50 Conn. App. 640 | Conn. App. Ct. | 1998
Lead Opinion
Opinion
This is an appeal from the trial court’s judgment for the plaintiff to recover a real estate commission. The defendant claims that the trial court improperly (1) disregarded the findings, conclusions and recommendations of the attorney trial referee, (2) ignored the provision of General Statutes § 20-325a (b) (7) requiring the owner’s signature, (3) found a ratification by the defendant of her husband’s conduct, (4) determined that the terms of the listing agreement extension were complied with and (5) failed to accept the report of the attorney trial referee to which the plaintiff had failed to file an objection. The plaintiff cross appeals claiming that the trial court failed to
The attorney trial referee made fifty-nine findings of fact, which are not in dispute and may be summarized as follows. On February 25,1992, the defendant entered into a written “Exclusive Right to Sell Listing” with the plaintiff, a real estate broker, with respect to the sale of the defendant’s house at 208 Tuttle Road in Wood-bury, at a price of $1,740,000, for a term of six months. Pursuant to that agreement, the defendant agreed to pay the plaintiff a commission of 6 percent if, during the term of the listing agreement, the property was sold or anyone found a buyer willing and able to buy the property at a price acceptable to the defendant or anyone obtained a binding enforceable agreement between the defendant and a buyer.
The defendant acquired the property jointly with her husband. Sometime after the purchase, the defendant’s husband conveyed his interest in the property to the defendant for no consideration. The defendant relied on her husband, an experienced real estate developer, in the negotiation, listing and sale of the property. The defendant’s husband negotiated the terms of the listing agreement directly with the plaintiff. The defendant’s husband freely used the equity in the property for his business purposes, including three separate mortgages to American Bank. During the term of the listing agreement, the plaintiff listed the property in the multiple fisting service, advertised it and showed it to several prospective purchasers. There were, however, no offers to purchase the property- accepted by the defendant during the original listing period.
Shortly before the expiration of the fisting period, the defendant’s husband told the plaintiff that the defendant would extend the fisting agreement. The defendant’s husband told the plaintiff to send the extension
In December, 1992, American Bank was foreclosing on one or more of the mortgages on the defendant’s property. That same month, the defendant’s husband called Arminda Murtha, who had previously expressed an interest in the property, to say that his wife would sell the property for $850,000. A contract was prepared in late December, 1992, that called for a closing on January 29, 1993, with occupancy to be given to Murtha on March 1, 1993. That contract was never signed by Murtha or the defendant. In early January, 1993, a second contract was prepared, which was identical to the first contract in all respects except that it called for a closing on March 1, 1993. Murtha signed the second contract on January 9, 1993, and sent a deposit check for $10,000. When the plaintiff heard about the possible sale to Murtha, he talked with the defendant’s husband and reminded him that the plaintiff would be owed a commission if the property was sold to Murtha. The
The defendant would have signed the contract with Murtha in the middle of January, 1993, except for the receipt of the plaintiffs demand for a commission, which the defendant and her husband did not want to pay. They did not attempt to negotiate with the plaintiff to reduce his commission. In February, 1993, the defendant’s attorney returned the $10,000 deposit check to Murtha’s attorney. The plaintiff believed that the sale to Murtha had not taken place and that the property was still on the market. He continued his efforts to sell the property.
On March 1, 1993, the defendant sold the property to Murtha for $850,000, although the price shown on the conveyance tax forms was $1,050,000. Until the day of the closing, Murtha was unaware that the $10,000 deposit had been returned to her attorney. At the closing on March 1, Murtha signed a new contract that was identical to the original contract that she had signed on January 9,1993, except that the “Balance at Closing” was increased from $840,000 to $850,000 to reflect the $10,000 deposit that had been returned to her attorney.
On February 23, 1993, the plaintiff received a facsimile from another real estate agent indicating that he had
The attorney trial referee found that the change authorization extending the term of the listing agreement was not signed by the defendant pursuant to § 20-325a (b) (7).
The trial court rejected the attorney trial referee’s finding and concluded that the provisions of § 20-325a (b) (7) were satisfied because the defendant’s husband was acting as the defendant’s agent when he signed the change authorization, and the defendant subsequently ratified his actions. Judgment for $52,000, plus reasonable attorney’s fees in the amount of $12,500, was entered. This appeal ensued, and the plaintiff filed a cross appeal claiming prejudgment interest from March 1, 1993.
“[Wjhere the legal conclusions of the court are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts set out in the memorandum of decision; where the factual basis of the court’s decision is challenged we must determine whether the facts set out in the memorandum of decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous.”
