194 Conn. 71 | Conn. | 1984
The plaintiff, John F. Epina Realty, Inc. (Epina Realty), brought this action against the defendants Space Realty, Inc. (Space Realty), Tavern on the Rocks, Inc. (Tavern), and Lee Vanacore seeking damages in the form of commissions resulting from the sale and lease of certain real estate and the sale of a restaurant business which were located at 581 West Putnam Avenue in Greenwich. Vanacore was the sole stockholder and president of both Space Realty, which owned the land and the buildings thereon, and Tavern, which conducted a restaurant known as the Penthouse Restaurant. The restaurant was located at 581 West Putnam Avenue, and Tavern orally leased it from Space Realty. Tavern paid no rent to Space Realty under its lease. John F. Epina, president of Epina Realty and also a licensed real estate broker, met Vanacore in 1973 when he approached Vanacore and asked him for a listing of his real estate at 581 West Putnam Avenue. Thereafter, Vanacore gave the plaintiff several listings of the real estate and the restaurant business.
In April or May of 1976, Vanacore admittedly “began conversations” with Robert Celona concerning the sale or lease of the restaurant business. This resulted in the execution on July 27, 1976, of a “collateral stock purchase agreement” between Celona, together with an associate John Lium, and Vanacore, whereby Vanacore transferred all of his stock in Tavern to Celona and Lium who in turn agreed to lease the premises on which the restaurant business conducted by Tavern was located. The lease agreement was also executed on July 27, 1976.
The trial court, Hon. William L. Tierney, Jr., state referee, determined that because of the listing agreements which the plaintiff had with Vanacore, the plaintiff had an “exclusive right to lease the premises up to June 4, 1976” as well as an “exclusive right to sell the Penthouse Restaurant business up to November 5, 1976.” The trial court therefore found “that the defendant violated the terms of the agreement to lease by conducting negotiations with the lessees and entering into agreements with the lessees and by agreeing to a twenty year lease while plaintiff had an exclusive right to sell the business.” The trial court also pointed out in its memorandum that at the time when “the exclusive agreement was entered into [the premises] had no binding lease imposed upon it which [the] defendant by his control of the corporation could not terminate, but
The trial court then concluded that the plaintiff was entitled to a commission of 10 percent of the value of the business sold. It therefore awarded the plaintiff the sum of $40,400 based upon the appraisal made by Samuel Boyarsky that the value of the Penthouse Restaurant business was $404,000 which appraisal the court found to be “fair.”
On appeal, the defendants claim that the trial court erred in: (1) its determination that the value of the Penthouse Restaurant business was $404,000 at the time of its sale; (2) excluding from evidence two state sales tax returns of Tavern for the fiscal quarters ending June 30,1975, and December 31,1975; and (3) concluding that the plaintiff was entitled to a commission under the listing agreements between the parties. On its cross appeal, the plaintiff claims that the trial court erred in: (1) not awarding it a commission for the lease of the premises; and (2) not finding the fair market value of the Penthouse Restaurant to be $654,000. We find no error on either the appeal or the cross appeal.
We turn first to the threshold issue of whether the plaintiff was entitled to any commission under its listing agreements with Yanacore. Here the defendants claim that the listing agreement of August 24, 1975, was properly characterized by the trial court as “an exclusive listing to sell the real estate for $1,750,000 which terminated August 24,1976, but which also permitted the owner [defendants] to sell without paying a commission [to the plaintiff],”
The challenge is not to the validity per se of the listing agreements here in question but, rather, to their interpretation. This issue primarily involves the three listing agreements between the parties dated August 24, 1975, February 3, 1976, and May 5, 1976.
The intention of the parties to a contract is to be determined by a fair and reasonable construction of the language used interpreted in light of the situation of
We further point out that it is significant that none of the three listing agreements in issue refers to any other one of these listing agreements so as to incorporate any of their terms or conditions. While such an incorporation in this case could have been accomplished by a reference in the February 3,1976 and May 5,1976 agreements to the August 24, 1975 agreement in a manner which would “establish that they intended to make the terms and conditions [the August 24, 1975 agreement] part of their understanding . . .”; E&F
We next turn to the defendants’ claims that the trial court erred in finding that the value of the restaurant business sold was $404,000. The defendants’ argument here is twofold: (1) they claim that the appraisal of Boyarsky was based on “extremely minimal data” and that it did not consider certain relevant factors concerning the value of the business; and (2) that the trial court erred in excluding certain state sales tax returns which the defendants claim would have altered the valuation of the business. We reject both of these claims.
