the amount of any compensation payable to the licensee, provided (A) the licensee provides written notice to the party, substantially similar to the following: `THE REAL ESTATE BROKER MAY BE ENTITLED TO CERTAIN LIEN RIGHTS PURSUANT TO SECTION 20-325a OF THE CONNECTICUT GENERAL STATUTES,' and (B) the notice is provided at or before the execution of the contract, authorization, memorandum, letter or other writing, and may be made part of the contract, authorization, memorandum, letter or other writing." General Statues § 20-325a(c)(2).
Finally, § 20-325a(d) also provides for recovery when there has not been strict compliance with the requirements under subsection (b) and subsection (c). "[S]ubsection (d) provides that, when . . . there is no strict compliance with the requirements of subsections (a), (b) and (c), an action for a real estate commission under § 20-325a nonetheless may proceed if two preconditions are met: (1) there has been substantial compliance with the requirements relevant to the transaction; and (2) the facts and circumstances of a case would make it inequitable to deny recovery." Location Realty, Inc. v. Colaccino, supra, 287 Conn. 719.
In this case, there is no question that there is a writing between the seller and broker regarding the services being provided, with the relevant dates, the amount of any compensation payable, signed by both the broker and the seller, and containing the requisite disclaimer regarding lien rights. The defendant argues, however, that the listing agreement does not comply with the statutory requirements because no specific purchase price is listed; rather, the agreement indicates "TBD" for the sale/lease price. Section 20-325a(b)(4) requires that the listing agreement "contain the conditions of such contract or authorization."
This court found two cases addressing the issue of a listing agreement not containing the specific price at which the property was to be offered for sale. See Sticklor v. Woodland House Condominium, Inc., 9 Conn.App. 293, 518 A.2d 949, cert. denied, 202 Conn. 807, 520 A.2d 1288 (1985); New England Land Co. Ltd. v. Demarkey, 213 Conn. 612, 549 A.2d 1098 (1990).
The instant case appears more analogous to Sticklor v. Woodland House Condominium, Inc., supra, 9 Conn.App. 293. In Sticklor, the plaintiff, a licensed real estate broker, appealed the granting of a motion for summary judgment based partly on the omission of the sales price in the agreement. "The dispositive issue [was] whether the parties' brokerage agreement [was] unenforceable under General Statutes § 20-325a(b) because it failed to identify the specific units of the defendant's condominium complex to be sold and also failed to set forth the sales price for those units." Sticklor v. Woodland House Condominium, Inc., supra, 9 Conn.App. 293-94. In reversing the trial court, the Appellate Court found that "[i]t is apparent from the nature of the premises, and the failure of the agreement to contain the purchase price of the individual units that the defendant was reserving to itself the right to determine which unit it was willing to sell and the price it would accept for any given unit. In this case, therefore, it was not necessary that the contract specify the particular location and price of the units in order to state the `conditions of such contract or authorization' under General Statutes § 20-325a(b)(4)." Id., 297.
Regardless, both Sticklor and New England Land Co. Ltd. were decided before the amendments to § 20-325a, which relaxed the expectation of strict compliance with the statute. As the Appellate Court has observed, "[t]he right of a real estate broker to recover a commission is dependent upon whether the listing agreement meets the requirements of § 20-325a(b) . . . Section 20-325a(b) conditions the recovery of a real estate sale commission on, inter alia, the existence of a `contract or authorization' for brokerage services that is `in writing' and `signed by the real estate broker or the real estate broker's authorized agent . . . General Statutes (Rev. to 1997) § 20-325a(b)(1) and (5). For many years after its enactment, the provisions of § 20-325a(b) were strictly construed and enforced . . . Under this strict reading, a real estate broker who failed to comply with any of the provisions of § 20-325a did so at his peril . . . In 1994, the legislature relaxed the standard of strict compliance with § 20-325a with respect to several of its provisions. While a written agreement is still strictly required, Number 94-240 of the 1994 Public Acts amended § 20-325a such that a real estate broker may recover a sale commission if the broker `has substantially complied with subdivisions (2) to (6), inclusive, of [§ 20-325a(b)] and it would be inequitable to deny recovery.' General Statutes (Rev. to 1997) § 20-325a(c)." (Citations omitted; internal quotation marks omitted.) Dow Condon, Inc. v. Muros North Ltd. Partnership, 69 Conn.App. 220, 226, 794 A.2d 554 (2002).
The seller made the "TBD" notation in the listing agreement to reflect its decision not to set a sales price, but rather leave the price to be determined by the circumstances, including any renovations that were made to the property. Both the seller and broker understood that the property needed substantial renovations and was difficult to value based on its condition. The seller was reserving to itself the right to determine the price it would accept for the property. Leaving the price to be determined made economic sense. It was not necessary for the listing agreement to specify the specific price in order to state the "conditions of such contract or authorization." See Sticklor v. Woodland House Condominium, Inc., supra, 9 Conn.App. 297.
