Smith v. H. Pearce Real Estate Co.
232 Conn. App. 82
Conn. App. Ct.2025Background
- DeForest W. Smith, a licensed broker, and DeForest Industries, Inc. (DII), sold certain business assets to H. Pearce Real Estate Company through a 2012 asset purchase agreement, which included commercial real estate listings and excluded certain assets listed in a schedule.
- As part of the agreement, Smith and other DII brokers joined Pearce as independent contractors, and commissions were to be paid for qualified transactions completed by specified dates or pending by the agreement's end date and closed within a year.
- Disputes arose over unpaid commissions, bonus compensation, and commissions relating to excluded assets (lease renewals), leading Smith and DII to sue Pearce for breach of contract, and Pearce to claim a setoff for an alleged overpayment regarding a property transaction.
- A related interpleader action by The Milford Bank concerned commission rights for a specific lease renewal at 9 Depot Street, claimed by both DII and Pearce; the case was consolidated and tried together with the main contract action.
- The trial court awarded Smith some bonus compensation, found Pearce entitled to a significant setoff for overpayment, and ruled for Pearce in the interpleader, granting it the contested commission. The judgment was appealed by Smith and DII.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to setoff for overpaid commission | Payment was proper as sale of 126 Boston Post Rd was pending by cutoff date | Overpayment occurred; sale was not pending as required | Pearce entitled to setoff |
| Personal liability for setoff | No evidence or argument made to pierce corporate veil | No need to pierce veil; personal liability stands | Not reviewed due to inadequate briefing |
| Scope of excluded lease renewals | All lease renewals by address/tenant, regardless of dates, were excluded | Only lease renewals for expected dates on schedule excluded | Exclusions limited by listed dates |
| Commission for 9 Depot Street (interpleader action) | Lease was excluded asset, so commission not due to Pearce | Not excluded as renewal dates don't match schedule | Pearce entitled to commission |
Key Cases Cited
- Circulent, Inc. v. Hatch & Bailey Co., 217 Conn. App. 622 (appellate standard for reviewing factual findings is clearly erroneous)
- Wethington v. Wethington, 223 Conn. App. 715 (principles of contract interpretation—ascertaining parties' intent from language)
- AGW Sono Partners, LLC v. Downtown Soho, LLC, 343 Conn. 309 (contract interpretation as question of law for appellate review)
- Johnson v. Vita Built, LLC, 217 Conn. App. 71 (interpretation must avoid rendering contract terms superfluous)
- Biro v. Matz, 132 Conn. App. 272 (expression of one thing as exclusion of another in contract interpretation)