Court Opinion

ID: 4116644
Source: CourtListenerOpinion
Date Created: 2017-01-18 21:07:18.861329+00
Date Added: 2024-06-11T14:33:37.958392
License: Public Domain

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                                      Appellate Court                         Date: 2017.01.18
                                                                              08:31:16 -06'00'

                  Halpern v. Titan Commercial LLC, 2016 IL App (1st) 152129

Appellate Court          CHARNA HALPERN, Plaintiff-Appellant and Counterdefendant-
Caption                  Appellant, v. TITAN COMMERCIAL LLC and BEN ROSENFIELD,
                         Defendants-Appellees and Counterplaintiffs-Appellees.

District & No.           First District, First Division
                         Docket No. 1-15-2129

Filed                    November 7, 2016

Decision Under           Appeal from the Circuit Court of Cook County, No. 13-CH-17139; the
Review                   Hon. Raymond Mitchell, Judge, presiding.

Judgment                 Affirmed.

Counsel on               Kevin Q. Butler, Cornelius E. McKnight, Bryan T. Butcher, and
Appeal                   Nathan P. Karlsgodt, of McKnight, Kitzinger & Pravdic LLC, of
                         Chicago, for appellant.

                         Tyler Manic, of Schain, Banks, Kenny & Schwartz, Ltd., of Chicago,
                         for appellees.

Panel                    JUSTICE SIMON delivered the judgment of the court, with opinion.
                         Justices Harris and Mikva concurred in the judgment and opinion.
                                              OPINION

¶1       This case arises out of a dispute over a real estate broker’s commission. Defendants Titan
     Commercial LLC (Titan) and its principal Ben Rosenfield filed a broker’s lien against a
     property. Plaintiff Charna Halpern filed a complaint to extinguish the lien as improper. In turn,
     defendants filed a counterclaim seeking payment of their real estate broker’s commission.
     Following a bench trial, the trial court awarded defendants a $50,000 commission and denied
     plaintiff’s claim for attorney fees. We affirm.

¶2                                          BACKGROUND
¶3       Plaintiff is the owner of iO Theatre, a comedy club that she leased near Wrigley Field for
     nearly 25 years. Plaintiff was looking to purchase a building to continue to operate her club at
     a different location. In May 2010, plaintiff began working with defendants who specialize in
     off-market properties. An off-market property, also known as a pocket listing, is a property not
     marketed to the public for sale, but known to the broker based on the broker’s preexisting
     relationship with the owner or landlord. Generally, when dealing with an off-market property,
     the broker approaches the building owner, explores the owner’s inclination to sell, and builds
     up a relationship that leads up to the owner’s willingness to sell the property. Other brokers do
     not know about the availability of these properties. Defendants informed plaintiff about the
     confidential nature of an off-market property and how they would be the only broker involved
     in the transaction.
¶4       Defendants showed plaintiff a number of properties. On June 22, 2010, defendants showed
     plaintiff an off-market property at 1501 N. Kingsbury (Kingsbury property) in Chicago.
     Defendants had several meetings with the owner of the Kingsbury property a few months prior
     to speaking with plaintiff about it. At the end of the showing, plaintiff and the owner of the
     Kingsbury property discussed a potential transaction and a selling price. The owner requested
     that plaintiff submit an offer to him.
¶5       Following the showing, defendants assisted plaintiff to find a parking solution in the event
     that she would purchase the Kingsbury property. Defendants arranged another showing on
     June 25, 2010, where plaintiff’s architect toured the property to evaluate the costs of
     converting the building into a theater. Defendants also obtained the full set of plans for the
     building on the property, information about the existing leases, and researched whether the
     zoning was appropriate for her comedy club. These efforts allowed plaintiff and her architect
     to determine that the Kingsbury property was financially feasible for plaintiff’s needs.
¶6       On July 15, 2010, plaintiff, through Titan, submitted a letter of intent containing plaintiff’s
     offer of $1.7 million to purchase the Kingsbury property. The letter stated that Titan would
     receive a commission and that the seller would be responsible for the payment of it to Titan. In
     the beginning of October 2010, plaintiff increased the offer to $2.8 million. Plaintiff intended
     to purchase the property vacant without the tenants. Rosenfield advised plaintiff that if she
     wanted the property vacant, based on his conversations with the owner, she could not purchase
     the property until the middle of 2012.
¶7       After submitting the offer, plaintiff instructed defendants to maintain contact with the
     owner and to make sure that no one else would buy the property. From 2010 to 2012,
     defendants stayed in contact with the owner of the Kingsbury property and showed him several

