NRT New Eng., LLC v. Longo
| Decision Date | 21 September 2021 |
| Docket Number | AC 43285 |
| Parties | NRT NEW ENGLAND, LLC v. Salvatore R. LONGO et al. |
| Court | Connecticut Court of Appeals |
James H. Lee, Fairfield, for the appellants (named defendant et al.).
Thomas E. Crosby, Madison, for the appellee (plaintiff).
The defendants1 Salvatore R. Longo, Anthony Longo, Salvatore Longo & Sons, LLC, and the estate of Salvatore Longo, Jr., appeal from the judgment of the trial court, rendered following a trial to the court, in favor of the plaintiff, NRT New England, LLC, doing business as Coldwell Banker Residential Brokerage, relating to the sale of commercial property owned by the defendants. On appeal, the defendants claim that the court erred in (1) concluding that the plaintiff had standing to bring an action for a real estate commission, (2) finding that the defendants breached the operative exclusive right to sell listing agreement, and (3) concluding that the defendants had violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. Although we disagree with the defendants’ standing claim, we agree with their second and third claims. Accordingly, we reverse the judgment of the trial court.
The following procedural history, factual allegations from the operative amended complaint, and certain facts discernible from the record are relevant to this appeal. The defendants were the owners of several parcels of real property located in Stamford that the parties refer to collectively as "220 West Avenue," which, in addition to 220 West Avenue, includes 0 West Avenue, 0-A Piave Street, 0-B Piave Street, 18 Piave Street, and 143 Leon Place (property). On October 31, 2013, the defendants listed the property for sale with the plaintiff at an asking price of $3,799,000. In connection with the listing, the defendants executed an exclusive right to sell agreement (listing agreement) for the property in which the defendants hired the plaintiff and its affiliated licensed sales associates, Kelly Feda and Joseph Porricelli, to procure a buyer for the property.2 The listing agreement was for a term of one year and expired on October 31, 2014.
Pursuant to the listing agreement, the defendants agreed that during the term of the listing agreement, the plaintiff would have the sole and exclusive right to list, market, sell and/or rent the property for the price, terms, and conditions set forth therein. The defendants agreed to pay the plaintiff 5 percent of the gross sale price of the property as a commission if, during the term of the listing agreement, (1) the plaintiff procured a buyer who was ready, willing and able to buy the property or any part thereof, even if the defendants refused to accept such an offer for any reason, or (2) the property or any part thereof, was sold, conveyed or became subject to an agreement to purchase or option to purchase, through the efforts of anyone, including the defendants, to anyone, including a co-owner of the property. In addition, the plaintiff would receive its 5 percent commission if the property or any part thereof, was sold, conveyed or became subject to an agreement to purchase or option to purchase within 180 days after the term of the listing agreement to anyone who was introduced to the property prior to the expiration of the term of the listing agreement, but only if the defendants did not owe a commission to another broker arising out of a subsequent listing agreement.
On or about August 3, 2014, during the term of the listing agreement, the defendants entered into a purchase and sale agreement with Empire Residential, LLC (Empire), in which Empire agreed to purchase the property from the defendants for $2,850,000. The Higgins Group, Inc. (The Higgins Group), a Connecticut corporation, and its affiliated real estate salesperson, Mihaela Kolich, represented Empire as its buyer's agency and agent, respectively, in the purchase transaction. The purchase and sale agreement identified Feda and Porricelli as the defendants’ brokers, and stated that they and Kolich were the brokers who negotiated the sale of the property. Empire eventually cancelled the August, 2014 purchase and sale agreement when a discrepancy arose as to the acreage the defendants would convey. As a result, the property had not been sold when the listing agreement expired on October 31, 2014.
On November 1, 2014, the defendants entered into an exclusive listing agreement with "Salvatore R. Longo, Broker" to sell the property. The agreement ran from November 1, 2014, to November 1, 2015, and set a listing price of $3,200,000. On or about January 23, 2015, the defendants entered into a second purchase and sale agreement to sell the property to Empire, this time at a price of $2,760,000.
