THE RESERVE REALTY, LLC, ET AL. v. WINDEMERE RESERVE, LLC, ET AL. (AC 38167); THE RESERVE REALTY, LLC, ET AL. v. BLT RESERVE, LLC, ET AL. (AC 38440); THE RESERVE REALTY, LLC, ET AL. v. WINDEMERE RESERVE, LLC, ET AL. (AC 38442)
AC 38167, AC 38440, AC 38442
Appellate Court of Connecticut
Argued December 2, 2020—officially released June 22, 2021
Alvord, Prescott and Suarez, Js.
The “officially released” date that appears near the beginning of each opinion is the date the opinion will be published in the Connecticut Law Journal or the date it was released as a slip opinion. The operative date for the beginning of all time periods for filing postopinion motions and petitions for certification is the “officially released” date appearing in the opinion. All opinions are subject to modification and technical correction prior to official publication in the Connecticut Reports and Connecticut Appellate Reports. In the event of discrepancies between the advance release version of an opinion and the latest version appearing in the Connecticut Law Journal and subsequently in the Connecticut Reports or Connecticut Appellate Reports, the latest version is to be considered authoritative. The syllabus and procedural history accompanying the opinion as it appears in the Connecticut Law Journal and bound volumes of official reports are copyrighted by the Secretary of the State, State of Connecticut, and may not be reproduced and distributed without the express written permission of the Commission on Official Legal Publications, Judicial Branch, State of Connecticut.
Syllabus
The plaintiffs, R Co., a real estate marketing company, and H, the executor of the estate of J, a real estate broker who was a founding member of R Co., sought to recover damages from the defendants W Co. and B Co., for, inter alia, breach of certain real estate listing agreements that allegedly would have entitled the plaintiffs to certain brokerage fees and commissions. In 2002, a group of real estate developers, D Co., engaged the services of J and another real estate brokerage firm, S Co., to negotiate the purchase of a large parcel of undeveloped land. D Co. thereafter entered into an agreement which, inter alia, gave J and S Co. the exclusive right to sell and/or lease any property that was to be developed on that land, and also required D Co. to inform any subsequent purchasers of any part or individual lots on the land that the exclusivity provision applied to them. After D Co. purchased the land, it sold two separate parcels of the land to W Co. and B Co., who, pursuant to their respective purchase agreements, executed a buyer‘s agreement and listing agreements with J and S Co., who had formed R Co. for the purpose of marketing the properties. Thereafter, B Co. constructed a rental apartment complex on its parcel, and W Co. planned to develop a commercial office building on its parcel. Neither B Co. nor W Co. used R Co. as the listing agent for its respective project, and the plaintiffs brought an action alleging a breach of the buyer‘s agreement and the listing agreements. The plaintiffs also brought two actions seeking to foreclose real estate broker‘s liens on the parcels of property that are the subject of the breach of contract action. The trial court rendered judgments discharging the liens in the foreclosure actions and judgment in favor of W Co. and B Co. in the breach of contract action, concluding, inter alia, that the purchase and sale agreements containing the exclusivity provision on which the plaintiffs based their claim for commissions under the listing agreements constituted illegal tying arrangements and violated the Connecticut Antitrust Act (
- The trial court properly determined that the listing agreements were unenforceable because they failed to comply with the requirement of
§ 20-325a that they specify the duration of the broker‘s authorization to act on behalf of W Co. and B Co.- The trial court erred in finding that the buyer‘s agreement and the listing agreements were ambiguous as to their intended duration; although the buyer‘s agreement had a stated duration of years, between September 10, 2003, and September 10, 2010, and the listing agreements had a stated duration of ten years from the date of the first sale or lease, the intent of the parties was to create different durations for different transactions, thus, effect can be given to both provisions, which used definitive language, and this court did not consider extrinsic evidence regarding the parties’ intent.
- The trial court correctly determined that the listing agreements did not strictly comply with the duration requirements of
§ 20-325a (b) and/or(c) and such failure was contrary to public policy and custom in the commercial real estate industry, as the agreements failed to set forth a measurable, definite duration; although the agreements specified a ten year period, it was unclear, at the time the agreements were executed, how far into the future the parties would be bound by the provision, and the provision did not provide a ceiling on the ultimate amount of time the agreements could last, as the amount of time for which the parties could be bound by the agreements was indeterminate because it could only be calculated by reference to an uncertain future event, the conveyance of an individual unit or executed lease.
