Opinion
No. CV 02 0467602S
February 23, 2004
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT
The Defendant has filed a motion for summary judgment. The facts reveal that the defendant owned a parcel of land and a building located at 1625 Highland Ave., Cheshire, Connecticut. In late 2000 or early 2001, the plaintiff learned that the Connecticut Department of Motor Vehicles was interested in purchasing the defendant's property. The plaintiff then took it upon himself to show the property to the Deputy Commissioner of Motor Vehicles and other state employees. The plaintiff through these contacts with state officials believed that the state would be willing to pay approximately $900,000 for the defendant Genest's property.
In March 2001, the plaintiff made an offer to the defendant to purchase the defendant's property for $695,000. The plaintiff and the defendant, however, never entered into any purchase and sale agreement. However, on April 30, 2001, the plaintiff and the defendant signed a "Consulting Agreement" containing a provision that the plaintiff would receive monetary compensation if the defendant's property was sold during the six-month consulting term which commenced April 30, 2001. In addition the agreement provided that the plaintiff would also receive compensation if a contract for sale was signed during the six-month term, despite the fact that the actual sale date of the property exceeded the expiration of the agreed-upon six-month term.
Subsequent to the signing of the agreement, the plaintiff informed the defendant's real estate broker that the plaintiff had already shown the defendant's real estate property to state employees and that they were interested in purchasing the property. The plaintiff suggested a sales asking price of $900,000.
On June 19, 2001, the defendant's real estate broker received a letter from the Connecticut Department of Public Works indicating the state's interest in purchasing the property. This letter of intent authorized the state to offer the sum of $850,000 to purchase the defendant's property. The letter also stated in its terms that the offer, if acceptable to the defendant, would be conditioned upon "required statutory approvals, which would include approval by the Office of Policy and Management, the State Properties Review Board and the Office of the Attorney General. The defendant, as instructed in the state's letter, indicated his interest in this offer, by signing this letter of intent and returning it to the Department of Public Works.
On December 10, 2001, the plaintiff requested that the defendant sign an extension of the Consulting Agreement between the plaintiff and the defendant, which had expired by its terms on October 31, 2001. The plaintiff drafted a proposed extension of the consulting agreement and titled this proposed extension "First Amendment to Consulting Agreement." The defendant refused to enter into or agree to any extension of the original consulting agreement which had commenced on April 30, 2001.
Subsequently after several months of negotiations and revisions to various draft contracts, a final real estate sales contract was executed by the defendant and the State of Connecticut. The defendant signed the contract on January 22, 2002. The State of Connecticut signed on January 28, 2002, and the State Properties Review Board signed on January 31, 2002. The sale of the property to the state occurred at a real estate closing transaction on February 6, 2002. The final sales price was $850,000. The defendant did not provide any monetary compensation to the plaintiff upon the sale of the property.
The plaintiff has now filed suit alleging that he was the "procuring cause" of the sale by the defendant Genest to the State of Connecticut, and that the defendant has breached the consulting agreement by failing to pay monetary compensation to the plaintiff in an amount as set forth for in the consulting agreement. The plaintiff further alleges that the defendant has breached the implied covenant of good faith and fair dealing, and that the defendant has been unjustly enriched by the defendant's failure to pay the plaintiff the sum of $100,000.
The defendant in filing the motion for summary judgment argues that no monetary payment is due the plaintiff as the consulting agreement had expired prior to the plaintiff signing a contract with the State of Connecticut. Further, the defendant argues that the plaintiff is not entitled to compensation because the plaintiff did not hold or possess a real estate salesperson's license or a real estate broker's license. Lastly, the defendant argues that as the plaintiff lacks the necessary real estate license, any consulting contract entered into by the plaintiff and the defendant is an illegal contract and is voidable because the inherent purpose of the contract would violate state law which requires the plaintiff to be licensed as a real estate agent or broker before the plaintiff could receive a commission, compensation or fee for the sale of the defendant's property.
