Case Name: Cushman & Wakefield, Inc., Appellant, v. 214 East 49th Street Corp., Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1996-04-02
Citations: 218 A.D.2d 464
Docket Number: 
Parties: Cushman & Wakefield, Inc., Appellant, v 214 East 49th Street Corp., Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 218
Pages: 464–478

Head Matter:
[639 NYS2d 1012]
Cushman & Wakefield, Inc., Appellant, v 214 East 49th Street Corp., Respondent.
First Department,
April 2, 1996
APPEARANCES OF COUNSEL
David H. Gikow of counsel (Lehman & Gikow, P. C., attorneys), for appellant.
Sidney Gottleib for respondent.

Opinion:
OPINION OF THE COURT
Wallach, J.
This is an action to recover a real estate brokerage commission. When defendant sought to sell its five-story building in 1985-1987 for $4.5 million, Stein, the building manager, approached Takeshi Okazaki as a prospective purchaser. Okazaki, who was president of a corporation which operated a restaurant at the premises and leased the first two floors, was not interested. Stein was unable to find a buyer.
In February 1988, defendant entered into a six-month exclusive brokerage agreement with plaintiff, whereby the latter would earn its 6% commission on any sale even after expiration of the period, provided that the property were "submitted" to the purchaser during the term of the agreement. The exclusivity agreement was subsequently extended for an additional two months, through October 26, 1988. Plaintiff was initially instructed not to approach Okazaki, despite his being a logical prospect, because the latter had already rejected an earlier offer. But in late August, during the two-month extension period, plaintiff received clearance from one of defendant's principals to approach the tenant again. Plaintiff's agent, Mark Bush, testified that at the first of two meetings with Okazaki, in September 1988, he reviewed the prospect in the light of an economic comparison between ownership and tenancy. Okazaki later rejected the offer because the asking price of $4 million was too high in comparison with other properties in the neighborhood. That was the extent of plaintiff's contact with Okazaki.
In May 1989, some seven months after expiration of plaintiff's contractual period of exclusive brokerage, Okazaki let it be known to Stein that his octogenarian father in Japan was interested in investment opportunities in New York City. (As early as February 1989, Okazaki had opened a joint account with his father in New York, in order to manage these local investments.) Stein raised the prospect of purchase of defendant's building, whose selling price would now be more attractive because of changed market conditions. At this price, Okazaki was interested. After obtaining power of attorney from his father (who spoke no English), Okazaki negotiated a purchase of the building for him in June at $2,230,000, arranged the financing, and entered into an informal agreement to continue renting the first two floors from the new owner while expand ing rent-free occupancy of the remainder of the premises. At the closing in August, Stein received a commission of $50,000.
At trial, plaintiff argued that defendant and Okazaki had engaged in a "tortious scheme" to deprive plaintiff of its rightful brokerage commission, casting Okazaki's father in a purely nominal role as purchaser of the property. But plaintiff has conceded that this is not a case of conspiracy or fraud; indeed, the complaint is couched in claims of breach of contract, quantum meruit and unjust enrichment. Nevertheless, plaintiff points to inconsistencies in Okazaki's testimony that raise questions as to his prior dialogue with Stein (in 1985-1987), the source of funding for the purchase, the true nature of the highly favorable new rental arrangement, and even the absent father's financial ability to make the purchase.
Our courts will scrutinize an alleged subterfuge designed to deny a real estate broker his rightful commission (see, Rachmani Corp. v 9 E. 96th St. Apt. Corp., 211 AD2d 262). Notwithstanding Okazaki's testimonial inconsistencies (which may or may not be attributable to linguistic nuance), plaintiff has failed to prove any such subterfuge. There is nothing sinister about the interest of Okazaki's absentee father—a man of means, if not a "millionaire" by American standards—in dabbling in the New York real estate market, even if that resulted in a rental arrangement whose terms were, for Okazaki, a considerable improvement over its predecessor. The father's incentives for this investment were amply proven.
Even if the father was merely an alter ego of Okazaki for purpose of this acquisition, that still would not entitle plaintiff to judgment on this record. For well more than a century we have been guided by the principle that a broker's duty is to bring the minds of a buyer and seller to agreement on the sale (i.e., its terms and price), and until that is accomplished, no right to commissions accrues (Sibbald v Bethlehem Iron Co., 83 NY 378). It is not enough simply to open negotiations between parties; unless the broker can produce a purchaser who is ready, willing and able to buy, under the terms as specified by the seller, he has done nothing to induce a purchase, and will not be entitled to a commission even if that prospect ultimately purchases the property (Levy v Hayman, 8 AD2d 854, appeal dismissed 8 NY2d 868).