- The trial court‘s finding that it would not be inequitable to deny the plaintiffs’ recovery was not clearly erroneous: the listing agreements did not substantially comply with
§ 20-325a (b) and/or(c) , as they were indefinite as to the key element of the duration of the agreement, which was imperative to the parties’ understanding of their respective rights under the contracts; moreover, it was not inequitable to deny recovery of commissions under the circumstances in which there was no sale or lease with regard to either parcel of property until almost ten years after the listing contracts were executed, the evidence having supported conclusions that the plaintiffs failed to use best efforts to market the properties and that the defendants did not wrongfully prevent the plaintiffs from performing their obligations under the listing agreements, and, once the plaintiffs became aware of the rental apartment complex constructed by B Co., they made no effort to lease the apartments.
Procedural History
Action, in the first case, to recover damages for, inter alia, breach of contract, and for other relief, brought to the Superior Court in the judicial district of Danbury, where the case was tried to the court, Truglia, J.; judgment for the named defendant et al., from which the plaintiffs appealed to this court, Alvord, Sheldon and Schaller, Js., which affirmed the trial court‘s judgment; thereafter, in the second and third cases, the court, Truglia, J., rendered judgments discharging broker‘s liens on certain real property of the named defendant in each case in accordance with the parties’ stipulations, from which the plaintiffs filed separate appeals to this court, Alvord, Sheldon and Schaller, Js., which affirmed the judgments of the trial court, and the plaintiffs, on the granting of certification, filed separate appeals from all three cases with the Supreme Court, which reversed this court‘s judgments and remanded the cases to this court for further proceedings. Affirmed.
J. Christopher Rooney, with whom were Drew J. Cunningham, and, on the brief, Brian A. Daley, for the appellees in Docket No. AC 38167 (defendants).
J. Christopher Rooney, with whom were Drew J. Cunningham, and, on the brief, Brian A. Daley, for the appellees in Docket Nos. AC 38440 and AC 38442 (named defendant et al.).
David F. Bennett submitted a brief for the appellee in Docket Nos. AC 38440 and AC 38442 (defendant Century 21 Scalzo Realty, Inc.).
Opinion
PRESCOTT, J.
The following facts and procedural history, as set forth in this court‘s opinion in Reserve Realty, LLC v. Windemere Reserve, LLC, 174 Conn. App. 130, 165 A.3d 162 (2017) (Reserve Realty I), rev‘d, 335 Conn. 174, 229 A.3d 708 (2020) (Reserve Realty II), or which are otherwise undisputed in the record, are relevant to our resolution of these appeals. “The plaintiff, Theodore Haddad, Sr., is the duly appointed executor of the estate of his wife, Jeanette Haddad. Prior to her death in January, 2013, Jeanette Haddad was a successful and highly regarded real estate broker in the Danbury real estate market, performing brokerage
“In early 2002, a group of real estate developers, later known as Woodland Group II, LLC (Woodland), contacted Jeanette Haddad and Century 21 Scalzo Realty, Inc. (Scalzo Realty), a real estate franchise owned by Scalzo,6 to engage their brokerage services in connection with the negotiations for the purchase of a 546 acre parcel known as the Reserve. As part of the broker/client relationship, the ‘Exclusive right to Sell–Listing Agreement’ (Woodland agreement) was executed by and between Jeanette Haddad and Scalzo, and two of the Woodland real estate developers. Pursuant to the
Woodland agreement, Jeanette Haddad and Scalzo Realty had the exclusive right to sell and/or lease property in the Reserve, and the real estate developers were required to ‘make aware to the new purchaser of any part, or of individual lots, or of land, that this Agreement shall apply to that new purchaser and [Jeanette Haddad and Scalzo Realty].’
“On or about June 28, 2002, Woodland purchased the Reserve. Woodland, which wished to develop the Reserve, continued to use the services of Jeanette Haddad and Scalzo thereafter to market the property. Woodland also proposed a master plan for the entire 546 acres, which the Danbury Zoning Commission approved on or about November 26, 2002. Shortly thereafter, Windemere filed an administrative appeal of the plan‘s approval in the Superior Court, which effectively stayed the approval of the master plan and prevented Woodland from moving forward with the development and sale of the Reserve. Thereafter, representatives of Woodland, Windemere, and BLT met to negotiate the sale of two tracts of land, later known as parcel 13 and parcel 15. Part of the negotiation resulted in Windemere‘s withdrawal of the administrative appeal.