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       properties the owner could potentially purchase with the proceeds from his sale of the
       Kingsbury property to plaintiff. In December 2010, plaintiff assured Rosenfield in an e-mail
       that she understood that the Kingsbury property was Titan’s deal and no other broker’s.
¶8         Plaintiff looked at various properties using other brokers, but she continued to maintain her
       interest in purchasing the Kingsbury property. Throughout 2012, she continued to negotiate
       the purchase of the Kingsbury property with the assistance of Justin Cozart, an employee of the
       Private Bank. In an e-mail from May 2012, he advised her, “[p]lease try to keep this quiet until
       we have our deal signed and done. This is a valuable property that we have been waiting out for
       over a year to get.”
¶9         In November 2012, plaintiff entered into a contract to purchase the Kingsbury property for
       $4.2 million and subsequently closed on the property. No real estate broker commission was
       paid, but a consulting fee of $100,000 was paid to Justin Cozart’s company. No commission
       was paid to Rosenfield or Titan.
¶ 10       Titan filed a commercial broker’s lien on the Kingsbury property. On July 18, 2013,
       plaintiff filed suit against Titan and Rosenfield seeking a temporary restraining order, a
       preliminary injunction, declaratory relief, an action to quiet title, adjudication of the lien,
       damages for tortious interference, and damages and attorney fees for violating the Commercial
       Broker’s Lien Act (Act) (770 ILCS 15/1 et seq. (West 2012)). The chancery court granted
       plaintiff the preliminary injunction. The case was then transferred to the law division.
¶ 11       Defendants counterclaimed and sought to recover their lost broker’s commission alleging
       breach of contract, promissory estoppel, and quantum meruit. Following a bench trial, the trial
       court denied plaintiff’s claim for attorney fees and granted defendants a judgment of $50,000
       on their quantum meruit claim. This appeal follows.

¶ 12                                            ANALYSIS
¶ 13       On appeal, plaintiff argues that the trial court erred when it denied her request for attorney
       fees and costs associated with pursuing the preliminary injunction action against defendants.
       Plaintiff argues the trial court erroneously denied her request because she was the prevailing
       party in her action to remove an improperly asserted lien on the property. We review the award
       of attorney fees under a de novo standard of review. People v. Blanks, 361 Ill. App. 3d 400, 407
       (2005) (matters of statutory interpretation are reviewed de novo).
¶ 14       Section 10(l) of the Act provides that the prevailing party is entitled to recover the “cost of
       proceedings asserting or defending a broker’s claim of lien, including reasonable attorneys’
       fees, costs, and prejudgment interests.” 770 ILCS 15/10(l) (West 2012). A party is a
       “prevailing party” for the purposes of awarding attorney fees when a judgment is entered in his
       favor and he achieves some sort of permanent affirmative relief after adjudication on the
       merits. See J.B. Esker & Sons, Inc. v. Cle-Pa’s Partnership, 325 Ill. App. 3d 276, 282 (2001).
¶ 15       Here, plaintiff cannot be considered a prevailing party by merely the grant of an
       interlocutory motion for a preliminary injunction. The court’s grant of the injunction was just a
       preliminary stage, was not a final disposition on the merits of plaintiff’s claim asserting an
       improper lien, and did not confer plaintiff a permanent relief. See People ex rel. Hartigan v.
       National Anti-Drug Coalition, 124 Ill. App. 3d 269, 273 (1984) (“Such an injunction does not
       decide controverted facts or the merits of the cause; rather it only shows that sufficient cause
       has been made to authorize or require the court to preserve the rights in issue until a final

