Julien J. Studley, Inc. v. New York News, Inc. , 505 N.Y.S.2d 419 ( 1986 )

— Order, Supreme Court, New York County (Lester Evens, J.), entered March 11, 1986, which denied defendants’ motion for summary judgment, is reversed, on the law, with costs and disbursements, defendants’ motion granted, and the action dismissed.

The action is brought by a real estate broker to recover a commission. In essence, the complaint alleges that plaintiff found a party interested in purchasing certain property defendants wanted to sell; that plaintiff advised defendants of the terms of such prospective purchaser’s offer; that plaintiff advised defendants that such offer was subject to a 3% broker’s commission; that plaintiff introduced the prospective purchaser to defendants; that defendants and the prospective purchaser negotiated with one another and drafted a contract of sale; and that plaintiff is entitled to a commission in that the prospective purchaser stood "ready, willing and able to purchase the premises on the terms and conditions agreed to by the defendants.” The draft contract provided for a $15 million purchase price, but, the day before it was to be executed, defendants withdrew from the deal.

Defendants seek dismissal on the ground that they never employed plaintiff to act as their broker. And indeed, noticeably absent from the complaint is any allegation that the parties expressly entered into a brokerage contract. This omission, however, may not have been inadvertent. With respect to its employment by defendants, plaintiff’s argument is that it performed a service which benefited defendants, and that defendants knew or had reason to believe that such service was rendered with an expectation of payment; in other words, that employment is to be implied in fact (citing 11 NY Jur 2d, Brokers, §§ 94, 171). There is no merit to this argument. The facts adduced on the motion show without question that any expectation on plaintiff’s part that it was to be paid by defendants was wholly unwarranted.

In support of this ostensible implied-in-fact brokerage contract, plaintiff relies on preintroduction conversations it had with defendants wherein, as best the court can make of plaintiff’s account thereof, and giving it every favorable interpretation, an understanding was reached that if and when defendants should ever ask plaintiff to procure a purchaser, plaintiff, in making defendants’ terms and conditions known to prospects, would increase the "asking price” specified by 3%. This additional 3% represented plaintiff’s commission, presumably to be paid by defendants out of the sales proceeds. Accepting plaintiff’s version of these conversations as true, it does not serve to raise an issue of fact as to whether there was an employment. It is undisputed that defendants never did specify terms to plaintiff; it is also undisputed that the $15 million price defendants asked for in their negotiations with plaintiff’s prospective purchaser did not include the 3%. As between the parties, all that happened is that plaintiff submitted a $9 million offer on behalf of a prospective purchaser, advised defendants in writing that such offer was subject to a 3% broker’s commission without indicating whether it was to be paid by the buyer or seller, and gave expert advice to the prospective purchaser during the negotiations that ensued. The words "submitted an offer on [the prospective purchaser’s] behalf’ are plaintiff’s own, used in the complaint to describe its unsolicited approach to defendants; similar modes of expression are to be found throughout plaintiff’s deposition. Such usage, if not an outright admission dispositive of the issue of employment, strongly evidences plaintiff’s understanding that it was acting as the purchaser’s agent, and that its activity as an agent was developed wholly in buying the property and not in selling it (see, Simon v Allied Chem. Corp., 35 AD2d 273, 276; Haynes v Fraser, 76 App Div 627; Kaake v Griswold, 104 App Div 137). Clearly, vis-a-vis defendants, plaintiff was, as the cases sometimes put it, a "mere volunteer” (see, Naum v Wiltsie, 271 App Div 169; Benedict v Pell, 70 App Div 40).

The dissent would find a triable issue of fact from the letter plaintiff wrote to defendant, dated July 5, 1983, identifying a prospective purchaser with an offer of $9 million, and advising that "[t]he offer is subject to [plaintiff] receiving a commission of 3% of the sales price.” According to plaintiff, shortly before July 5, the parties had a telephone conversation, initiated by plaintiff, wherein plaintiff advised that it had a prospect offering $9 million subject to plaintiff receiving a full commission. Defendant inquired as to plaintiff’s commission rates and, after being advised, responded that any commission would have to be added to the asking price. Defendant then requested plaintiff to submit the offer in writing. At no time in this or any other preintroduction conversation did defendant ever specify an asking price, or ask plaintiff to find prospects. The letter itself, while purporting to confirm this conversation, does not purport to confirm any agreement between the parties. It does not specifically propose that the commission be paid by defendant; nor does it give any indication as to when the commission was to be earned. The letter represents nothing more than an unsolicited offer accompanied by the statement that plaintiff considered the offer "subject to” its receiving a commission. At best, it was a simple request for a commission from some party to a proposed deal. That the letter may have enticed defendant into meeting with plaintiff’s prospect does not manifest a " 'plain intent’ ” on defendant’s part to ratify plaintiff’s acts in bringing about a meeting (Benedict v Pell, supra, at p 45), or otherwise make plaintiff any the less a volunteer. " 'It is well settled that if a broker, without a previous request, brings a customer to a vendor, and the latter, without further acceptance of the broker’s services, takes the customer, the broker is not entitled to a compensation.’ ” (Meltzer v Flying Fame, 224 App Div 41, 43, quoting Fowler v Hoschke, 53 App Div 327, 329.) " 'An owner cannot be enticed into a liability for commissions against his will. A mere volunteer without authority is not entitled to commissions, merely because he has inquired the price which an owner asks for his property, and has then sent a person to him who consents to take it.’ ” (Benedict v Pell, supra, at p 45.)

If ever there was a question as to who was to pay for plaintiffs services, it was resolved during the negotiations between defendants and the prospective purchaser in which, the deposition testimony clearly shows, plaintiff fully participated as the purchaser’s representative. Defendants insisted that plaintiffs commission be paid by the buyer, which demand was acknowledged and acceded to by plaintiff in a letter it wrote to defendants’ representative in the negotiations. The understanding that plaintiff was to look to the purchaser for its commission is further evidenced by the fact that plaintiff actually entered into a written brokerage contract with the prospective purchaser, as it represented it would do in the letter it wrote to defendants’ representative. The legal effect of this documentary evidence is to negate any implication of an employment. " 'A contract cannot be implied in fact where the facts are inconsistent with its existence; or against the declaration of the party to be charged; or where there is an express contract covering the subject matter involved; or against the intention or understanding of the parties’ ” (Adams & Co. Real Estate v E. & B. Super Mkts., 26 AD2d 365, 366-367, quoting Miller v Schloss, 218 NY 400, 406-407; 11 NY Jur 2d, Brokers, op cit). Concur — Sullivan, J. P., Milonas and Wallach, JJ.