McCutcheon and Burr, Inc. v. Berman

• Decision Date: 07 May 1991
• Docket Number: 14114,Nos. 14113,s. 14113
• Citation: 218 Conn. 512,590 A.2d 438
• Court: Connecticut Supreme Court
• Parties: McCUTCHEON AND BURR, INC. v. William W. BERMAN, et al.

Page 438

590 A.2d 438

218 Conn. 512

McCUTCHEON AND BURR, INC. v. William W. BERMAN, et al.

Nos. 14113, 14114.

Supreme Court of Connecticut.

Argued Jan. 11, 1991.

Decided May 7, 1991.

Richard P. Weinstein, West Hartford, for appellants in first case, appellees in second case (defendants).

Richard W. Tomc, with whom was John H. Hanks, Middletown, for appellee in first case, appellant in second case (plaintiff).

Before SHEA, CALLAHAN, COVELLO, BORDEN and MENT, JJ.

CALLAHAN, Associate Justice.

These two appeals arise from an action to recover a real estate commission. The defendants appeal from the denial of their motion to dissolve a prejudgment attachment of real estate, while the plaintiff appeals from the granting of the defendants' motion to dismiss. The principal issue in both appeals is whether a real estate listing agreement satisfied the requirements of General Statutes § 20-325a(b). ¹ We conclude that those requirements were not satisfied.

The material facts are not in dispute. The plaintiff, McCutcheon & Burr, Inc., is a licensed real estate broker. On or about October 3, 1989, the plaintiff entered into an open listing agreement to sell certain real property, known as the Cromwell West Office Park, the record owners of which were the defendants William W. Berman, Edward Silverman and Loreto G. Marocchini. The defendant Washington Ridge Associates is a Connecticut partnership whose general partners are Berman, Silverman and Marocchini. ² On the bottom of the listing agreement next to the preprinted term "OWNER(S)" appears the typed name "WASHINGTON RIDGE ASSOCIATES, PTNSHP." Under this name is the signature of Berman, and typed below his signature is "WILLIAM BERMAN, PARTNER" and a post office box address.

On October 10, 1989, Anchor Companies (Anchor) addressed a letter of intent to the plaintiff broker setting forth its proposal to purchase the property in question for $3,950,000. The letter was signed by Berman on October 11, 1989, indicating his assent to enter into negotiations to draw up a purchase contract at that price. On October 24, 1989, the defendants and Anchor executed a purchase contract that identified Berman, Silverman and Marocchini as the sellers of the property. The contract was signed by each of the sellers and listed a post office box as their address. ³ The contract was contingent upon Anchor obtaining financing under certain stated terms. Anchor subsequently requested the return of its deposit when it was unable to obtain financing according to those terms. In its complaint the plaintiff claimed that the reason the sale did not go through was its refusal to acquiesce in the defendants' alleged request that it compromise its commission.

The plaintiff brought this action in three counts: (1) a breach of contract claim on the basis of its alleged right to a commission under the listing agreement; (2) a claim for the value of its services under the theory of quantum meruit; and (3) a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110b et seq. On January 23, 1990, the trial court, R. O'Connell, J., granted the plaintiff's application for a prejudgment attachment of real estate owned by the defendants. On February 13, 1990, the defendants filed a motion to dissolve the prejudgment attachment pursuant to General Statutes § 52-278e. ⁴ After a hearing, the trial court, Hon. Harry W. Edelberg, state trial referee, denied that motion. The court concluded that although the listing agreement did not include the names, addresses or signatures of Silverman and Marocchini, the requirements of § 20-325a(b) were satisfied because Berman had signed the agreement on behalf of the partnership. The court reasoned that a strict interpretation of § 20-325a(b) would conflict with the provisions of General Statutes § 34-47 ⁵ concerning the authority of a partner to bind the partnership. The defendants subsequently filed a motion to dismiss pursuant to Practice Book § 142, ⁶ and the trial court, Higgins, J., granted the motion on the ground that the court lacked subject matter jurisdiction. In so doing, the trial court concluded that Berman's signature alone did not satisfy § 20-325a(b) because title to the property was in the names of the three individual sellers, rather than in the name of the partnership. The court concluded that § 20-325a(b) required the names, addresses and signatures of Silverman and Marocchini to be included in the listing agreement in order for it to be binding. Both parties filed an appeal in the Appellate Court, and that court granted the plaintiff's motion to consolidate the appeals. We transferred the cases to ourselves pursuant to Practice Book § 4023.

In the first appeal, Docket No. 14113, the defendants challenge the denial of their motion to dissolve the prejudgment attachment. ⁷ In the second appeal, Docket No. 14114, the plaintiff claims that the trial court improperly granted the defendants' motion to dismiss. We conclude that the plaintiff's cause of action was properly dismissed, although we reach our conclusion by a different procedural route than that traveled by the trial court.

