| Monahan v Lewis |
| 2008 NY Slip Op 04589 [51 AD3d 1308] |
| May 22, 2008 |
| Appellate Division, Third Department |
| Brian Monahan et al., Appellants, v Joseph Lewis, Defendant, andWhitbeck Associates, Respondent. |
—[*1] Clute, Clute & Thompson, Plattsburgh (James W. Clute of counsel), forrespondent.
Stein, J. Appeal from an order of the Supreme Court (Dawson, J.), entered February 26, 2007in Clinton County, which, among other things, granted defendant Whitbeck Associates' motionfor summary judgment on its counterclaim against plaintiffs.
Defendant Whitbeck Associates initially represented defendant Joseph Lewis, theprospective buyer, and—unsolicited by plaintiffs—approached plaintiffs with aspecific offer to arrange the sale of their home to Lewis, if they would list it with Whitbeck as thebroker. Plaintiffs agreed and executed a listing agreement with Whitbeck. The listing agreementcovered only a two-week period, admittedly because the broker had Lewis ready as a buyer. Thelisting agreement included a provision that plaintiffs would pay Whitbeck a commission uponsecuring a purchaser for the property at the sales price and terms listed in the agreement or forany other sales price or terms acceptable to the owner. Lewis made an offer to purchase the housewithin the time covered by the listing agreement and then withdrew the offer based upon thefailure of a contingency contained therein. Lewis then made a second offer, after the expiration ofthe listing agreement, which was accepted by plaintiffs. Thereafter, Lewis defaulted on thecontract for sale.[*2]
Plaintiffs commenced this action to recover costs andexpenses incurred as a result of their efforts to comply with the second purchase contract, as wellas with other related demands made by Lewis, and for an order directing that Lewis's downpayment be paid to plaintiffs. In its answer to the complaint, Whitbeck interposed a counterclaimagainst plaintiffs for payment of its commission. Whitbeck then moved for summary judgmenton its counterclaim. Plaintiffs cross-moved for leave to amend their answer to the counterclaimto include a claim for indemnification and contribution against Lewis for the commission. In adecision and order filed in February 2007, Supreme Court, among other things, grantedWhitbeck's motion for summary judgment on its counterclaim against plaintiffs and deniedplaintiffs' cross motion to amend. Plaintiffs now appeal.
"It is fundamental that a real estate broker earns its commission when it produces a buyerwho is ready, willing and able to purchase the subject property under the terms offered by theseller" (Blackman DeStefano Real Estate v Smith, 157 AD2d 932, 934 [1990] [citationomitted]). Furthermore, where a valid listing agreement exists, "[i]n the absence of an agreementproviding to the contrary, the broker's right to compensation is not dependent upon theperformance of the realty contract or the receipt by the seller of the selling price" (id.;see Paul J. Boyer Realty v Perry, 208 AD2d 1024 [1994]).
Here, it is uncontroverted that the contract of sale was executed after the expiration of thenarrow period indicated in the listing agreement. Whitbeck contends that it is neverthelessentitled to its commission because the conduct of the parties demonstrates—as a matter oflaw—that they implicitly agreed to continue the listing agreement. Although the conduct ofparties to a contract following the expiration of that contract can operate to demonstrate that theparties " 'impliedly agree that their rights and obligations . . . should continue to bemeasured as provided in the old contract' " (Town of Webster v Village of Webster, 280AD2d 931, 934 [2001], quoting New York Tel. Co. v Jamestown Tel. Corp., 282 NY365, 371 [1940]), the existence of such an implied contract will ordinarily be a question of fact,as it involves an assessment of the parties' conduct and the extent to which such conductdemonstrates a meeting of the minds (see Town of Webster v Village of Webster, 280AD2d at 934; see also Lobosco v New York Tel. Co./NYNEX, 96 NY2d 312, 316[2001]; Robison v Sweeney, 301 AD2d 815, 817 [2003]).
We note that, although the contract of sale between plaintiffs and Lewis specifically providedthat Whitbeck brought about the sale and was entitled to a commission, that contract was notexecuted by Whitbeck. Furthermore, even if that provision of the contract of sale suggests thatplaintiffs agreed to pay Whitbeck a commission under the terms of that contract, this evidence isinsufficient to decide on this record—as a matter of law—that the parties agreed tocontinue the terms of the listing agreement. Significantly, " '[t]he fact that the parties continue todeal under some sort of informal arrangement does not, without more, mean that all the terms ofthe expired formal contract continue to apply' " (Town of Webster v Village of Webster,280 AD2d at 934, quoting Twitchell v Town of Pittsford, 106 AD2d 903, 904 [1984],affd for reasons stated below 66 NY2d 824 [1985]).
Indeed, a reasonable factfinder might conclude that plaintiffs' agreement to pay Whitbeck itscommission after the listing agreement had expired was not an indication that plaintiffs wereagreeing to extend the listing agreement according to its original terms but, rather, as alleged byplaintiff Brian Monahan, an independent promise conditioned upon the expectation that Lewiswould actually purchase the property. Whitbeck's actions could also be construed as underminingthe conclusion that it continued to represent plaintiffs. For example, although the [*3]listing agreement promised that Whitbeck would list the propertywith, among others, the Multiple Listing Service, plaintiffs allege that the property was notmarketed to anyone other than Lewis. After Lewis defaulted, Whitbeck began showing Lewisother properties. Under these circumstances, we find that a valid question of fact exists as towhether the parties implicitly agreed that the listing agreement—which had a unique, cleartwo-week duration—was extended.
With respect to plaintiffs' cross motion to amend its answer to Whitbeck's counterclaim, wenote that "a defaulting purchaser may not be compelled to indemnify the seller for payment of arealtor's commission in the absence of an express agreement" (Blackman DeStefano RealEstate v Smith, 157 AD2d at 934). This is a purely contractual matter and there is nocontractual indemnification clause in the contract of sale. Therefore, the proposed claim againstLewis was without merit and Supreme Court properly denied the cross motion (see Murray vCity of New York, 43 NY2d 400, 404-405 [1977]; Ramundo v Town of Guilderland,108 AD2d 995, 996 [1985]; Sharapata v Town of Islip, 82 AD2d 350, 362 [1981],affd 56 NY2d 332 [1982]).
We have considered the remaining contentions of the parties and have found them to bewithout merit.
Cardona, P.J., Spain and Malone Jr., JJ., concur. Ordered that the order is modified, on thelaw, without costs, by reversing so much thereof as granted the motion of defendant WhitbeckAssociates; motion denied; and, as so modified, affirmed.