For the above-stated reasons, the court finds that the plaintiff has complied with General Statutes § 20-325a(b) and (c). See Dow Condon, Inc. v. Muros North Ltd. Partnership, supra, 69 Conn.App. 226 ("The requirement that the contract or authorization be signed by the broker or his authorized representative falls within subdivisions (2) to (6), requiring substantial rather than strict compliance"). The court also finds that under subsection (d) of § 20-325, this action is valid because there has been substantial compliance with the statutory requirements and the facts and circumstances of a case would make it inequitable to invalidate an action for recovery. See Dow Condon, Inc. v. Muros North Ltd. Partnership, supra, 69 Conn.App. 228 ("[E]quitable determinations that depend on the balancing of many factors are committed to the sound discretion of the trial court . . . The determination of whether a particular set of circumstances was unjust is essentially a factual finding for the trial court"). (Citation omitted; internal quotation marks omitted.)
B
CT Page 11998
Recovery of Commission Under the Agreement and the Doctrine of Prevention
The next issue is whether the broker has proved that the seller breached the listing agreement by failing to pay a commission on the sale of the property to the city. The broker argues that it is entitled to a commission under three separate provisions of the listing agreement. The seller contends that the express terms of the listing agreement bar the broker from any entitlement to a commission.The language of the listing agreement is clear and unambiguous. By its terms, the agreement is an exclusive right to sell listing. Paragraph 1 provides: "EXCLUSIVE RIGHT TO SELL/EXCHANGE/LEASE. Broker has the exclusive right to offer the Property for SALE/EXCHANGE/LEASE during the term of this Agreement and Owner will refer all inquiries about, or offers for, the Property to Broker."
The broker may recover a commission by fulfilling the conditions set forth in any of three provisions of the listing agreement. The first provision, paragraph 5, provides: "If said property is sold, traded or in any other way disposed of, or leased either by Broker or by anyone else within the time specified in this listing, it is agreed to and understood that Broker shall receive from the sale or trade or lease payments of said property its commission . . ."
The second provision, paragraph 7, provides: "Should said property be sold or traded or leased within 60 days after expiration of this listing agreement to a purchaser with whom the Broker has been negotiating for the sale or trade or lease of the property, the said commission shall be due and payable in accordance with Section 6 [Commission Amount] above."
Finally, the third provision, paragraph 7, provides: "In the event that active, ongoing negotiations between the Owner and a person or entity introduced to the Owner by the Broker during the term of the agreement are taking place at the time of termination then providing such negotiations result in a transaction being consummated within 60 days or less of the termination of the negotiations, but in no case later than 12 months following the termination of this agreement, then Broker shall be entitled to a commission in accordance with section 6. Active, ongoing negotiations are defined as negotiations where a term sheet has been exchanged and where the Owner and prospective purchaser or lessee have been in constant negotiation with no more than a one week gap between the communications between the Owner and prospective purchaser or lessee."
The court has reviewed decisional and treatise authority to determine whether the broker is entitled to recover a commission from the seller. "To recover a commission, a broker must ordinarily show (1) that he has produced a customer ready, willing and able to buy on terms acceptable to the seller, or (2) that he has brought the buyer and seller to an enforceable agreement . . . He must also show that he has complied with General Statutes § 20-325a." (Internal quotation marks omitted.) Ditchkus Real Estate Co. v. Storm, 25 Conn.App. 51, 54, 592 A.2d 959, cert. denied, 220 Conn. 905, 593 A.2d 971 (1991). The court has already determined that the broker has complied with § 20-325a. In the first instance, "[a] broker earns his commission in a real estate transaction when he procures a customer who is ready, willing and able to purchase upon terms prescribed or accepted by the seller." (Emphasis added.) Richter v. Drenckhahn, 147 Conn. 496, 500, 163 A.2d 109 (1960). "As an alternative theory of recovery, the broker can also prevail by showing that he has procured a binding contract between the buyer and the seller, because ordinarily the broker has fully performed his task when he brings the parties to an enforceable agreement." Nugent v. DelVecchio, 36 Conn.Sup. 532, 535, 415 A.2d 1339 (1980).
In Real Estate Listing Services, Inc. v. Real Estate Commission, 179 Conn. 128, 132, 425 A.2d 581 (1979), the court discussed the types of real estate listing agreements that have been traditionally used in this state: open listing, exclusive agency listing and exclusive right to sell listing. As to the latter, the court observed that "the exclusive right to sell listing, under which the sale of the property during the contract period, no matter by whom negotiated, obligates the property owner to pay a commission to the listing broker." Real Estate Listing Services, Inc. v. Real Estate Commission, supra, 179 Conn. 132. The court further stated that "[b]oth the exclusive agency and the exclusive right to sell listings, as distinguished from the open listing, constitute valid bilateral contracts. Under both, the property owner relinquishes to some extent the right, although not the power, to alienate his real property. Likewise, the broker incurs an obligation to use his best efforts during the contract period to procure a buyer. Thus, the obligations being mutual, an enforceable contract has been formed and rights and liabilities have vested. Where an exclusive listing contract has been entered into, the respective obligations of each party are enforceable by the other even if the object of the agreement (the sale of the property) is never achieved." Id., 133-34.
