Turnpike Motors, Inc. v. Newbury Group, Inc.

• Decision Date: 16 July 1992
• Citation: 413 Mass. 119,596 N.E.2d 989
• Parties: TURNPIKE MOTORS, INC., & others 1 v. NEWBURY GROUP, INC., & another. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 989

596 N.E.2d 989

413 Mass. 119

TURNPIKE MOTORS, INC., & others ¹ v. NEWBURY GROUP, INC., & another. ²

Supreme Judicial Court of Massachusetts Suffolk.

Argued April 8, 1992.

Decided July 16, 1992.

Marcus E. Cohn, Boston (Rachel Beth Cohen, with him), for defendants.

Gary R. Greenberg, Boston (George W. Mykulak & Louis J. Scerra, Jr., with him), for plaintiffs.

Before LIACOS, C.J., and WILKINS, ABRAMS, NOLAN and O'CONNOR, JJ.

NOLAN, Justice.

The sellers commenced this action in May, 1984, seeking a declaratory judgment that the defendant broker was not entitled to any commissions on the sales of the assets of two automobile dealerships, which included interests in real estate and both tangible and intangible personal property, because the broker was not a licensed real estate broker as required by G.L. c. 112, § 87RR (1990 ed.). ³ The broker, seeking to recover commissions and damages under G.L. c. 93A, counterclaimed and contended that the sellers were estopped to use G.L. c. 112, § 87RR, to deny commissions to the broker. On appeal of summary judgment in favor of the sellers and against the broker on its counterclaim, this court vacated that decision and remanded the case to the Superior Court. Turnpike Motors, Inc. v. Newbury Group, Inc., 403 Mass. 291, 297, 528 N.E.2d 1176 (1988) (Turnpike Motors I ). In Turnpike Motors I, a majority of this court held that: (1) while an unlicensed broker is not entitled to collect a commission on the sale of real estate under G.L. c. 112, § 87RR, that statute does not bar the collection of a commission on the sale of personal property as part of the same transaction; and (2) G.L. c. 112, § 87RR will not bar full recovery of a commission to an unlicensed broker if that broker reasonably relied to its detriment on the seller's representations that the sale was a sale of corporate stock.

On remand, the jury, in answer to special questions, found that the sellers were estopped to raise G.L. c. 112, § 87RR, as a bar to the broker's claim for commissions, and awarded damages to the broker in the amount of $343,000. The sellers then filed a motion for judgment notwithstanding the verdict or, alternatively, for a new trial. The trial judge granted the motion in part, entering judgment for the broker in the amount of $69,479.15, which reflected commissions on only the tangible personal property interests. The judge then ruled that, in the event that an appellate court reversed his decision, the sellers would be entitled to a new trial. The judge also dismissed the broker's counterclaim under G.L. c. 93A. We granted the broker's application for direct appellate review.

On appeal, the broker contends that it was error for the judge to: (1) allow the sellers' motion for judgment notwithstanding the verdict; (2) grant a new trial conditionally; and (3) deny the broker any recovery under c. 93A. ⁴ We agree with the broker that the judge erred in granting the sellers' motion for judgment notwithstanding the verdict or, alternatively, a new trial, but we affirm the judge's dismissal of the broker's c. 93A counterclaim. We therefore direct the Superior Court judge to enter judgment in accordance with the jury's verdict.

1. The judgment notwithstanding the verdict. In reviewing a judge's allowance of a motion for judgment notwithstanding the verdict, we determine whether "anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the [broker]." Dobos v. Driscoll, 404 Mass. 634, 656, 537 N.E.2d 558, cert. denied sub nom. Kehoe v. Dobos, 493 U.S. 850, 110 S.Ct. 149, 107 L.Ed.2d 107 (1989), quoting Poirier v. Plymouth, 374 Mass. 206, 212, 372 N.E.2d 212 (1978). The judge concluded that judgment notwithstanding the verdict was warranted because the broker failed to present evidence sufficient to warrant an estoppel. Specifically, the judge ruled that the evidence did not warrant a finding of reasonable reliance by the broker, and that the broker did not present adequate evidence of two of the four factual elements that we considered in Turnpike Motors I, supra 403 Mass. at 295-296, 528 N.E.2d 1176. ⁵

In Turnpike Motors I, supra at 296, 528 N.E.2d 1176, we discussed four facts alleged in the broker's pleadings, and we stated that, if these facts were true, the sellers would be estopped to deny the broker full commissions. Both the judge and the sellers, as well as the dissent in this appeal, have taken that discussion to mean that Turnpike Motors I holds that the sellers can only be estopped to deny the broker full commissions if the broker is able to prove that these four specific facts are true. ⁶ Our conclusion in Turnpike Motors I, however, that certain of the facts alleged by the broker, if true, would lead to an estoppel, does not prevent the broker from making its case based on other facts alleged within the pleadings, nor does it necessarily require that proof of each of these specific facts is a threshold step that the broker must climb in order to prove its case.