“On July 17, 2003, Woodland entered into the purchase and sale agreement with
“Woodland, BLT, and Windemere also executed an escrow agreement, pursuant to which the purchase and sale agreements would be held in escrow by Woodland‘s counsel for ninety days until several conditions were met. One of the conditions was the execution of listing agreements . . . to be executed by Jeanette Haddad and Scalzo Realty. This condition was included to satisfy the requirement in the Woodland agreement . . . that Woodland ‘make aware to the new purchaser of any part, or of individual lots, or of land, that this Agreement shall apply to that new purchaser and [Jeanette Haddad and Scalzo Realty.]’
“Between July 17 and September 10, 2003, representatives of Woodland, BLT, Windemere, and Jeanette Had-
dad7 negotiated the terms of the listing agreements. On September 10, 2003, a meeting was held, at which several documents were executed,8 including the exclusive right to represent buyer/tenant (buyer‘s agreement);9 the consent agreements;10 the exclusive right to sell–listing agreement for parcel 13;11 the exclusive right to sell/lease–listing agreement for parcel 13;12 the exclusive right to sell/lease–listing agreement for parcel 15;13 and the exclusive
“Despite having executed the listing agreements, the defendants at no time desired to retain Jeanette Haddad as the broker for the sale and/or lease of units to be built on parcel 13 and parcel 15. Rather, the defendants entered into the listing agreements only to satisfy the requirements of paragraph eight of the purchase and sale agreements, and the only reason that the parties included paragraph eight in the purchase and sale agreements was to allow Woodland to comply with its contractual obligation under the Woodland agreement to require subsequent purchasers of the Reserve to retain Jeanette Haddad and Scalzo Realty as their brokers.
“Beginning in early 2006, representatives of Jeanette Haddad and Scalzo Realty, including Theodore Haddad, Sr., and Theodore Haddad, Jr., diligently marketed and contacted possible buyers and lessees for the Reserve. At some point, however, the defendants decided that the listing agreements were a ’ “bad marriage,” ’ and, in January, 2007, Paul Kuehner and Theodore Haddad, Jr., met to discuss terminating the broker/client relationship. A buyout figure was offered to Jeanette Haddad and Scalzo, which they both refused. . . . [Although Jeanette Haddad and Scalzo Realty continued to make good faith efforts to find prospective buyers or lessees for parcel 13 and parcel 15 until mid-2007, the real estate market softened, and those efforts ultimately were unsuccessful.] The defendants began to explore other available options, including the development of parcel 13 into a luxury apartment rental complex.
“On or about April 18, 2011, the Danbury Planning and Zoning Department issued a site plan approval to BLT for the construction of a rental apartment complex on parcel 13, which would later be known as Abbey Woods. Shortly thereafter, the defendants began construction. BLT subsequently leased the apartment units in Abbey Woods through its own on-site leasing agent, with the first lease being entered into in March, 2013.” (Footnotes in original; footnote added; footnotes omitted.) Reserve Realty I, supra, 174 Conn. App. 132–37.
The defendants did not notify the Haddads16 or Scalzo of the site plan approval for, or the construction of, the Abbey Woods apartments. Theodore Haddad, Jr., upon learning about Abbey Woods in 2013, shortly after his mother had died, contacted Carl Kuehner, Jr., and asked him if the defendants intended to honor the listing
agreements. Carl Kuehner, Jr., refused to discuss the issue with Theodore Haddad, Jr., claiming that the listing agreements for parcel 13 were personal service agreements between BLT and Jeanette Haddad.
In July, 2013, the plaintiffs brought this action alleging breach of contract and anticipatory breach with regard to the buyer‘s agreement and listing agreements17 for
“The defendants raised five special defenses: (1) the listing agreements were entered into pursuant to an illegal tying arrangement; (2) there was a lack of consideration in that the plaintiffs had failed to perform brokerage services entitling them to compensation; (3) the listing agreements were personal service contracts; (4) the listing agreements, by their express terms, expired on September 10, 2010; and (5) the listing agreements were unenforceable because the necessary conditions precedent had not been satisfied.” Reserve Realty I, supra, 174 Conn. App. 138. After hearing twelve days of evidence, the trial court rendered judgment in favor of the defendants, concluding that the purchase and sale agreements created an illegal tying arrangement that violates the Connecticut Antitrust Act,
With regard to the issue of compliance with
for commissions in a commercial real estate transaction pursuant to
Furthermore, with respect to the plaintiffs’ argument that they were prevented from performing their obligations under the agreements, the court stated: “The court does not find that [after the fall of 2007], the defendants ‘land banked’ the parcels, as suggested by the plaintiffs, that is, taking the property off the market and thereby excusing the plaintiffs from further performance. The court finds, rather, that had Jeanette Haddad or Scalzo found a valuable and qualified prospect during this time, the defendants would have been happy to entertain it. The court further finds that the defendants simply waited for a prospective buyer to meet their demands, and in the meantime employed all available options.”