In Colliers, Dow Condon, Inc. v. Schwartz, 77 Conn.App. 462, 474, 823 A.2d 438, (2003), the court, citing Real Estate Listing Services, Inc. v. Real Estate Commission, supra, 179 Conn. 128, reversed the trial court's finding that the plaintiff broker failed to prove its breach of contract claim. In 1997, the plaintiff broker and defendant seller had signed, as in the present case, "an agreement captioned `Exclusive Right to Sell/Exchange/Lease Agreement.'" Colliers, Dow Condon, Inc. v. Schwartz, supra, 77 Conn.App. 464. The seller asked the broker to approach a current tenant to determine if the tenant was interested in purchasing the property where the tenant occupied approximately 86 percent of the space. Id., 465. The broker's discussions with the tenant culminated in a letter in which the broker presented to the tenant two proposed acquisition plans for the property. Id., 465. The tenant responded with a counteroffer at a price well below either of the broker's two proposals. Id. The tenant then proposed directly to the seller that it continue renting the property. Id. Between March and August 1998, the seller and tenant exchanged a series of letters, which led to a lease agreement being signed at the end of August 1998. Id. In April 1999, the broker sent the seller a bill for its commission, which the seller refused to pay. Id.
The defendant seller claimed that "it would be inequitable to award a commission to the plaintiff for securing the renewal of the lease by the current occupants because such renewal was not the product of substantial effort by the plaintiff." Id., 472-73. In rejecting the seller's argument, the court found that: "We need not determine, however, whether negotiating that lease renewal required extensive effort by the plaintiff. All that we may consider is whether such an action was within the scope of the parties' agreement. We do not unmake bargains unwisely made . . . [a]bsent other infirmities, bargains moved on calculated considerations, and whether provident or improvident, are entitled nevertheless to sanctions of the law . . . Although parties might prefer to have the court decide the plain effect of their contract contrary to the agreement, it is not within its power to make a new and different agreement." (Citation omitted; internal quotation marks omitted.) Id., 473. In finding that the plaintiff broker had proved the breach of contract claim by a preponderance of the evidence, the court, citing Real Estate Listing Services, Inc. v. Real Estate Commission, supra, 179 Conn. 128, held: "By its terms, the listing agreement was to provide the plaintiff with the exclusive right to offer the property for sale or lease. Under such an agreement, the sale or lease of the property during the contract period, no matter by whom negotiated, obligates the property owner to pay a commission to the listing broker." Id., 473-74.
In another relevant authority, Covino v. Pfeffer, 160 Conn. 212, 213, 276 A.2d 895 (1970), the plaintiff broker sued the defendant seller "to recover a commission upon the sale of property subject to a written exclusive sale agreement." There, the broker and seller had entered into a ninety-day written exclusive sales agreement. Covino v. Pfeffer, supra, CT Page 12001 160 Conn. 214. Under the agreement, the broker was entitled to a commission of 6 percent of the sale price if the broker found a buyer ready, willing and able to purchase the property at a designated price or at a figure acceptable to the sellers. Id. During the ninety-day period, the seller agreed to sell the property to a buyer procured by one of the sellers or by a person other than the broker. Id. During the ninety-day period, the broker made reasonable efforts to sell the property. Id. After the ninety-day period, the sellers sold the property to the buyer. Id. The trial court found in favor of the broker and awarded the commission. Id., 213.
The Covino court held that "[t]he owner in a contract giving a broker the exclusive sale of property agrees that he will not sell his property during the life of the contract to any purchaser not procured by the broker . . . The owner, in such a contract, makes the broker the only medium through which a purchaser can be procured during its life . . . The owner agrees not only to exclude another agent, but also himself from procuring a purchaser . . . The broker is entitled to his commission as damages for the breach of an exclusive sale contract, if during the life of such a contract, the owner sells the property to a purchaser procured by his own efforts, or by other agents, or if the broker during such period produced a customer ready, able and willing to buy the property." (Citations omitted.) Id., 214-15. Furthermore, "[d]uring the life of an exclusive sale contract, an agreement between the owner and the ultimate purchaser to sell and buy, whether or not specifically enforceable, gives rise to a cause of action on the part of an exclusive broker who uses reasonable efforts to sell the property." Id., 215. "[I]f an owner, during the life of an exclusive sale contract, sells the subject property, the exclusive broker is entitled to his commission." Id., 217. The Covino court rejected the seller's claim that an "owner shall not be deemed to have sold the property which is the subject of an exclusive sale contract unless and until negotiations with the prospective purchaser have been consummated into a binding and enforceable contract for sale." Id.
