DONALD ZUCKER COMPANY v. Prime Properties, Inc.
| Decision Date | 17 March 1975 |
| Docket Number | No. 73 Civ. 2042.,73 Civ. 2042. |
| Citation | 392 F. Supp. 933 |
| Parties | DONALD ZUCKER COMPANY, Plaintiff, v. PRIME PROPERTIES, INC. and Gilbert L. Dozier, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Jay J. Gurfein, New York City, for plaintiff.
Breed, Abbott & Morgan, New York City, for defendants.
Plaintiff Donald Zucker Company ("Zucker"), a New York corporation engaged in the loan brokerage business, brought suit against defendants Prime Properties ("Prime"), a Louisiana corporation, and Gilbert L. Dozier, an officer and shareholder of Prime, for breach of a brokerage commission agreement.1 Defendants move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure contending there are no material factual issues in dispute. For the reasons set forth below, defendants' motion is granted.
Although plaintiff opposes summary judgment, the material facts are not in dispute. In the Summer of 1972, defendant Dozier and a partner possessed contractual rights and options to purchase a tract of commercial land in Baton Rouge, Louisiana from four selling interests. In order to acquire the property under these rights, Dozier needed substantial sums of cash by late March and early April of 1973. To this end, Prime was set up to obtain a land loan from an institutional lender and to take title to the property.
In the Fall of 1972, a representative of plaintiff Zucker contacted defendant Dozier and discussed the possibilities of having Zucker secure the loan from a lending institution on Dozier's behalf. On January 25, 1973, a Zucker form brokerage commission agreement was presented to defendant Dozier. After various changes had been made, Zucker and Dozier executed the agreement dated that day. Plaintiff Zucker alleges in its complaint that it earned its commission under that agreement by producing an acceptable loan commitment from a lending institution, Institutional Investors Trust ("IIT").
There is no dispute over the written provisions of the agreement between Zucker and Prime. The agreement provided for a 21-day period of exclusive authorization for Zucker to obtain a commitment from IIT acceptable to defendants in the principal sum of 2.8 million dollars. The deadline for a commitment, therefore, was February 15, 1973. In addition, the agreement provided that "the loan must be funded no later than March 25, 1973."
It is also undisputed by the parties that defendants received no commitment either orally or in writing during the 21-day period provided in the agreement. However, on February 23, 1973, Institutional Property Advisers, Inc., ("IPA"), an IIT subsidiary acting as its investment advisor, gave defendant Dozier a proposed commitment in a letter dated February 21, 1973.
Defendants, finding this proposal unacceptable, replied on the same day "accepting" the proposal with certain detailed changes. Between March 8 and March 12, 1973, defendant Dozier received a new letter from IPA dated March 6, 1973, amending its prior proposed commitment on behalf of IIT. Defendants again found this proposal unacceptable and on March 13, 1973 informed Zucker that their agreement had by its terms expired and that it was rejecting the amended commitment of IIT.
Subsequently, defendants obtained a commitment for the land loan from another institution through the services of another broker.
Plaintiff argues, in opposition to summary judgment, that essentially three factual issues are in dispute: (1) whether the brokerage agreement was extended beyond its termination date of February 15, 1973 by the continued negotiations between plaintiff, defendants and IIT after that date; (2) whether plaintiff fulfilled its obligations under the brokerage contract by delivering the revised commitment; and (3) whether any fraud was committed by defendants either concerning the selection of J. T. Dorion ("Dorion") to appraise the property which provided the basis for the loan amount or concerning the loan finally obtained by Prime through the services of another broker.
Summary judgment may be granted unless the issues raised present a genuine issue of material fact. Schwartz v. Associated Musicians of Greater New York, Local 802, American Federation of Musicians of U. S. and Canada, 340 F.2d 228 (2d Cir. 1964); Dressler v. MV Sandpiper, 331 F.2d 130 (2d Cir. 1964). We find here that each of the above-enumerated issues raised by plaintiff fail either to raise a genuine issue or to present a dispute as to a material fact.