In June, 2015, pursuant to General Statutes § 20-325a, the plaintiff recorded a notice of and claim for a broker's lien for its commission against the defendants and the property in the Stamford land records. On March 24, 2016, the plaintiff, the defendants, The Higgins Group, and the defendants’ attorney, Mark F. Katz, entered into an escrow agreement in which the plaintiff agreed to release its broker's lien in order to permit Empire to purchase the property from the defendants. Under the escrow agreement, Attorney Katz would hold $138,000, the plaintiff's claimed commission from the sale, in escrow. The agreement further provided that, after the closing, any one of the parties could file a lawsuit to obtain a determination with respect to the proper disposition of the funds in escrow and to resolve all of the plaintiff's claims to the commission. On the same day, the defendants closed on the sale of the property to Empire, and Empire paid the defendants $2,760,000 for the property. In December, 2016, the plaintiff brought this action seeking to recover its commission pursuant to the listing agreement.
In May, 2017, the plaintiff filed a two count amended complaint alleging breach of contract and violations of CUTPA. In its breach of contract claim, the plaintiff alleged that it had performed all of its obligations under the listing agreement and that it is due a commission from the defendants in the amount for $138,000. In its CUTPA claim, the plaintiff alleged that the defendants were engaged in the conduct of trade or commerce, which included the sale and development of the property, and that they had engaged in unfair and deceptive acts or practices by engaging in unethical, immoral, illegal, and unscrupulous conduct. In its request for relief, the plaintiff sought, inter alia, compensatory damages, punitive damages, and attorney's fees. The defendants filed an answer, special defenses, and a counterclaim in which they alleged claims of misrepresentation, forgery, fraud, and violations of CUTPA.3
A trial to the court was held over the course of two days on September 11 and 12, 2018. On December 12, 2018, the parties filed posttrial briefs. In addition to arguing that the plaintiff had failed to prove any breach of the listing agreement, the defendants claimed in their brief, pursuant to § 20-325a (a), that the plaintiff was not entitled to a commission because it failed to prove that, at the time it rendered the services on which its claim was based, it was properly licensed, pursuant to General Statutes § 20-312,4 to provide such services. The defendants argued that, based on this failure, the plaintiff lacked standing to bring this action, and, consequently, the court lacked subject matter jurisdiction over the case and should dismiss it.
In April, 2019, the court issued its memorandum of decision ruling in favor of the plaintiff. In its decision, the court found that there was undisputed evidence that the plaintiff was licensed, in accordance with §§ 20-312 and 20-325a. The court then examined the plaintiff's breach of contract claim and concluded that the plaintiff had failed to prove its claim for a commission pursuant to the pleaded provisions of the listing agreement.5 The court found, however, that Salvatore R. Longo (Longo) had instructed Empire to cease all communication with the plaintiff and to negotiate solely with him. The court held that Longo's directive to Empire constituted a breach of the listing agreement because it caused the plaintiff to lose any opportunity to participate in the effort to negotiate the sale to Empire during the final month of the exclusive listing agreement with the plaintiff. Last, the court held that Longo's instruction to Empire constituted a violation of CUTPA, finding that Longo's directive to Empire was preceded by misrepresentations or "nonrepresentations" as to the true ownership status of the property, the interfamily litigation background, and a mortgage on the property that led to a foreclosure case and judgment during the negotiations with Empire. The court held that these actions constituted violations of CUTPA and awarded compensatory and punitive damages to the plaintiff.
In May, 2019, Longo filed a motion to reargue and reconsider, arguing, inter alia, that the plaintiff lacked standing to commence the action. Longo claimed that the court erroneously found that the plaintiff, through its designated broker/realtor Brendan Grady, was licensed, in accordance with §§ 20-312 and 20-325. He argued that Grady was neither a plaintiff nor a party to the action and that, because there was no evidence presented during the trial showing that the plaintiff was a licensed real estate broker, the plaintiff lacked standing to commence the action.
In its memorandum of decision on the motion to reargue and reconsider, the court concluded that its finding that the plaintiff had established that it was licensed as a real estate broker had been erroneous. The court, however, then held that it would be inequitable to deny the plaintiff recovery of the commission that it claims in the present action. The court...
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