Richard Tucker Associates, Inc. v. Smith

• Decision Date: 12 August 1985
• Citation: 395 Mass. 648,481 N.E.2d 489
• Parties: RICHARD TUCKER ASSOCIATES, INC. v. Donald B. SMITH et al. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 489

481 N.E.2d 489

395 Mass. 648

RICHARD TUCKER ASSOCIATES, INC. v. Donald B. SMITH et al. ¹

Supreme Judicial Court of Massachusetts Berkshire.

Argued April 4, 1985.

Decided Aug. 12, 1985.

Gerald A. Denmark, Pittsfield, for plaintiff.

J. Norman O'Connor, Philip H. Grandchamp, John D. Lanoue, and David B. Mongue, Adams, for defendants.

Before HENNESSEY, C.J., and LIACOS, ABRAMS, NOLAN and LYNCH, JJ.

LYNCH, Justice.

The plaintiff appeals from an order of the Appellate Division reversing a judgment entered in his favor in the Pittsfield Division of the District Court. The plaintiff sued to recover $10,250 for the breach of an alleged oral contract for a real estate broker's commission. The defendants asserted as an affirmative defense that the alleged oral contract falls under the Statute of Frauds, G.L. c. 259, § 1 (1984 ed.), because the agreement could not be performed within one year of its making. The trial judge found for the plaintiff and the defendants claimed a report to the Appellate Division, which held that the oral contract was not by its terms capable of full performance within one year. The Appellate Division held, therefore, that the contract was unenforceable and reversed the judgment of the District Court. We affirm the order of the Appellate Division.

The District Court judge found that in August or September, 1979, the defendants talked to the plaintiff concerning the sale or lease of property owned by the defendants in Pittsfield. The parties orally agreed that the premises should be leased for approximately $25,000 per year and that, upon arranging for the lease, the plaintiff would receive a commission of 6% of the rent for the first year, 5% of the rent for the second year, and 4% of the rent for the third and any subsequent years for which the premises were leased. The plaintiff brought the property to the attention of General Electric Company (G.E.) which later entered into a lease agreement with the defendants. ² The lease agreement provided for annual rent of $83,000 for a three year period commencing April 15, 1980, ³ with options for renewals up to five years beyond the original term. The defendants paid a total of $2,200 to the plaintiff, and admitted that they owed a balance of $1,550 to the plaintiff, based on their contention that they were to pay 6% of $25,000, plus 5% of $25,000, and 4% of $25,000, for a total of $3,750. The plaintiff contended that he was entitled under the contract to 6% of $83,000, plus 5% of $83,000 and 4% of $83,000, for a total of $12,450.

The only issue on appeal is whether the oral agreement falls within the Statute of Frauds, G.L. c. 259, § 1, and is, therefore, unenforceable. The Appellate Division ruled that since the contract expressly called for payment over a period of years, it falls under G.L. c. 259, § 1. ⁴ We hold that the Appellate Division properly concluded that the contract was not capable of full performance within one year. We have held that "where an oral contract may, by its terms, be fully performed within the year it is not unenforceable by reason of the [Statute of Frauds]." Joseph Martin, Inc. v. McNulty, 300 Mass. 573, 575, 16 N.E.2d 4 (1938). We look to the terms of the contract, as they reflect the understanding of the parties at the time they entered into the contract, to determine whether the agreement could have been performed within one year of its making. See Growers Outlet, Inc. v....