The plaintiffs appealed, claiming that the trial court improperly concluded that (1) the purchase and sale agreements constituted part of an illegal tying arrangement in violation of the Connecticut Antitrust Act, (2) the listing agreements did not comply with
See Reserve Realty I, supra, 174 Conn. App. 141. Our Supreme Court, in Reserve Realty II, supra, 335 Conn. 174, 204, 211, overruled Hossan-Maxwell, Inc., reversed this court‘s decision with regard to the defendants’ antitrust special defense, and remanded the case to this court with direction to consider the plaintiffs’ remaining claims. Additional facts will be set forth as needed.
The plaintiffs’ claim that the trial court improperly concluded that the listing agreements do not satisfy the requirements of
I
“The right of a real estate broker to recover a commission is dependent upon whether the listing agreement meets the requirements of
Section 20-325a (b) provides in relevant part: “No person, licensed under the provisions of this chapter, shall commence or bring any action with respect to any acts done or services rendered after October 1, 1995 . . . unless the acts or services were rendered pursuant to a contract or authorization from the person for whom the acts were done or services rendered. To satisfy the requirements of this subsection any contract or authorization shall . . . contain the conditions of such contract or authorization . . . .” (Emphasis added.) In addition, with specific regard to commercial real estate transactions,22
pensation payable to the licensee. Similarly, the pertinent regulation;
“To the extent that we are required to review conclusions of law or the interpretation of the relevant statute by the trial court, we engage in plenary review. . . . We review the court‘s factual findings, however, under a clearly erroneous standard. . . . [W]hether a particular listing agreement complies with
A
We begin by construing the agreements at issue to determine the parties’ intent as to the duration of the authorization. When the trial court construed the agreements, it determined that they were ambiguous as to duration and that the evidence adduced at trial was evenly balanced between a finding that (1) all of the agreements were intended to expire on September 10, 2010, and (2) the term of the agreements began with the date of the first sale or lease of a unit and continues for a period of ten years thereafter. The plaintiffs dispute these findings, arguing that it was improper for the court to conclude that the agreements were ambiguous as to duration because the different provisions in the buyer‘s agreement and the listing agreements are not in conflict, and the court‘s determination in this regard was based on a purported inconsistency that no party had ever found or voiced. We agree with the plaintiffs that the agreements are not ambiguous as to the intended duration.
“The law governing the construction of contracts is well settled. When a party asserts a claim that challenges the trial court‘s construction of a contract, we must first ascertain whether the relevant language in the agreement is ambiguous.” (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 13, 938 A.2d 576 (2008). “The court‘s determination as to whether a contract is ambiguous is a question of law; our standard of review, therefore, is de novo.” (Internal quotation marks omitted.) Santos v. Massad-Zion Motor Sales Co., 160 Conn. App. 12, 18, 123 A.3d 883, cert. denied, 319 Conn. 959, 125 A.3d 1013 (2015). “The intent of the parties as expressed in a con-
tract is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction.” (Internal quotation marks omitted.) Connecticut Light & Power Co. v. Lighthouse Landings, Inc., 279 Conn. 90, 109, 900 A.2d 1242 (2006).
“[A] contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself. . . . The contract must be viewed in its entirety, with each provision read in light of the other provisions . . . and every provision must be given effect if it is possible to do so. . . . If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous. . . . The fact that the parties interpret the terms of a contract differently, however, does not render those terms ambiguous. . . . [W]e accord the language employed in the contract a rational construction based on its common, natural, and ordinary meaning and usage as applied to the subject matter of the contract. . . . Moreover, in construing contracts, we give effect to all the language included therein, as the law of contract interpretation . . . militates against interpreting a contract in a way that renders a provision superfluous.” (Citation omitted; internal
The buyer‘s agreement provides, inter alia, that “You (BUYER(S)/TENANT(S): BLT Reserve, LLC and Windemere Reserve, LLC appoint us . . . Jeanette Haddad, Broker, [Scalzo Realty], and UC Properties, LLC as your exclusive agent to assist you to locate and purchase/option/exchange/lease real property acceptable to you. . . . The type of property you would like to purchase/option/exchange/lease is: GENERAL PROPERTY DESCRIPTION: Parcels #13 and #15—Portions of The Reserve.” There are four documents that comprise the listing agreements.23 Two of the documents provide, inter alia, that BLT and Windemere “hereby [grant] to Broker the Exclusive Right to Sell and/or Lease the Property [more particularly described as parcel 13 and parcel 15]. [BLT and Windemere] shall not on [their] own or in conjunction with others sell and/or lease the Property without written approval from Broker, nor shall [they] grant any such rights to anyone else during the term of this Agreement.” The other two documents comprising the listing agreements provide, inter alia, that “Buyer hereby grants to Broker the Exclusive Right to Sell and/or Lease the Property [defined as parcel 13 and parcel
15 in the respective documents] and any portion thereof pursuant to the terms and conditions set forth herein and in the attached Agreement.”
