Reiman v. International Hospitality Group

• Decision Date: 04 May 1989
• Docket Number: No. 87-105.,87-105.
• Citation: Reiman v. International Hospitality Group, 558 A.2d 1128 (D.C. 1989)
• Court: D.C. Court of Appeals
• Parties: Richard REIMAN, d/b/a Reiman & Company, Appellant, v. INTERNATIONAL HOSPITALITY GROUP, et al., Appellees.

558 A.2d 1128

Richard REIMAN, d/b/a Reiman & Company, Appellant, v.INTERNATIONAL HOSPITALITY GROUP, et al., Appellees.

No. 87-105.

District of Columbia Court of Appeals.

Argued January 19, 1989.

Decided May 4, 1989.

David S. Greene, for appellant.

W. John McNally, III, Washington, D.C., for appellees.

Before ROGERS, Chief Judge, and NEWMAN and BELSON, Associate Judges.

ROGERS, Chief Judge:

AppellantRichard Reiman contends the trial judge erred in failing to apply the prevention doctrine to excuse the closing of a real estate transaction as a condition precedent to appellee International Hospitality Group's (IHG)¹ promise to pay him brokerage commissions.He appeals from the denial of his motion under Super.Ct. Civ.R. 59(e) for reconsideration of the dismissal under SuperCt.Civ.R. 41(b) of his breach of contract claim against IHG for a brokerage commission of $200,000 plus interest in connection with the sale and purchase of the Connecticut Inn Motel.He also appeals from the granting of IHG's motion for reconsideration of the judgment awarding him a separate $50,000 commission for additional services to IHG in connection with its purchase of the motel.The trial judge ruled that IHG did not have the duty to pay the commissions because all of the agreements between the parties made payment contingent upon the transfer of all rights in the motel to IHG which did not occur.However, the trial judge also found, based on Reiman's case-in-chief, that IHG wrongfully prevented the closing of the transaction.We hold that Reiman stated a claim upon which relief could be granted and the trial judge erred in refusing to apply the prevention doctrine to excuse the condition precedent to Reiman's receipt of the commissions where IHG made occurrence of the condition precedent impossible through its own fault or misconduct.Accordingly, we reverse and remand for a new trial.

In 1981, appellantRichard Reiman, a licensed D.C. real estate broker, approached the Connecticut Inn Partnership(CIP) with a proposal to list the Connecticut Inn Motel for sale.CIP accepted the proposal and entered into a listing agreement authorizing Reiman to market the property.CIP and Reiman orally agreed that Reiman would receive a $200,000 commission at the closing.

Of potential buyers to whom Reiman showed the motel, International Hospitality Group, Ltd.(IHG) sent CIP a letter on August 19, 1982, expressing its intent to purchase the motel.Three months later, on November 16, 1982, CIP and 4400 Connecticut Avenue Associates (CAA), a D.C. limited partnership formed by IHG, entered into a written purchase agreement.IHG assumed CIP's obligation to pay appellant's $200,000 commission and the purchase price was accordingly reduced from $4,300,000 to $4,100,000.

Paragraph 14 of the purchase agreement provided that Reiman's commission would be "earned, due and payable only upon the transfer of all Seller's right, title and interest in the Property to Purchaser."Reiman signed the agreement indicating that he agreed to the terms of paragraph 14.The purchase agreement established a closing date of December 1, 1982 but provided that if "all conditions precedent to the Purchaser's obligations have not been satisfied or all of Seller's representations and warranties are not true and correct on the date scheduled for the Closing," then either CIP or IHG could extend the closing date for a reasonable period of time in order to afford additional time to satisfy such conditions and representations and warranties."However, in no event was the closing to extend beyond June 1, 1983.

IHG also agreed to pay Reiman a separate commission of $50,000 for additional services beyond the normal brokerage services.This agreement was set forth in three letters all of which provided that the commission would be paid only in the event of a closing by MG.²

IHG never went to closing on the motel.The outstanding debts on the motel increased in four months from approximately $549,000 in mid September 1982 to $687,923 by January 12, 1983, five days before closing was to occur.IHG was "staggered" by the news and immediately hand-delivered a letter to CIP requesting postponemerit of the closing "to a date to be mutually determined" and suggesting that the purchase deal be restructured.CIP, through its managing partner Bruce Lyons, agreed to do whatever was necessary to "get the deal to settlement."