We first address the trial court’s exclusion of the state sales tax returns. The circumstances relating to this claim are as follows: The plaintiff had initially sought on December 19, 1980, the defendants’ authorization to order copies of their tax returns from the Internal Revenue Service and the state of Connecticut for the years 1971 through 1976. Thereafter, apparently when full compliance had not been made, the plaintiff filed a request for production on September 24,1981, of the defendants’ federal income tax returns and state sales tax returns for 1974, 1975, and 1976.
On October 27,1981, the plaintiff filed a motion for order of compliance which referred to the defendants’ failure to produce the requested tax records for the years 1975 and 1976. The plaintiff requested an order of compliance and an order establishing the income of the Penthouse Restaurant to be not less than the 1974 income. The trial court, Landau, J., entered an order on November 23,1981, establishing the income of the restaurant for 1975 and 1976 as being not less than the income for 1974
More than four months after this order was entered and after the trial had begun, counsel for the defend
The defendants claim that in excluding the tax records from evidence the trial court abused its discretion. They argue that if the records had never become available, it might have been reasonable for the court to follow the November 23, 1981 order, but that since the records were actually available, it was “prejudicial error” to exclude them.
Before the trial court, when the records were offered, as well as before this court, defense counsel related the circumstances under which these records were ulti
We point out that the defendants have not challenged the propriety of the trial court’s November 23, 1981 order. They make no claim at all that the trial court erred in issuing its order under Practice Book § 231, the clear implication of which is that the defendants had failed to respond properly to the plaintiff’s request for production of the tax returns, thereby permitting the court, in the exercise of its discretion, to enter its order under Practice Book § 231 (c). Rather, the defendants would have us ignore their previous failure to respond properly to the plaintiff’s discovery requests, made well in advance of trial, simply because of their claim that some subsequent effort made on their part on the eve of trial yielded some of the information initially sought by the plaintiff.
It is important to recognize that Practice Book § 231 is akin to federal rule 37. Both rules clearly provide for the imposition of sanctions on a party who, under certain circumstances, fails to act properly under the rules of discovery. Both permit a trial court to enter an order that the matters for which the discovery was
As we have already stated, the defendants make no claim concerning the correctness of the trial court’s November 23, 1981 order “[u]nder § 231 of the Connecticut Practice Book [that] it is established that income for 1975 and 1976 is conclusively proven as not less than 1974.” They do not point to any claim made by them prior to the entering of the November 23,1981 order by Landau, J., which would have indicated that their failure to meet the plaintiff’s requests was due to circumstances beyond their control. Pavlinko v. Yale-New Haven Hospital, 192 Conn. 138, 144-45, 470 A.2d 246 (1984); see Societe Internationale Pour Participations Industrielles et Commercials v. Rogers, 357 U.S. 197, 78 S. Ct. 1087, 2 L. Ed. 2d 1255 (1958).
Likewise, we find no error in the trial court’s reliance on the appraisal of the value of the business made
In determining the fair market value of the business, the trial court is vested with broad discretion. No one appraisal method is binding on the court and the court has the right to accept so much of the expert testimony and the recognized appraisal methods which are employed as it finds applicable. Federated Department Stores, Inc. v. Board of Tax Review, 162 Conn. 77, 86, 291 A.2d 715 (1971) and cases cited therein. “The exercise of this right would be reviewable only if it were apparent that the [trial court] misapplied or overlooked, or gave a wrong or improper effect to, any testimony or consideration which it [has a] duty to regard. Stanley Works v. New Britain Redevelopment Agency, 155 Conn. 86, 99, 230 A.2d 9 [1967]; Bennett v. New Haven Redevelopment Agency, 148 Conn. 513, 516, 172 A.2d 612 [1961].” Id. Moreover, the defendants have not pointed us to their performance of any appraisal of the business to rebut the appraisal evidence of the plaintiff. We cannot find error as claimed by the defendants in the trial court’s valuation of the business.
As we have repeatedly stated, there are two elements which must be established in order to find an estoppel: one party must do or say something that is intended or calculated to induce another into believing in the existence of certain facts and to act upon that belief, and the other party must thereby actually change his position or do some act to his injury which he would otherwise not have done. Papcun v. Papcun, 181 Conn. 618, 621, 436 A.2d 282 (1980); Remkiewicz v. Remkiewicz, 180 Conn. 114,119, 429 A.2d 833 (1980), and cases cited therein. Estoppel rests on the misleading conduct which results in prejudice to the other and absent such prejudice an estoppel cannot exist. Remkiewicz v. Remkiewicz, supra; see Russo v. East Hartford, 179 Conn. 250, 258, 425 A.2d 1282 (1979), cert. denied, 445 U.S. 940, 100 S. Ct. 1334, 63 L. Ed. 2d 773 (1980).
