Summary
holding that to satisfy Connecticut's statute requiring a written listing agreement "the agreement must be in effect at the time the broker's services are rendered."
Summary of this case from In re Capitol Hill GroupOpinion
(11177)
The plaintiff real estate broker sought to recover a real estate commission allegedly owed by the defendants in connection with the plaintiff's having found a tenant for certain of the defendants' property. The defendants had orally agreed to pay the plaintiff a commission for finding the tenant but had not signed a written listing agreement until two months after the tenant signed a lease. The trial court granted the defendants' motion for summary judgment on the ground that the plaintiff had failed to comply with the statute ( 20-325a [b]) requiring listing agreements to be in writing. On the plaintiff's appeal to this court, held: 1. The trial court properly determined that the plaintiff's failure to comply with 20-325a (b) barred it from recovering a commission; the requirement that listing agreements be in writing is mandatory and subject to strict construction, and, although separate agreements may satisfy the statute, the written listing agreement had to be in existence at the time the plaintiff rendered its services. 2. The plaintiff could not prevail on its claim that because it was equitably entitled to a commission the defendants should have been equitably estopped from raising the plaintiff's noncompliance with 20-325a (b) as a defense; to allow such a recovery would nullify 20-325a.
Argued March 31, 1993
Decision released June 22, 1993
Action to recover damages for the alleged breach of a real estate brokerage agreement, brought to the Superior Court in the judicial district of Hartford-New Britain at New Britain, where the court, O'Neill, J., granted the defendants' motion for summary judgment and rendered judgment thereon, from which the plaintiff appealed to this court. Affirmed.
Daniel S. Fabricant, with whom, on the brief, was Jeffrey A. McChristian, for the appellant (plaintiff).
David A. Netburn, for the appellees (defendants).
The plaintiff appeals from the summary judgment rendered for the defendants in this action to collect a real estate broker's commission. The plaintiff claims that the trial court improperly held that (1) the listing agreement was unenforceable under General Statutes 20-325a (b) and (2) the plaintiff could not invoke estoppel to preclude the defendants from relying on General Statutes 20-325a. We affirm the judgment of the trial court.
There are two defendants in this case, Spire Realty and Development Corporation (Spire Corporation) and Spire Realty of Enfield Associates Limited Partnership (Spire Enfield). Spire Enfield is a limited partnership formed and organized by Spire Corporation in January, 1990.
General Statutes 20-325a (b) provides: "No person, licensed under the provisions of this chapter, shall commence or bring any action in respect of any acts done or services rendered after October 1, 1971, as set forth in subsection (a), unless such acts or services were rendered pursuant to a contract or authorization from the person for whom such acts were done or services rendered. To satisfy the requirements of this subsection any such contract or authorization shall (1) be in writing, (2) contain the names and addresses of all the parties thereto, (3) show the date on which such contract was entered into or such authorization given, (4) contain the conditions of such contract or authorization and (5) be signed by the owner or an agent authorized to act on behalf of the owner only by a written document executed in the manner provided for conveyances in section 47-5, and by the real estate broker or his authorized agent."
This appeal arises from a listing agreement between the plaintiff real estate broker and the defendants regarding real property in Enfield. In November, 1989, the defendants orally agreed to pay the plaintiff a commission if it found a tenant for its property. Later that month, the plaintiff prepared and forwarded a listing agreement to the defendants but the defendants did not sign the agreement at that time. Subsequently, the plaintiff located a tenant, Pace Membership Warehouse, Inc., which entered into a lease with the defendants on November 30, 1989. The defendants did not sign the written listing agreement until January 16, 1990.
At the time of the oral agreement, Spire Corporation was the optionee of the property. The agreement was contingent on Spire Corporation's acquiring title to the property, which it did on January 25, 1990. Spire Corporation then transferred the property to Spire Enfield.
On September 16, 1991, the plaintiff commenced this action after the defendants failed to pay the full commission specified in the listing agreement. On February 18, 1992, the trial court granted summary judgment in favor of the defendants, concluding that (1) the listing agreement was unenforceable because it did not satisfy the requirements of General Statutes 20-325a (b) and (2) the defendants were not estopped from relying on 20-325a as a defense. The plaintiff appealed.
The total commission was $225,000. Spire Corporation made $25,000 payments to the plaintiff on April 1, 1990, and October 11, 1990.
I
The plaintiff's first claim implicates the statutory restriction that a broker may not collect a commission unless there was a valid listing agreement in effect prior to rendering the services in question. Such agreement must "(1) be in writing, (2) contain the names and addresses of all the parties thereto, (3) show the date on which such contract was entered into . . . (4) contain the conditions of such contract . . . and (5) be signed by the owner or an agent authorized to act on behalf of the owner . . . and by the real estate broker or his authorized agent." General Statutes 20-325a (b). It is not necessary that the listing agreement be contained in a single document. For separate documents to constitute a valid contract under the statute, however, the documents must collectively satisfy the requirements of the statute and relate to the same listing agreement. Jay Realty, Inc. v. Ahearn Development Corporation, 189 Conn. 52, 55, 453 A.2d 771 (1983); Boline v. Albert, 23 Conn. App. 688, 691, 583 A.2d 945 (1991). The plaintiff argues that the lease to Pace in conjunction with the listing agreement satisfy the statutory requirements. We do not agree.
