Sheldon Greene & Associates, Inc. v. Rosinda Investments, N.V.

• Decision Date: 13 August 1985
• Docket Number: No. 84-857,84-857
• Court: Florida District Court of Appeals
• Parties: 10 Fla. L. Weekly 1940 SHELDON GREENE & ASSOCIATES, INC., a Florida corporation, and Litwin Realty, Inc., a Florida corporation, Appellants, v. ROSINDA INVESTMENTS, N.V., a Netherlands Antilles corporation, and Harry Horn and Sala Horn, his wife, Appellees.

Page 925

475 So.2d 925

10 Fla. L. Weekly 1940

SHELDON GREENE & ASSOCIATES, INC., a Florida corporation, and Litwin Realty, Inc., a Florida corporation, Appellants, v. ROSINDA INVESTMENTS, N.V., a Netherlands Antilles corporation, and Harry Horn and Sala Horn, his wife, Appellees.

No. 84-857.

District Court of Appeal of Florida,

Third District.

Aug. 13, 1985.

Rehearing Denied Oct. 4, 1985.

Kline, Moore & Klein and Donald Klein, Miami Beach, for appellants.

Morton B. Zemel, North Miami Beach, Dubbin & Berkman and Andrew H. Moriber, Miami, for appellees.

Before HUBBART, NESBITT and DANIEL S. PEARSON, JJ.

DANIEL S. PEARSON, Judge.

Sheldon Greene & Associates, Inc. and Litwin Realty, Inc., real estate brokers, appeal from an adverse judgment entered after a non-jury trial in an action to recover brokerage commissions on the sale of a hotel property known as The Prince Arthur Apartments. We reverse with directions to enter judgment for the brokers.

Our task of deciding this case is made easier by the fact that the trial judge, as the fact-finder, announced that he believed the brokers' version of the pertinent events. That version was as follows.

The purchasers, Mr. and Mrs. Horn, visited Litwin Realty, Inc. to discuss investing in a hotel property. Mr. Pollock, Litwin's agent, introduced the Horns to Mr. Bastacky of Sheldon Greene & Associates, Inc., because that agency had a larger inventory of hotel properties. On two separate occasions, Pollock and Bastacky took the Horns to visit and inspect The Prince Arthur Apartments. ¹ The Horns' visits and inspections were done with the full knowledge and approval of the owner's resident manager. ² According to Bastacky, only when the Horns told him that they were not interested in purchasing the property and when he learned that the Horns had bought another hotel property did he stop communicating with the Horns. Within a year of being shown The Prince Arthur Apartments by Bastacky and Pollock, the Horns contacted an agent for Rosinda Investments, N.V., the owner of the apartments, and directly negotiated the purchase of the apartments. The Horns acquired the property in the name of a corporate entity of which they were half-owners, and it was conveyed by Rosinda to a trustee for the corporation. In sum, then, the brokers showed the Horns the property and had no further involvement in any negotiations only because the Horns misleadingly informed them that they had no interest in purchasing the property.

The trial judge erroneously believed that the brokers had to establish (which clearly and concededly they did not) that there were continuing negotiations between the seller and purchaser conducted by or through the brokers, which ultimated in the sale of the property. This failure, said the trial judge, was fatal to the brokers' claim.

The correct rule of law is not that stated by the trial judge; it is, instead, that a broker, to be considered the "procuring cause" of a sale, must have brought the purchaser and seller together and effected a sale through continuous negotiations inaugurated by him unless the seller and buyer intentionally exclude the broker and thereby vitiate the need for continuous negotiations. Plainly,

"[w]hen the broker has brought the prospective parties together, they cannot complain that the broker did not participate in negotiations when they have purposely excluded the broker from these negotiations by dealing with one another directly and in secret."

First Realty Corp. v. Standard Steel Treating Co., 268 So.2d 410, 413 (Fla. 4th DCA 1972).

See Bermil Corp. v. Sawyer, 353 So.2d 579 (Fla. 3d DCA 1977); Alcott v. Wagner & Becker, Inc., 328 So.2d 549 (Fla. 4th DCA 1976) (commission due where seller's property advertised by broker, prospective buyer reads ad and discovers seller is a friend, and consummates sale without broker); Mead Corp. v. Mason, 191 So.2d 592 (Fla. 3d DCA 1966), cert. denied, 200 So.2d 813 (Fla.1967) (commission due where broker showed buyer property twice, buyer and seller negotiated terms of sale without notifying broker, and agreed as part of purchase contract that no broker was involved). Thus, where the broker is excluded, the requirement of continuous negotiations is quite obviously dispensed with, and the broker is nonetheless deemed to be the "procuring cause" of the ensuing sale. See Realty Marts, Inc. v. Barlow, 312 So.2d 544 (Fla. 1st DCA 1975). Moreover, a broker has done all that he is required to do and is entitled to a commission where he has shown the buyer the property but makes no further efforts because an initial purchase offer is rejected or the buyer expresses no interest in the property. See Crystal River Enterprises, Inc. v. Nasi, Inc., 418 So.2d 1038 (Fla. 5th DCA 1982); Gibbs v. Gibbs, 296 So.2d 613 (Fla. 1st DCA 1974). If the rule were otherwise:

