Romanek-Golub & Co. v. Anvan Hotel Corp.

• Citation: 168 Ill.App.3d 1031,119 Ill.Dec. 482,522 N.E.2d 1341
• Decision Date: 15 April 1988
• Docket Number: ROMANEK-GOLUB,No. 87-1704,87-1704
• Court: United States Appellate Court of Illinois
• Parties: , 119 Ill.Dec. 482 & COMPANY and E. Barry Mansur, Plaintiffs-Appellees, Cross-Appellants, v. ANVAN HOTEL CORPORATION, Regency Partners, an Illinois Limited Partnership and Anthony A. Antoniou, Defendants-Appellants, Cross-Appellees.

Page 1341

522 N.E.2d 1341

168 Ill.App.3d 1031, 119 Ill.Dec. 482

ROMANEK-GOLUB & COMPANY and E. Barry Mansur Plaintiffs-Appellees, Cross-Appellants, v. ANVAN HOTEL CORPORATION, Regency Partners, an Illinois Limited Partnership and Anthony A. Antoniou Defendants-Appellants, Cross-Appellees.

No. 87-1704.

Appellate Court of Illinois,

First District, Fifth Division.

April 15, 1988.

Rehearing Denied May 13, 1988.

[119 Ill.Dec. 484] [168 Ill.App.3d 1034] Maurice J. McCarthy, Chicago, for defendants-appellants and cross-appellees.

Howard C. Emmerman, Jonathan D. Sherman, Rudnick & Wolfe, Chicago, for plaintiffs-appellees and cross-appellants.

Justice SULLIVAN delivered the opinion of the court:

Plaintiffs, Romanek-Golub & Company and E. Barry Mansur, brought an action against defendants, Anvan Hotel Corporation, Regency Partners and Anthony A. Antoniou, seeking compensation for services they provided in procuring an investor in the Barclay Chicago hotel. In Count I of Defendants appeal, contending that they were prejudiced by the admission into evidence of the "Letter Agreement," that plaintiffs did not sustain their burden of proof on Count II (quantum meruit ), that the jury was not properly instructed and that the court erred in awarding certain costs. Plaintiffs cross-appeal, contending that the court erred in directing a verdict in defendants' favor on Count I (express contract).

                [119 Ill.Dec. 485] their amended complaint, plaintiffs sought recovery of $300,000 on the basis of a 10% real estate broker's commission in a "Letter Agreement" dated October 23, 1978.  In Count II, plaintiffs sought recovery of the same amount on a theory of quantum meruit.   Shortly after plaintiffs rested their case, the trial court directed a verdict in favor of defendants as to Count I (express contract) and the trial continued as to Count II (quantum meruit ).  The jury returned a verdict in favor of plaintiffs in the amount of $150,000 on Count II.  Judgment was entered on the verdict
                

On May 31, 1978, Quad Buildings, an Illinois limited partnership which was developing an office building complex in Lombard, Illinois (the St. Regis Center), engaged Romanek-Golub & Company, a licensed real estate broker, to locate investors for a 75% equity interest in the partnership for a total cash consideration of $2,325,000. Under the terms of their exclusive brokerage agreement, Quad Buildings agreed to pay Romanek-Golub a broker's commission of 10% of the consideration contributed to the limited partnership by investors who were obtained through Romanek-Golub's efforts. The agreement was signed by Anthony A. Antoniou, Quad Buildings' general partner, and E. Barry Mansur, vice-president of Romanek-Golub's investment brokerage division. Antoniou was a prominent real estate developer and an experienced hotel owner and operator; Mansur was a licensed real estate broker in Illinois.

Paragraph nine of the agreement provided that a broker's commission of "not less than five per cent" of the total cash investment would be paid to Romanek-Golub in the event one of the purchasers of an equity interest in Quad Buildings invested in any other development on an adjoining 50-acre parcel of land in which Antoniou had an interest. Antoniou signed individually as to paragraph nine. No broker's commissions were earned under this provision.

Romanek-Golub procured an investor, Werner Hans, a Swiss citizen, who acquired the equity interest in the limited partnership, and Romanek-Golub was paid its 10% commission pursuant to the exclusive brokerage agreement. Hans had been a valued client of Romanek-Golub since 1977.

Toward the end of the negotiations regarding the St. Regis Center, after substantial work had been done at the construction site, Antoniou asked Mansur to arrange a meeting with Hans, who was being represented by a Chicago attorney, so that he could personally evaluate his future business partner. Antoniou told Mansur, "if the deal is made, I have to meet Mr. Hans before it's signed." Antoniou admitted at trial that he also wanted to meet Hans because he knew that Hans might make substantial investments in other properties in which he had an interest.

