U-Buy Realty, Inc. v. Aliota, U-BUY
| Decision Date | 27 June 1991 |
| Docket Number | U-BUY |
| Citation | 573 N.Y.S.2d 824,151 Misc.2d 485 |
| Parties | REALTY, INC., Plaintiff, v. Jack ALIOTA and Louis J. Aliota, Defendants. Jack ALIOTA, Third-Party Plaintiff, v. Herman J. SOLOWAY, Third-Party Defendant. |
| Court | New York City Court |
Solomon Cohen, Brooklyn, for U-Buy Realty, Inc.
Gerard A. Imperato, Brooklyn, for defendant-third party plaintiff Jack Aliota.
Louis J. Aliota, pro se.
Hawkins, White, Feretic, Daly, O'Neill & Maroney (Brian J. Daly, of counsel), New York City, for third party defendant Herman J. Soloway.
Jack Aliota, as seller, and Giovanni and Anna Paolilli, as purchasers, signed a document entitled "offer to purchase" supplied by real estate broker U-Buy Realty, Inc. whereby Aliota agreed to sell 2281 West 1 St. in Brooklyn to the Paolillis. The "offer to purchase" provided for the seller to pay the brokerage commission pursuant to a separate agreement.
Attorney Herman J. Soloway representing Jack Aliota prepared a formal contract in which the sellers were named not only as Jack Aliota but also as Louis J. Aliota (Jack's son) since they owned the property as joint tenants. The contract was executed on behalf of the sellers by Jack Aliota in his own capacity and as attorney in fact for Louis J. Aliota. While Jack Aliota never returned a signed copy of the brokerage agreement it is uncontroverted that he agreed to pay the broker $10,000.
Within two weeks of execution of the contract of sale Soloway contacted the Paolillis' attorney and advised him that the deal was being cancelled because Jack Aliota did not have a power of attorney authorizing him to sign the contract for Louis Aliota.
Subsequent to this cancellation the broker commenced this action seeking to recover its commission. The broker in its complaint claims that the defendants, Jack and Louis Aliota, agreed to pay a 6% commission if a purchaser was found for their building. The broker alleges that a ready, willing, and able purchaser (the Paolillis) was procured but that the Aliotas refused to go forward with the sale. The first cause of action states the broker is entitled to $17,400. As a second cause of action the broker states that the Aliotas agreed to pay a commission of $10,000 but have failed to do so. While unstated, the clear implication is that the Aliotas upon retaining the broker agreed to pay a 6% commission which was reduced to $10,000 when a purchaser was actually procured. Finally, a third cause of action maintains that the Aliotas have been unjustly enriched.
Jack Aliota interposed an answer and also served a third party complaint against Soloway. The substance of the third party complaint is that attorney Soloway misled Jack Aliota into believing that he had authority to sign on behalf of Louis J. Aliota but that in fact Louis never executed a power of attorney granting such authority. As a result Jack Aliota improperly entered into a contract with the Paolillis and if any brokerage is due because of that agreement Soloway should ultimately pay it. Soloway's answer asserts that the other parties were contributorily negligent.
The matter is now before the court by virtue of a motion by the broker seeking summary judgment against Jack Aliota. In support of the motion the broker contends that it produced a buyer ready, willing, and able to purchase the premises on Aliota's terms so that it is entitled to collect the $10,000 that was to be paid. As to the other causes of action in the complaint the broker asks that they be severed.
In opposing the motion, Aliota contends that he cannot be liable for a commission since any default by him was not willful. It is also Aliota's position that if there is liability it is his lawyer's fault since the legal advice he received inaccurately led him to believe that he had a power of attorney from his son, Louis. Based on this point Aliota also cross-moves for summary judgment against third party defendant Soloway in the event the broker prevails on its motion for summary judgment. Aliota points out that while Soloway forwarded a power of attorney to son Louis for execution it was never returned.
In opposing the cross motion Soloway maintains that he had nothing to do with Aliota's decision to retain a broker and that the broker, by producing a buyer acceptable to Aliota, earned his commission regardless of any later occurrences or legal malpractice.
The primary issue arising from these motions concerns the circumstances under which a real estate broker may collect a commission for procuring a ready, willing and able purchaser where only one of the joint owners of the property engaged him. Corollary issues involve the parameters of a broker's and attorney's duties to a principal operating under a power of attorney.
The rule is well established that a real estate broker will be deemed to have earned his commission when he produces a buyer who is ready, willing and able to purchase on the terms set by the seller (Lane--Real Estate Dept. Store v. Lawlet Corp., 28 N.Y.2d 36, 42, 319 N.Y.S.2d 836, 268 N.E.2d 635; Graff v. Billet, 101 A.D.2d 355, 475 N.Y.S.2d 122, aff'd 64 N.Y.2d 899, 487 N.Y.S.2d 733, 477 N.E.2d 212). As a general proposition it would seem to follow that if a sale does not close because one of the owners refuses to convey title, the broker, having performed that for which he was hired, may recover a commission. It should also as a generalization follow that if only one of the owners retains the broker and he brings a ready, willing and able buyer the owner that retained the broker should pay the commission. This type of situation has frequently arisen between spouses where only one spouse retained the broker and the other one later refuses to convey title. A majority of jurisdictions have held that such refusal is not a defense to the commission claim (Rohan-Goldstein-Bobis, Real Estate Brokerage Law and Practice, section 4.04[3].
Examination of the few precedents on the subject in this state shows that while there is no clear rule concerning the circumstances under which a broker may recover where only one owner was party to the brokerage agreement, the broker's knowledge of the co-ownership relationship is a key factor. Regarding this in Stein v. Micelli, 109 N.Y.S.2d 913 defendant husband hired a broker to find a purchaser for certain real property. After the broker found a customer defendant refused to go forward with the deal because his wife who owned the property jointly with him refused to sell. The broker sued to collect his commission and defendant contended none was owing because of his wife's refusal to sell. In holding for the broker the court stated at page 916,
[T]he defendant sought out the broker and listed the property in question for sale. There was no obligation on the part of the broker to find out whether the defendant was the sole owner of the premises, or, in fact, whether he owned it at all. In employing the broker the defendant entered into an agreement rendering him liable for a commission if the broker produced a purchaser willing to purchase on acceptable terms.
In a similar vein in Greiner-Maltz Co. v. Stevens, 66 Misc.2d 79, 319 N.Y.S.2d 512 the broker's contract was with only one of three co-owners. There was no evidence that the broker knew of the co-owners or that the co-owners in any way acquiesced in the brokerage agreement. The court determined that the broker was entitled to...
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ScalaCustom Props., Ltd. v. Birol
...execute the brokerage agreement unless the person or persons executing it are cloaked with such authority. See, generally, U-Buy Realty v. Aliota, 151 Misc.2d 485 (Civil Ct., Kings Cty. 1991). In cases where that authorization is lacking, some have turned upon the broker's knowledge of the ......