Finally, we address the second claim raised by the plaintiff on its cross appeal in which it asserts that the trial court erred in not finding that it was entitled to a. commission for the defendants’ lease of the premises.
In Covino, the defendants had entered into a written exclusive right to sell agreement with the plaintiff for a term of ninety days. During the term of the agreement the defendants agreed to sell the subject property to a customer procured by one of the defendants or by a person other than the plaintiff. The sale of the property was “consummated by a conveyance ...” after the expiration of the exclusive right to sell agreement. Covino v. Pfeffer, supra, 214. The Covino court then discussed the defendants’ liability for a commission to the plaintiff as follows: “The owner in a contract giving a broker the exclusive sale of property agrees that he will not sell his property during the life of the contract to any purchaser not procured by the broker. Harris v. McPherson, 97 Conn. 164, 167, 115 A. 723 [1922]. The owner, in such a contract, makes the broker the only medium through which a purchaser can be procured during its life. Harris v. McPherson, supra, 167,168. The owner agrees not only to exclude another agent, but also himself from procuring a purchaser. Harris v. McPherson, supra, 168. The broker is entitled to his commission as damages for the breach of an exclusive sale contract, if during the life of such a contract, the owner sells the property to a purchaser procured by his own efforts, or by other agents, or if the broker during such period produced a customer ready, able and willing to buy the property. Harris v. McPherson, supra, 171.
We deem it clear from Covino that on the facts in this case, the plaintiff cannot recover a commission based upon its exclusive right to lease listing. There is no claim here that a lease or agreement to lease was in fact agreed upon during the term of the exclusive right to lease agreement; the plaintiff concedes that there were only negotiations during that time and the trial court so found. The plaintiff's right to a commission is controlled by the provisions of its contract with the defendants. Nugent v. DelVecchio, 36 Conn. Sup. 532, 535, 415 A.2d 1339 (1980), citing Craig v. Margrave, 84 Nev. 638, 641, 446 P.2d 653 (1968). In the absence of a provision in a contract precluding negotiations by the owner during the term of the exclusive listing, or some showing of bad faith or fraud, the plaintiff, who had no contact whatsoever with the eventual lessees, is not entitled to a commission upon the consummation of the lease after the expiration of the agreement.
The plaintiff is therefore not entitled to a commission under the exclusive right to lease agreement.
There is no error on either the appeal or the cross appeal.
In this opinion the other judges concurred.
The listing agreements between Vanacore and the plaintiff were characterized in the trial court’s memorandum of decision as follows:
“November 10, 1973 — an open listing to sell for $1,770,000 reserving the right to sell the premises by the owner or another broker with no termination date.
“February 19,1975 — an open listing to sell the property for $1,820,000 reserving the right to sell by the owner or another broker which terminated May 19, 1975.
“June 2,1975 — an open listing on the same terms and price which terminated December 31, 1975.
“August 24,1975 — an exclusive listing to sell the real estate for $1,750,000 which terminated August 24, 1976, but which also permitted the owner to sell without paying a commission.
“February 3, 1976 — an exclusive right to lease the premises which terminated on March 3,1976 which right was extended until May 4,1976 and further to June 4, 1976.
“May 5,1976 — an exclusive right to sell the Penthouse Restaurant business for $450,000 which terminated November 5, 1976.
“October 27,1976 — a twenty-four hour listing agreement to sell the real estate at 579-581 West Putnam Avenue, Greenwich, for $1,800,000.”
The lease agreement provided for an annual rental payment of $54,000. The collateral stock purchase agreement stated that Vanacore was to receive “One ($1.00) Dollar and other valuable considerations . . .” for the transfer of his stock. There appears to be no dispute that Celona and Lium paid only one dollar for the Tavern stock.
There appears to be no dispute that the trial court properly determined that the defendants retained the right to sell the real estate without paying a commission to the plaintiff under the terms of the August 24, 1975 listing.
In Real Estate Listing Service, Inc. v. Real Estate Commission, 179 Conn. 128,132, 425 A.2d 581 (1979), we referred to the three basic types of listing agreements and described them as follows: “[T]he open listing, under which the property owner agrees to pay to the listing broker a commission if that broker effects the sale of the property but retains the right to sell the property himself as well as the right to procure the services of any other broker in the sale of the property; the exclusive agency listing, which is for a time certain and authorizes only one broker to sell the property but permits the property owner to sell the property himself without incurring a commission; . . . and the exclusive right to sell listing, under which the sale of the property during the contract period, no matter by whom negotiated, obligates the property owner to pay a commission to the listing broker.” (Citations omitted.)
