Bonin v. Chestnut Hill Towers Realty Corp.
Bonin v. Chestnut Hill Towers Realty Corp.
Opinion of the Court
A Superior Court jury awarded the plaintiffs a total of $600,000 on count one of their complaint, based on express contract, to recover a real estate brokerage commission allegedly due for their services to the defendants. The jury found for the defendants on the second count, on which the plaintiffs had sought recovery in quantum meruit. The judge denied the defendants’ motions for a directed verdict, made at the close of all the evidence, and for judgment notwithstanding the verdict on count one. Mass. R. Civ. P. 50 (b), 365 Mass. 814 (1974). The Appeals Court reversed, ordering judgment on count one to enter for the defendants. Bonin v. Chestnut Hill Towers Realty Co., 14 Mass. App. Ct. 63 (1982). We granted the plaintiffs’ application for further appellate review. We reach the same result.
In reviewing the denial of a motion for judgment notwithstanding the verdict, as well as for a directed verdict, the standard to be employed is whether “the evidence, construed against the moving party, justifies] a verdict against him.” D’Annolfo v. Stoneham Hous. Auth., 375 Mass. 650, 657 (1978). See Alholm v. Wareham, 371 Mass. 621, 627 (1976). Considering the evidence in the light most favorable to the plaintiffs, the jury could have found these facts: In 1976, Chestnut Hill Towers Realty Corp. (Chestnut Hill Towers), a limited partnership comprised of Joseph Carabetta and Carabetta Enterprises, Inc., owned land in Newton on which a multi-unit apartment complex (the property) was in the early stages of construction. Joseph Carabetta, an experienced developer and chief executive officer of Carabetta Enterprises,
Abramson quickly talked to a client of his, Paul Slater, about possible purchase of the property. Slater owned several sizable properties. At a preliminary meeting on January 20, among Abramson, Bonin, and two associates of Slater, it was disclosed to Star that one George Katz would attend a planned meeting between the principals. Katz, an associate and friend of Slater, was also a syndicator and partner of the firm Private Investment Placements (PIP).
That evening Katz, who was to leave shortly for a month’s trip, telephoned Bonin at the home of a mutual friend. She upbraided him for having raised the subject of syndication at the meeting “when he had been asked not to do that. ” According to Bonin, Katz was enthusiastic about the property and asked her to be in touch with him and with an associate to find other projects for him to syndicate. Subsequently she showed other property to that associate, and she estimated that she spoke with Katz by telephone about eight or ten times over the next four months. In these conversations they spoke of the Chestnut Hill Towers property and several other properties. Katz never asked her to “supply any more information” with respect to Chestnut Hill Towers, after the initial meeting. On May 23, she telephoned to tell Katz of Abramson’s death, and Katz
Bonin testified to the attempts of other brokers at Star as well as to her own attempts to interest prospective buyers in the property. On behalf of one such prospect, Bonin received tax projections from Fiondella on March 9, 1977, together with a transmittal letter which stated, “It is our understanding that any sale by CEI [Carabetta Enterprises, Inc.] will be a 100% sale with no guarantees by CEI.” On April 16, 1977, Fiondella wrote to Bonin asking for the return of the tax projections and notifying her that the property was no longer for sale “unless otherwise authorized in writing” by Carabetta. Bonin immediately talked with Carabetta, who told her that Fiondella was probably prompted to write because he was close to effecting a syndication of the property. Bonin testified that she persuaded Carabetta to allow Star to continue working as long as he did not have another deal. She then wrote Fiondella, promising to “comply with [Carabetta’s] guidelines.” On April 29, she wrote to Carabetta stating that Star believed “we have what we’ve been seeking ... a cash buyer who will meet your terms; who is not interested in any kind of syndication; who is not a builder; who needs great tax shelter” (emphasis in original). Star’s efforts continued through October; proposals by two of Star’s clients were described by the plaintiffs as offers to syndicate and by the defendants as offers to purchase and then to syndicate the property. None of these negotiations bore fruit.