"a crafty prospect could reject the contract submitted by the broker, go behind his back to the owner, modify the terms without affording the broker an opportunity for negotiations, purchase the property and thereby evade, on behalf of the seller, the payment of a commission. Such is not the law of the State of Florida." ³

Realty Marts International, Inc. v. Barlow, 348 So.2d 63, 64 (Fla. 1st DCA 1977).

Thus, the continuous negotiation requirement is vitiated where the seller and buyer exclude the broker, and the broker need only establish that the seller and buyer dealt him out. While we acknowledge that such descriptive terms as "secret," "clandestine," and "conspiratorial" are often found in the broker commission cases, the use of such terms hardly establishes an additional element of a broker's cause of action for a commission, that is, that the seller and buyer acted with bad motives. In our view, these terms, in this context, mean nothing more than that the buyer has negotiated directly with the seller without the participation of the broker who first called the property to the buyer's attention; this negotiation is called "secret," "clandestine," and "conspiratorial" because only the buyer and seller are in on it.

We therefore conclude that liability for the brokers' commission may be predicated on the simple fact that the seller and buyer, having been brought together by the brokers, strike their own deal. Contrary to the trial court, we conclude that there is no need for continuous negotiations to be conducted by or through a broker once the broker has been excluded by the seller and buyer. Accordingly, we reverse the judgment below with directions to enter judgment for the brokers.

Reversed.

NESBITT, J., concurs.

HUBBART, Judge (dissenting).

I must respectfully dissent. I would affirm the final judgment appealed from in all respects.

The court is in error in stating that the trial judge accepted the brokers' version of the pertinent events of this case, as, admittedly, the final judgment under review contains no findings of fact at all. It is true that the trial judge did state orally during counsels' closing arguments that he was strongly inclined to find, in effect, that the brokers did show the subject property to the buyers as the brokers claimed, but this "finding"--if it can be called that--was confined solely to that disputed fact and nothing more. The trial judge stated:

"THE COURT: Now we are getting into a different issue.

Well, let me say this for the purposes of the record. I am the Judge of the credibility of witnesses and I just about have decided on the issue of the meeting with the Horns [buyers] and Mr. Bastacky [broker]. I am resolving that issue in favor of the plaintiffs' theory. Now, wherever that leads us on the law so be it. I am still not satisfied that that in fact makes a necessity for finding for the plaintiff because of the other matters that are involved.

But, I think we are going to have to concede that fact and the more I sit here and the more I think that I am going to have to resolve that in favor of the plaintiffs. It just doesn't sound logical that Mrs. Litwin would pick the Greene agency and decide to send a mailgram out to them and the Horns on the same day without giving it some credence to their version.

MR. ZEMEL: If the Prince Arthur had been shown to them it doesn't make any sense that she wouldn't send the mailgram to the Prince Arthur and the other properties that had been shown.

MR. KLEIN: Sure it does.

THE COURT: That you can argue separately. I think I have made a statement and I just wanted to clear the air so you fellows know what I am thinking."

T. 391-92.

The trial judge never stated--as the court now claims--that it was accepting in toto the brokers' version of the facts of this case, which version is now recited in the court's opinion; nor did he ever incorporate such findings of fact into the final judgment.

Beyond that, the trial judge also made other oral statements throughout counsels' final arguments in this case, which statements leaned toward a version of the facts which was favorable to the seller and buyers below. The trial judge stated that he was much impressed with the fact that the buyers bought another hotel, The Greystone Hotel, after the brokers had allegedly shown them the subject hotel property, The Prince Arthur Apartments (T. 383-84) and that they became interested in The Prince Arthur only after their purchase of The Greystone when, by happenstance, they were put in touch with the seller's agent, Mr. Esmail, through one Pepe, a prospective employee of the seller at The Greystone. (T. 393). The trial judge stated:

"THE COURT: That little scenario, I believe, did happen. I believe that Pepe was there somewhere and came into the picture like your clients claim he did and for the sake of making a finding of fact, I would find that to be the case and this happened at the end of February or March of 1981 and that is how the Horns made contact directly with Mr. Sadru.

Let us say that is a finding of fact."

T. 393.

Moreover, the trial judge...