Dow & Condon, Inc. v. Brookfield Development Corp.

• Decision Date: 11 November 2003
• Docket Number: (SC 16774)
• Citation: 833 A.2d 908,266 Conn. 572
• Court: Connecticut Supreme Court
• Parties: DOW AND CONDON, INC. v. BROOKFIELD DEVELOPMENT CORPORATION

266 Conn. 572

833 A.2d 908

DOW AND CONDON, INC. v. BROOKFIELD DEVELOPMENT CORPORATION

(SC 16774)

Supreme Court of Connecticut.

Argued February 13, 2003.

Officially released November 11, 2003

Sullivan, C. J., and Norcott, Katz, Vertefeuille and Zarella, Js. Glenn T. Terk, for the appellant (plaintiff).

Lisa Kelly Morgan, for the appellee (defendant).

Eugene A. Marconi filed a brief for the Connecticut Association of Realtors, Inc., as amicus curiae.

Opinion

VERTEFEUILLE, J.

This appeal arises from an action in which the plaintiff, Dow and Condon, Inc., doing business as Colliers, Dow and Condon, sought to recover a real estate broker's commission in connection with a lease entered into by Federal Express Corporation (Federal Express) as tenant and the defendant, Brookfield Development Corporation, as landlord. After a trial to the court, judgment was rendered for the defendant on the ground that the plaintiff was not entitled to recover a commission because it had violated General Statutes (Rev. to 1997) § 20-325a (a)¹ and § 20-328-8a (e) of the Regulations of Connecticut State Agencies² by agreeing to share its commission with a real estate broker not licensed in this state. The plaintiff appeals from the trial court's judgment,³ claiming, inter alia, that the trial court improperly concluded that it had violated § 20-325a and § 20-328-8a (e) of the regulations. We affirm the judgment of the trial court.

The following facts and procedural history guide our resolution of the plaintiff's claims on appeal. In July, 1996, Stein and Company (Stein), a real estate brokerage company located in Chicago, Illinois, and the plaintiff entered into a cobrokerage agreement. At the time the agreement was executed and at all other relevant times, the plaintiff was licensed to engage in the real estate business in this state. Stein, however, was not so licensed.⁴ The cobrokerage agreement pertained to the acquisition of a site for a Federal Express facility in the Hartford area. Pursuant to the terms of the agreement, the plaintiff was to serve as the local representative for Federal Express for site evaluation and selection and Stein was to handle communications with Federal Express and negotiations with prospective landlords. The agreement further provided that if Federal Express entered into a build-to-suit lease, the plaintiff would receive 20 percent of the commission and Stein would receive 80 percent.

In January, 1997,⁵ Stein signed a commission agreement with the defendant. The commission agreement referred to property located in the town of Windsor for a Federal Express facility and provided that a commission in the amount of $408,000 would be paid in certified funds or by wire transfer to Stein's cobroker, the plaintiff. One half of the commission was to be paid on the date of the closing of the financing for the project and the balance was to be paid upon occupancy of the property.

On July 29, 1997, the defendant, as landlord, and Federal Express, as tenant, entered into a build-to-suit lease (lease) for the land located in Windsor. The lease was negotiated by an employee of Stein and not by the plaintiff. Pursuant to the terms of the lease, the defendant was to construct and lease to Federal Express a facility in Windsor on land, which was identified in an exhibit attached to the lease, to be purchased by the defendant. Section 33 of the lease provided in part that "[e]ach party represents to the other that the only broker used in connection with this agreement is [Stein], whose commission [the defendant] Landlord shall pay." Section 1 (b) of the lease allowed for the amendment of the lease and provided: "At any time prior to Landlord's purchase of the Land [particularly identified in exhibit A attached to the lease], Landlord and Tenant may agree to substitute another site on which to construct the Improvements. In such event, this Lease will be amended to incorporate the legal description of the new site, which new site shall become the [land that is the subject of this lease]."

The defendant ultimately was unable to acquire financing for the project and, therefore, was unable to purchase the Windsor property that was the subject of the lease. The proposal to develop the Federal Express facility on that particular property in Windsor therefore eventually was abandoned.