See footnote 1, supra.
The parties had also signed three other printed “form” listing agreements prior to the agreements referred to above. On the top of these agreements the words “OPEN LISTING AGREEMENT” appeared in bold print and each of these agreements specifically provided that “I/we reserve the right to sell the property myself/ourselves or through another broker or agent, in which event . . . you will be entitled to no commission.”
We note that although the defendants have claimed in their brief that if a commission was found to be due to the plaintiff it should be based upon the amount expressed in the agreement of sale, i.e., $1, counsel for the defendants abandoned that claim at oral argument.
Counsel for the plaintiff represented to us at oral argument that the plaintiff never received the authorization to order copies of the defendants’ tax returns which it sought in December, 1980.
The restaurant’s income for 1974 was $456,093.
The order of Landau, J., was the following: “The foregoing having been heard, it is hereby ordered: (1) Under § 231 of the Connecticut Practice Book, it is established that income for 1975 and 1976 is conclusively proven as NOT less than 1974.”
Practice Book § 231, which is entitled “Order for Compliance; Failure to Answer or Comply with Order,” provides in part: “If any party has failed to answer interrogatories or to answer them fairly, or has intentionally answered them falsely or in a manner calculated to mislead, or has failed to respond to requests for production or for disclosure of the existence and contents of an insurance policy or the limits thereof, or has failed to submit to a physical or mental examination, or has failed to comply with a discovery order made pursuant to Sec. 230A, or has failed to comply with the provisions of Sec. 232, or has failed to appear and testify at a deposition duly noticed pursuant to this chapter, or has failed otherwise substantially to comply with any other discovery order made pursuant to Secs. 222, 226, and 229, the court may, on motion, make such order as the ends of justice require.
“Such orders may include the following: . . .
“(c) The entry of an order that the matters regarding which the discovery was sought or other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order . . . .”
Defense counsel first referred to those records in objecting to the plaintiff’s “claim of proof” made during the examination of its appraisal witness, Boyarsky, that the trial court’s previous ruling under Practice Book § 231 be “conclusive.” Boyarsky testified that in making his appraisal of the restaurant business, he based the income of the business for 1975 and 1976 upon its income for 1974 consistent with the court’s previous order. The plaintiff at that time made its “claim of proof.” Defense counsel objected, pointing to the tax records.
These records showed earnings of $49,821.30 and $52,422 for their respective quarters. The defendants claim that if this evidence was admitted, these quarterly figures could then have been projected as an annual income which would have been approximately $200,000 for calendar year 1975 and $210,000 for calendar year 1976, each of which is less than half of the figure used by the plaintiffs appraiser under the trial court’s November 23, 1981 order under Practice Book § 231.
Defense counsel pointed to his previous unsuccessful efforts to obtain from the state tax department the 1975 and 1976 tax records requested by the plaintiff. He also said that his office had earlier tried to get these records from the state tax department which “informed us that since these were sales tax returns prior to 1977, when they went on a computer, that they had been destroyed.” Additionally, he said that the defendant Vanacore had been unable to produce these records. He then stated that on the day before trial he sent his associate to the state tax commissioner’s office to make a further attempt to obtain the records. Defense counsel then stated that the tax commissioner himself dispatched an employee to look at some old records and out of those records, “two random copies of sales tax returns [of the restaurant] were discovered.”
Additionally, an examination of the court file does not disclose that the defendants filed any objection to the plaintiffs motion for an order under Practice Book § 231.
Boyarsky referred to his use on previous occasions of the appraisal method used in this case.
The plaintiff arrives at the $654,000 figure based upon the gross sales figures for various periods given by the defendants which it claims were incorporated into its written brochures which it circulated in its efforts to sell the premises. At trial, Boyarsky, the plaintiff’s appraiser, testified that if those sales figures were used in appraising the value of the business, its fair market value would be $654,000.
Pursuant to the commission rate set out in the exclusive right to lease agreement and the annual rental of the premises of $54,000 received by the defendants, the plaintiff claims an additional commission of $32,400.
There is no claim that the plaintiff introduced the eventual lessees, Lium and Celona, to the property.
The agreement initially was to terminate on March 3, 1976, but was extended until May 4, 1976, and finally to June 4, 1976.
We point out that the trial court’s memorandum states that the defendants “violated the terms of the agreement to lease . . . .’’It is quite clear, however, that it based its award of damages (commission) on the commission rate stated in the exclusive right to sell the business agreement, i.e., “10% commission on the value of the business sold . . . .” Although the exclusive right to lease agreement provided for a commission based upon