OPINION OF THE COURT
In this matter, the Court is asked to enforce against defendants, tenants of premises owned by Olympia & York, a brokerage agreement providing that plaintiff will seek compensation only from defendants’ landlord, which is not a party to this litigation. The contract drafted by plaintiff includes no remedy in the event of defendants’ breach and fails to specify whether an exclusive agency or the exclusive right to deal with potential lessors is granted to the broker. Plaintiff appeals from an order which granted defendants’ motion for summary judgment dismissing the complaint against them and which denied plaintiffs cross motion for partial summary judgment on the issue of liability and from the judgment entered thereon. Despite the shortcomings in the terms of the contract, this Court defers to fundamental principles of contract law to hold that the broker is entitled to maintain this action.
Defendants are apparel companies with showrooms and offices located at 1290 Avenue of the Americas, a location notable for housing the operations of "almost the entire industry comprising the men’s tailored clothing business”, as
Plaintiff served separate complaints against the three defendants, which are identical in all relevant aspects, and the actions were subsequently consolidated. The complaints state that defendants’ present leases with Olympia & York were to expire on April 30, 1990. Plaintiff found an acceptable alternative location and, on November 23, 1987, the respective defendants executed letters of intent to lease space in premises located at 1500 Broadway. "In order to force the landlord to reduce its terms” plaintiff then "gave copies of said letter of intent to certain other individuals with the knowledge that those individuals would exhibit said letter of intent to the landlord.” In December of 1987, however, defendants commenced their own lease negotiations with Olympia & York, culminating in leases on terms comparable to those set forth in the letter of intent circulated by plaintiff. The complaints charge that defendants prevented plaintiff from becoming the procuring cause of renewal leases for defendants’ current space, thereby depriving it of a commission.
In its first cause of action, plaintiff seeks damages for breach of the brokerage agreement in the total amount of $402,000 ($172,000 from defendant Greif Companies, $130,000 from defendant Joseph & Feiss Company, and $100,000 from
Side agreements were executed contemporaneously with the basic brokerage agreement, stating the terms of Olympia & York’s initial renewal offer ($40 per square foot for first five years, $45 for next five years, plus $10 per square foot allowance for renovations) and waiving any commission from Olympia & York should plaintiff fail to secure leases on better terms than originally proposed. The pertinent language states, "In the event that we are unsuccessful in negotiating a transaction in some other building satisfactory to you in all respects, or a transaction at 1290 Avenue of the Americas, more favorable to you than the one described above, we agree that, at your election, we shall have no right to represent you with the owners of 1290 Avenue of the Americas, notwithstanding that negotiations may be continuing from prior to December 31, 1987.” These side agreements provide that defendants’ sole obligation with respect to this waiver of commission is not to disclose to Olympia & York the existence of the letter of intent for space at 1500 Broadway, "so as not to prejudice any pending negotiations.”
In their joint answer, defendants do not deny plaintiffs efforts on their behalf. The gravamen of their defense is that, as a matter of law, they are under no obligation to compensate plaintiff. Defendants rely on the express terms of their agreement, which provides that plaintiffs "sole compensation shall be that paid by the seller or leasor [sic]”. Defendants’ answer further maintains that negotiations for renewal leases were initiated by Olympia & York, that defendants renewed their leases after the brokerage agreements had expired, and that plaintiff was not the procuring cause of the renewal leases ultimately obtained from Olympia & York.
Upon defendants’ joint motion to dismiss the complaints, the parties raise several other material issues of fact. They dispute whether plaintiff advised Olympia & York of its representation of defendants in negotiations for renewal of their leases at 1290 Avenue of the Americas and, if so, whether Olympia & York maintained a policy of refusing to deal with a broker in negotiating renewal leases with its tenants. Defendants question the viability of the alternative space located by plaintiff. Finally, defendants assert that they
In granting defendants’ motion, Supreme Court determined that Olympia & York had "absolutely refused” to negotiate with plaintiff. The court noted that the letter agreement contains no language expressly prohibiting the principals from dealing directly with the landlord and imposes no contractual liability upon defendants for the broker’s commission.
