Agawam Realty, Ltd. v. Haggerty , 636 N.Y.S.2d 379 ( 1996 )

dissents, and votes to affirm the judgment appealed from, with the following memorandum in which Balletta, J., concurs. As noted in the memorandum decision of my colleagues in the majority, on July 1, 1992, a formal contract was received by the attorneys for the buyers who had previously been procured by the plaintiff real estate broker. This contract incorporated all of the terms previously agreed to in a Purchase Memorandum. Some eight days later, the defendant had subjectively, and most conveniently (at least for himself) decided that these buyers were an "iffy proposition”. My colleagues in the majority hold that the plaintiff real estate broker will be deprived of its right to a commission in the event that the trier of fact ultimately concludes that the defendant’s subjective doubts about the buyers’ willingness to complete the transaction were objectively justified in light of this eight day delay in the signing of the formal contract. Hence, the dispositive issue, and apparently the only issue of fact which precludes the award of summary judgment, is said to be whether the buyers "were provided a reasonable amount of time to sign the subject contract and tender the down payment”. I cannot agree with this analysis.

As a general rule, "to be entitled to a real estate commission, a broker must show that he brought the parties together at mutually acceptable terms within the period of his employment” (Bashant v Spinella, 67 AD2d 1100; citing, Bereswill v Yablon, 6 NY2d 301, 306; Saum v Capital Realty Dev. Corp., 268 NY 335; Sibbald v Bethlehem Iron Co., 83 NY 378; see also, Spalt v Lager Assocs., 177 AD2d 879; Gabrielli v Cornazzani, 135 AD2d 340). The plaintiff in the present case had indubitably done just that prior to the defendant’s preparation of the formal contract. The defendant and the prospective buyers procured by the plaintiff had undoubtedly agreed to all the essential terms of the transaction. My colleagues in the majority suggest that the subsequent doubts subjectively, and more importantly, mistakenly entertained by the defendant with respect to the buyers’ ability and willingness to perform are sufficient to warrant denial of summary judgment to the plaintiff, and hold, further, that if objectively justified, these doubts will ultimately warrant judgment in favor of the defendant.

I find no authority for the proposition that, once a broker’s commission has been earned, the right to that commission is forfeited simply because the broker’s principal mistakenly concludes that the prospective buyer is no longer able or willing to proceed with the agreed-upon transaction. Even if this were the rule, it is obvious — and the majority holds as much— that such a mistaken belief would have to be reasonable under all the circumstances. I cannot agree with the majority’s proposition that there is an issue of fact as to whether the defendant’s belief that the prospective buyers herein were no longer willing or able to proceed was or was not reasonable.

The only objective circumstance identified by the majority as a factor which might have justified the defendant’s mistaken conclusion respecting the prospective buyers’ intent to proceed is the eight day delay noted above. However, if this delay of a few days had in fact generated sincere doubts in the mind of the defendant concerning the buyers’ continued ability to perform, such doubts should have been dispelled when the buyers’ attorneys told the defendant that the execution of the contract was imminent. If the inability of the buyers’ attorneys to review and secure execution of the contract within a week were for some reason insufficient, the defendant could easily have said so.

In sum, I conclude that no rational trier of fact could find that the defendant’s purported doubts about the buyers’ willingness to proceed were objectively justified. As a matter of law, these supposed doubts, even assuming they were sincere, were unreasonable and capricious. A principal may not defeat a broker’s right to a commission by refusing to complete the contract for reasons that are capricious, unreasonable, or in bad faith (see, e.g., Kirk Assocs. v McDonald Equities, 155 AD2d 281; Elliman & Co. v Lantzounis, 30 Misc 2d 550, affd 14 AD2d 872; 11 NY Jur 2d, Brokers, § 124). For these reasons, I agree with the Supreme Court that the plaintiff is entitled to summary judgment, and I therefore vote to affirm.