The court noted "[t]hat the complaint does not allege that the plaintiff was the procuring cause of the sale is inconsequential . . . That the complaint does not allege that the defendants and the purchaser entered into a specifically enforceable agreement of sale during the exclusive ninety-day period is also of no importance . . . That the complaint does not allege any type of fraud is of no moment since the complaint sounds in contract and not in tort." (Citation omitted.) Id., 215.
The court in Levy, Miller, Maretz, LLC v. Vuoso, 70 Conn.App. 124, CT Page 12002 132-33, 797 A.2d 574 (2002), citing Covino v. Pfeffer, supra, 160 Conn. 212, affirmed the trial court's determination that the plaintiff broker was entitled to its real estate commission on a lease agreement based on the defendant property owner's breach of the exclusive right contract between the plaintiff and defendant. The trial court awarded a real estate commission, attorneys fees and court costs to the plaintiff. Levy, Miller, Maretz, LLC v. Vuoso, supra, 70 Conn.App. 125.
In that case, the broker and owner had entered into a six-month exclusive right to sell/lease/exchange multiple listing contract. Id., 126. Under the agreement, the plaintiff would be paid a commission of either 5 percent or 6 percent, depending on the lease. Id. During the term of the listing agreement, the broker began marketing the property and altered a representative of a franchisor that the property was available for lease or sale. Id. The franchisor representative informed a franchisee that the property was available. Id., 127. The broker later learned through another real estate agency that the defendant and franchisee had signed a lease for the property about one year after the six-month term. Id. The negotiation between the owner and franchisee took place without the broker being present. Id., 131. The franchisee never had any contact with the broker. Id. After the defendant refused to pay the full commission to the broker, the broker brought a breach of contract action. Id., 127. The court found that "[o]n the basis of that conflicting testimony, the court reasonably could have found that the defendant showed [the franchisee] his property in June 1995, and began negotiations with him at that time. Further, it would not have been unreasonable for the court to have found that those negotiations concluded about one month later in July 1995, and within the period of time reserved under the exclusive right contract between the defendant and the plaintiff. Moreover, it is undisputed that the defendant had an exclusive right contract with the plaintiff that ran from February 8, 1995, until and including August 8, 1996." Id., 132.
The Levy court concluded, "relying on Covino, that the plaintiff therefore is entitled to its commission on the lease agreement between Testa and the defendant by virtue of the defendant's breach of the exclusive right contract with the plaintiff." Id., 132-33.
There are two other cases citing Covino that guide the resolution of this case. In LaMalfa v. Higgins, 38 Conn.Sup. 509, 513, 452 A.2d 320 (1982), the court held that "[t]here is no requirement . . . that the plaintiff [broker] must prove that he would have been able to sell the property during the period of the contract had the defendant [sellers] not breached their sale agreement." The court in Nugent v. DelVecchio, 36 Conn.Sup. 532, 538, 415 A.2d 1339 (1980), noted that under "an exclusive right to sell listing . . . the plaintiff broker would be entitled to a commission if he or anyone else effectuated a sale of the property during the term of the agreement."
In addition to the issue of whether the broker is entitled to the commission, the broker has raised the contract doctrine of prevention of performance. The resolution of this matter requires the court to determine the applicability of the doctrine of prevention to the facts.
"It is a general rule of law that one who violates his contract with another is liable for all the direct and proximate damages which result from such violation. It is a rule so obviously just and so well established by authority that it ought not to be called in question. It is also a rule of law that in all cases of prevention of performance, where the plaintiff has been deprived by the defendant of the benefit of the contract, the plaintiff is entitled to recover what he has lost by the act of the defendant." (Internal quotation marks omitted.) Kastner v. Beacon Oil Co., Inc., 114 Conn. 190, 193, 158 A. 214 (1932).
The law regarding prevention of performance is set forth by Professor Williston in his learned treatise. "It is a general principle of contract law that if one party to a contract hinders, prevents, or makes impossible performance by the other party, the latter's failure to perform will be excused. This general principle has been referred to as the `doctrine of prevention.' Under the doctrine, a contracting party whose performance of his or her promise is prevented by the other party is not obligated to perform, and is excused from any further offer of performance. In turn, the preventing party is not allowed to recover damages for the resulting nonperformance or otherwise benefit from his or her own wrongful acts . . .
"Where a promisor prevents, hinders, or renders impossible the occurrence of a condition precedent to his or her promise to perform, or to the performance of a return promise, the promisor is not relieved of the obligation to perform, and may not legally terminate the contract for nonperformance. Furthermore, in such a case, the promisor may not invoke the other party's nonperformance as a defense when sued upon the contract. In short, under the doctrine of prevention, where a party to a contract is the cause of the failure of the performance of the obligation due him or her, that party cannot in any way take advantage of that failure . . .
