Capezzuto v. John Hancock Mut. Life Ins. Co.

• Decision Date: 03 April 1985
• Parties: John G. CAPEZZUTO 1 v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 188

476 N.E.2d 188

394 Mass. 399

John G. CAPEZZUTO ¹ v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY.

Supreme Judicial Court of Massachusetts Suffolk.

Argued Dec. 5, 1984.

Decided April 3, 1985.

Philip J. Crowe, Jr., Boston, for plaintiff.

Donald R. Frederico, Boston, for defendant.

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

HENNESSEY, Chief Justice.

In Tristram's Landing, Inc. v. Wait, 367 Mass. 622, 629, 327 N.E.2d 727 (1975), we set forth the prerequisites to a real estate broker's recovery of its commission in a case where a sale of real property was defeated by reason of the buyer's withdrawal. In this case we are asked to apply Tristram's Landing to a situation where the sale to the broker's client falls through because of the seller's decision to convey the property to a third party. We conclude, in the circumstances presented here, that the prerequisites to the recovery of a commission were not satisfied, and thus that the judge correctly granted the seller's motion for summary judgment.

This action was brought by the plaintiff broker, John G. Capezzuto, to recover a brokerage fee from the defendant seller, John Hancock Mutual Life Insurance Company (John Hancock). The uncontroverted facts as established by the depositions submitted by the parties are as follows. On January 22, 1981, Stephen Kelly, the broker's agent, met with George Rowland, who managed John Hancock's wholly-owned properties, to inquire whether John Hancock owned any property that it wanted to sell. Rowland told Kelly that John Hancock was interested in selling a certain improved commercial lot on Route 128 in Dedham. Rowland further stated that John Hancock wanted to net $450,000 cash from the sale, and that any buyer had to be willing to close the transaction within sixty days. Kelly responded that Capezzuto would list the property at $550,000, and that, after Capezzuto took his commission, John Hancock would net in excess of $450,000.

Capezzuto then called his client Paul Hurlbert, who expressed an interest in the Dedham property. On January 23, Hurlbert signed a written offer to purchase the property, subject to financing, for $550,000, and he gave Capezzuto a $10,000 deposit. On the same day, Capezzuto gave the offer and the deposit to his agent Kelly, who in turn presented the offer and the deposit to Rowland at John Hancock. When Kelly presented the offer, Rowland indicated that he could not submit it to John Hancock's review committees because of the presence of the finance contingency clause. At this same meeting, Rowland also informed Kelly that he would be in communication with another broker, William Zielinski, and that he would give a client of Zielinski's a chance to make an offer for the property. ²

On January 26, 1981, Capezzuto met with Hurlbert, who agreed to execute a new offer without the finance contingency. Kelly then telephoned Rowland and told him that he "had an offer coming in," which "would meet all [John Hancock's] criteria." Rowland again indicated that he would be discussing Hurlbert's offer with Zielinski. On January 27, Kelly telephoned Rowland again to tell him that Hurlbert's offer was signed, but that Hurlbert's attorney had wanted to review it before it was submitted. Rowland told Kelly to call him when Kelly was ready to deliver the offer, and, for the third time, Rowland informed Kelly that he was going to discuss the proposed sale of the property with Zielinski.

On January 28, Kelly made four attempts to telephone Rowland. Kelly was informed each time by Rowland's secretary that Rowland was unavailable. Kelly told Rowland's secretary that he had a written offer that he wanted to deliver, and he read the terms of the offer over the telephone. At some point on January 28, Rowland's secretary passed this information on to Rowland. On January 29, Capezzuto and Kelly met with Rowland in Rowland's office and presented Hurlbert's written offer. Rowland refused to accept it, on the ground that he had already accepted an oral offer from Zielinski's client, Uniroyal. On four separate occasions between February and July, 1981, Capezzuto submitted offers on behalf of Hurlbert, all of which were rejected by John Hancock.

On May 18, 1981, Capezzuto brought an action against John Hancock to recover the $55,000 broker's commission which he was allegedly owed. ³ The defendant moved for summary judgment, and on April 29, 1983, the motion was granted. The judge ruled that Capezzuto had not met the conditions set forth in Tristram's Landing, supra, for a broker's recovery of its commission. The Appeals Court reversed, holding that the rules set forth in Tristram's Landing did not apply to a case where the broker "produces a customer ready, willing, and able to buy on the precise terms set by the seller but the seller has a change of heart or otherwise defeats the transaction." Capezzuto v. John Hancock Mut. Life Ins. Co., 18 Mass.App. 46, 48-49, 462 N.E.2d 1131 (1984). We granted John Hancock's application for further appellate review.

In Tristram's Landing, Inc. v. Wait, 367 Mass. 622, 327 N.E.2d 727 (1975), we adopted the following rule governing a broker's right to a commission. "When a broker is engaged by an owner of property to find a purchaser for it, the broker earns his commission when (a) he produces a purchaser ready, willing and able to buy on the terms fixed by the owner, (b) the purchaser enters into a binding contract with the owner to do so, and (c) the purchaser completes the transaction by closing the title in accordance with the provisions of the contract." Id. at 629, 327 N.E.2d 727, quoting Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 551, 236 A.2d 843 (1967). There is no dispute, in this case, that these three prerequisites were not all met. There was no binding contract between the seller and the broker's client.

Tristram's Landing does, however, recognize an exception to these requirements. In circumstances where "the failure of completion of the contract results from the wrongful act or interference of the seller, the broker's claim is valid and must be paid." Tristram's Landing, supra 367 Mass. at 629, 327 N.E.2d 727, quoting Ellsworth Dobbs, Inc. v. Johnson, supra. In Lewis v. Emerson, 391 Mass. 517, 462 N.E.2d 295 (1984), we applied this exception to uphold a broker's right to her commission. In that case, the broker had produced a buyer who was ready, willing and able to buy, and who had entered into a purchase and sale agreement with the seller, but the closing was prevented by the seller's default. Id. at 525, 462 N.E.2d 295. Capezzuto contends that this exception is also applicable here because the seller, John Hancock, thwarted the sale of the property to Hurlbert by conveying to a third party, Uniroyal. We disagree, and hold that for the broker to take advantage of this exception, the seller must have agreed to sell the property to the broker's client. Because John Hancock and Hurlbert never entered into a contract of sale, Capezzuto is not entitled to his commission.

Capezzuto contends that a jury could have found that John Hancock did, in fact, orally accept Hurlbert as a buyer of the property. Even if it could be shown that there was such an oral acceptance, it would avail the plaintiff nothing. In order for Capezzuto to prevail, proof of a binding contract of sale between Hurlbert and John Hancock is necessary. See Lewis v. Emerson, supra 391 Mass. at 524, 462 N.E.2d 295; Tristram's Landing, supra 367 Mass. at 629, 327 N.E.2d 727. We add here that the uncontroverted record before us makes it clear that John Hancock did not even manifest an informal...