In its challenge to the dismissal of the complaint (Docket No. 14114), the plaintiff asserts that: (1) the trial court incorrectly concluded that the requirements for an enforceable listing agreement set forth in § 20-325a(b) were not met; (2) under the law of the case, the trial court was bound by the earlier ruling by the state trial referee that the provisions of § 20-325a(b) were satisfied; and (3) even if the trial court was correct in concluding that the listing agreement did not meet the requirements of § 20-325a(b), it should not have dismissed the CUTPA count in the complaint because the plaintiff's CUTPA claim was not subject to those requirements. We find none of these arguments persuasive.

I

The right of a real estate broker to recover a commission is dependent upon whether the listing agreement meets the requirements of § 20-325a(b). New England Land Co., Ltd. v. DeMarkey, 213 Conn. 612, 621, 569 A.2d 1098 (1990); Revere Real Estate, Inc. v. Cerato, 186 Conn. 74, 77, 438 A.2d 1202 (1982). Section 20-325a(b) requires that the listing agreement: "(1) be in writing, (2) contain the names and addresses of all the parties thereto, (3) show the date on which such contract was entered into or such authorization given, (4) contain the conditions of such contract or authorization and (5) be signed by the owner or an agent authorized to act on behalf of the owner only by a written document executed in the manner provided for conveyances in section 47-5, and by the real estate broker or his authorized agent." In addition, the broker ordinarily must prove that it has found a buyer that is ready, willing and able to purchase the property on terms agreed to by the seller. Storm Associates, Inc. v. Baumgold, 186 Conn. 237, 242, 440 A.2d 306 (1982); Revere Real Estate, Inc. v. Cerato, supra, 186 Conn. at 77-78, 438 A.2d 1202.

The defendants contend that the trial court properly concluded that "owner," as used in § 20-325a(b), means "record owner" and that the listing agreement is therefore unenforceable because it does not include the names, addresses or signatures of Silverman and Marocchini. ⁸ The plaintiff argues that when construing the term "owner" in § 20-325a(b), this court must read that statute in light of § 34-47, which states that "[e]very partner is an agent of the partnership for the purpose of its business." The plaintiff asserts, therefore, that the signature of Berman under the name of the partnership on the listing agreement was sufficient to meet the requirements of § 20-325a(b). In the alternative, the plaintiff argues that it has satisfied the requirements of § 20-325a(b) if the listing agreement, trade name certificate, letter of intent from Anchor Companies, purchase contract and parol evidence are considered together. We disagree with the plaintiff.

It is well established that the requirements of § 20-325a(b) are mandatory rather than permissive and that the statute is to be strictly construed. New England Land Co., Ltd. v. DeMarkey, supra, 213 Conn. at 623, 569 A.2d 1098 (listing agreement must include sale price of property); Jay Realty, Inc. v. Ahearn Development Corporation, 189 Conn. 52, 54, 453 A.2d 771 (1983) (listing agreement lacking addresses of both parties unenforceable); Thornton Real Estate, Inc. v. Lobdell, 184 Conn. 228, 230-31, 439 A.2d 946 (1981) (brokerage contract signed by owner's agent unenforceable under the statute as then worded); Hossan v. Hudiakoff, 178 Conn. 381, 383, 423 A.2d 108 (1979) (failure to include broker's address fatal to listing agreement); Rostenberg-Doern Co. v. Weiner, 17 Conn.App. 294, 305-307, 552 A.2d 827 (1989) (omission of rate of broker's commission fatal); Howland v. Schweir, 7 Conn.App. 709, 713-15, 510 A.2d 215 (1986) (commission not recoverable where broker could not prove he produced a buyer during effective term of listing agreement); Arruda Realty, Inc. v. Doyon, 35 Conn.Sup. 617, 620, 401 A.2d 625, cert. denied, 176 Conn. 763, 394 A.2d 201 (1978) (owner's address requirement not satisfied even though the listing agreement included the address of the subject property, which was the same as the owner's address). "A broker who does not follow the mandate of [§ 20-325a(b) ] does so at his peril." Thornton Real Estate, Inc. v. Lobdell, supra, 184 Conn. at 230-31, 439 A.2d 946.

The plaintiff first claims that the requirements of § 20-325a(b) were satisfied because Berman ostensibly signed the listing agreement on behalf of the partnership. The dispositive issue concerning this claim is whether the purported partnership signature satisfies the statute or whether, as the defendants assert, the term "owner" in § 20-325a(b) means "record owner." As previously noted, the record title to Cromwell West Office Park was vested in Berman, Silverman and...