"The principle that prevention by one party excuses performance by the other applies to both the performance of a condition and of a promise, and may be laid down broadly as applying to every contract. Whether interference by one party to a contract amounts to prevention so as to excuse performance by the other party and constitute a breach by the interfering party is a question of fact to be decided by the jury under all of the proved facts and circumstances." 13 S. Williston, Contracts (4th Ed. 2000) § 39:3, pp. 516-22.
"Prevention of performance is a material breach of contract that excuses further performance by the nonbreaching party, and renders the party preventing performance liable to pay damages for the breach. The breach generally consists of the violation of the implied promise of cooperation present in all contracts, and the damages recoverable represent the harm resulting from that lack of cooperation." 13 S. Williston, Contracts (4th Ed. 2000) § 39:12, p. 551.
In his treatise, Real Estate Brokerage Law, Professor Gaudio writes: "[I]f the reason that the sale does not close is the default or interference of the seller, the broker may nevertheless collect the commission. In the Restatement, Second, Agency it is stated that if the principal is responsible for the nonperformance of such condition, it is dispensed with and the promise to pay the commission becomes unconditional . . . The types of seller default which occur can be loosely classified into two groups — the seller's refusal to perform, and the seller's lack of good title . . . Also included in this category are situations in which the seller's actions prevent performance by the buyer. The common thread which runs through all of these situations is a voluntary or intentional act on the part of the seller which prevents or makes impossible the performance of the contract of sale. It is not difficult to see why the courts are willing to give the commission to the broker in these cases. The broker has done his job under the brokerage agreement and the sale would have proceeded as required by law had the seller not prevented it." A. Gaudio, Real Estate Brokerage Law (1987) § 157, pp. 222-23.
The court in Real Estate Listing Services, Inc. v. Real Estate Commission, supra, 179 Conn. 133-34, found that an exclusive right to sell listing agreement is a bilateral contract. Where a "contract [is] bilateral containing mutual and dependent covenants demanding of each of the partie's readiness and willingness to perform[,] [i]t . . . [requires] as a condition of judicial enforcement or redress for breach at the complaint of either, such readiness and willingness on his part, or a showing of sufficient excuse for their absence . . . Therefore . . . if [a plaintiff] on [its] part [was] prevented by [a defendant] from completing the contract, [the plaintiff would be] entitled to bring [an] action for damages for [the defendant's] breach of it . . . In order to amount to a prevention of performance by the adversary party, the conduct on the part of the party who is alleged to have prevented performance must be wrongful, and, accordingly, in excess of his legal rights . . . [W]here a party stipulates that another shall do a certain thing, he thereby impliedly promises that he will himself do nothing which will hinder or obstruct that other in doing that thing." (Citations omitted; internal quotation marks omitted.) Godburn v. Meserve, 130 Conn. 723, 725-26, 37 A.2d 235 (1944).
Having reviewed the decisional and treatise authority, the court now examines the claim made by the broker and the seller's case against recovery.
The broker seeks recovery of the commission pursuant the first and second recovery provisions of the listing agreement. The plaintiff broker argues that "[t]he only reason that the sale of the property did not take place within the time parameters provided under the first and second provisions was because of the injunction action that was filed by the Defendant which prevented the transfer from taking place." Plaintiff's Trial Memorandum, 5/1/09, p. 9.
Under the redevelopment statutes, a redevelopment agency can acquire property by eminent domain with approval of the municipality's legislative body. General Statutes § 8-129 sets forth the procedure for real property to be acquired by eminent domain pursuant to General Statutes § 8-128.
In support of recovery under these circumstances, the broker argues: "The step following the resolution of the common council in the normal course of events would have been for the City of New Britain to file a statement of compensation containing a description of the property to be taken, name(s) of the person(s) having record interest therein, setting forth the amount of compensation and provide a deposit to the Clerk of the Superior Court for the Judicial District in which the property is located. (Connecticut General Statutes [§]8-129(3)). Under the normal circumstances, upon filing above the statement of compensation, there also would have been recorded a copy of such statement in the land records of the City of New Britain (Connecticut General Statutes [§]8-129(b)). Thereafter, within not less than 35 days and no more than 90 days after the statement of compensation, the Clerk of the Court without any delay or continuance would have issued a certificate of taking setting forth the taking. Upon recording the certificate of taking, title to the property would have vested in the City of New Britain and the right of compensation would then vest in the owner of the property. Connecticut General Statutes [§]8-129(c)." Plaintiff's Trial Memorandum, 5/1/09, p. 10.
The broker further argues that it is entitled to a commission under the first or second provisions: "Clearly, the injunction action had the effect of preventing the City of New Britain from taking this property in the normal course of events. Otherwise, the property would have been transferred in compliance with the first or second provision . . . It was not until such time as the settlement was reached in the entire matter that the property was transferred. The only reason that the transfer of this property did not take place was in the terms of the listing agreement that the actions of the Defendants itself or its attorneys." Plaintiff's Trial Memorandum, 5/1/09, p. 11.