An agreement in principle for Hans to purchase the 75% equity interest in the Quad Buildings limited partnership was reached on October 20, 1978. On October 24, 1978, Mansur, as a condition of introducing Antoniou to Hans, asked Antoniou to sign an agreement to compensate Romanek-Golub if its client, Hans, made any other investments in real estate owned by Antoniou. The proposed agreement, which was set forth in a letter from Mansur to Antoniou dated October 23, 1978, provided:

"It is hereby agreed that in the event Mr. Werner Hans of Zurich, Switzerland, or any related or affiliated entities acquires all or a partial interest in real estate owned by Anthony A. Antoniou, or related or affiliated entities, there will be a fee of 10% of the money invested due and payable to Romanek-Golub and Company in cash at the time of funding of said monies."

Although Antoniou testified that he did not like the "Letter Agreement" presented to him on October 24, 1978, he admitted that he signed it voluntarily. He also acknowledged that Mansur never threatened to block Hans' investment in the St. Regis Center if he refused to sign. Antoniou then traveled to Europe and met Hans.

Several months after the "Letter Agreement" was executed, Antoniou asked Romanek-Golub to present other investment opportunities to Hans, including the Knickerbocker hotel and the Regency-Orleans apartment building (later converted to the Barclay Chicago hotel) which Antoniou was seeking to purchase. Hans was "very interested" in the properties but he wanted to know whether he could acquire an interest in the Knickerbocker alone. Mansur asked Antoniou if he would be willing to split the two transactions, but Antoniou insisted that the two properties be offered as a package because the hotels would share the same management staff and some of the same equipment and it would be impossible to allocate expenses between them fairly. On August 10, 1979, Mansur sent a telex to Hans explaining Antoniou's requirement of one investor for both hotels.

In a letter dated September 10, 1979, Antoniou, on behalf of Anvan Hotel Corporation (Anvan), authorized Romanek-Golub to prepare a submission to Hans for a 50% equity interest in a limited partnership that had been formed to acquire both hotels. The letter reflected the parties' agreement that Romanek-Golub would receive a broker's commission of 10% of the funds invested in the partnership. Although Antoniou denied that Romanek-Golub was entitled to a broker's commission under the "Letter Agreement" of October 23, 1978, he admitted that he agreed to pay Romanek-Golub 10% of any monies Hans invested in the hotel partnership.

Romanek-Golub's staff analyzed the information supplied by Anvan and spent six to eight weeks preparing its own financial projections. To assist with its analysis, Romanek-Golub had the partnership proposal reviewed by an internal consultant, the former chief operating officer of the Four Seasons hotel chain, as well as outside consultants recommended by Anvan.

Between August and November 1979, Mansur communicated extensively with Hans regarding his possible investment in the Knickerbocker and Barclay limited partnership. On October 12, 1979, Mansur sent a six-page letter to Hans describing the financial structuring of the two hotels, economic projections for the first five years of Hans' proposed participation, renovations planned for the physical structure of the two buildings, and marketing strategies for the two properties under the proposed new ownership. Mansur's letter was accompanied by a 35-page report prepared by Romanek-Golub and submitted to Hans for his consideration in connection with the hotel purchases.

On November 26, 1979, Hans sent Mansur a telex stating that because of the uncertain American economic and political situation, he was not willing to invest in any more real estate in the United States until a new president was elected. Mansur immediately informed Antoniou of Hans' refusal to pursue further negotiations and, some time later, Antoniou asked him to locate other investors in the hotel properties. Mansur ultimately identified several other potential investors, including Hotel Investors, a real estate investment trust with whom Mansur and Antoniou had extensive negotiations, but no final agreements were reached with any of them.

Antoniou testified that after Mansur related the substance of Hans' telex message, he decided to give Hans the opportunity to invest in the Knickerbocker alone because he had expressed more interest in that hotel than in the Barclay. Accordingly, Antoniou asked Mansur to offer the Knickerbocker to Hans and called him several times to ascertain Hans' intent. In mid-December 1979, Mansur telephoned Antoniou and told him that Hans was not interested. Mansur, however, denied that Antoniou had authorized him to present the Knickerbocker alone to Hans, and Antoniou offered no documentary evidence contradicting Mansur's denial.

Antoniou testified further that Hans visited him at his office in the St. Regis Center in Lombard, Illinois, on Tuesday, February 19, 1980. After a brief conversation, Hans became angry and was very upset. He made two telephone calls, then left. Antoniou called Romanek-Golub and arranged a meeting with Jordan Glazov, Romanek-Golub's senior vice president in charge of its investment brokerage and leasing division, at King Arthur's Pub on Thursday, February 21, 1980. Glazov was Mansur's supervisor.

Antoniou and Glazov gave conflicting versions of their conversation at King Arthur's Pub. Antoniou testified that he told Glazov that Hans became very upset when he discovered that Mansur had not offered him the opportunity to invest in the Knickerbocker separately from the Barclay. Glazov,...