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       hearing on the merits.”). In granting plaintiff’s preliminary injunction, the chancery court
       specifically stated that it was not deciding the merits of the plaintiff’s claim against the
       defendants. The court emphasized that it was only making a determination on the likelihood of
       success on the merits for the purposes of the preliminary injunction and suggested that
       defendants would not be successful in an action to enforce the lien. The propriety of the lien
       was never adjudicated on the merits.
¶ 16        Moreover, the Act, which is the statute relied on by the plaintiff here, does require that, in
       order to recover fees, plaintiff must be the “prevailing party” in a proceeding “asserting or
       defending a broker’s claim of lien.” The preliminary injunction was not a final adjudication on
       the merits as to the propriety of the lien, and plaintiff cannot be viewed as the prevailing party.
       Therefore, the trial court did not err in denying plaintiff’s request for attorney fees and costs.
¶ 17        Plaintiff next argues that the trial court’s determinations that defendants were entitled to a
       broker’s commission under a quantum meruit theory and that defendants were the procuring
       cause for the sale of the Kingsbury property were against the manifest weight of the evidence.
       Plaintiff contends that defendants did not negotiate the final sale of the Kingsbury property and
       were not the procuring cause of sale. Instead, plaintiff maintains, a different real estate
       professional actually negotiated the purchase of the property more than two years after plaintiff
       had made her initial offer to buy the property. We review the trial court’s factual findings under
       a manifest weight of the evidence standard. Lozman v. Putnam, 379 Ill. App. 3d 807, 820
       (2008). A finding is against the manifest weight of the evidence “only when an opposite
       conclusion is apparent or when the findings appear to be unreasonable, arbitrary, or not based
       on the evidence.” (Internal quotation marks omitted.) Id.
¶ 18        A broker’s right to commission depends on whether the sale was procured through his
       efforts or through information derived from him, and cannot be defeated by the owner’s
       making the sale through another broker. Edens View Realty & Investment, Inc. v. Heritage
       Enterprises, Inc., 87 Ill. App. 3d 480, 485 (1980); Van C. Argiris & Co. v. FMC Corp., 144 Ill.
       App. 3d 750, 754 (1986) (whether the complaining broker is the procuring cause of the sale “is
       a logical sine qua non to the establishment of the fact that the services rendered were valuable
       and of benefit to the seller, and thus, it is merely a part of the existing elements required for
       recovery in quantum meruit”). A real estate broker may be the procuring cause of a sale “if he
       brings together the parties who ultimately consummate the transaction [citation] or if he is
       instrumental in its consummation [citations]” or “on the basis of the negotiations he conducts,
       even though he does not take part in bringing the parties together initially. [Citation.]
       Moreover, a real estate broker may be the procuring cause where the transaction is effectuated
       through information which he disseminates [citations], although it has been noted that in such
       cases, the broker actually may do more than supply information [citation].” Pietka v. Chelco
       Corp., 107 Ill. App. 3d 544, 549-50 (1982).
¶ 19        In light of the above principles and of the record before us, we find that the trial court’s
       holding that defendants were the procuring cause of the Kingsbury property was not against
       the manifest weight of the evidence. The Kingsbury property was never publicly marketed for
       sale but was an off-market property known to plaintiff because defendants showed her the
       property and introduced her to its owner. Clearly, the only means to plaintiff purchasing the
       property was through the defendants’ discovery of the property as a potential deal for plaintiff.
       Furthermore, not only did Titan facilitate several meetings between the owner and plaintiff, but
       it also conducted its due diligence when it procured information regarding the leases on the