In order for a listing agreement to satisfy the statutory mandate and provide a basis of recovery to the broker, the agreement must be in effect at the time the broker's services are rendered. See Ditchkus Real Estate Co. v. Storm, 25 Conn. App. 51, 55-56, 592 A.2d 959, cert. denied, 220 Conn. 905, 593 A.2d 97 (1991); Currie v. Marano, 13 Conn. App. 527, 530, 537 A.2d 1036, cert. denied, 207 Conn. 809, 541 A.2d 1238 (1988). Even if the lease and the listing agreement, read together, satisfied the statute, it was necessary that both be in existence when the services were rendered. That was not the situation here.
On November 30, 1989, the last date on which the plaintiff rendered its brokerage services, the only document in existence was the lease to Pace. The listing agreement was not signed until January 16, 1990, nearly two months later. Section 20-325a (b) is mandatory and subject to strict construction. Howland v. Schweir, 7 Conn. App. 709, 714, 510 A.2d 215 (1986). Because no listing agreement was in effect when the plaintiff's services were rendered, the plaintiff is statutorily barred from recovering a commission. "`A broker who does not follow the mandate of the statute does so at his peril.'" Id., quoting Thornton Real Estate, Inc. v. Lobdell, 184 Conn. 228, 230-31, 439 A.2d 946 (1981); see also Real Estate Auctions, Inc. v. Senie, 28 Conn. App. 563, 570-71, 611 A.2d 452 (1992).
II
The plaintiff next argues that even if it cannot recover because the listing agreement was invalid, the defendant should be estopped from refusing to pay its commission because the facts of the case demonstrate its equitable entitlement thereto. The plaintiff's reliance on Currie v. Marano, supra, is misplaced. In fact, Currie, which is factually similar to the present case, expressly ruled out application of the estoppel doctrine when there was no valid listing agreement. In Currie, the plaintiff was a real estate broker seeking a commission. Following the trial court's finding that his services had been performed after his listing agreement had expired, he argued that the defendant property owners were equitably estopped from raising the plaintiff's noncompliance with the listing statute as a defense. Id., 531.
The Currie court refused to apply estoppel for two reasons. First, a broker is expected to know the laws regulating his profession and when ignorance of those laws is the primary cause of his need for relief, the doctrine of estoppel does not apply. The court concluded that Currie should have been aware of the strict legal prerequisites to obtaining a broker's commission and it was his ignorance of those prerequisites that was the primary reason he was seeking to apply the doctrine of estoppel. Id., 531-32. This is on all fours with the present case. Here, the plaintiff real estate broker should have been aware that the law would not permit it to recover a commission if it failed to have a valid listing agreement signed prior to rendering its services. Second, the Currie court recognized that "General Statutes 20-325a has been strictly construed and enforced. . . . The scenario arising most commonly in cases of real estate commission claims, when there has not been compliance with the listing statute, as here, presents a fact pattern in which a real estate owner allegedly reaps the benefits of a broker's services without paying for them. To allow recovery on . . . the plaintiff's legal theories in the present case would nullify 20-325a and emasculate the state's real estate sales licensing system." (Citations omitted.) Id., 531. For the same reasons, we reject the plaintiff's attempt to employ equitable estoppel in this case.
The plaintiff also attempted to invoke equitable estoppel in support of its contention that the failure of the defendants to abide by the invalid listing agreement constituted a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes 42-110b. This claim is controlled by McCutcheon Burr, Inc. v. Berman, 218 Conn. 512, 590 A.2d 438 (1991), in which our Supreme Court enunciated that "[t]he plaintiff's invocation of equitable principles in support of its CUTPA claim is an attempt to effect an end run around the requirements of 20-325a (b) . . . . The plaintiff's attempt to circumvent the requirements of 20-325a (b) by filing a CUTPA claim must . . . be denied." (Citations omitted.) Id., 530; see also Real Estate Auctions, Inc. v. Senie, supra, 573-74.
The plaintiff's reliance on Habetz v. Condon, 224 Conn. 231, 618 A.2d 501 (1992) is unavailing. Habetz involved General Statutes 20-429 (a), a part of the Home Improvement Act, and is not authority for a case concerning a real estate broker's listing agreement. Real estate listing agreements "are governed exclusively by 20-325a . . . ." (Internal quotation marks omitted.) McCutcheon Burr v. Berman, supra. Accordingly, analogizing to cases from other areas of law is of little value. See, e.g., William Pitt, Inc. v. Taylor, 186 Conn. 82, 84, 438 A.2d 1206 (1982) (listing contracts do not fall within the statute of frauds); Goldblatt Associates v. Panza, 24 Conn. App. 250, 253, 587 A.2d 433 (1991) (broker cannot recover in quantum meruit); Currie v. Marano, supra, 532 (broker cannot invoke equitable estoppel). Consequently, Habetz is not relevant to a construction of 20-325a.
III
Practice Book 384 provides that rendition of a summary judgment is appropriate "if the pleadings, affidavit and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Summary judgment is proper when a plaintiff real estate broker seeks to recover a judgment without a valid listing agreement. See Thornton Real Estate, Inc. v. Lobdell, supra.