In objecting to recovery under these provisions, the defendant seller contends that evidence established that the first and second provisions were not met so as to entitle the broker to a commission. Defendant's Posttrial Brief, 5/20/09, p. 13. The defendant argues: "No injunction ever issued against the City prohibiting it from proceeding with the eminent domain process." Defendant's Posttrial Brief, 5/20/09, p. 13. The attorney for the city "testified that the Action had `no dispositive effect' on the condemnation process and that it never stopped [the city] from filing a Statement of Compensation regarding the Property." Defendant's Posttrial Brief, 5/20/09, p. 13. "The fact that the City and Garden Main entered into an agreement in the middle of September 2001, which was after the term of the agreement, in which they agreed to hold off on pursuing the Action or filing a certificate of taking to engage in settlement discussions had no practical effect as it only related to a one-month period, and the ultimate sale didn't take place until five months later." Defendant's Posttrial Brief, 5/20/09, p. 13. In addition, the seller argues that: "the fact that at the time the Action was filed, the City had passed a Resolution authorizing it proceed with the condemnation of the Property is of little consequence. Pursuant to the statutory procedures governing eminent domain, title to real property only passes through eminent domain when a certificate of taking is issued and recorded on the land records. See [General Statutes] § 8-129(d) (2008). A certificate of title was never filed in this case. In addition, a municipality can unilaterally abandon and withdraw from condemnation proceedings at any time until title has actually passed . . . See [General Statutes] § 8-130 (2008) . . . Accordingly, even if the Action had not been filed, the mere fact that the City took some preliminary steps that might have resulted in a condemnation had no consequential effect under the Agreement or Connecticut eminent domain law." Defendant's Posttrial Brief, 5/20/09, p. 14.
The broker also seeks recovery of the commission under the third provision of the listing agreement. The broker argues that it introduced the city to the property, which the city ultimately purchased for $1.6 million. The seller "took steps that prevented the transfer from taking place and then attempts to use this as an excuse to not pay the commission." Plaintiff's Trial Memorandum, 5/1/09, p. 12. The seller "manipulated the purchase and sales agreement so as to be able to claim that the Plaintiff did not perform its obligations under the listing agreement." Plaintiff's Trial Memorandum, 5/1/09, p. 12. In addition, the seller "prevented the performance by the Plaintiff of the terms of this agreement by filing the injunction and prevented the performance of the contract by the Plaintiff in continual negotiations as provided in Section 7 of the agreement by sending the letter that all future negotiations were to take place between the attorneys." Plaintiff's Trial Memorandum, 5/1/09, p. 12.
In objecting to recovery on this ground, the seller contends that: "By entering into the Agreement, Garden Main granted the Plaintiff with the exclusive right to sell or lease the Property, not just to identify a potential purchaser . . . Paragraph 7 of the Agreement dictates whether the Plaintiff is entitled to a commission in connection with a sale of the Property that occurs after the term of the Agreement has expired . . . The undisputed testimony at trial was that there were not `active ongoing negotiations' as that term is defined in the Agreement, and the Purchase and Sale Agreement accurately reflects that fact . . . The fact that Paragraph 17 was included at the request of Garden Main does not mean that it `manipulated' the Purchase and Sale Agreement, as is argued by the Plaintiff. The City testified that it agreed to this provision because it was true-there simply were not `active ongoing negotiations' discussions between the City and Garden Main." Defendant's Posttrial Brief, 5/20/09, p. 14-15. The seller further argues that: "The situation present in this case is the functional equivalent of the typical negotiations that take place between private parties in connection with the sale of property-the fact that a municipality was the potential buyer should not change the analysis . . . Just as Garden Main would have been entitled to exercise its discretion as to whether to accept or reject an offer in negotiations with a private purchaser, the same applies for its dealing with the City. Garden Main had the right to reject the City's initial below-market low offers. It should not be penalized because it took the City over a year to make an offer that was remotely in line with the Property's fair market value, which caused the sale to occur outside the term of the Agreement and the parameters under which a commission would be due." Defendant's Posttrial Brief, 6/20/09, p. 15-16.
As to the broker's argument that the doctrine of prevention applies, the seller contends: "Garden Main acted appropriately by getting its attorneys involved . . . These below-market offers, coupled with the threats of eminent domain and health and building code violations, compelled Garden Main to involve its attorneys in order to protect its interests." Defendant's Posttrial Brief, 5/20/09, p. 16-17. In addition, "Garden Main acted reasonably and within its rights by filing the Action in which it sought to compel the City to act in accordance with its statutory obligations." Defendant's Posttrial Brief, 5/20/09, p. 17. Finally, the seller was not doing things that were wrongful and in excess of its legal rights as required under the doctrine of prevention, rather the seller "acted appropriately and entirely with its rights by involving its attorneys and filing the Action." Defendant's Posttrial Brief, 5/20/09, p. 18.