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       property, the zoning, the parking situation, and a full set of plans for the property to allow
       plaintiff’s architect to estimate the cost of converting the building on the property into a new
       comedy club.
¶ 20       In 2010, plaintiff, through Titan, submitted an offer to purchase the property. Titan also
       advised plaintiff that if she wanted the property vacant, without the tenants, she could not
       purchase the property until the middle of 2012. After submitting her offer, plaintiff never
       requested defendants to stop working on the purchase of the Kingsbury property. Rather she
       instructed them to maintain contact with the owner to make sure no one else would buy the
       property. She also assured Rosenfield in an e-mail that the Kingsbury property would be
       “absolutely [his] deal.” From 2010 to 2012, defendants stayed in contact with the owner of the
       Kingsbury property and showed him properties he could purchase with the sale proceeds from
       his sale of the Kingsbury property to plaintiff. Although plaintiff stopped working with Titan
       and purchased the Kingsbury property with the assistance of another real estate professional,
       not a broker, plaintiff admitted that she would have never known about the property had Titan
       not shown it to her. Based on this record, we cannot say that the trial court’s finding that Titan
       was the procuring cause of the sale was against the manifest weight of the evidence. See Owen
       Wagener & Co. v. U.S. Bank, 297 Ill. App. 3d 1045, 1052 (1998) (“Where a real estate broker
       shows that he has been instrumental in bringing parties together and the transaction is
       consummated, he is to be regarded as the procuring cause of the sale and entitled to his
       commission. [Citation.] It is sufficient if the sale is effectuated through the efforts of the broker
       or through information [provided by] him.” (Internal quotation marks omitted.)).
¶ 21       Contrary to plaintiff’s argument, defendants did not abandon the deal. If the purchaser
       claims that the broker abandoned the deal, “the evidence must show not only a discontinuance
       of his efforts by the broker, it must show abandonment by the purchaser of all intention to buy
       the property.” Western Pride Builders, Inc. v. Zicha, 23 Ill. App. 3d 770, 773 (1974). Certainly,
       plaintiff never abandoned her intention to buy the Kingsbury property. In May 2012, Cozart
       and plaintiff discussed how to keep their new offer to purchase the property “quiet” because it
       “is a valuable property that we have been waiting out for over a year to get.” Moreover, there
       was no evidence in the record that shows that defendants ever refused to perform any
       brokerage activity to effectuate plaintiff’s purchase of the property. Instead, Rosenfield made
       regular calls to the owner of the Kingsbury property to stay updated and offered to lend any
       assistance to close the deal. After discovering plaintiff’s 2012 offer made through Cozart,
       Rosenfield reiterated to plaintiff that Titan was owed a commission if plaintiff purchased the
       Kingsbury property.
¶ 22       Ultimately, plaintiff bought the Kingsbury property. Despite being an off-market property
       where the purchaser and the seller did not know one another, there was no real estate broker
       commission paid. Plaintiff signed the contract stipulating that she did not work with any broker
       and warranted that only Cozart is owed a commission in the form of a “finder’s fee,” although
       without defendants’ efforts she would not have been able to purchase the property. Under these
       circumstances, the trial court correctly held that defendants were entitled to their commission.
       A broker who is the procuring cause of a sale is entitled to a commission under the theory of
       quantum meruit where a party receives a benefit which is unjust for him to retain without
       paying for it. Romanek-Golub & Co. v. Anvan Hotel Corp., 168 Ill. App. 3d 1031, 1042-43
       (1988). If a buyer excludes a broker from a transaction, the buyer may become liable to pay the

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       broker’s commission even in the absence of an express agreement. Louis v. Lexington
       Development Corp., 253 Ill. App. 3d 73, 78 (1993).
¶ 23       In the instant case, defendants performed real estate broker services, which benefitted
       plaintiff. Plaintiff’s benefit consisted of the ability to purchase the Kingsbury property, which
       derived from defendants’ efforts. Defendants could not be deprived of their commission
       merely because plaintiff completed the sale without the direct involvement of defendants, who
       brought the parties together and without whom plaintiff admittedly would have never known
       about the existence of the property. See Bennett & Kahnweiler Associates v. Ratner, 133 Ill.
       App. 3d 316 (1985). The trial court properly held that it would be unfair for plaintiff to keep
       that benefit without compensating defendants who created that opportunity.
¶ 24       Finally, we reject plaintiff’s argument that defendants failed to establish the reasonable
       value of their services to recover under quantum meruit. Plaintiff argues that the award was
       “contrary to the law and speculative.” At trial, two experts testified that a reasonable and
       customary commission paid to a real estate broker for brokering the Kingsbury property would
       range between 1% and 6% of the sale price. Plaintiff did not produce any counterevidence
       suggesting that this range of commissions was erroneous. Plaintiff paid a $100,000 “finder’s
       fee” to another real estate professional and did not pay any broker’s fee. The $50,000
       commission representing 1.19% of the sale price is a reasonable commission in light of the
       unchallenged expert testimony that 6% of the sale price would have been reasonable.
       Accordingly, we are unable to conclude that the judgment in favor of defendants on their
       quantum meruit claim was excessive or against the manifest weight of the evidence.

¶ 25                                      CONCLUSION
¶ 26      Based on the foregoing, we affirm.

¶ 27      Affirmed.

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