Julien J. Studley, Inc. v. Gulf Oil Corporation

• Decision Date: 15 December 1969
• Docket Number: Docket 33729.,No. 162,162
• Citation: 425 F.2d 947
• Parties: JULIEN J. STUDLEY, INC., Plaintiff-Appellant, v. GULF OIL CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

425 F.2d 947 (1969)

JULIEN J. STUDLEY, INC., Plaintiff-Appellant, v. GULF OIL CORPORATION, Defendant-Appellee.

No. 162, Docket 33729.

United States Court of Appeals Second Circuit.

Argued November 3, 1969.

Decided December 15, 1969.

Alan E. Bandler, New York City (Bandler, Goldstein & Kagan, New York City, of counsel), for plaintiff-appellant.

William M. Kufeld, New York City (Carb, Luria, Glassner, Cook & Kufeld, New York City, of counsel), for defendant-appellee.

Before WATERMAN, FRIENDLY and SMITH, Circuit Judges.

FRIENDLY, Circuit Judge:

In this diversity action by an in-state plaintiff against an out-of-state defendant, now before us on an appeal by the plaintiff for the third time, see 386 F.2d 161 (1967), 407 F.2d 521 (1969), Julien J. Studley, Inc., a real estate broker, seeks to recover from Gulf Oil Corporation certain commissions which allegedly would have been received from the landlord upon a 1962 lease of office space by Gulf but for the latter's breach of a contract to designate Studley to the lessor as broker. On this occasion the appeal is from the trial judge's refusal to award preverdict interest, an issue which we instructed him to consider on remand. 407 F.2d at 529 n. 8. The facts are fully set out in our prior opinions and we here state only those necessary to understand this narrow point.

The jury found that Studley assisted Gulf in obtaining office space in the Sperry Rand building; that Gulf bound itself to designate Studley to the lessor as the broker involved in the transaction, to whom the commission should be paid, but instead designated Cushman & Wakefield; and that as a result of this breach of contract Studley suffered injury in the amount of $25,000. The parties stipulated at trial and the case went to the jury on the theory that the brokerage commissions that had been or might be payable at the New York Real Estate Board's suggested rates fell into three classes: (1) a basic commission, payable in December 1962, in the amount of $44,883.31; (2) additional commissions accruing from the reduction of certain take-over obligations, to date of trial, in the amount of $4,207.50; and (3) a possible commission of $37,173.75 if Gulf exercised an option to extend the lease from May 1, 1973 for ten years, payable if and when the option was exercised. There was testimony that even if Gulf had represented the true facts to the lessor, Studley might not have received the entire commission as the lessor's practice in these situations was to "get the two brokers together and try and get them to split the commission in some way." In sustaining the verdict on the second appeal, Judge Frankel observed that the award of $25,000 was "almost exactly half of the commissions actually paid by the lessor to Cushman & Wakefield," 407 F.2d at 526, 528, that is to say the commissions in categories (1) and (2) above.

On remand, Judge Pollack entered judgment for Studley in the amount of $25,000 with interest from the date of verdict and costs, but denied Studley's motion for preverdict interest. He observed that the amounts recited in the stipulation were only the Real Estate Board's suggested rates, which were offered to the jury as a guide, but one which it was not bound to follow, and that there was "a rational and valid possibility" that its award included an unascertainable amount as Studley's share of the commissions to be earned in the future if Gulf exercised its option, a sum on which Studley would not be entitled to preverdict interest. Alternatively, he found that "as a matter of fundamental fairness," Studley should not be entitled to interest against Gulf, since it was "beyond question that defendant in this suit had not had the benefit itself of moneys which belonged to the plaintiff."

The New York statute, which controls in this action to enforce a state-created right, is CPLR § 5001:

Interest to verdict, report or decision

(a) Actions in which recoverable. Interest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property, except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court\'s discretion.

(b) Date from which computed. Interest shall be computed from the earliest ascertainable date the cause of action existed, except that interest upon damages incurred thereafter shall be computed from the date incurred. Where such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date.

(c) Specifying date; computing interest. The date from which interest is to be computed shall be specified in the verdict, report or decision. If a jury is discharged without specifying the date, the court upon motion shall fix the date, except that where

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