On January 17, 1983, CIP and IHG met to discuss the status of the transaction.IHG proposed changes in the purchase agreement, including reducing the purchase price of the motel, extending the note payments, and making the purchase contingent on IHG obtaining a lease of the motel by the University of District of Columbia for use as a dormitory.CIP's attorney testified that IHG's proposal "was basically a take-it or leave-it attitude," and that IHG told CIP what "the deal should be and if [CIP] didn't like it, [there] wouldn't be any deal."Lyons testified that he interpreted IEG's proposal as an anticipatory breach of the purchase agreement because IHG made it clear that it would only go to closing if the lease with the University was accepted as a condition precedent to the sale, and he therefore informed IHG that the contract was terminated.

CIP put the motel back on the market.On January 20, 1983, IHG wrote CIP that it still considered the purchase agreement to be valid.CIP responded on January 24, 1988, that "purchaser has anticipatorily breached the Agreement" and threatened litigation if IHG interfered with other prospective deals.Appellant, who believed that IHG still wanted to purchase the motel, attempted unsuccessfully to arrange a new agreement between IHG and CIP.In November, 1983, CIP sold the motel to Van Ness Limited Partnership.³

Reiman filed suit against IHG in September 1983 for breach of contract and fraud.At the close of Reiman's case, the trial judge granted IHG's motion under Super.Ct.Civ.R. 41(b) to dismiss Reiman's breach of contract claim for the $200,000 commission on the ground that Reiman's evidence did not demonstrate that IHG prevented the occurrence of the closing,⁴ but denied IHG's motion to dismiss Reiman's claim for the $50,000 commission on the ground that a factual issue remained whether this commission was independent of the $200,000 commission for the sale of the motel and involved separate consideration for other services that Reiman rendered to appellees.At the close of IHG's case, the judge entered judgment for Reiman on the $50,000 commission, ruling that Reiman had performed services for IHG independent of the purchase agreement between CIP and IHG and that IHG's promise to pay the $50,000 was not conditioned on the closing of the deal but that the closing was simply the date on which this separate commission was due and payable.Reiman and IHG filed motions for reconsideration.The trial judge, by memorandum order, denied Reiman's motion and granted IHG's motion.

In his memorandum order the trial judge found that

[o]n January 17, 1983[IHG] refused to go forward with the purchase of the motel pursuant to the terms of the November 16, 1982 Purchase Agreement and represented that they would go forward only if the terms of that agreement were substantially modified.The owners [CIP] were at all times ready, willing and able to go forward with the sale of this motel.The Court found and finds that there was no reason justifying [IHG] in refusing to go forward with the purchase of the motel.⁵

Nevertheless the judge rejected Reiman's argument that his right to the commissions matured when the purchase agreement was signed and that IHG's subsequent failure to purchase the motel would not defeat that right.Instead the judge found that under the unambiguous terms of the purchase agreement and the correspondence between the parties, Reiman was entitled to both commissions only if IHG actually purchased the motel.Reiman appeals from the denial of his motion for reconsideration of the dismissal of his breach of contract claim for the $200,000 commission and the granting of IHG's motion for reconsideration of the judgment awarding Reiman the separate $50,000 commission.

II.

The granting or denial or a motion for reconsideration will be disturbed by this court only upon a showing of an abuse of discretion.Wallace v. Warehouse Employees Union,482 A.2d 801, 810(D.C.1984)(citations omitted).Reiman contends that the trial judge abused his discretion by refusing to vacate the dismissal of his breach of contract claim for the $200,000 commission pursuant to Super.Ct.Civ.R. 41(b).Reiman maintains, citing Marshall v. District of Columbia,391 A.2d 1374(D.C.1978), that he has presented sufficient evidence to withstand the motion to dismiss.He relies on the trial judge's memorandum order and the purchase agreement as evidence that he adequately demonstrated a breach of contract in which the promisor, IHG, wrongfully prevented the condition to its performance.It similarly follows, Reiman maintains, that the trial judge also abused his discretion in granting IHG's motion for reconsideration of the judgment awarding him the $50,000 commission.

Under Rule 41(b)the trial court may not dismiss the action unless upon the facts and the law the plaintiff has shown no right to relief.Bay Gen. Indus., Inc. v. Johnson,418 A.2d 1050, 1054(D.C.1980).Based on the trial judge's finding of facts at the close of Reiman's case-in-chief, Reiman demonstrated facts which, under the prevention doctrine, established a claim upon which relief could be granted.Accordingly, the trial judge erred in dismissing the breach of contract claim for the $200,000 commission and in denying Reiman's motion for reconsideration.Similarly, the trial judge erred in ruling that Reiman would not be entitled to the $50,000 commission under the prevention doctrine when it granted IHG's motion for reconsideration.See generallyJohnson v. United...