Opinion
No. CV 0175799 S
May 26, 2005
MEMORANDUM OF DECISION ON MOTION TO STRIKE (#105)
This is an action to foreclose a statutory broker's lien filed by the plaintiff against two properties on East Putnam Avenue in the town of Greenwich, one (119 East Putnam Ave.) owned by the defendant Putnam Avenue Properties, Inc. ("Putnam, Inc.") and the other (85 East Putnam Avenue) owned by the defendant Moran Real Estate Holdings, Inc. ("Moran, Inc."). The underlying dispute relates to plaintiff's claim for a $249,000 brokerage commission for allegedly procuring a ready, willing and able contract purchaser for the two properties at a combined purchase price of $4,150,000. Despite the lofty numbers, the documentation of the commission claim can be described as nothing other than sloppy, evidencing attention to detail well short of the care that the average person would use in purchasing something like a washing machine or a lawn tractor.
Recorded on the Greenwich land records to secure a claim for a brokerage commission per § 20-325a, Conn. Gen. Stat.
The Amendment to Complaint ("Amended Complaint") of January 25, 2000 alleges, in part: that the defendant Putnam, Inc. owned a property known as 119 East Putnam Avenue in Greenwich, which is particularly described by a metes and bounds legal description; that the defendant Moran, Inc. owned a property known as 85 East Putnam Avenue which is more particularly described by a metes and bounds legal description; that the plaintiff is a licensed real estate broker; and that on April 11, 1997 the defendant Putnam, Inc. entered into an exclusive right to sell listing agreement (the "Listing Agreement") with the plaintiff for the sale or the lease of the property at "85 East Putnam Avenue." A copy of the Listing Agreement is an exhibit to the complaint. The Listing Agreement is an exclusive right to sell or lease listing agreement between the plaintiff and the defendant Putnam, Inc., applicable by its terms to property known as "99 East Putnam Avenue, Cos Cob, Connecticut" (which is the address of neither of the properties liened by the plaintiff and described in the complaint) which is described more particularly in a legal description attached as a Schedule to the Listing Agreement. That legal description, upon review by the court, is the same as the legal description alleged in the complaint to be the legal description of the property at 85 East Putnam Avenue, owned by the defendant Moran, Inc. (not a party to the Listing Agreement). The April 11, 1997 Listing Agreement has an expiration date of June 15, 1997.
A further Motion to Amend Complaint was filed by the plaintiff on March 13, 2000 after the defendants had filed this February 14, 2000 Motion to Strike. That Motion to Amend Complaint has never been acted on by the Court. It was not claimed to the short calendar when the instant Motion to Strike was argued . . . The amendments requested in the March 13, 2000 Motion to Amend therefore cannot and will not be considered by the Court in deciding this Motion to strike the complaint.
The commission claimed is alleged to be due for the plaintiff having obtained "on or before October 28, 1997" a contract buyer (Argonaut Holdings, Inc.) for the properties at 119 East Putnam Ave. and 85 East Putnam Ave. for a combined contracted purchase price of $4,150,000. Copies of two purchase and sale agreements dated "October 1997" between Argonaut Holdings, Inc., a Delaware corporation, as buyer, and each corporate defendant, as seller, are attached as exhibits to the Amended Complaint.
Without even getting to the issue of whether or not Argonaut Holdings, Inc. was a "ready willing and able buyer" or whether or not an actual consummation of the sale was a prerequisite to the plaintiff being entitled to a commission, it is obvious that the documentation presents numerous obstacles to Plaintiff's claim, including:
1. The Listing Agreement covers a property at a street address (99 Putnam Avenue) which is not alleged to be owned by either defendant and is not one of the properties for which plaintiff claims to have produced a buyer;
2. Even if reference is made to the legal description attached to Listing Agreement, the owner of that described property (being the property at 85 East Putnam Avenue) is the defendant Moran, Inc. which is not a party to the Listing Agreement; and
3. The Argonaut Holdings, Inc. Purchase and Sale Agreements were signed in October of 1997, some four months after the June 15, 1997 expiration of the Listing Agreement.
To overcome these deficiencies in the commission claim the plaintiff alleges, first, that the Listing Agreement was modified "by subsequent letters and agreements" between the plaintiff and Frederick A. Moran, acting as chairman of each corporate defendant; and second, with respect to the passing of the June 15, 1997 expiration date, that the Listing Agreement was extended for one year beyond June 15, 1997 by operation of an "automatic extension" provision of the Listing Agreement itself. Because the court finds that the June 15, 1997 expiration date of the Listing Agreement based on the facts alleged in the Amended Complaint, was not extended beyond June 15, 1997 and that the contract buyer was not obtained until October 1997, it will not be necessary to address the other problems with the plaintiff's commission claim.