The standard of law for considering a motion for summary judgment is well established. "A motion for summary judgment is designed to eliminate the delay and expense of litigating an issue where there is no real issue to be tried." Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989). "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the non-moving party." Hertz Corp. v. Federal Ins., Co., 245 Conn. 374, 381, 713 A.2d 820 (1998). In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any issues exist. Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988). The moving party has the burden of demonstrating the absence of any genuine issue of material fact. Hertz Corp. v. Federal Ins. Corp., supra, 245 Conn. 381. "The opposing party must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." Id. "A material fact is a fact which will make a difference in the result of a case." Suarez v. Dickmont Plastics Corp., 229 Conn. 99, 639 A.2d 507 (1994). The test used by the court is to determine if the moving party would be entitled to a directed verdict if the same set of facts were presented at trial. Connell v. Colwell, 214 Conn. 242, 246-47, 571 A.2d 116 (1990). A directed verdict is properly rendered if a trier of fact cannot reasonably and legally find in any fashion other than that directed. Santopietro v. New Haven, 239 Conn. 207, 225, 682 A.2d 106 (1996).
I
The defendant claims that the plaintiff is not due any monetary payment pursuant to the terms of the "Consulting Agreement" because no contract for the sale of the defendant's property was signed with any purchaser, the state included, within the effective term of the agreement. Paragraph 3 of the consulting agreement reads as follows:
Pavacich shall be entitled to a consulting fee in the amount of the gross sales price less $750,000.00 if during the Consulting Term, Genest sells the property for more than $750,000.00, to the State of Connecticut, or any of its departments or agencies, or to a buyer for whom Pavacich was the procuring cause of the purchase or who Pavacich referred to Genest or Gaudio.
Gaudio was the defendant Genest's real estate broker.
For the purposes of this Agreement, a sale of the Property shall mean either the closing of the property within the Consulting Term, or the signing of a contract to purchase the property within the Consulting Term that calls for a closing after the Consulting Term. A sale of the property to a Qualifying Buyer shall include the Qualifying Buyer, any entity owned or controlled by the Qualifying Buyer, or any assignee of the foregoing. In the event the contracting purchaser fails to purchase the Property for any reason other than the willful breach of the Purchase and Sale Agreement by Genest, then no consulting fee shall be due. Genest shall have the sole right to accept or reject any offer brought to him, in his reasonable discretion.
Paragraphs 2 and 7 of the Consulting Agreement define the term of the agreement as "six months from the date hereof." The "date hereof" as defined in paragraph 7 is the last date a party executes the agreement. Defendant Genest signed the agreement on April 11, 2001, and the plaintiff Pavacich signed the agreement on April 30, 2001. Thus, the six-month term referred to in paragraph 3 ran from April 30, 2001 through the end of October 2001.
The defendant argues that the contract for the sale of the real estate to the State of Connecticut was entered into by the defendant on or about June 19, 2001 when the defendant signed the letter of intent from the state, said letter being dated June 19, 2001. The plaintiff argues that the letter is a contract in that it consists of an offer and acceptance for mutual consideration that was signed by a representative of the state and the defendant.
The defendant argues that the letter of intent does not constitute a contract in that the language of the letter provides that the State of Connecticut is "interested in purchasing the property" and that the letter lacks language setting forth a closing date, deposit, adjustments, type of deed required, mortgage contingency information, risk of loss and environmental obligations of the parties, wherein the Purchase and Sale Agreement between the defendant and the State dated January 28, 2002, signed by the defendant and representatives of the state, including the Deputy Commissioner of Public Works and the State Properties Review Board is in fact the valid contract for sale.