“The right of a real estate broker to recover a commission is dependent upon whether the listing agreement meets the requirements of § 20-325a (b). New England Land Co., Ltd. v. DeMarkey, 213 Conn. 612, 621, 569 A.2d 1098 (1990); Revere Real Estate, Inc. v. Ceralo, 186 Conn. 74, 77, 438 A.2d 1202 (1982). Section 20-325a (b) requires that the listing agreement: ‘(1) be in writing, (2) contain the names and addresses of all the parties thereto, (3) show the date on which such contract was entered into or such authorization given, (4) contain the conditions of such contract or authorization and (5) be signed by the owner or an agent authorized to act on behalf of the owner only by a written document executed in the manner provided for conveyances in section 47-5, and by the real estate broker or his authorized agent.’ In addition, the broker ordinarily must prove that it has found a buyer that is ready, willing and able to purchase the property on terms agreed to by the seller. Storm Associates, Inc. v. Baumgold, 186 Conn. 237, 242, 440 A.2d 306 (1982); Revere Real Estate, Inc. v. Cerato, supra, 77-78.” McCutcheon & Burr, Inc. v. Berman, 218 Conn. 512, 519, 590 A.2d 438 (1991).
“It is well established that the requirements of § 20-325a (b) are mandatory rather than permissive and that the statute is to be strictly construed. New England
The trial court determined that the plaintiff should have recovered on the theory of ratification. “Ratification requires acceptance of the results of the act with an intent to ratify, and with full knowledge of all the material circumstances.” (Internal quotation marks omitted.) CMG Realty of Connecticut, Inc. v. Colonnade One Ltd. Partnership, 36 Conn. App. 653, 659, 653 A.2d 207 (1995). We affirm the judgment of the trial court, but not its reasoning, because we conclude that the requirements of § 20-325a are mandatory and because
“Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed ... as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse.” (Internal quotation marks omitted.) Brock v. Cavanaugh, 1 Conn. App. 138, 141-42, 468 A.2d 1242 (1984).
Although this court has refused in the past to apply equitable estoppel in favor of real estate brokers seeking commissions and against homeowners seeking to avoid paying such commissions, the present case can be factually distinguished from those decisions. In New England Investment, Properties, Inc. v. Spire Realty & Development Corp., 31 Conn. App. 682, 687-88, 626 A.2d 1316 (1993), the real estate broker did not obtain a valid listing agreement that was signed by the homeowners prior to rendering his services. In concluding that the plaintiff could not invoke equitable estoppel in that case, this court relied on its decision in Currie v. Marano, 13 Conn. App. 527, 531-32, 537 A.2d 1036, cert. denied, 207 Conn. 809, 541 A.2d 1238 (1988) (real estate broker performed services after listing agreement had expired). This court stated that “[t]he Currie court refused to apply estoppel for two reasons. First, a broker is expected to know the laws regulating his profession and when ignorance of those laws is the primary cause of his need for relief, the doctrine of estoppel does not apply. . . . Second, the Currie court recognized that ‘General Statutes § 20-325a has been strictly construed and enforced. . . . The scenario arising most commonly in cases of real estate commission
In the present case, unlike in Currie and New England Investment Properties, Inc., the plaintiffs ignorance of the laws governing his profession is not the cause for his need for relief. The plaintiff obtained what he believed to be a valid extension of the listing agreement that was signed by the defendant. The plaintiff was unaware that it was actually the defendant’s husband that signed the extension agreement on behalf of and with the consent of the defendant. The plaintiff relied thereon to his detriment. Furthermore, permitting the plaintiff to prevail on an equitable estoppel theory in the present case would not emasculate this state’s real estate licensing system because the plaintiff believed that he was operating within the requirements of the law, and the defendant and her husband allowed the plaintiff to so believe. As a result, the plaintiffs claim in the present case is factually distinguishable from cases that have precluded real estate brokers from invoking the doctrine of equitable estoppel.
The plaintiff in his cross appeal claims that the trial court improperly failed to award prejudgment interest pursuant to § 37-3a.
“A trial court must make two determinations when awarding compensatory interest under § 37~3a: (1) whether the party against whom interest is sought has wrongfully detained money due the other party; and (2) the date upon which the wrongful detention began in order to determine the time from which interest should be calculated. Metcalfe v. Talarski, 213 Conn. 145, 160, 567 A.2d 1148 (1989); West Haven Sound Development Corp. v. West Haven, supra, 207 Conn. 321.” (Internal quotation marks omitted.) Blakeslee Arpaia Chapman, Inc. v. El Constructors, Inc., 239 Conn. 708, 734-35, 687 A.2d 506 (1997).
It is obvious from the memorandum of decision that the trial court did not address whether the plaintiff was entitled to interest under § 37-3a, even though the plaintiff requested such relief in its motion for entry of judgment to the trial court.
On the cross appeal, the judgment is reversed only as to the failure to address the plaintiffs request for an
In this opinion LANDAU, J., concurred.
General Statutes § 20-325a (b) provides in relevant part: “No person, licensed under the provisions of this chapter, shall commence or bring any action in respect of any acts done or services rendered . . . pursuant to a contract or authorization .... To satisfy the requirements of this subsection any contract or authorization shall ... (7) be signed by the person or persons for whom the acts were done or services rendered or by an agent authorized to act on behalf of such person or persons, pursuant to a written document executed in the manner provided for conveyances in section 47-5, except, if the acts to be done or services rendered involve a listing contract for the sale of land containing any building or structure occupied or intended to be occupied by no more than four families, be signed by the owner of the real estate or by an agent authorized to act on behalf of such owner pursuant to a written document executed in the manner provided for conveyances in section 47-5.”