The defendant subsequently entered into discussions with Federal Express regarding an alternative site that was located in the town of Windsor Locks. The property was owned by Old County Road LP I, a Connecticut limited partnership. In order to facilitate the purchase, development and leasing of the property to Federal Express, a new entity, Brookfield Windsor Locks Limited Partnership (limited partnership), was formed.⁶ Early in 1998, the limited partnership purchased the property from Old County Road LP I.

On October 23, 1997, at Stein's request, a representative of the plaintiff sent a letter to Frank A. Fitzgerald, an attorney for the defendant, seeking payment of $204,000, one half of the claimed commission, under the terms of the lease. Fitzgerald responded with a letter that acknowledged that the total commission due on the Windsor property, the originally chosen site, was $408,000, but made no payment at that time.

The lease between Federal Express and the defendant subsequently was amended on or about February 20, 1998. The amendment changed the identity of the landlord by substituting the limited partnership for the defendant, and also changed the site that was the subject of the lease to the new location in Windsor Locks.

In July, 1998, the limited partnership sent a check to Stein in the amount of $204,000 for the first half of the commission due under the terms of the lease. A letter accompanying the check provided that the balance of the commission would be paid in accordance with the commission agreement that had been signed by the defendant. Stein shared the commission payment with the plaintiff in accordance with the cobrokerage agreement. The $204,000 balance of the commission, however, never was paid.

The plaintiff then brought this action against the defendant, seeking a judgment for the remaining balance of the commission. The case was tried to the court, which rendered judgment for the defendant. In its memorandum of decision, the trial court determined that: (1) there was a binding contract between the plaintiff and the defendant; (2) the plaintiff was the proper party to bring this action; and (3) the plaintiff had earned the commission. The trial court nevertheless concluded that the plaintiff was not entitled to recover the balance of the commission because it had violated both § 20-325a (a) and § 20-328-8a (e) of the regulations by agreeing to share a real estate commission with Stein, an unlicensed broker that illegally had engaged in the real estate business in this state. This appeal followed.

The plaintiff claims on appeal that the trial court improperly: (1) allowed the defendant to amend its answer and special defenses on the day that trial was scheduled to begin; and (2) determined that the plaintiff had violated § 20-325a (a) and § 20-328-8a (e) of the regulations.⁷ The defendant raises several alternate grounds for affirmance, including a claim that the trial court lacked subject matter jurisdiction because the plaintiff lacked standing to bring this action.

We conclude that the plaintiff had standing to bring this action. We further conclude that the trial court properly granted the defendant's request to amend its answer to the plaintiff's complaint. Lastly, we conclude that the trial court properly determined that the plaintiff's agreement to share the commission with Stein violated § 20-328-8a (e) of the regulations and, therefore, it would violate the public policy underlying the entire statutory scheme to allow the plaintiff to recover a commission from the defendant. Accordingly, we affirm the judgment of the trial court.

I

Ordinarily, we would consider the defendant's alternate grounds for affirmance only after finding merit in at least one of the claims raised on appeal. "[O]nce the question of lack of jurisdiction of a court is raised, [however, it] must be disposed of no matter in what form it is presented . . . and the court must fully resolve it before proceeding further with the case." (Citations omitted; internal quotation marks omitted.) Castro v. Viera, 207 Conn. 420, 429, 541 A.2d 1216 (1988). We therefore consider as a threshold issue the defendant's claimed alternate ground for affirmance that the trial court lacked subject matter jurisdiction because the plaintiff did not have standing to bring this action.

"It is a basic principle of law that a plaintiff must have standing for the court to have jurisdiction. Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy." (Internal quotation marks omitted.) Ganim v. Smith & Wesson Corp., 258 Conn. 313, 347, 780 A.2d 98 (2001). "[W]hen standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue and not whether the controversy is otherwise justiciable, or whether, on the merits, the [party] has a legally protected interest [that may be remedied]." (Internal quotation marks omitted.) In re Jonathan M., 255 Conn. 208, 219, 764 A.2d 739 (2001). "It is well settled that one who [is] neither a party to a contract nor a contemplated beneficiary thereof cannot sue to enforce the promises of the contract . . . ." (Internal quotation marks omitted.) Tomlinson v. Board of Education, 226 Conn. 704, 718, 629 A.2d 333 (1993). "[W]hether a party has standing, based upon a given set of...