In response, the plaintiff counters that: "The Defendant received a price for this property that was exactly what the Plaintiffs indicated was the fair market value of the property. The Plaintiff produced the buyer. The Defendant received the benefit of that buyer. The Plaintiff was prevented from performing on its contract by the actions of the Defendant. The Plaintiff is entitled to its compensation. What the Defendant did in this case that was wrongful and in excess of their legal rights was to file an injunction and then used the delay caused by their own actions to claim that they do not have to honor the contract. Further, it was wrongful and in excess of their legal rights for the Defendant to instruct the brokers and the parties to cease ongoing negotiations and then claim that because the brokers followed their instructions they should not be allowed to be paid a commission." Plaintiff's Reply to Defendant's Posttrial Brief, 6/1/09, p. 6-7.
On November 8, 2006, the seller and broker entered into an exclusive right to sell listing agreement. The listing agreement provided the broker with the exclusive right to offer the property for sale or lease. During the term of the agreement, the broker used its best efforts to procure a buyer. The broker marketed the property and introduced the seller to the city. Under this exclusive right to sell contract, the sale of the property during the contract period, no matter by whom negotiated, obligates the seller to pay a commission to the broker. See Real Estate Listing Services, Inc. v. Real Estate Commission, supra, 179 Conn. 132. By entering into an exclusive right to sell listing, the seller relinquished to some extent the right to alienate its property. See Id., 133-34.
This case shares several similarities with the above-mentioned precedent. The sale or lease of the property during the contract period, no matter by whom negotiated, obligates the seller to pay a commission to the broker. See Colliers, Dow Condon, Inc. v. Schwartz, supra, 77 Conn.App. 474. A commission is recoverable based on negotiations between the seller and city that took place without the broker being present. See Levy, Miller, Maretz, LLC v. Vuoso, supra, 70 Conn.App. 124-33. A broker is entitled to the commission even though the property was sold after the initial term of the agreement. See Covino v. Pfeffer, supra, 160 Conn. 213-17. The broker is not required to prove that it would have been able to sell the property during the period of the contract had the seller not breached their sale agreement. See LaMalfa v. Higgins, supra, 38 Conn.Sup. 513.
Under Covino v. Pfeffer, supra, 160 Conn. 215-17, "[t]he broker is entitled to his commission as damages for the breach of an exclusive sale contract, if during the life of such a contract, the owner sells the property to a purchaser procured by his own efforts . . . [Furthermore,] [d]uring the life of an exclusive sale contract, an agreement between the owner and the ultimate purchaser to sell and buy, whether or not specifically enforceable, gives rise to a cause of action on the part of an exclusive broker who uses reasonable efforts to sell the property . . . [I]f an owner, during the life of an exclusive sale contract, sells the subject property, the exclusive broker is entitled to his commission." (Citations omitted.) Here, the broker used reasonable efforts to sell the property. The listing agreement covers a sale occurring no later than twelve months following the termination of the agreement. The initial nine-month term expired of August 1, 2007. The property was sold to the city on March 28, 2008.
The broker has raised the doctrine of prevention of performance. The broker was acting within the scope of the agreement on January 31, 2007, when the seller's attorney directed the city that "any further discussions relating to these issues be conducted through our office." In effect, the seller, through its attorney, was directing the city to not discuss the property with the broker.
As previously noted, "[i]t is . . . a rule of law that in all cases of prevention of performance, where the [broker] has been deprived by the [seller] of the benefit of the contract, the [broker] is entitled to recover what he has lost by the act of the [seller]." (Internal quotation marks omitted.) Kastner v. Beacon Oil Co., Inc., supra, 114 Conn. 193. "It is a general principle of contract law that if one party to a contract hinders, prevents, or makes impossible performance by the other party, the latter's failure to perform will be excused . . . Under the doctrine, a contracting party whose performance of his or her promise is prevented by the other party is not obligated to perform, and is excused from any further offer of performance. In turn, the preventing party is not allowed to . . . benefit from his or her own wrongful acts. Furthermore, in such a case, the promisor may not invoke the other party's nonperformance as a defense when sued upon the contract. In short, under the doctrine of prevention, where a party to a contract is the cause of the failure of the performance of the obligation due him or her, that party cannot in any way take advantage of that failure." 13 S. Williston, Contracts (4th Ed. 2000) § 39:3, pp. 516-22.
Based on the proven facts and circumstances, the seller, through its attorney, hindered, prevented and made it impossible for the broker to perform under the listing agreement by directing the city to only discuss the property with the seller's attorney. It was the voluntary and intentional acts on the part of the seller, through its attorney, which prevented or made impossible the performance by the broker. See A. Gaudio, Real Estate Brokerage Law (1987) § 157, pp. 222-23.