The terms of plaintiff's brokerage employment contract entitled it to a commission if "at any time after the expiration or termination of this agreement a sale of all or any portion of the Property, upon any terms acceptable to us, shall be made with any purchaser to whom the Property were submitted by C&W, or by us, or by any other person during the term of this agreement". This language substantially alters the common-law rights of a broker in its favor, relieving said agent of the requirement to bring its prospect to a meeting of the minds on all the essential terms of the ultimate transaction before a commission is earned. Under this contract, plaintiff simply has to show that it (or "any other person" Presumably, this could even include Stein, although it is clear that neither of Stein's "submissions" took place "during the term of this agreement".) "submitted" the property, during the term of the agreement, to the ultimate purchaser who closed the deal at any later time. But however broadly defined, this "submission" theory of recovery will not avail plaintiff here because it was Stein, rather than plaintiff, who had first submitted the property to Okazaki for possible purchase, long before plaintiff arrived on the scene. Under these circumstances, plaintiff, at this point no longer the "exclusive" broker, could only earn a commission if it satisfied the common-law requirement that it achieve a meeting of the minds between Okazaki and defendant on all the essential terms and conditions of the purchase. Admittedly, nothing of the sort ever occurred.
To prove plaintiff's entitlement, there must thus be a proximate link between the bare introduction of the parties and the consummation of the transaction (Greene v Heilman, 51 NY2d 197). Here, the link between plaintiff's unfruitful meetings with Okazaki in September 1988 and the latter's contract to purchase in June 1989 (eight months after expiration of plaintiff's exclusivity contract), on drastically different terms, is nonexistent. Plaintiff is reduced to intimating that Stein's overture may have been as early as January or February of 1989, in light of the fact that Okazaki opened the joint account with his father in February. The dissent accepts this intimation as established fact. But despite the vague recollection by defendant's principal of Stein's reference to such early discussions, Stein's testimony was quite firm that the subject had not been broached until May of that year. Even if negotiations had commenced in January, that would still have been three months after expiration of plaintiff's exclusivity contract.
Plaintiff was required to prove its case by a preponderance of the evidence. It failed to sustain that burden. Whatever testimonial inconsistencies there were, deference must be given to the Trial Judge in evaluating the credibility of witnesses, "unless it is obvious that the court's conclusions could not be reached under any fair interpretation of the evidence" (Claridge Gardens v Menotti, 160 AD2d 544, 545). Where the record supports those conclusions, the standard has been met and our review function has been served (Nightingale Rest. Corp. v Shak Food Corp., 155 AD2d 297, lv denied 76 NY2d 702).
The dissent is correct when it notes that this case was tried upon the supposition that the pretrial decision denying both parties' respective motions for summary judgment (Altman, J.) had narrowed the issues at trial, and that the quantum of plaintiff's brokerage services, however slight, was not in controversy before the trial court. Indeed, there was never any dispute as to the two brief visits made by plaintiff's salesman to defendant. But we are unable to conclude that the outcome of the parties' motion practice was to relieve plaintiff of its obligation to establish a prima facia case, or its obligation, if it were ultimately to prevail, to prove its case by a preponderance of the credible evidence. This Court, of course, is not bound by the doctrine of "law of the case" made on pretrial motions in reviewing a full record after trial (Metropolitan Life Ins. Co. v Noble Lowndes Intl., 192 AD2d 83, 87-88, affd 84 NY2d 430). What is "determined" on a motion for summary judgment is the entitlement of a party to a pretrial judgment upon the affidavits and proofs before the court at that time, not the issues defined by the living testimony and proofs at trial (Sackman-Gilliland Corp. v Senator Holding Corp., 43 AD2d 948, 949, lv denied 34 NY2d 515; see also, Aufiero v New York Life Ins. Co., 74 NYS2d 277, 279, affd 274 App Div 928). By way of further example, proof offered to defeat a motion for summary judgment does not meet the standard of proof required to resolve an issue of fact at trial (see, Jenks v Mc-Granaghan, 30 NY2d 475, 479 [Breitel, J.]).
We also reject the notion that under the guise of "interpretation", we have in reality rewritten the brokerage agreement. In our view, it is the dissent's misreading of the agreement which steps into this very trap. By the time plaintiff's salesman, Bush, called on Okazaki fils in September 1988, it is undisputed that defendant's manager, Stein, had already "submitted" the property to Okazaki for consideration, long before the "exclusive" agreement was signed, and all that Bush was providing were some comparative cost studies. In this context, what Bush was doing was resubmitting the property with some additional sales input. At this juncture, then, Bush's efforts fall outside the coverage of plaintiff's exclusive agreement, unless, with the reasoning adopted by the dissent, we are required to translate "submit" as the equivalent of "resubmit." We decline to rewrite the agreement in this fashion simply to bestow a $150,000 windfall on plaintiff for its marginal role in this salvage sale transaction.
Finally, on the factual aspect of the case, we are in complete agreement with the trial court's conclusion that plaintiff simply failed to prove any of its multiple theories of recovery by a fair preponderance of the credible evidence. The case could simply have been affirmed on this fully supported finding of the able and experienced Judge who conducted the bench trial.
Accordingly, the judgment of Supreme Court, New York County (Walter M. Schackman, J.), entered August 10, 1994 after nonjury trial, dismissing the complaint, should be affirmed, without costs.