Discussion
The defendants have moved to strike the Amended Complaint for the reason, inter alia, that:
Plaintiff fails to allege that a real estate brokerage commission was earned pursuant to a listing agreement that met the mandatory requirements of Conn. Gen. Stat. § 20-325a(b). The only allegedly compliant agreement expired before the commission was supposedly earned, and the alleged subsequent writings were insufficient as a matter of law to revive or extend the terms of that agreement.
The role of the trial court in ruling on a motion to strike is "to examine the [complaint] construed in favor of the [plaintiff] to determine whether the [pleading party has] stated a legally sufficient cause of action. (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378 (1997). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Moreover, [w]hat is reasonably implied [in an allegation] need not be expressly alleged." (Citation omitted; internal quotation marks omitted.) Lombard v. Edward J. Peters, Jr., P.C., 252 Conn. 623, 626 (2000). Viewing the allegations of the Amended Complaint most favorably to the plaintiff there is a claim for a real estate brokerage commission under a listing Agreement that expired on June 15, 1997, based on the plaintiff's allegation that he procured a contract buyer for certain properties in October of 1997. Although the plaintiff has alleged in ¶ 5 of the Amended Complaint that the Listing Agreement was subsequently modified by "subsequent letters and agreements" dated May 6, 1997, October 14, 1997, October 21, 1997, October 29, 1997, and November 12, 1997, plaintiff's counsel has stipulated in his Memorandum of Law that those alleged "modifications" are not claimed to have extended the June 15, 1997 expiration date of the Listing Agreement:
The Defendant misunderstood the basis and thrust of the Plaintiff's Complaint. The Plaintiff's Complaint does not attempt to avoid the expiration date of Plaintiff's April 11, 1997 Listing Agreement. The purpose of the subsequent documents and letters is to show that 85 East Putnam Avenue became part of the original Listing Agreement of April 11, 1997. (Plaintiff's Memorandum of Law, March 13, 2000, p. 11.)
Plaintiff's position with respect to the June 15, 1997 expiration date is premised entirely on the so-called "automatic extension" clause of the April 11, 1997 Listing Agreement itself: "Very clearly, the Listing Agreement had an automatic ONE (1) year extension provided certain conditions were met." Id. The clause of the Listing Agreement relied upon by plaintiff appears in the section of the contract entitled "Honoring Broker's Position" and provides in its entirety as follows:
During the terms of this listing agreement Silvio Benedetto Associates will be recognized as Broker of record in the event of purchase, lease or exchange and will be so recognized for 12 months after this agreement expires in the event of a sale, lease or exchange of this property or business to any client to whom broker may have shown or introduced this property. All commissions are due and payable upon Broker producing a customer ready, willing and able upon terms and price acceptable to Owner.
In the Listing Agreement, there is a hand-drawn line drawn through the words "and will be so recognized for 12 months after this agreement expires in the event of" followed by the handwritten notation "O.K." in the margin. The court finds that the deletion was accidental and the notation "O.K." was meant to designate that the deleted words remain part of the Agreement.
The Court construes this provision as requiring that the broker shall have shown or introduced this property to the client in question prior to the normal expiration date of the Listing Agreement, in this case June 15, 1997. Any introduction of a client to the property occurring for the first time after the normal expiration date of the Listing Agreement would not be an authorized act under the agreement, as the broker's agency would have expired. See, DeForest Industries v. Gaetano, 38 Conn.Sup 703 (Appellate Session of the Superior Court, 1983). Plaintiff does not disagree with this interpretation, as he claims that he "showed both properties before the June 15, 1997 expiration date of the Listing Agreement" (Plaintiff's Memorandum of Law, March 13, 2000, p. 11), and submits, as an attachment to his Memorandum of Law, a letter of May 5, 1997 from counsel for Argonaut Holdings, Inc. to the plaintiff confirming contact with that prospective purchaser prior to June 15, 1997. The problem with plaintiff's position as to the expiration of the Listing Agreement, is that for purposes of this motion to strike, the court is limited to the allegations of the Amended Complaint. Even construing those allegations most favorably to the plaintiff there is nothing therein to confirm any contact with or introduction of the property to Argonaut Holding, Inc. prior to June 15, 1997. Paragraph 8 of the Amended Complaint alleges that:
On or before October 28, 1997, the Plaintiff obtained a buyer for the Property located at 119 East Putnam Avenue, Greenwich, Connecticut and the Defendant PUTNAM AVENUE PROPERTIES, INC. entered into a purchase and sales contract (hereinafter referred to as the "Contract") for the said property with ARGONAUT HOLDINGS, INC. A copy of said contract is attached hereto and made a part hereof as Exhibit H.