Additionally, the defendant points out that on October 12, 2001, representatives of the state met with the defendant and Gaudio, the defendant's real estate broker met and agreed that the parties needed to enter into a real estate contract. The Attorney General's Office did send a draft contract to the defendant and after revisions and negotiations the contract was signed and approved by the State Properties Review Board. The approval by the State Properties Review Board was specifically indicated in the previous letter of intent dated June 19, 2001. Therefore, the actions of the parties to the contract dated January 28, 2002, are an indication that those parties did not treat the letter of intent as a contract, and that it was their intent that a formal Purchase and Sale Agreement, such as the agreement that was dated January 28, 2002, would be necessary.
However, for the purposes of summary judgment the court must look to whether a genuine issue of material fact exists as to whether the letter of intent dated June 19, 2001 did meet all of the necessary elements to constitute a contract, despite the subsequent execution of the later Purchase and Sale Agreement.
"The statute of frauds requires that the essential terms and not every term of a contract be set forth therein . . . The essential provisions of a contract are the purchase price, the parties, and the subject matter for sale . . . In order to be in compliance with the statute of frauds, therefore, an agreement must state the contract with such certainty that its essentials can be known from the memorandum itself without the aid of parol proof . . ." (Citations omitted; internal quotation marks omitted.) Donenfeld v. Friedman, 79 Conn. App. 64 (2003); quoting Fruin v. Colonnade One at Old Greenwich Ltd. Partnership, 38 Conn. App. 420, 426, 662 A.2d 129 (1995), aff'd, 237 Conn. 123, 676 A.2d 369 (1996).
The letter of intent in this case was in writing and signed by both the State of Connecticut and the defendants. In addition, the essential elements were included, i.e., the parties were identified by name and address, the purchase price was stated, and the subject matter of the sale was sufficiently identified as "1625 Highland Avenue (Route 10), Cheshire, Ct." General Statutes § 52-550(a) provides in relevant part: "No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged . . . (4) upon any agreement for the sale of real property or any interest in or concerning real property . . ." An address alone has been held to be a sufficient description of the property that is the subject matter of the contract, even if the address does not include the name of the town as long as the contract was executed in the town in which the property is located. See Gendelman v. Mongillo, 96 Conn. 541, 547, 114 A. 914 (1921); Kilday v. Schancupp, 91 Conn. 29, 33, 98 A. 335 (1916). "[T]he description of land contained in a contract of sale or any option to purchase is sufficiently definite to satisfy the requirements of the Statute of Frauds whenever it is reasonably certain from the contract itself, or can be made certain through reference to record, contract, map or fact, by resort to extraneous evidence thereof, whether oral or written. McMahon v. Plumb, 88 Conn. 547, 552, 92 A. 113; Peterson v. Bray, 138 Conn. 227, 230, 83 A.2d 198." Pigeon v. Hatheway, 156 Conn. 175, 182, 239 A.2d 523 (1968); Foley v. Huntington Company, 42 Conn. App. 712, 735-36, 682 A.2d 1026 (1996).
The information contained in the letter of intent is in itself sufficient to establish probable cause to sustain the minimum requirements for a binding contract for the sale of real property. Donnenfeld v. Friedman, supra, 79 Conn. App. 69-70 (2003). The identification of the essential elements of a contract depends "on the particular circumstances of each case." Coalition to Save Horsebarn Hill v. FOIC, 73 Conn. App. 89, 98, 806 A.2d 1130 (2002); Willow Funding Co., L.P. v. Grencom Associates, 63 Conn. App. 832, 845, 779 A.2d 174 (2001). A question about the existence of a contract is a question that must be decided by the finder of facts. Pagano v. Ippoliti, 245 Conn. 640, 654, 716 A.2d 848 (1998).
The letter of intent by its terms, as well, does not specifically set forth information from which the court can determine for the purposes of this motion, that it was the intent that the parties that they contemplated further execution of a formal written purchase and sale contract, which would in turn, render the letter of intent non-binding. The letter of intent contained conditions regarding statutory approvals and further approval by other state offices, but these are not enough to conclusively establish that a further written document was necessary. "In the absence of definitive contract language . . . the determination of what the parties intended to encompass in their contractual commitments is a question of the intention of the parties, and an inference of fact." (Internal quotation marks omitted.) Ballard v. Asset Recovery Management Co., 39 Conn. App. 805, 808, 667 A.2d 1298 (1995), quoting Finley v. Aetna Life Casualty Co., 202 Conn. 190, 199, 520 A.2d 208 (1987); see also Bryan v. Reynolds, 143 Conn. 456, 460, 123 A.2d 192 (1956).