"It was said in Greenwood v. Martins Bank, Ltd. [1933] A.C. 51, 57: 'The essential factors giving rise to an estoppel are ... (1.) A representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made. (2.) An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made. (3.) Detriment to such person as a consequence of the act or omission.' " Cleaveland v. Malden Sav. Bank, 291 Mass. 295, 297-298, 197 N.E. 14 (1935). These essential factors are present in this case. As the judge found, there was adequate evidence presented by the broker at trial to establish that the defendant David Hackett informed the sellers' representative, the plaintiff Eugene F. Looney, that Hackett was not a licensed real estate broker, and that Looney told Hackett that a license would not be necessary because the transaction would be structured as a sale of stock of a corporation rather than real estate. The agreements signed between the broker and the sellers reflected Looney's representation that the potential sales would involve corporations whose assets would include real estate. ⁷ The jury reasonably could have inferred from Looney's testimony that he did not intend to pay the agreed-upon commissions when he signed the agreements with the broker. ⁸ Following the signing of those agreements, the broker sought out and procured buyers for the sellers' businesses, but the sellers have refused to compensate the broker for these services in accordance with their agreements with the broker. All of these factors would support the jury's conclusion that Looney's representations to the broker induced the broker to procure buyers for the sellers, and that the broker suffered detriment from its uncompensated, but successful, efforts on behalf of the sellers. ⁹

It is also necessary, however, that the reliance of the party seeking the benefit of estoppel must have been reasonable. See O'Blenes v. Zoning Bd. of Appeals of Lynn, 397 Mass. 555, 558, 492 N.E.2d 354 (1986), and cases cited. The jury could reasonably have inferred from the evidence that the broker's reliance was reasonable. Looney's representations induced Hackett to undertake efforts on behalf of the sellers. The formal agreements between the broker and the sellers supported those representations. Hackett, who had been in business only a short time and had little education beyond high school, dealt directly with both Looney, a sophisticated businessman, and Looney's attorney from whom, it was reasonable for Hackett to assume, the sellers sought advice. ¹⁰ All the sellers, as well as their attorney, consulted with the broker in the preparation of the agreements. The asking prices for the automobile dealerships included the amounts necessary to pay the broker's commissions. Several agreements between the sellers and buyers of the businesses, which, according to Looney's testimony, were signed after he became aware of the broker's lack of a license, explicitly referred to the sellers' obligation to pay commissions to the broker. ¹¹ In these circumstances, the broker's reliance was reasonable and the jury were warranted in concluding that the sellers should be estopped to raise the issue of the broker's lack of a real estate license, and we reverse the judge's grant of the sellers' motion for judgment notwithstanding the verdict. ¹² 2. The motion for a new trial. The grant or denial of a motion for "a new trial on the ground that the verdict is against the weight of the evidence rests in the discretion of the judge." Robertson v. Gaston Snow & Ely Bartlett, 404 Mass. 515, 520, 536 N.E.2d 344, cert. denied, 493 U.S. 894, 110 S.Ct. 242, 107 L.Ed.2d 192 (1989), quoting Bergdoll v. Suprynowicz, 359 Mass. 173, 175, 268 N.E.2d 362 (1971). The judge, however, "should not decide the case as if sitting without a jury; rather, the judge should only set aside the verdict if satisfied that the jury 'failed to exercise an honest and reasonable judgment in accordance with the controlling principles of law.' " Robertson, supra, quoting Hartmann v. Boston Herald-Traveler Corp., 323 Mass. 56, 60, 80 N.E.2d 16 (1948). Moreover, a judge should exercise this discretion only when the verdict "is so greatly against the weight of the evidence as to induce in his mind the strong belief that it was not due to a careful consideration of the evidence, but that it was the product of bias, misapprehension or prejudice." Scannell v. Boston Elevated Ry., 208 Mass. 513, 514, 94 N.E. 696 (1911). The grant or denial of a new trial, however, will only be disturbed if the judge has abused his discretion. Robertson v. Gaston Snow & Ely Bartlett, supra 404 Mass. at 520-521, 536 N.E.2d 344.

In the same memorandum granting the sellers' motion for...