Storm Associates, Inc. v. Baumgold

• Decision Date: 09 February 1982
• Citation: 440 A.2d 306,186 Conn. 237
• Court: Connecticut Supreme Court
• Parties: STORM ASSOCIATES, INC. v. Norma BAUMGOLD.

Page 306

440 A.2d 306

186 Conn. 237

STORM ASSOCIATES, INC. v. Norma BAUMGOLD.

Supreme Court of Connecticut.

Argued Dec. 9, 1981.

Decided Feb. 9, 1982.

Philip R. Schiff, for appellant-appellee (defendant).

Stephen F. Donahue, Bridgeport, with whom, on the brief, was Kevin L. Burns, Bridgeport, for appellee-appellant (plaintiff).

Before PETERS, HEALEY, PARSKEY, ARMENTANO and WRIGHT, JJ.

PETERS, Associate Justice.

The principal issue in this case is whether the plaintiff, Storm Associates, Inc., has earned its commission under an exclusive real estate listing contract with the defendant, Norma Baumgold. The plaintiff, alleging that it had found buyers ready, willing, and able to purchase the listed property in Redding, sued to recover its commission and an attorney's fee. The defendant filed an answer and a counterclaim alleging misrepresentation in the plaintiff's valuation of the premises. The trial court rendered judgment for the plaintiff on its complaint and on the defendant's counterclaim but refused to award an attorney's fee. The defendant has appealed from the judgment against her on the complaint, but not on the counterclaim; the plaintiff, in a cross appeal, has appealed the denial of the attorney's fee.

The trial court's memorandum of decision and the record reveal the following facts. The plaintiff, Storm Associates, Inc., and the defendant, Norma Baumgold, entered into an exclusive listing contract on September 28, 1977. Under that contract, which was to be effective for the term of one year, the landowner, Baumgold, authorized Storm Associates, Inc., to offer the real property for sale at a price of $67,500. The listing contract provided that "(s)hould a purchaser be found or sale be made, by said owner(s), agent ... or by any other person or agent during the life of this agreement, for such price and upon such terms or for a price and upon terms acceptable to me/us (the owner), then in consideration of your services in this connection, I/We (the owner) hereby promise to pay you 10% commission of said sale price." The listing contract contained no terms other than a description of the real property and the proposed sale price.

Shortly after the execution of the listing contract, the plaintiff brought the property to the attention of Mr. and Mrs. Bruce L. Mims. ¹ They signed a written offer to purchase the property at its listed price of $67,500, but added two conditions not contained in the real estate listing. Their offer was expressly made "subject to clarification of SNETCO right-of-way, subject to satisfactory perc test and reasonable cost of septic system." The defendant signed this "offer to purchase" on October 3, 1977, but added that her agreement was subject to "seller's stipulations as outlined by seller's lawyer."

Thereafter, a contract of sale was prepared by the defendant's attorney containing the stipulations which the defendant had insisted upon. These stipulations reserved to the defendant a right of first refusal upon any resale of the property by the Mims and prohibited the Mims from subdividing the property. The contract containing these terms was signed by the Mims, and forwarded to the defendant, with a deposit check, on October 13, 1977. The deal was not then consummated, however, because the Mims attached to the contract a new paragraph 17, setting additional terms which were unacceptable to the defendant. After further negotiation and a new addendum prepared by the defendant, the buyers signalled their agreement to the substance of all of the defendant's terms. They added only a clarification about the consequence of the owner's failure to exercise her reserved right of first refusal in a timely fashion. Their signatures are dated October 26, 1977. On October 31, before the signed contract had been mailed to the defendant's attorney, that attorney advised the Mims' attorney that the defendant was electing not to sell. This election was neither then nor later grounded upon the Mims' clarification of the defendant's addendum. Although the contract signed by the Mims was subsequently received in the mail by the defendant's attorney, the defendant never executed the contract.

