Botka v. SC Noyes & Co., Inc.

• Decision Date: 31 October 2003
• Citation: 834 A.2d 947,2003 ME 128
• Court: Maine Supreme Court
• Parties: W. Gregg BOTKA et al. v. S.C. NOYES & CO., INC. et al.

834 A.2d 947

2003 ME 128

W. Gregg BOTKA et al. v. S.C. NOYES & CO., INC. et al.

Supreme Judicial Court of Maine.

Argued: September 9, 2003.

Decided: October 31, 2003.

David M. Sanders (orally), Livermore Falls, for plaintiffs.

Stephen E.F. Langsdorf (orally), Preti Flaherty Beliveau Pachios & Haley, LLC, Augusta, for defendants.

Panel: SAUFLEY, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, CALKINS, and LEVY, JJ.

ALEXANDER, J.

[¶ 1] S.C. Noyes & Co. and L. Jean Noyes (SCN) appeal from a judgment entered, after a nonjury trial, by the Superior Court (Franklin County, Gorman, J.). The judgment awarded W. Gregg Botka and Geraldine Botka (the Botkas) $49,900 for unpaid commissions due on real estate sales; $2200 for overcharging on a lease between the parties; and $612.15 for overcharging for use of a fax machine. The judgment also denied relief on SCN's counterclaim for breach of contract and unpaid rents. SCN asserts that the Superior Court erred by (1) awarding commissions for direct sales of property by SCN to particular buyers when the property had not been "placed on the market"; (2) determining that SCN breached its lease agreement by overcharging the Botkas for rent and use of the fax machine; and (3) determining that SCN was not entitled to judgment on its counterclaim for breach of contract and rent due under SCN's lease to the Botkas. The Botkas cross-appeal asserting that the Superior Court (Humphrey, J.) erred in entering a summary judgment in favor of SCN on the Botkas' claim for intentional infliction of emotional distress.

[¶ 2] Because the contract provision entitling the Botkas to commissions is ambiguous, we vacate and remand for fact-finding as to whether commissions are due on three particular sales. In all other respects, we affirm the judgment.

I. CASE HISTORY

[¶ 3] This case arises out of what SCN characterizes as "a business relationship which turned sour." L. Jean Noyes is the president of S.C. Noyes & Co., a real estate and land development company operating in the Rangeley area. S.C. Noyes & Co. was established in the 1950s and since then has engaged in several business ventures, including purchase and development of tracts of land, sales of timber, and a real estate brokerage. The business was originally established by Mrs. Noyes' husband and was taken over by her after his death.

[¶ 4] In September 1996, SCN entered into an Asset Purchase and Business Relationship Agreement (Asset Purchase Agreement) with the Botkas. This agreement, drafted by an attorney representing SCN, transferred the real estate brokerage business of SCN to the Botkas. The agreement provided that SCN expected to continue "to be engaged in the real estate development business." The agreement also provided that Mrs. Noyes would act as the designated broker for the Botkas until one of the Botkas became qualified as a designated broker, but no later than December 1997. Paragraph 14 of the agreement, the focus of the principal controversy in this case, provided that:

14. Land Sales. From time to time S.C.N. may place on the market certain parcels which it owns. So long as the lease for the Main Street office space remains in effect between these parties Botka will have exclusive right to sell the same at the present commission rate of 5%. Botka agrees to exercise the best professional diligence and its best conscientious efforts in attempting to find purchasers for the real estate that S.C.N. lists with Botka.

[¶ 5] In a separate document, the Botkas and SCN entered into a five-year lease permitting the Botkas to conduct their real estate business in the office space where the SCN real estate sales office had been located. The lease required the Botkas to pay $1000 rent per month and authorized SCN to adjust the rent annually to recognize tax, fuel, and utility cost increases. The agreement also required the Botkas to pay one-third of the fax and copier-related costs. After these agreements took effect, Mrs. Noyes, on behalf of SCN, signed exclusive right to sell agreements with the Botkas covering more than twenty parcels of real estate owned by SCN.

[¶ 6] After the first year of this arrangement, the relationship between Mrs. Noyes and the Botkas deteriorated. The Botkas asserted that Mrs. Noyes overcharged them for rent and use of the fax machine, harassed them in front of customers, interfered with sales relationships, and made working in the same building difficult, upsetting the Botkas and, on one occasion, resulting in a physical confrontation between Gregg Botka and Mrs. Noyes. The Botkas also asserted that on seven occasions, SCN had completed sales of real estate without paying the commissions required by the Asset Purchase Agreement.

