Graff v. Billet

• Decision Date: 14 February 1984
• Citation: 477 N.E.2d 212,64 N.Y.2d 899,487 N.Y.S.2d 733
• Parties: , 477 N.E.2d 212 Guy GRAFF, Doing Business as South Fork Realty, Appellant, v. Marvin BILLET, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 733

487 N.Y.S.2d 733

64 N.Y.2d 899, 477 N.E.2d 212

Guy GRAFF, Doing Business as South Fork Realty, Appellant, v. Marvin BILLET, Respondent.

Court of Appeals of New York.

Feb. 14, 1984.

Stephen R. Angel, Riverhead, for appellant.

Michael J. Kopcsak, New York City, for respondent.

John T. DeGraff, Jr., Michael T. Wallender, Albany, and Nancy L. Girard for N.Y. State Ass'n of Realtors, Inc., amicus curiae.

OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division should be affirmed, with costs, for reasons stated in that court's Per Curiam opinion, 101 A.D.2d 355, 475 N.Y.S.2d 122. We would only note the following.

The dissent relies upon the rule that where the sale fails due to the seller's fault or default, a broker is entitled to the commission unless the parties clearly intend otherwise. Their reliance is misplaced. The rule is inapplicable where, as here, the brokerage agreement explicitly provides that the commission is due when "title passes", not merely when the broker has obtained a prospective buyer. In light of such a provision, the rule would apply only if the seller and the broker's prospective buyer had already entered a sales contract, and the seller's "fault" or "default", within the meaning of the rule, would have reference solely to a breach of that sales contract. Indeed, such were precisely the circumstances in the cases adverted to by the dissent in support of the rule. (See, Colvin v. Post Mtge. & Land Co., 225 N.Y. 510, 515-516, 122 N.E. 453; see also, the additional cases on point cited in 2 NY PJI 935-936 to which the dissent refers: Levy v. Lacey, 22 N.Y.2d 271, 273-274, 292 N.Y.S.2d 455, 239 N.E.2d 378; Stern v. Gepo Realty Corp., 289 N.Y. 274, 276-277, 45 N.E.2d 440.) Here, there was no executed sales contract to be breached, and the seller's mere refusal to enter into one with the broker's prospective buyer is not a "fault" or "default" of the seller in the absence of any specific commitment by the seller in the brokerage agreement to enter into the sales contract.

A fortiori this conclusion is unavoidable under the well-settled maxim of contra proferentem. If there is any doubt or uncertainty as to the meaning of the disputed language in the brokerage agreement, all ambiguity must be resolved against the broker who prepared it. (See, 151 West Assoc. v. Printsiples Fabric Corp., 61 N.Y.2d 732, 734, 472 N.Y.S.2d 909, 460 N.E.2d 1344; United States v. Seckinger, 397 U.S. 203, 216, 90 S.Ct. 880, 887, 25 L.Ed.2d 224.) Here, the brokerage agreement does not define the phrase "willful default on the part of the seller", but leaves it fairly susceptible, on its face, to different interpretations. Under these circumstances, the terms should be construed against the broker and, thereby, limited in their application to seller's nonperformance of an executed sales contract.

KAYE, Judge (dissenting).

The Appellate Division's decision, reached entirely as a matter of law, upholds the right of a seller (defendant) offered a better price to escape payment of a fee to a real estate broker (plaintiff) who has produced a buyer ready, willing and able to purchase the property on the seller's terms. In defendant's words: "Marvin Billet testified (and the trial court and Appellate Division both found) that he did not enter into the proposed contract of sale with Mr. Steinberg so that he could accept Mr. Little's better offer."

The parties to a brokerage contract may of course fashion their own agreement, and if their agreement plainly contemplated such a result there would be no occasion to dissent. But the brokerage agreement in issue does not plainly provide for, or require, the unpalatable result that a party by his own willful, unjustified act of withholding his signature from a contract for the sale of the property on his terms may defeat the broker's right to a commission.

The brokerage agreement entered into by plaintiff and defendant provides, in relevant part: "The aforesaid commission is due and payable to the above named licensed broker as, if and when title passes [rider omitted], except for willful default on the part of the seller, in which case the commission shall be payable upon demand after said default." We are informed that such a clause is standard in brokerage agreements in this State.

In the view of the Appellate Division (now the view of this court) "willful default" can be read only to mean a formal contract default, thereby permitting the seller to avoid any obligation to the broker until there is a signed contract of sale for the property. We believe, with Justice Lazer, that it is "immaterial whether the...