On November 16, 1977, Katz’s Firm, PIP, was given an exclusive agency to “use [its] best efforts to sell limited partnership interests” in the partnership. By the terms of the agreement, Carabetta and Carabetta Enterprises, Inc., would remain as general partners jointly holding a 1 % interest in the partnership. The net proceeds of the offering were to be not less than $2,950,012. PIP received a gross fee of $299,988. Katz and his partner in PIP became special limited partners. Katz testified that several persons had spoken to him during the summer of
The defendants argue that the plaintiffs’ evidence is insufficient as a matter of law to show that Carabetta authorized Star, either by their original agreement or by a waiver of its terms, to effect a syndication of the property, or to show that Star and Bonin were the predominating, efficient cause of the syndication which ultimately took place. They further contend that, as there was never any agreement with the plaintiffs with respect to syndication, there could be no agreement to pay them $600,000 in the event that a syndication occurred. The defendants urge that, because of the fundamental difference between a syndication (sale of shares or securities in a limited partnership) and a sale of real property (conveyance of property by deed), it was error to submit to the jury the question whether the plaintiffs had earned a commission in this case. The plaintiffs counter that the evidence warranted findings that Carabetta listed the property with Star for an agreed commission of $600,000, that the agreement to pay a commission was not conditioned on Star’s producing a buyer who would take title to the property,
1. The original agreement. The parties do not dispute that after a meeting held on January 18, 1977, among Abramson, Bonin, and Carabetta, the property was listed by Star at an asking price of $22,500,000. Despite some disparity in the testimony of the parties, there was ample evidence from which the jury could conclude that Carabetta authorized Star to list the property. There was also sufficient evidence that Star’s potential commission was fixed by the parties at $600,000. This included Carabetta’s own testimony that he told Abramson and Bonin that he required a net profit of $3,000,000. On conflicting evidence, it was open to the jury to find both the existence of the oral agreement and the agreed upon commission. See McEvoy v. Ginsberg, 345 Mass. 733, 736 (1963). With respect to the nature and extent of the plaintiffs’ authority under the agreement, however, we do not reach the same conclusion. The testimony of all the parties was in accord that, at the time of the January 27 meeting at which Star brought the property to the attention of Katz, the plaintiffs were limited
Nor do we view the distinction between a sale by conveyance of the property and a sale of limited partnership interests in the partnership as formal or artificial in this case. The jury could
2. Waiver. In the absence of evidence that Carabetta waived the original contract limitation, the plaintiffs could not have
On the evidence most favorable to the plaintiffs, the jury could have found that as early as the evening of January 27, in the same conversation in which she rebuked Katz for having mentioned syndication to Fiondella earlier in the day, Bonin did not discourage him from considering the property in terms of syndication.
Bonin’s testimony of the April 16 meeting does not make out a waiver. She knew during that month that other syndicators were on the construction site,
The dissent relies upon testimony of one Allen, another of Star’s brokers, as providing evidence of a waiver in April, 1977. Allen testified that Stem was interested in doing a syndication and having Carabetta remain as a general partner. There was no evidence that this interest of Stem’s was ever communicated to the defendants. Clearly, an “interest” of a possible purchaser expressed only to the plaintiff is not evidence that the defendants waived an express provision of the contract between the plaintiffs and the defendants. From Allen’s testimony, the jury could have found that Stem told Carabetta that he was willing to set aside $800,000 that would be Carabetta’s if the costs of completing the project did not exceed a stated amount and that Carabetta said he would think about it. This offer was not an offer to syndicate,
In July, Star produced the first of a series of proposals from two customers, Kosow and Simon, who it contends were prospective syndicators. These proposals were the subject of eight exhibits at trial. There was some evidence that the defendants
The dissent’s incantation of the virtues of having questions of fact decided by juries is quite wide of the mark. Rather than trenching upon any long established line of demarcation between the role of judge and jury, we have simply applied the time tested and universally approved formula for discerning when a party with the burden of proof has failed in his obligation to introduce enough evidence to permit a jury to find in his favor. “In a civil case, as to motions for a directed verdict or for judgment notwithstanding the verdict, if the judge, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, considers the evidence in the light most favorable to the party against whom the motion is directed and determines that the jury could reasonably find just one way, the judge should allow the motion .... O’Shaughnessy v. Besse, 7 Mass. App. [Ct.] 727 (1979). Adams v. Herbert, 345 Mass. 588 (1963). Cf. Abraham v. Woburn, [10 Mass. App. Ct. 416 (1980)].” P.J. Liacos, Massachusetts Evidence 46 (5th Ed. 1981). We have demonstrated above that a reasonable jury would have no option but to conclude that the plaintiffs’ contract was limited to producing buyers for the property and that this limitation was never waived at any time material to the events in question.
Because we conclude that a verdict should have been directed for the defendants on the plaintiffs’ claims in express contract, it is unnecessary to reach the other arguments made by the parties. The judgment on count one is reversed, and a judgment is to be entered thereon for the defendants.
