Bonin v. Chestnut Hill Towers Realty Corp.

• Decision Date: 23 May 1984
• Citation: 392 Mass. 58,466 N.E.2d 90
• Parties: Angela BONIN et al. 1 v. CHESTNUT HILL TOWERS REALTY CORP. et al. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 90

466 N.E.2d 90

392 Mass. 58

Angela BONIN et al. ¹ v. CHESTNUT HILL TOWERS REALTY CORP. et al. ²

Supreme Judicial Court of Massachusetts Suffolk.

Argued Feb. 10, 1983.

Decided May 23, 1984.

David G. Hanrahan, Boston, for First Star Realty Corp.

Robert M. Bonin, Boston, for Angela Bonin.

Richard W. Renehan, Boston (Lizbeth Lyons, Boston, with him), for defendants.

Before HENNESSEY, C.J., and WILKINS, LIACOS, ABRAMS, NOLAN, LYNCH and O'CONNOR, JJ.

LYNCH, Justice.

A Superior Court jury awarded the plaintiffs a total of $600,000 on count one of their complaint, based on express contract, to recover a real estate brokerage commission allegedly due for their services to the defendants. The jury found for the defendants on the second count, on which the plaintiffs had sought recovery in quantum meruit. The judge denied the defendants' motions for a directed verdict, made at the close of all the evidence, and for judgment notwithstanding the verdict on count one. Mass.R.Civ.P. 50(b), 365 Mass. 814 (1974). The Appeals Court reversed, ordering judgment on count one to enter for the defendants. Bonin v. Chestnut Hill Towers Realty Co., 14 Mass.App. 63, 436 N.E.2d 970 (1982). We granted the plaintiffs' application for further appellate review. We reach the same result.

In reviewing the denial of a motion for judgment notwithstanding the verdict, as well as for a directed verdict, the standard to be employed is whether "the evidence, construed against the moving party, justif[ies] a verdict against him." D'Annolfo v. Stoneham Housing Auth., 375 Mass. 650, 657, 378 N.E.2d 971 (1978). See Alholm v. Wareham, 371 Mass. 621, 627, 358 N.E.2d 788 (1976). Considering the evidence in the light most favorable to the plaintiffs, the jury could have found these facts: In 1976, Chestnut Hill Towers Realty Corp. (Chestnut Hill Towers), a limited partnership comprised of Joseph Carabetta and Carabetta Enterprises, Inc., owned land in Newton on which a multi-unit apartment complex (the property) was in the early stages of construction. Joseph Carabetta, an experienced developer and chief executive officer of Carabetta Enterprises, Inc., was approached by Star through the efforts of Star's employee, Angela Bonin. At a meeting among Bonin, Carabetta, and Star's president, Leonard Abramson, held on January 18, 1977, Carabetta gave permission to Star, which specialized in investment property, to list the property for sale. Carabetta said that he required a net return of $3,000,000 over the existing mortgage of $18,881,000. Abramson requested a commission of $600,000 and Carabetta agreed. ³ As a result, Star listed the property for sale at a price of $22,500,000.

Abramson quickly talked to a client of his, Paul Slater, about possible purchase of the property. Slater owned several sizable properties. At a preliminary meeting on January 20, among Abramson, Bonin, and two associates of Slater, it was disclosed to Star that one George Katz would attend a planned meeting between the principals. Katz, an associate and friend of Slater, was also a syndicator and partner of the firm Private Investment Placements (PIP). ⁴ Abramson and Bonin responded that Star was "authorized to sell the property," and that Katz should be reminded of this "to make sure that we were all headed in the same direction." ⁵

On January 27, the meeting was held in Slater's office with Slater, Katz, and two other associates, and Abramson and Bonin in attendance. Michael Fiondella, Carabetta's accountant, represented Carabetta. According to Bonin, Katz opened the meeting by saying, "[W]e don't want to buy your property, we want to syndicate it." Fiondella immediately protested that he had been brought to the meeting under false pretenses by Bonin, and Bonin told Katz "that he had been told that he was there to discuss an acquisition or purchase of the property, not syndication." The meeting continued for a time, during which Fiondella allowed Katz to examine some financial data about the property. At the end of the meeting, the participants exchanged business cards, and Fiondella asked with whom he should get in touch if it became necessary. Slater and Katz told Fiondella he could "get in touch with any of us." Slater testified, in essence, that he had no further dealings involving the property after that date.

