Leo Eisenberg & Co., Inc. v. Payson

• Decision Date: 09 March 1989
• Docket Number: CA-CV,No. 2,2
• Citation: 784 P.2d 301,162 Ariz. 475
• Parties: LEO EISENBERG & CO., INC., Plaintiff/Appellee, v. John G. PAYSON and Robert F. Snowden, co-trustees Murphey Investment Trusts, Defendants/Appellants. 88-0286.
• Court: Arizona Court of Appeals

Page 301

784 P.2d 301

162 Ariz. 475

LEO EISENBERG & CO., INC., Plaintiff/Appellee, v. John G. PAYSON and Robert F. Snowden, co-trustees Murphey Investment Trusts, Defendants/Appellants.

No. 2 CA-CV 88-0286.

Court of Appeals of Arizona Division 2, Department A.

March 9, 1989.

Review Granted Sept. 19, 1989.

Lewis and Roca by John N. Iurino and Megan E. Miller, Tucson, for plaintiff/appellee.

Miller & Pitt, P.C. by John A. Baade, Eugene N. Goldsmith and Andrea C. Weinstein, Tucson, for defendants/appellants.

OPINION

HATHAWAY, Judge.

This appeal is taken from a jury verdict for plaintiff in an action to recover a brokerage commission.

Plaintiff/appellee Leo Eisenberg & Co., Inc., (Eisenberg) is a corporation duly qualified to engage in sales, leases, exchanges and other transactions involving real property in the State of Arizona. In the spring of 1981, Eisenberg entered into an oral commission agreement with Murphey Investment Trusts (the appellees shall collectively be referred to as the Trust), in connection with the securing of a tenant for a restaurant located on property owned by the Trust located at Broadway Village Shopping Center in Tucson, Arizona. Pursuant to the agreement, Eisenberg found, as a tenant, David B. Karmel. In anticipation of a lease being executed by Karmel, the parties entered into a written commission agreement on September 10, 1981. That agreement provided, inter alia, as follows:

For and in consideration of your services rendered in connection with a restaurant lease to be executed by David B. Karmel as lessee at Broadway Village Shopping Center, we agree to pay you a commission equal to 5% of the minimum rent scheduled in the lease. Said commission payment is subject to and contingent upon full execution by all parties of the lease and will be payable upon the date the tenant opens for business....

Karmel and the Trust executed a lease on December 11, 1981. However, Karmel did not open the restaurant because of financial difficulties he experienced after entering into the lease agreement. The Trust and Karmel then rescinded the lease. Karmel subsequently incorporated with others as Karmel's on Broadway, Inc. (Broadway Inc.). On December 31, 1982, the Trust and Broadway, Inc. entered into a lease of the same property which was the subject of the first lease, and Broadway, Inc. opened a restaurant at that site.

Eisenberg demanded payment of the commission which was due under its commission agreement with the Trust. John Sarikas, the agent of the Trust, notified Eisenberg that no commission was due since David Karmel never opened for business.

Eisenberg brought suit to recover the commission. The trial court granted Eisenberg's motion for summary judgment. On appeal we reversed, Leo Eisenberg & Co. Inc. v. Payson, 152 Ariz. 390, 732 P.2d 1128 (App.1987), finding the commission agreement ambiguous. On remand, a jury trial resulted in a verdict for Eisenberg. The Trust raises several issues, one of which we find dispositive.

Contract interpretation is a legal issue which we determine de novo. Gutmacher v. H & J Construction Co., 101 Ariz. 346, 419 P.2d 525 (1966). In our previous opinion, after reviewing the facts and the contract--the commission agreement, we stated:

If the payment of the commission was subject to the opening of the restaurant, then Karmel's financial difficulties, which prevented the opening, excused the Trust from its obligation to pay a commission. That is the purpose of such a condition.

152 Ariz. at 393, 732 P.2d at 1131. We also stated: "There is no contention that there was any fraud or subterfuge by the Trust, Karmel and Broadway, Inc. in the recission of the first lease and the entry into the subsequent lease." 152 Ariz. at 392, 732 P.2d at 1130.

The essential facts of the case were before us when we issued our prior opinion. Nothing was...