So ordered.
Bonin testified that Carabetta said, “$600,000 is okay with me. You can get a million dollars as long as I get what I want. I don’t care what you ask for as commission.” She further testified that she and Star wanted their commission “immediately upon sale,” and that Carabetta would accept $1,000,000 at the time of sale and the $2,000,000 balance in equal payments over a three-year period.
In a syndication of real estate, investors are solicited to purchase shares and thus become limited partners in the partnership holding the property.
At trial, Bonin testified as follows:
Defendant’s counsel: “As of the conclusion of that [January 18 meeting, it is true, is it not, that Mr. Carabetta had hired Star Realty only to sell his property, not to syndicate?”
The witness: “That’s right.” «
Defendant’s counsel: “And you then said [to Slater’s associates]: ‘Make sure [Katz] knows that this is a sale. There’s no syndication here. ’ That is what you told them, isn’t it, back on January 20th?”
The witness: “Or words to that effect; yes.”
Defendant’s counsel: “In your originad discussions, Mrs. Bonin, you and Mr. Abramson and Mr. Carabetta were talking about a straight purchase. That’s clear, is it not?”
*61 The witness: “Originally."
Defendant’s counsel: “Originally. By ‘originally’ you mean back [in] January of 1977?”
The witness: “Yes.”
Carabetta testified that he was accustomed to syndicating real estate projects, that he had used syndicators in New York, Connecticut, and Massachusetts, and that by January, 1977, his firm had contacted several syndicators in connection with this property.
One of the persons who contacted Katz was an attorney for a client of Star. Katz declined the offer to join this client’s team as a syndicator of the property.
In their argument to this court, the plaintiffs further contend that if any restriction on Star’s authority to produce a syndicator rather than a buyer in
We make no intimation of what would constitute the “efficient cause” entitling the broker to his commission in the case of an agreement between the owner and the broker that syndication of the property is the object.
Bonin’s sole testimony which could be given this effect was: “I think I said something like: ‘You don’t need any other project. This is the best thing you are going to find.’ or ‘You ought to put all your eggs in this basket because this is the best project you are going to get,’ or something like that.”
Bonin testified that she knew that Tracy, among others, was working on syndication at that time, and that she met with him in October to commiserate about their respective failures to close a deal on the property.
See ante at note 4.
The plaintiffs’ contention, that the Kosow and Simon proposals demonstrate that they were not barred from procuring syndicators under the original agreement, fails by virtue of our conclusion in part 1 of this opinion. Supra at 64-66. Since the terms of the original contract were clear the July events might demonstrate that the restriction against syndicators had been waived for the future but could not be understood as varying the terms that existed in January. The further contention that Fiondella’s conduct at the end of the January 27 meeting was a “personal” acceptance of Katz as Star’s customer for syndication purposes, and signified that the defendants and Slater’s team would now deal directly with no further negotiations required by Star, must fail for the same reason.
Dissenting Opinion
(dissenting, with whom Liacos, J., and Nolan, J., join). This court has long adhered to the rule that, in suits by real estate brokers against property owners to recover commissions due for services performed, it is “for the jury to determine what the agreement of the parties was and whether the plaintiff complied with it.” McEvoy v. Ginsberg, 345 Mass. 733, 736 (1963). Boyle v. Goldenberg, 267 Mass. 24, 27 (1929). I perceive no reason why this rule should be inapplicable where the broker’s services are rendered in connection with a syndication of property.
The court concedes that “[t]he jury could have found . . . that Carabetta was indifferent whether he received the $3,000,000 profit from a sale or a syndication of the project.” Ante at 65-66. Carabetta summed up his outlook on the transaction when he stated at trial that “[t]he American dollar is all [the defendants were] interested in.” The court asserts that “it does not follow” from Carabetta’s disinterest in the form of the transaction that he authorized the plaintiffs to seek out syndicators. Ante at 66. the question whether it “followed” from this evidence that Carabetta agreed to pay a commission to the plaintiffs if they procured a syndicator is within the realm of reasonable inferences a jury should be permitted to make. I am unable to discern why the jury should be precluded from considering Carabetta’s indifference to the form of the transaction as persuasive evidence in support of the plaintiffs’ claim that, though Carabetta originally hired them to find a buyer (as opposed to a syndicator), he subsequently waived the syndicator restriction.