II
The defendant next argues that the plaintiff is not entitled to monetary payment because he did not hold a real estate salesperson's or broker's license. The plaintiff acknowledges that he does not hold such licenses. However, the plaintiff does not agree that he is barred from a monetary payment from the defendant for the sale of the property. The plaintiff claims that General Statutes § 20-325a(a) does not apply to him, as the defendant has not offered any evidence that the plaintiff acted as a real estate salesperson or broker, as defined by the statutes. The plaintiff argues that, in fact, Gaudio acted as the defendant's real estate broker and negotiated the sale with the state. A reading of Gaudio's deposition testimony reveals that Gaudio negotiated with the state in the defendant's behalf including the negotiation for the $850,000 sales price. Gaudio was not aware of the plaintiff acting in the defendant's behalf in the listing or the selling of the property. Gaudio was not aware of the plaintiff acting in any capacity to negotiate the price. Gaudio testified that he himself did each of those tasks. The defendant also testified at deposition similar to Gaudio. The defendant testified that he has not paid the plaintiff because the property wasn't sold or under contract within the time specified in the Consulting Agreement. The defendant complained that the plaintiff hadn't done anything to help get the property sold, other than one phone call to put the state in contact with the defendant. However, the defendant also testified that it was his understanding that what the plaintiff was to do, was to put the defendant or Gaudio in contact with "the person at the state" and if the state bought the property within the confines of the terms of the Consulting Agreement, the plaintiff would be entitled to his fee.
General Statutes § 20-325a(a) reads as follows:
No person who is not licensed under the provisions of this chapter, and who was not so licensed at the time the person performed the acts or rendered the services for which recovery is sought, shall commence or bring any action in any court of this state, after October 1, 1971, to recover any commission, compensation or other payment with respect to any act done or service rendered by the person, the doing or rendering of which is prohibited under the provisions of this chapter except by persons duly licensed under this chapter.
General Statutes § 20-311(1) defines the term "real estate broker" as follows:
(1) "Real estate broker" or "broker" means (A) any person, partnership, association, limited liability company or corporation which acts for another person or entity and for a fee, commission or other valuable consideration, lists for sale, sells, exchanges, buys or rents, or offers or attempts to negotiate a sale, exchange, purchase or rental of, an estate or interest in real estate, or a resale of a mobile manufactured home, as defined in subdivision (1) of section 21-64, or collects or offers or attempts to collect rent for the use of real estate, and (B) any person, partnership, association, limited liability company or corporation employed by or on behalf of the owner or owners of lots or other parcels of real estate, at a stated salary, upon commission, upon a salary and commission basis or otherwise to sell such real estate, or any parts thereof, in lots or other parcels, and who sells or exchanges, or offers, attempts or agrees to negotiate the sale or exchange of, any such lot or parcel of real estate;
General Statutes § 20-311(2) defines the term real estate salesperson as follows:
CT Page 2675 (2) "Real estate salesperson" or "salesperson" means a person affiliated with any real estate broker as an independent contractor or employed by a real estate broker to list for sale, sell or offer for sale, to buy or offer to buy or to negotiate the purchase or sale or exchange of real estate, or to offer for resale, a mobile manufactured home, as defined in subdivision (1) of section 21-64, or to lease or rent or offer to lease, rent or place for rent any real estate, or to collect or offer or attempt to collect rent for the use of real estate for or on behalf of such real estate broker, or who offers, sells or attempts to sell the real estate or mobile manufactured homes of a licensed broker, or acting for another as a designated seller agent or designated buyer agent, lists for sale, sells, exchanges, buys or rents, or offers or attempts to negotiate a sale, exchange, purchase or rental of, an estate or interest in real estate, or a resale of a mobile manufactured home, as defined in subsection (a) of section 21-64, or collects or offers or attempts to collect rent for the use of real estate, but does not include employees of any real estate broker whose principal occupation is clerical work in an office, or janitors or custodians engaged principally in that occupation.
