Court Opinion

ID: 5833254
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:31:01.308063+00
Date Added: 2024-06-11T08:43:16.559220
License: Public Domain

Lane and Markewich, JJ.,
dissent in a memorandum by Lane, J. as follows: Kule Resources, Ltd. (Kule), brought this suit to recover a commission in connection with the sale by Reliance Group, Incorporated (Reliance), of its subsidiary, Disclosure Incorporated (Disclosure). Disclosure was sold to Snyder, Hixon & Associates. In 1976, a vice-president of Reliance contacted Kule to arrange for the sale of Discovery. Shortly thereafter, a principal of Kule contacted an employee of Smith, Barney & Co., Inc. (Smith Barney), for the names of companies interested in acquiring Disclosure. Two names were elicited: Butler Publishing Co., and Snyder, Hixon. Kule allegedly revealed these names to Reliance and was directed to develop Butler and not Snyder, Hixon. The Butler transaction did not come to fruition and Discovery was sold to Snyder, Hixon. When Kule was denied its commission, it brought this lawsuit. Reliance moved for summary judgment in its favor, which was denied by Special Term. I would affirm the determination of Special Term because there are material and triable issues of fact which preclude summary disposition of this case. Reliance claims that it is entitled to summary judgment in its favor because Kule failed to comply with the letter agreement requiring that Kule obtain prior written consent from Reliance before approaching a prospective purchaser, and further failed to obtain a waiver-of-commissions form from Smith, Barney. Both these alleged prerequisites were concededly not performed by Kule. Nonetheless, this failure does not automatically warrant the granting of summary judgment to Reliance. The operative letter agreement upon which Kule bases its claim for commissions provided that Kule could possibly provide services to Reliance as "finder, broker, originator, consultant or otherwise,” and be in each event entitled to remuneration. The letter did not specify that it related to any particular prospective purchaser, but did contain an additional caveat that prior written consent of Reliance must be obtained before third parties were approached with respect to sale of Disclosure. The letter also provided that Reliance could withhold consent in its sole discretion. These provisions in the letter agreement create an issue of fact as to whether the parties intended that Kule obtain prior written consent when it acted as a finder, or only when it acted as a broker or negotiator. Clearly, if prior written consent could be denied at the sole discretion of Reliance, then Rule’s function as a finder would be an impossible one. As a finder, it would merely present a name to Reliance. Reliance could fail to give prior written consent and then follow up on that same name itself, leaving Kule without recourse. The intent of the parties in this regard is a question of fact requiring a full hearing.* The waiver of commissions by Smith, Barney alleged to be a prerequisite to Rule’s right to compensation was described in *755a separate cover letter. That cover letter related only to the obtaining of Butler Publishing Co. as a prospective purchaser. It could not therefore operate as a bar to Rule’s compensation for obtaining a prospective purchaser. If the parties intended the waiver letter to be presented in all transactions, that, too, raises an issue of fact to be explored. Lastly, there is a dispute among the parties whether Snyder, Hixon was offered as a prospective purchaser through Rule or through some other source. All of these issdps of fact require a full hearing, since a motion for summary judgment is the vehicle for issue finding and not for issue determination (Esteve v Abad, 271 App Div 725, 727; Sillman v Twentieth Century-Fox, 3 NY2d 395, 404). Accordingly, the order of the Supreme Court, New York County, entered October 20, 1978, denying summary judgment to the defendant, should be affirmed.

 Normally, ambiguities in the text of an agreement may be resolved by the court on a motion for summary judgment. However, in this case, the ambiguity of the clauses permeates the basic aspects of the agreement, and the intent of the parties cannot be gleaned from the instrument itself. This presents a question of fact which must be determined dehors the words of the instrument (Musman v Modern Deb, 56 AD2d 752, 753).