Identical allegations are made in ¶ 8 of the Amended Complaint with respect to the property owned by the defendant Moran, Inc. at 85 East Putnam Ave., and that contract is attached as Exhibit I. "On or before October 28, 1997" could conceivably refer to a date prior of June 15, 1997, but the contracts attached as Exhibits H and I dated "October 1997" clearly put the date of "obtaining" Argonaut Holdings, Inc. as a contract buyer sometime during the month of October 1997. There is no allegation whatsoever in the Amended Complaint as to when the plaintiff first showed the properties to Argonaut Holdings, Inc. or otherwise first introduced Argonaut Holdings, Inc. to these properties. Plaintiff's attempt to fill this gap by attaching to his Memorandum of Law a copy of the May 5, 1997 letter to the plaintiff from counsel for Argonaut Holdings, Inc. is unavailing. The court must decide this motion strictly on the allegations of the complaint or facts necessarily implied therein. Lombard v. Edward J. Peters, Jr., P.C., supra. It is well settled that a "speaking" motion to strike (one imparting facts outside the pleadings) will not be granted. Doe v. Marselle, 38 Conn.App. 360, 364 (1995), rev'd on other grounds 209 Conn. 273, 278 (1996). The same principles apply to a "speaking" objection to a motion to strike. Plaintiffs may not file objections to motions to strike which refer to facts and accusations not contained in the four corners of the complaint. Lebrun v. York, No. CV94-0539534-S, 1995 WL562213, at *1 (Conn.Sup., Sept 15, 1995, Corradino, J.). Because the only facts indicating that the plaintiff introduced Argonaut Holdings, Inc. to these properties prior to June 15, 1997 appears in the improper attachment to the plaintiff's memorandum of law, the condition of the "automatic extension" clause of the Listing Agreement is not satisfied, and, so far as the allegations of the Amended Complaint are concerned the Listing Agreement expired on June 15, 1997, well prior to the plaintiff's "obtaining" Argonaut Holdings, Inc. as a contract purchaser. This is fatal to the plaintiff's claim for a commission, since a real estate broker may not bring an action to recover for any services rendered unless such services were rendered pursuant to a contract which complies with Conn. Gen. Stat. § 20-325a. Howland v. Schweir, 7 Conn.App 709 (1986). Services performed after the expiration of a listing agreement are not performed "pursuant to" that agreement. Id. 7 Conn.App. at 715.
Nor can the plaintiff's alleged cause of action be saved by any suggestion that his services were performed pursuant to a "listing agreement" cobbled together from the various subsequent letters and agreements referenced in the Amended Complaint and attached thereto as Exhibits B through G. First of all, that is not the theory on which the plaintiff has pleaded his case. The Amended Complaint is clearly premised on a claim that plaintiff's services were performed pursuant to the April 11, 1997 Listing Agreement as subsequently modified by those writings. In any event, considered either individually or collectively, the letters and agreements do not comply with Conn. Gen. Stat. § 20-325a. Section 20-325a(b) specifies that no licensed broker shall commence any action with respect to any acts or services rendered after October 1, 1995 unless the acts or services were rendered pursuant to a written contract or authorization which ". . . (6) if such contract or authorization pertains to any real property, include the following statement: `THE REAL ESTATE BROKER MAY BE ENTITLED TO CERTAIN LIEN RIGHTS PURSUANT TO SECTION 20-325a OF THE CONNECTICUT GENERAL STATUTES.'" The quoted mandatory language appears nowhere in any of the subsequent letters and agreements attached to the Amended Complaint as Exhibits B through G. Under § 20-325a(d) it is now the law that nothing in § 20-325a(b) shall prevent a licensee from recovering any commission, ". . . if it would be inequitable to deny such recovery and . . . (2) with respect to a commercial real estate transaction, has substantially complied with subdivisions (2) to (6), inclusive, of subsection (b) of this section . . ." The court finds that the letters and agreements attached to the Amended Complaint as Exhibits B through G do not comply at all with subsection (6) of § 20-325a(b). Section 20-325a(d) therefore does not apply, and § 20-325a(b) would bar any action for a commission allegedly earned pursuant to the "letters and agreements."
For that matter the Listing Agreement itself does not contain the mandatory language of § 20-325a(b)(6) which would be an alternative ground for denying recovery of plaintiff's commission claimed pursuant to the April 11, 1997 Listing Agreement.
Since the plaintiff's claim for his commission, as alleged in the Amended Complaint, is defective, the action to foreclose the plaintiff's broker's lien must also fail. See, Conn. Gen. Stat. § 20-325a(k)(4) ("Except as otherwise provided in this section all liens claimed under this section shall be foreclosed in the manner in which mortgage foreclosures are conducted.)"; and Little v. United Investors Corp., 157 Conn. 44 (1968) (if debt is extinguished, right to enforce the mortgage is gone).
Order
For the foregoing reasons, Defendant's Motion to Strike (No. 105) is granted and Plaintiff's Objection to Defendant's Motion to Strike (No. 107) is overruled.
BY THE COURT:
Alfred J. Jennings, Jr., Judge