In order to determine the plaintiff's role in the sale of the defendant's real estate located at 1625 Highland Avenue, Cheshire, Connecticut, the court returns to the terms of the Consulting Agreement between the plaintiff and the defendant to determine their intent. The language of the agreement indicates that the plaintiff represented himself as having "personal contacts with automobile dealers and other persons or entities who might have an interest in pursuing business opportunities for the property . . ." The plaintiff was to "pursue discussions and negotiations on behalf of Genest with the State of Connecticut, automobile dealers and other persons or entities known to Pavacich . . ." The plaintiff, Pavacich, was to receive a consulting fee from the defendant if he was the "procuring cause of the purchase."
It is clear from the terms of the consulting agreement and the terms therein that the plaintiff's efforts were to be devoted to finding a purchaser for the defendant's property. His payment for this service was a commission based upon the sales price. His fee bore no relation to any time, effort or expenses related to finding a buyer, such as an hourly fee or a flat rate that was not fixed by the sales price. By contacting the state to purchase the defendant's real estate, he was negotiating the sale of an interest in real estate and was acting as an unlicensed real estate broker. He is barred from bringing an action in any court of this state to recover any commission, compensation or other payment from the defendant, pursuant to General Statutes § 20-325a(a).
III
The defendant lastly argues that the plaintiff is prohibited from recovering due to the fact that the Consulting Agreement is an illegal contract. General Statutes § 20-312(a) states that, "[n]o person shall act as a real estate broker or real estate salesperson without a license issued by the commission, unless exempt under this chapter." General Statutes § 20-325 provides monetary fines and/or imprisonment for one who acts as a real estate salesperson or real estate broker without a license.
Sec. 20-325. Engaging in business without license.
Any person who engages in the business of a real estate broker or real estate salesperson without obtaining a license as provided in this chapter shall be fined not more than one thousand dollars or imprisoned not more than six months or both, and shall be ineligible to obtain a license for one year from the date of conviction of such offense, except that the commission, in its discretion, may grant a license to such person within such one-year period upon application and after a hearing on such application.
Having concluded that the plaintiff was acting in such capacity without a license, the court will not aid in enforcing the Consulting Agreement.
In construing statutes, "our fundamental objective [is to ascertain and give effect] to the apparent intent of the legislature." Packer v. Board of Education, 246 Conn. 89, 115, 717 A.2d 117 (1998). It is well established that contracts that violate public policy are unenforceable. Konover Development Corp. v. Zeller, 228 Conn. 206, 231, 635 A.2d 798 (1994). Moreover, "[i]t is unquestionably the general rule, upheld by the great weight of authority, that no court will lend its assistance in any way toward carrying out the terms of a contract, the inherent purpose of which is to violate the law. In case any action is brought in which it is necessary to prove the illegal contract in order to maintain the action, courts will not enforce it, nor will they enforce any alleged right directly springing from such contract . . . McMullen v. Hoffman, 174 U.S. 639, 654, [ 19 S.Ct. 839 (1899)]. Vaszauskas v. Vaszauskas, 115 Conn. 418, 423, 161 A. 856 . . . Solomon v. Gilmore, 248 Conn. 769, 785-86, 731 A.2d 280 (1999); Tator v. Valden, 124 Conn. 96, 101-02, 198 A. 169 (1938).
Accordingly for the reasons set forth in parts I and II herein, the defendant's motion for summary judgment dated August 22, 2003, coded by the clerk's office as entry number 116.01, is hereby granted.
THE COURT
By Arnold, J.