[¶ 7] Ultimately, in December 1999, the Botkas filed a request for protection from harassment against Mrs. Noyes. After a discussion at the District Court (Farmington), the protection from harassment action was dismissed. To separate themselves from Mrs. Noyes, the Botkas returned all of the SCN property listings. Separately, the record indicates that Mrs. Noyes' attorney advised the Botkas that their lease would not be renewed and asked them to leave the premises before the expiration of the lease. The Botkas did so, purchasing a separate office and vacating the leased premises at SCN in October 2000.

[¶ 8] Previously, in April 2000, the Botkas had filed a four-count complaint against SCN alleging (1) intentional infliction of emotional distress; (2) violation of the Asset Purchase Agreement by nonpayment of commissions on certain properties sold directly to buyers by SCN; (3) a need for a declaratory judgment to establish the Botkas' rights under the lease in light of alleged interference with the free-use of space, overcharging for rent and use of the fax machine, and other disruptions of the Botkas' business activities; and (4) tortious interference with the Botkas' business relationships. In response, SCN filed a counterclaim alleging breach of the Asset Purchase Agreement by return of the listings of SCN's property. After the Botkas vacated the premises, the counterclaim was amended to add a breach of contract claim for failure to pay rents.

[¶ 9] SCN filed a motion for summary judgment on all counts of the Botkas' complaint. The Superior Court (Humphrey, J.), granted a partial summary judgment for SCN on the intentional infliction of emotional distress and tortious interference with business relationships claims. The court dismissed the Botkas' request for declaratory judgment to declare rights under the lease because they had vacated the leased premises, and the business relationship between the parties had terminated.

[¶ 10] In resolving the intentional infliction of emotional distress claim, the court discussed the evidence of emotional distress addressed in the Botkas' statement of material facts. That statement asserted that Mrs. Noyes had (1) interfered with the Botkas' business activities; (2) frequently interrupted, berated, insulted, and harassed the Botkas alone or in front of clients or others; (3) initiated a physical confrontation with Gregg Botka; (4) acted imperiously; (5) threatened the Botkas with eviction from the premises and disrupted their use of the premises; and (6) directed the Botkas not to sell SCN properties to people of color. The summary judgment court determined that this conduct and the resulting stress it caused to the Botkas "although inappropriate, does not rise to the level of `extreme and outrageous' and is insufficient to support the plaintiffs' claim of infliction of emotional distress."

[¶ 11] After the summary judgment ruling, the Botkas amended their complaint to restate a count for failure to pay commissions and to assert violations of the Asset Purchase and Lease Agreements that had increased their rent and fax machine costs and otherwise caused them to relocate at substantial cost.

[¶ 12] After a three-day nonjury trial, the Superior Court (Gorman, J.) entered judgment in favor of the Botkas on their breach of contract claims, and on SCN's counterclaims. Specifically, the court found that (1) Mrs. Noyes had breached the lease contract by interfering with the Botkas' use and quiet enjoyment of the leased space and their ability to conduct their business on the premises; (2) Mrs. Noyes' breach of the contract justified the Botkas' terminating the lease and supported judgment for the Botkas on SCN's counterclaim; (3) the Botkas had proven overcharges for rent and the fax machine, which were breaches of the lease contract entitling the Botkas to $2200 for overcharges on rent, and $612.15 for overcharges on the fax machine; (4) SCN's direct sales of some parcels of land were a material breach of paragraph 14 of the Asset Purchase Agreement, which the court viewed as unambiguous in requiring that sales of property by SCN be processed exclusively through the Botkas; and (5) Mrs. Noyes, while acting as a broker licensed through the Botkas' real estate agency, had brokered a third party sale of real estate without providing a commission to the Botkas.

[¶ 13] In its findings, the court identified three direct sales of land, having a total value of $570,000, for which no commissions had been paid. These were sales to International Paper Corp., Jordan Landing Partnership, and Hall and Sorensen.¹ The court found that in three other instances SCN had engaged in direct sales, without paying commissions, of properties which had been on the market and which, prior to sale, SCN had taken off the market or removed from listing with the Botkas. These parcels, with a total value of $195,000, involved sales to Axelson (two parcels) and Keep. Finally, the court found that while Mrs. Noyes was "licensed to act as a broker only through the Botkas' agency," she had brokered a third party sale for $225,000, but provided no commission to the Botkas. The court determined that the Botkas were entitled to commissions of $49,900 on...