It is undisputed that, at a January 27,1977, meeting arranged by the plaintiffs, Fiondella, Carabetta’s agent, was introduced to Katz, the eventual syndicator of the defendants’ property. According to Bonin, when Katz, in the course of the meeting, proposed a syndication, Fiondella protested that he (Fiondella) was not there to discuss a syndication. Bonin stated that Fiondella nonetheless remained at the meeting, provided Katz with
Bonin stated that Katz called her on the evening of January 27 to express his enthusiasm for the Chestnut Hill Towers project. Bonin encouraged Katz to pursue a deal with Carabetta, telling Katz that “[y]ou ought to put all your eggs in this basket because this is the best project you are going to get.” The court admits that “the jury could have found that as early as the evening of January 27 . . . Bonin did not discourage [Katz] from considering the property in,terms of syndication.” Ante at 67. According to Bonin, she discussed the Chestnut Hill Towers project with Katz in the course of eight to ten subsequent conversations that took place through May 23, 1977. The jury could infer that Bonin not only alerted Katz to the existence of the Chestnut Hill property, “but that she furnished him with information about the project and attempted to keep him interested in it.” Bonin v. Chestnut Hill Towers Realty Co., 14 Mass. App. Ct. 63, 71 (1982). Further, as the court observes, “the jury could have found that Carabetta knew in January, 1977, that his own syndicators were not having success in moving the project, and . . . that the first contact between Katz and the defendants . . . occur[red] ... as early as April 1977.” Ante at 70.
On this evidence, it was permissible for the jury to conclude that the plaintiffs nourished Katz’s interest in the syndication, and that, as a direct result, Katz and the defendants began negotiations that culminated in a successful syndication. The court nonetheless nullifies the jury verdict for the plaintiffs,
Bonin stated that, after receiving a letter from Fiondella in April, 1977, stating that the Chestnut Hill property was being taken off the market, she went to see Carabetta. According to Bonin, Carabetta told her that Fiondella was negotiating a syndication but authorized Bonin to continue seeking out prospects interested in the property.
Further evidence of a waiver of the syndication restriction was provided by Susan Allen, one of several Star brokers, who introduced Star clients to Carabetta. Allen testified that
The record indicates that the defendants hired the plaintiffs, that the defendants were indifferent to the means by which they obtained a $3,000,000 profit, that the plaintiffs expended considerable time and effort on the defendants’ behalf, that the plaintiffs brought Katz and the defendants together, that the defendants negotiated with other syndicators produced by the plaintiffs, and that the defendants obtained everything they wanted from a syndication reasonably attributable to the plaintiffs ’ efforts.
The evidence presented a question of fact as to whether the plaintiffs were authorized to seek out syndicators. Jurors saw the witnesses, and their judgment of the credibility of the witnesses, of the comparable strength of the conflicting evi
In discounting evidence on the basis of which the jury could properly have found facts supportive of the plaintiffs’ claim, the court negates the traditional division of functions between judge and jury. This “separation of the functions of court and jury . . . cannot be confounded or disregarded without endangering the stability of public justice, as well as the security of private and personal rights.” Commonwealth v. Canon, 373 Mass. 494, 515-516 (1977), quoting Sparf & Hansen v. United States, 156 U.S. 51, 106 (1895). The court is the ultimate guardian of the proper allocation of these duties; if the court does not act with restraint in reviewing the sufficiency of the evidence, it abuses its trust, with harmful consequences to the administration of justice and to community acceptance of the rule of law. That acceptance is rooted in the central role of the jury in our legal system. The court’s decision “trenches on our long-established, consistently applied, and zealously guarded line of demarcation between the respective roles, functions, and responsibilities of the judge and of the jury.” Commonwealth v. Dickerson, 372 Mass. 783, 802 (1977) (Quirico, J., concurring). The court’s decision deprives these plaintiffs of their right to have the facts decided by the jury and usurps the jury’s rightful role, thereby “diminishing the extent of citizen participation in the administration of justice and the many benefits which flow from such participation.” Commonwealth v. Canon, supra at 516 (Abrams, J., dissenting).
Because the facts support a conclusion that “[mjore than one decision was possible to honest and reasonable [persons], and, therefore, the jury was the tribunal to determine which one,” Hicks v. H.B. Church Truck Serv. Co., 259 Mass. 272, 277 (1927), I respectfully dissent.