Next, "[i]n order to amount to a prevention of performance by the adversary party, the conduct on the part of the party who is alleged to have prevented performance must be wrongful, and, accordingly, in excess of his legal rights." (Internal quotation marks omitted.) Godburn v. Meserve, supra, 130 Conn. 725-26. The word "wrongful" is defined as "full of wrong; unjust, unfair, or injurious." Webster's New Twentieth Century Dictionary Unabridged (2d Ed. 1975), p. 2112.
While the broker was making reasonable efforts to do its job under the listing agreement, the seller unfairly prevented the broker having contact with the city and therefore performing under the exclusive right to sell agreement. The broker was injured by the seller's subsequent refusal to pay the commission of $96,000.
The seller acted in excess of its legal rights by preventing the performance by the broker and violating the implied promise of cooperation present in the listing agreement. See 13 S. Williston, Contracts (4th Ed. 2000) § 39:12, p. 551 ("Prevention of performance is a material breach of contract that excuses further performance by the nonbreaching party, and renders the party preventing performance liable to pay damages for the breach. The breach generally consists of the violation of the implied promise of cooperation present in all contracts, and the damages recoverable represent the harm resulting from that lack of cooperation").
The seller's wrongful conduct is also evidenced in § 17 of the sales agreement, which was included at the seller's request. Section 17 provides in relevant part: "The Purchaser specifically represents that it was not introduced to the Premises by Colliers, Dow and Condon." Contrary to this representation, the facts clearly show that the broker introduced the city to the property while acting on behalf of the seller and within the term of the listing agreement. The evidence supports the broker's argument that the seller manipulated the sales agreement to avoid paying a commission to the broker. The interference by the seller amounted to prevention so as to constitute a breach by the seller.
While the court agrees with the seller's arguments that it had a right to reject the city's initial below-market offers for the property and that it had the right to get its attorney involved in the discussions with the city regarding the property, the seller did not have the right to wrongfully, and in excess of its legal rights, prevent the broker from performing under the exclusive right contract.
Moreover, the court cannot unmake the listing agreement entered into by the seller and the broker based on the city's confrontational approach toward the seller. The parties made a bargain when they entered into the listing agreement. See Colliers, Dow Condon, Inc. v. Schwartz, supra, 77 Conn.App. 473. The seller bargained the exclusive right to sell the property to the broker. Likewise, the plaintiff broker incurred an obligation to use its best efforts to procure a buyer during the contract period. See Real Estate Listing Services, Inc. v. Real Estate Commission, supra, 179 Conn. 133-34. The broker was prevented by the seller from using not only its best efforts, but any efforts, to earn its commission. Although this court recognizes the unique circumstances present in this case, including the city's efforts to take the property by eminent domain, this court cannot unmake the parties' bargain based on the city's hard-bargaining approach toward the seller. See Colliers, Dow Condon, Inc. v. Schwartz, supra, 77 Conn.App. 473.
The broker has proved the breach of contract claim by a preponderance of the evidence. On March 27, 2008, the property was sold by the seller to the city for the purchase price of $1,600,000. As a result of the sale to the city, a commission is due to the broker in the amount of 6 percent of the sales price, $96,000. The seller prevented the broker from performing under the agreement, and therefore, is liable to pay damages to the broker for breaching the agreement by not paying the commission.
In its trial memorandum, dated 5/1/09, p. 13, the broker also argues that "the Defendant has breached the covenant of good faith and fair dealing by bringing an action to extend the time for the sale of the property well beyond the time that the sale normally would have taken place and then claiming it does not have to pay a commission as a result of the fact that the sale did not take place during the term of the agreement." The court has found in favor of the plaintiff on the breach of contract count, thereby eliminating the need to decide the breach of good faith and fair dealing issue, as it presents an alternative basis for recovery. See William Raveis Real Estate v. Newtown Group Properties Ltd. Partnership, 95 Conn.App. 772, 775 n. 5, 898 A.2d 265 (2006). In addition, the operative complaint in this case, dated May 20, 2008, does not allege a separate count of breach of covenant of good faith and fair dealing.
IV CONCLUSION AND ORDER
For the above-stated reasons, the court renders judgment in favor of the plaintiff broker and awards damages in the amount of $96,000.
The plaintiff also requests attorneys fees. Pursuant to paragraph 11 of the listing agreement, the defendant seller is obligated to pay the plaintiff all costs of collection including a reasonable attorneys fee based on the plaintiff's successful prosecution of this action. The following procedure is hereby ordered. By July 16, 2009, the plaintiff must submit a bill of cost and a sworn affidavit of attorneys fees, describing in detail the services rendered. By July 23, 2009, the defendant must file an objection, describing in detail the grounds for contesting any fees and costs. If an objection is filed, a hearing will be held on July 24, 2009, at 10 a.m. in Courtroom 3. If no objection is filled by the deadline, the court will take the papers on the matter and issue a written order.
SO ORDERED.