Kalmon Dolgin Affiliates, Inc. v. Estate of Nutman

• Decision Date: 04 April 1991
• Citation: 172 A.D.2d 917,568 N.Y.S.2d 204
• Parties: KALMON DOLGIN AFFILIATES, INC., Respondent, v. ESTATE OF George H. NUTMAN, Deceased, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 204

568 N.Y.S.2d 204

172 A.D.2d 917

KALMON DOLGIN AFFILIATES, INC., Respondent, v. ESTATE OF George H. NUTMAN, Deceased, Appellant.

Supreme Court, Appellate Division,

Third Department.

April 4, 1991.

Blatchly & Foster, P.C. (Bruce D. Blatchly, of counsel), New Paltz, for appellant.

Agins, Dolgin, Siegal & Bernstein (R. Gordon Abitbol, of counsel), New York City, for respondent.

Before MAHONEY, P.J., and WEISS, MIKOLL, YESAWICH and CREW, JJ.

MAHONEY, Presiding Justice.

Appeal from a judgment of the Surrogate's Court of Ulster County (Traficanti, Jr., S.), entered January 21, 1990, upon a decision of the court in favor of plaintiff.

Plaintiff, a real estate brokerage firm, commenced this action against defendant to recover commissions due from defendant's decedent, George Nutman. Nutman, as the sole shareholder of George Nutman, Inc., had owned a parcel of commercial real estate in Kings County, a large portion of which he sold in September 1982 to 105 Evergreen Associates. In June 1983 plaintiff, which had regularly listed properties for Nutman but was unaware of the September 1982 sale of the large parcel to 105 Evergreen Associates, received a listing from Nutman to find a buyer for that property as well as a small parcel of adjacent land that Nutman had retained. Plaintiff thereafter actively sought a purchaser for the property, believing that Nutman was still the owner and with Nutman arranging for on-site inspections. In late 1983, plaintiff procured a buyer, Penco Industries, which thereafter met with Nutman to negotiate a sale. Penco and Nutman eventually reached an agreement for the sale of the larger parcel for $1.5 million, with the sale of that smaller portion that Nutman actually owned left open for further negotiations. Nutman told Penco to draw up a contract listing 105 Evergreen Associates as seller, representing to Penco that he was a principal thereof. A contract was drawn which Nutman retrieved himself for review by his attorney. The next day Nutman informed plaintiff that the property had already been sold and that he did not own it. A sale between Penco and 105 Evergreen Associates never materialized, as the latter had already contracted to sell elsewhere. Nutman himself received $25,000 in brokerage commissions for his own involvement in that subsequent sale.

Plaintiff then brought this action against Nutman and 105 Evergreen Associates for brokerage commissions. Those claims brought against 105 Evergreen Associates were discontinued and, because Nutman subsequently died in September 1986, the remaining claims against Nutman continued against defendant and the matter was transferred pursuant to SCPA 501(1)(b) to Surrogate's Court. Following a nonjury trial, Surrogate's Court rendered a decision in favor of plaintiff on its claim for commissions earned on the sale of the larger parcel once owned by 105 Evergreen Associates. Defendant now appeals.

We affirm. Defendant initially contends that plaintiff had the burden of proving that it was employed by the property's true owner in order to be entitled to a commission. Defendant further argues that, because Nutman was not the true owner of the property, plaintiff could not establish that the requisite employment relationship with an actual seller existed. We take a different view. The relationship between broker and principal is a contractual one which involves, in general terms, a promise by one party, a principal, to pay the other, the broker, in consideration for the latter's production of a ready, willing and able buyer of property upon the former's terms (see, Lane-Real Estate Dept. Store v. Lawlet Corp., 28 N.Y.2d 36, 42, 319 N.Y.S.2d 836, 268 N.E.2d 635; 11 NY Jur 2d, Brokers, § 16, at 359). The principal, in effect,...