We note that the attorney trial referee inadvertently applied the current version of § 20-325a (b) instead of the one in effect in 1992 and 1993, when the events at issue occurred. The language now contained in subdivision (7) of subsection (b) was in subdivision (5) prior to 1993 and, while the exact language differs from the current text, its operative effect remains unchanged. See General Statutes (Rev. to 1993) § 20-325a (b), as amended by Public Acts 1993, No. 93-355, and Public Acts 1994, No. 94-240, and subsequent revisions.
The attorney trial referee also recommended that § 20-325a (c), which was enacted by Public Acts 1994, No. 94-240, § 3, be ruled inapplicable even if effective retroactively because that statute is limited to subdivisions (2) through (6) and does not affect the signature requirement of subdivision (7). General Statutes § 20-325a (c) provides: “Nothing in subsection (a) of this section or subdivisions (2) to (6), inclusive, of subsection (b) of this section shall prevent any licensee from recovering any commission, compensation or other payment in respect to any acts done or services rendered, if such person has substantially complied with subdivisions (2) to (6), inclusive, of subsection (b) of this section and it would be inequitable to deny such recovery.”
General Statutes § 37-3a provides in relevant part: “[I]nterest at the rate of ten per cent a year, and no more, may be recovered and allowed in civil actions ... as damages for the detention of money after it becomes payable. . . .”
Concurrence Opinion
concurring. I agree with the result of the majority, but I believe this court, en banc, or the Supreme Court should revisit New England Investment Properties, Inc. v. Spire Realty & Development Corp., 31 Conn. App. 682, 687-88, 626 A.2d 1316 (1993), regarding its position on the applicability of the bad faith doctrine set forth in Habetz v. Condon, 224 Conn. 231, 618 A.2d 501 (1992), involving a section of the Home Improvement Act, General Statutes § 20-429 (a),
I believe the following language from Habetz v. Condon, supra, 224 Conn. 239-40, applies to the facts in this case. “In the absence of specific legislative indication, however, we do not read the act to override the general principle embodied in the bad faith exception: that an individual should not profit from his own deceptive and unscrupulous conduct. This court never intended to advance the cause of the unscrupulous. We can only presume that the legislature had a similar intent. The question is not whether the legislature specifically carved out this bad faith exception, as the plaintiff has argued, but whether, in the absence of specific legislative indication otherwise, a doctrine founded on public policy and containing a strong strain of estoppel can prevent a misbehaving party from invoking the benefits
The attorney trial referee’s conclusions that it would be inequitable to deny the plaintiff a recovery and that it was bad faith on the defendant’s part in raising as a defense the statutory signature requirement contained in § 20-325a (b) (7) were consistent with the underlying facts found.
“Abad faith exception is designed to prevent a party’s disavowal of previous conduct if such repudiation would not be responsive to demands of justice and good conscience. The law does not permit the exercise of a right to repudiate a contract when the exercise of such a right in bad faith would work an injustice. Every contract carries an implied covenant of good faith and fair dealing requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement.” Id., 238; Fruin v. Colonnade One at Old Greenwich Ltd. Partnership, 38 Conn. App. 420, 431-32, 662 A.2d 129 (1995), aff'd, 237 Conn. 123, 676 A.2d 369 (1996).
General Statutes § 20-429 (a) provides in relevant part: “No home improvement contract shall be valid or enforceable against an owner unless it: (1) Is in writing, (2) is signed by the owner and the contractor, (3) contains the entire agreement between the owner and the contractor, (4) contains the date of the transaction, (5) contains the name and address of the contractor, (6) contains a notice of the owner’s cancellation rights in accordance with the provisions of chapter 740, (7) contains a starting date and completion date, and (8) is entered into by a registered salesman or registered contractor. ...”
I also note that in Fmin v. Colonnade One at Old Greenwich Ltd. Partnership, supra, 38 Conn. App. 431, we relied on Habetz v. Condon, supra, 224 Conn. 239-40, and applied the bad faith exception to a claim brought under the Common Interest Ownership Act (CIOA), General Statutes § 47-200 et seq. “Although the language of CIOA is not similar- to that in [the Home Improvement Act (HIA)], HIA is similar to CIOA in that its ‘objective . . . is to promote understanding by the consumer, to ensure his ability to make an informed decision and to protect him from substantial work by an unscrupulous contractor. See Habetz v. Condon, [supra, 239]. Both statutes, then, are essentially consumer protection statutes. We, therefore, turn to cases interpreting HIA to guide our resolution of the present case.” Fruin v. Colonnade One at Old Greenwich Ltd. Partnership, supra, 430. “As in the HIA cases, allowing the plaintiff to use CIOA to shield his