The court correctly refuses to adopt the Appeals Court’s conclusion that a real estate broker is, as a matter of law, precluded from earning a commission in a syndication transaction. Because the court concludes that there was no evidence indicating that the defendants authorized the plaintiffs to seek out syndicators, it does not decide “what would constitute the ‘efficient cause’ entitling the broker to his commission in the case of an agreement between the owner and the broker that syndication of the property is the object.” Ante at note 8. Because, on my view of the evidence, the jury could have found that the plaintiffs produced Katz as a syndicator at a time when they were authorized to do so, I discuss the question whether a broker may be the efficient cause of a syndication. In my opinion, a broker who brings together an owner and a syndicator capable of producing $3,000,000 profit for the owner performs a service indistinguishable in practical effect from the service provided by a broker who matches the owner with a buyer willing to purchase the property at a price that will net the owner a $3,000,000 profit. An owner may, without legal or logical impediment, contract to pay a commission to a broker whose efforts produce a syndicator capable of effectuating a syndication on the owner’s terms; a broker who fulfils such a contract may be deemed the efficient cause of the syndication.
Because a broker’s services leading to a syndication of property resemble those performed by a broker hired to effectuate a sale or a lease, I see no reason to vary the standard of efficient causation applied in precedents involving sales and leases. See Holton v. Shepard, 291 Mass. 513, 516 (1935) (broker may be found to be efficient cause of transaction, provided broker produces customer prior to termination of broker’s employment, and that connection between broker’s efforts and transaction is causally unbroken); Stuarts. Valsom, 249 Mass. 149, 151 (1924). Cf. Siegel v. Lowe, 327 Mass. 154, 155 (1951) (to be efficient cause of transaction, broker “did not have to be present [when transaction consummated], or cognizant of it at the time, and its terms need not be the same as those given to the broker”).
The following statements were elicited from Carabetta with respect to the plaintiffs’ continued authority to seek out clients interested in a transaction involving the Chestnut Hill property:
Plaintiffs’ counsel: “You continued [in April, 1977] to have Mr. Fiondella see people that were brought by Star Realty brokers to the job; correct?”
The witness: “Yes, sir.”
Plaintiffs’ counsel: “Because you realized that they were still working for you, didn’t you?”
The witness: “Yes.”
Plaintiffs’ counsel: “And you wanted to pay them their fee earned — that brokerage fee; didn’t you?”
The witness: “Absolutely.”
The Appeals Court’s determination that Kosow’s and Simon’s proposals were limited to syndication on their own accounts, rather than on Carabetta’s account, 14 Mass. App. Ct. 63 , 70 (1982), is erroneous. Paragraph 9 of the plaintiffs’ exhibit 13, a proposal which, according to Bonin’s testimony, was dictated to her over the telephone by Kosow and subsequently transmitted to Carabetta, reads as follows: “Buyer will give investors of syndication approximately 50% of the equity. The remaining approximately 50% equity will be split 50/50 between the seller and the buyer.” The Kosow proposal thus indicates that Carabetta would remain a partner in the syndicated property, retaining a 25% interest in the equity.
In dismissing evidence from which the jury could infer a waiver in April of the original restriction on Star’s procurement of syndicators, the court places great emphasis on Bonin’s April 29 letter to Carabetta characterizing a cash buyer as “what we’ve been seeking.” Ante at 62. The court reads that letter as an acknowledgment by Bonin “that the restriction on syndication was still in effect.” Ante at 68. Although the jury could have adopted the gloss placed on the April 29 letter by the court, it was not required to do so; there is no inconsistency between Bonin’s statement that she had been seeking a cash buyer and her claim that, in April, she was also authorized to seek syndicators. Interpretation of the April 29 letter was a matter for the jury’s consideration in light of the other evidence presented.
As the Appeals Court noted, “Katz and Carabetta’s dealings with [Bonin] do not stand as a model of decency, wisdom and candor.” 14 Mass. App. Ct., supra at 75.
In fact, Carabetta may receive more from the syndication than he would from a straight sale. Carabetta testified as follows:
Plaintiffs’ counsel: “Now, Mr. Carabetta, is it fair to say that you will receive — by you I mean the owners of the equity — what’s transferred; you will receive at least three million dollars from this transaction?”
The witness: “Yes, sir.”
Plaintiffs’ counsel: “Can you tell us how much more than three million dollars would be a fair portion?”
The witness: “I think that’s three million, two hundred and fifty [thousand].”
Under the syndication agreement, Carabetta also retained a fifty per cent residual interest in the property.
I note that an experienced and able trial judge denied the defendant’s motion for judgment notwithstanding the verdict.
Reference
- Full Case Name
- Angela Bonin & Another vs. Chestnut Hill Towers Realty Corp. & Others
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- 26 cases
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- Published