Factual disputes are not amenable to resolution on a motion for summary judgment dismissing the complaint (Harris v City of New York,
Irrespective of how the relationship of the parties might be characterized in the brokerage agreement, under the peculiar circumstances of this case, it is clear that plaintiff entered into a contract with defendants under which its right to represent them could not be abrogated unilaterally by defendants. The relationship between plaintiff and defendants is unlike the normal relationship of broker and client (Sibbald v Bethlehem Iron Co.,
The case under review is unusual because the parties’
In essence, a contract is a promise supported by consideration and, in the case of a bilateral contract such as this, the promise of each party must be based upon valuable consideration (Calamari and Perillo, Contracts § 70, at 134). Plaintiff cannot be regarded as having bargained for the privilege of rendering its services to defendants without also imposing some reciprocal obligation upon them. It would be merely gratuitous and contrary to the commercial relationship of a broker and his principal to assume that plaintiff undertook a duty to locate space without any prospect of compensation (Gronich & Co. v 649 Broadway Equities Co.,
As a matter of law, having entered into an agreement under which the broker’s compensation is conditioned on its right to represent defendants’ interests with a third party, defendants are precluded from taking any action which would defeat that condition. As this Court recently noted in Rachmani Corp. v 9 E. 96th St. Apt. Corp. (
This Court is unable to conclude, as defendants contend, that they retained the right to deal directly with Olympia & York. Under circumstances in which the exercise of this right defeats any chance for plaintiff to receive payment from defendants’ lessor, its retention cannot be said to have been within the contemplation of the parties at the time they executed the brokerage agreement and related side agreements. The circumstances under which defendants can elect to discharge plaintiff as their agent are expressly set forth in the side agreements. Moreover, defendants bear the burden of proof with respect to the propriety of their election to deal directly with Olympia & York, as it operates to relieve them from their only obligation under the brokerage agreement. The termination of plaintiff’s right to represent defendants obviates the condition precedent to plaintiff’s compensation, preventing it from being the procuring cause of the transaction for renewal leases, and offends the principal that a party to a contract may not frustrate its performance by bringing about the failure of a condition precedent (Creighton v Milbauer, supra, at 165). In this event, the law permits recovery on the theory of implied contract (Knobel v Manuche,
Another fundamental premise of contract law militates against adopting the interpretation of the agreement proposed by defendants. Under the facts of record, the grant of an exclusive agency by defendants (as opposed to a more extensive right to deal on their behalf) bestows no benefit on plaintiff. A promise to refrain from dealing directly with their landlord, so long as they do not feel so disposed, is an illusory promise obliging defendants to nothing (Strong v Sheffield,
The courts avoid an interpretation that renders a contract
If this Court were to accept defendants’ contention that the agreement with plaintiff conferred only an exclusive agency and find the agreement void for lack of mutual obligation, the outcome would be no different. In the absence of a contract, express or implied, a broker is entitled to receive a commission in a reasonable amount for bringing together the parties to a transaction (Sibbald v Bethlehem Iron Co., supra, at 380-381 [contract established by facts showing conscious appropriation of broker’s labor]). As this Court stated in Gronich & Co. v 649 Broadway Equities Co. (169 AD2d, supra, at 602), "When the seller has accepted the buyer brought to him by a broker, and when the seller and buyer have agreed upon terms and execute a lease agreement, the broker’s work is done and he has earned a commission” (citing Colvin v Post Mtge. & Land Co.,
Having availed themselves of the benefits of their bargain with plaintiff, defendants may not evade the obligation to pay compensation for services rendered by the broker (Bradkin v Leverton,
Finally, the finding that the agreement between the parties constitutes more than the grant of an exclusive agency does not dictate the conclusion that defendants are liable for payment of plaintiff’s commission. The writings do not, as Supreme Court noted, go so far as to declare that the contract gives plaintiff an exclusive right to deal on defendants’ behalf and, in the absence of unequivocal language, this Court declines to infer the grant of so extensive a right (see, Solid Waste Inst. v Sanitary Disposal,
Defendants have raised triable issues of fact. Among other contentions, they argue that Olympia & York refused to deal with plaintiff, making their direct participation in the negotiations imperative. Nothing in the agreement with defendants suggests that they had any control over, or responsibility for, any actions of their landlord during the course of negotiations (see, Millicom Inc. v Breed, Abbott & Morgan,
Accordingly, the judgment of the Supreme Court, New York County (Herman Cahn, J.), entered March 25, 1994, which granted defendants’ motion for summary judgment dismissing the complaint and denied plaintiffs cross motion for partial summary judgment with respect to liability on its first cause of action, should be modified, on the law, defendants’ motion for summary judgment denied and the complaint reinstated and, except as so modified, affirmed, without costs. The appeal from the order of the same court and Justice, entered February 16, 1994, should be dismissed as superseded by the judgment entered thereon, without costs.
Motion seeking leave to file an amicus curiae brief is denied.
Murphy, P. J., Rosenberger, Tom and Mazzarelli, JJ., concur.
Judgment, Supreme Court, New York County, entered March 25, 1994, modified, on the law, defendants’ motion for summary judgment denied and the complaint reinstated and, except as so modified, affirmed, without costs. The appeal from the order of the same court and Justice, entered February 16, 1994, dismissed as superseded by the judgment entered thereon, without costs. Motion seeking leave to file an amicus curiae brief is denied.