That evening Katz, who was to leave shortly for a month's trip, telephoned Bonin at the home of a mutual friend. She upbraided him for having raised the subject of syndication at the meeting "when he had been asked not to do that." According to Bonin, Katz was enthusiastic about the property and asked her to be in touch with him and with an associate to find other projects for him to syndicate. Subsequently she showed other property to that associate, and she estimated that she spoke with Katz by telephone about eight or ten times over the next four months. In these conversations they spoke of the Chestnut Hill Towers property and several other properties. Katz never asked her to "supply any more information" with respect to Chestnut Hill Towers, after the initial meeting. On May 23, she telephoned to tell Katz of Abramson's death, and Katz told her that "they weren't going to do the Chestnut Hill Towers project." Bonin did not talk to Katz again for many months.

Bonin testified to the attempts of other brokers at Star as well as to her own attempts to interest prospective buyers in the property. On behalf of one such prospect, Bonin received tax projections from Fiondella on March 9, 1977, together with a transmittal letter which stated, "It is our understanding that any sale by CEI [Carabetta Enterprises, Inc.] will be a 100% sale with no guarantees by CEI." On April 16, 1977, Fiondella wrote to Bonin asking for the return of the tax projections and notifying her that the property was no longer for sale "unless otherwise authorized in writing" by Carabetta. Bonin immediately talked with Carabetta, who told her that Fiondella was probably prompted to write because he was close to effecting a syndication of the property. Bonin testified that she persuaded Carabetta to allow Star to continue working as long as he did not have another deal. She then wrote to Fiondella, promising to "comply with [Carabetta's] guidelines." On April 29, she wrote to Carabetta stating that Star believed "we have what we've been seeking ... a cash buyer who will meet your terms; who is not interested in any kind of syndication; who is not a builder; who needs great tax shelter" (emphasis in original). Star's efforts continued through October; proposals by two of Star's clients were described by the plaintiffs as offers to syndicate and by the defendants as offers to purchase and then to syndicate the property. None of these negotiations bore fruit.

On November 16, 1977, Katz's firm, PIP, was given an exclusive agency to "use [its] best efforts to sell limited partnership interests" in the partnership. By the terms of the agreement, Carabetta and Carabetta Enterprises, Inc., would remain as general partners jointly holding a 1% interest in the partnership. The net proceeds of the offering were to be not less than $2,950,012. PIP received a gross fee of $299,988. Katz and his partner in PIP became special limited partners. Katz testified that several persons had spoken to him during the summer of 1977 with respect to syndication of the property. ⁶ Among them was an accountant for one Robert Tracy, who at that time was Carabetta's exclusive agent to syndicate the project. Tracy's accountant mailed Katz information about the project on July 19. On August 16, Katz sent Carabetta a mailgram stating, "I believe we can give you three million dollars as investment in Chestnut Hill Towers, contingent upon mutually-agreeable conditions." There was evidence from Carabetta's pretrial deposition, repudiated by him at trial, from which the jury could have found that Katz and Fiondella began dealing with each other in April. Upon learning, at the end of November or first of December, that Katz was syndicating the property, Bonin wrote to him claiming to have brought the property to his attention. Both Katz and Carabetta rebuffed her attempts to press her claim with them.

The defendants argue that the plaintiffs' evidence is insufficient as a matter of law to show that Carabetta authorized Star, either by their original agreement or by a waiver of its terms, to effect a syndication of the property, or to show that Star and Bonin were the predominating, efficient cause of the syndication which ultimately took place. They further contend that, as there was never any agreement with the plaintiffs with respect to syndication, there could be no agreement to pay them $600,000 in the event that a syndication occurred. The defendants urge that, because of the fundamental difference between a syndication (sale of shares or securities in a limited partnership) and a sale of real property (conveyance of property by deed), it was error to submit to the jury the question whether the plaintiffs had earned a commission in this case. The plaintiffs counter that the evidence warranted findings that Carabetta listed the property with Star for an agreed commission of $600,000, that the agreement to pay a commission was not conditioned on Star's producing a buyer who would take title to the property, ⁷ that the plaintiffs were the efficient, predominating cause of the syndication, and that Carabetta and Katz dealt secretly with one another in order to avoid paying the agreed commission to the plaintiffs. We consider those contentions in turn.

1. The original agreement. The parties do not dispute that after a meeting held on January 18, 1977, among Abramson, Bonin, and Carabetta, the property was listed by Star at an asking price of $22,500,000. Despite some disparity in the testimony of the parties, there was ample evidence from which the jury could conclude that Carabetta authorized Star to...