Plaintiff first contends that the brokerage agreement which expired by its terms on February 15, 1973 was extended by the continued negotiations between plaintiff, defendants and IIT after that date. Plaintiff states that "on February 22, 1973, both plaintiff and defendant were aware that plaintiff was not acting gratuitously and expected to be compensated." (Plaintiff's Rule 9(g) statement ¶ e). While we may sympathize with plaintiff, it is axiomatic that a broker is not entitled to receive a commission for unsuccessful attempts to perform a brokerage agreement. See Murray Adler Realty Co. v. Benerofe, 42 A.D.2d 715, 345 N.Y.S.2d 1023, aff'd, 34 N.Y.2d 583, 354 N.Y.S.2d 947, 310 N.E.2d 543 (1973). Consequently, we must agree with defendants that once the brokerage agreement had expired by its terms, there was no obligation upon defendants to accept any offer obtained by Zucker as broker and Prime incurred no liability to pay a brokerage fee in the absence of an agreement. See Hewitt v. Renn, 286 App.Div. 1145, 145 N.Y.S.2d 768 (1955); Burman Realty of Lindenhurst, Inc. v. Allen, 76 Misc.2d 773, 351 N.Y.S.2d 516 (1973).2
We turn now to plaintiff's contention that it fulfilled the terms of the brokerage agreement. In order to make out a prima facie case here for a brokerage commission, plaintiff must introduce evidence not only that an agreement existed, but also that a lender was produced ready, willing and able to meet the terms of the loan set forth in the agreement. Lane-Real Estate Department Store, Inc. v. Lawlet Corp., 28 N.Y.2d 36, 319 N.Y.S.2d 836, 268 N.E.2d 635 (1971); Carnegie v. Abrams, 37 A.D.2d 327, 325 N.Y.S.2d 326 (1971); Penzotti v. Broda Machine Co., 37 A.D.2d 340, 325 N.Y.S.2d 228, aff'd 33 N.Y.2d 815, 350 N.Y.S.2d 908, 305 N.E.2d 917 (1971); Trade Properties, Inc. v. Ziminski, 75 Misc.2d 606, 348 N.Y.S.2d 476 (Sup.Ct.1973). Plaintiff has failed to produce enough evidence to establish a prima facie case or to raise a sufficient factual question as to whether it complied with the brokerage agreement to preclude summary judgment.
Plaintiff contends that defendants by their actions agreed to alterations in the terms originally set forth in the brokerage agreement, because when IIT made its proposed commitment on February 23, 1973, defendants continued to negotiate with IIT. Somehow, plaintiff argues, through these negotiations which never evolved into an agreement, defendant agreed to different terms. This argument is without merit. A principal has no obligation to accept any terms other than the ones originally set forth no matter how reasonable those new terms may be. See Amott, Baker & Co. v. Bing, 13 Misc.2d 797, 155 N.Y.S. 2d 550, 551 (Sup.Ct.1956), aff'd 3 A.D. 2d 706, 160 N.Y.S.2d 805 (1957).
The standard by which the broker's performance is to be measured is to be found in the brokerage agreement, not the agreement or proposed agreement between buyer and seller. Sanders A. Kahn Associates, Inc. v. Maidman, 69 Misc.2d 90, 329 N.Y.S.2d 121, 123 (Sup. Ct.1971).
Plaintiff has cited us to no case or New York law, and we have found none, which in any way alters the basic requirement that a broker must produce a party willing to comply exactly with the material terms set forth by the employer in order to be entitled to a commission. See House v. Hornburg, 267 A.D. 557, 563, 39 N.Y.S.2d 20 (1944), aff'd 294 N.Y. 750, 61 N.E.2d 748 (1945) ; 6 N.Y.Jur., Brokers, § 111. In other words, for Zucker to recover its commission, Prime and the lender needed to arrive at a meeting of the minds with respect to all the essential contract terms, an understanding which never was reached in this case. See Murray Adler Realty Co. v. Benerofe, 42 A.D.2d 715, 345 N.Y.S.2d 1023, aff'd 34 N.Y.2d 583, 354 N.Y.S.2d 947, 310 N.E.2d 543 (1973) (granting summary judgment).
Plaintiff Zucker has not raised a sufficient factual question concerning whether IIT met the loan terms set forth by Prime to entitle it to a trial in this case. There are many requirements Prime claims were never met. We mention only two such requirements which are clearly vital to any loan agreement and which, therefore, if not met by the lender, would be proper grounds for Prime to refuse to complete the agreement. These two items are the time for obtaining and funding the loan and the amount of the loan.3
The brokerage commission agreement specified that Zucker had to obtain a loan commitment for Prime by February 15, 1973 and that the loan had to be funded no later than March 25, 1973. In the proposed commitment made by IIT on February 21, 1973, IIT proposed that the closing should occur within 90 days of that date. When Prime conditionally accepted IIT's proposed commitment, it made various changes. One such change related to the 90-day closing clause. Prime changed that clause to require the closing within 60 days or upon 10 days notice from Prime to IIT. In IIT's revised proposed commitment of March 6, 1973, IIT accepted the 60-day closing requirement as set forth by Prime but omitted the 10 day notice alternative. Defendants claim that this revision was unacceptable to them since the March 25, 1973 deadline originally set in the brokerage agreement was close at hand and there was a possibility that Prime might require the money before the late April deadline encompassed by the 60-day closing clause. It does not appear from these negotiations that Prime ever indicated that it was no...
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Helmsley-Spear v. Westdeutsche Landesbank, 86 Civ. 7759 (RWS).
...to avoid paying a commission by taking advantage of time restrictions in a brokerage contract. Cf. Donald Zucker Co. v. Prime Properties, Inc., 392 F.Supp. 933 (S.D.N.Y.1975). The difficulty here is lack of any evidence of bad faith. In view of their monthly payments for the property which ......