The trial court found that, on October 31, 1977, there was no meeting of the minds of the defendant and the Mims. Nonetheless, it concluded that when the defendant's attorney, after October 31, 1977, received copies of the contract of sale executed by the Mims, "the plaintiff agent had procured a buyer ready, willing and able to purchase the property in question on the terms set by the exclusive listing." Because the agent had procured a buyer upon terms prescribed by the owner, the agent had earned its commission despite the presumed absence of an enforceable agreement of sale. ²

The defendant's appeal urges this court to find error in these conclusions of the trial court. The defendant maintains that her withdrawal, on October 31, 1977, of her offer to sell her property to the Mims necessarily defeated the plaintiff's right to its commission. We do not agree.

We have recently had occasion to note the significant difference between the rights and obligations created by a listing contract and a sales contract. Revere Real Estate, Inc. v. Cerato, 186 Conn. 74, 81, 438 A.2d 1202 (1982); William Pitt, Inc. v. Taylor, 186 Conn. 82, 84, 438 A.2d 1206 (1982). Although it is possible for the parties to agree, in the listing contract, that the real estate agent's commission is not due and payable until there has been a full consummation of a sales contract, a listing contract need not be so limited. Revere Real Estate, Inc. v. Cerato, supra; William Pitt, Inc. v. Taylor, supra; Walsh v. Turlick, 164 Conn. 75, 80, 316 A.2d 759 (1972). In the case before us, it is undisputed that the listing contract entitled the plaintiff to recover its commission upon the procurement of a purchaser ready, willing, and able to purchase the defendant's property either on the terms of the listing contract or on terms "acceptable" to the owner. The trial court's conclusion that the plaintiff had earned its commission was based on its factual determination that the plaintiff had procured a purchaser on terms prescribed by, and hence necessarily acceptable to, the owner. This court has repeatedly held that a broker who has, in accordance with a listing contract, found a purchaser ready, willing, and able to purchase, on the owner's own terms, is entitled to its commission even though no contract for the sale of the property has ever been executed. Dyas v. Akston, 137 Conn. 311, 313, 77 A.2d 79 (1950); Finch v. Donella, 136 Conn. 621, 626, 73 A.2d 336 (1950); Wright v. Reid, 111 Conn. 141, 145, 149 A. 239 (1930).

With respect to liability under the listing contract, the only question before us is whether the trial court erred in its determination that the Mims were ready, willing, and able to buy the Redding property on the defendant's terms. It is undisputed that they had not persisted in the conditions they had originally attached to their offer to purchase, and that they were, by the end of October, financially able to purchase. Their signatures on the contract prepared by the defendant's attorney attested to their full agreement to the substance of all of the defendant's stipulations. Their delay in communicating their acceptance to the defendant, although unexplained, extended in any case to no more than a few days. Nothing in the negotiations between the parties had indicated that time was of the essence. In the light of all of these circumstances, we cannot say that the trial court's finding that the Mims were ready, willing, and able to purchase on terms acceptable to the defendant was clearly erroneous. Practice Book § 3060D; Revere Real Estate, Inc. v. Cerato, supra; Pandolphe's Auto Parts, Inc. v. Manchester, 181 Conn. 217, 221-22, 435 A.2d 24 (1980).

Belatedly the defendant has sought to interject a second defense to bar the plaintiff's recovery despite its compliance with the terms of the listing contract. Although the defendant never raised any statutory defense in her initial pleadings in the trial court, in a motion to open judgment and reargue, which the trial court denied without opinion, she complained of the trial court's failure to consider General Statutes § 20-325a (b). That section requires a listing contract to contain "the conditions of such contract or authorization." ³ Because the listing contract did not contain the terms of sale stipulated by the owner with regard to the right of first refusal and the prohibition against subdivision, it was, according to the defendant's argument, unenforceable.

It is by no means clear that this argument was sufficiently raised in the trial court to warrant our review. We cannot ascertain, in the absence of a memorandum of decision on the motion to reargue, whether it was rejected by the trial court for lack...