The listing agreements at issue are exclusive right to sell listing agreements.24 “[T]hree types of real estate listing agreements have traditionally been used in this state . . . . Those categories are: the open listing, under which the property owner agrees to pay 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; emphasis added.) Real Estate Listing Service, Inc. v. Connecticut Real Estate Commission, 179 Conn. 128, 132, 425 A.2d 581 (1979).
The plaintiffs argue that, contrary to the trial court‘s findings, the intent of the parties, which is definitively expressed in the agreements, was “to create different durations for different transactions.” That is, the buyer‘s agreement, by its terms, obligated the defendants to use the named brokers as their representatives in purchasing parcels 13 and 15 from Woodland, while the listing agreements obligated the defendants to use the named brokers as their exclusive agents in the subsequent marketing and sale and/or leasing of the parcels. In response, the defendants argue that when reading and interpreting the five agreements together as one contract, the court correctly concluded that they were conflicting as to the time frame governing the parties’ relationship, and thus ambiguous. We agree with the plaintiffs.
When viewed in isolation, the two durational provisions seem to be contradictory. When viewed, however, in the context of the entirety of the documents in which they are contained, it is clear that there is a way to give effect to both provisions, as we must. See A.C.
Consulting, LLC v. Alexion Pharmaceuticals, Inc., supra, 194 Conn. App. 327. That is to say that the buyer‘s agreement and the listing agreements governed different aspects of the relationship between the parties. Specifically, the buyer‘s agreement granted the named brokers the exclusive right to represent BLT and Windemere in purchasing parcels 13 and 15 from Woodland, and such authorization expired on September 10, 2010. The listing agreements, by contrast, granted the named
As of the September 10, 2003 meeting, at which the buyer‘s agreement and listing agreements were executed, the defendants already had executed purchase and sale agreements for parcels 13 and 15 that were being held in escrow by Woodland‘s counsel for ninety days until certain conditions were met. One such condition was that the defendants enter into listing agreements with the brokers named in the purchase and sale agreements. It strains credulity that the defendants would have granted the brokers seven years to assist with a sale that was essentially finalized on September 10, 2003. On the other hand, these are commercial contracts made by sophisticated parties with the advice of counsel. Accordingly, we presume that “the parties meant what they said and said what they meant, in language sufficiently definitive to obviate any need for deference to the trial court‘s factual findings as to the parties’ intent.” Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 497, 746 A.2d 1277 (2000). As our Supreme Court explained in Tallmadge Bros., Inc., when the contracts at issue are commercial in nature and were made by sophisticated commercial parties with the advice of counsel, there is “a presumption of definitiveness,”25 meaning that in interpreting such contracts we presume that the parties used definitive language to describe their agreement. Id., 496–97; see also Schwartz v. Family Dental Group, P.C., 106 Conn. App. 765, 773, 943 A.2d 1122 (“[C]ourts do not unmake bargains unwisely made. Absent other infirmities, bargains moved on calculated considerations, and whether provident or improvident, are entitled nevertheless to sanctions of the law.” (Internal quotation marks omitted.)), cert. denied, 288 Conn. 911, 954 A.2d 184 (2008). Indeed, because the language in the listing agreements is definitive, we do not consider any extrinsic evidence regarding the parties’ intent.26
Having concluded that the agreements are unambiguous as to the parties’ intent that the September 10, 2010 expiration date set forth in the buyer‘s agreement only
pertains to the brokers’ authority to represent the defendants in purchasing parcels 13 and 15 from Woodland, we now turn to the issue of whether the provision governing the duration of the brokers’ authority to act as the defendants’ exclusive listing agent to market and sell and/or lease parcels 13 and 15, or portions thereof, strictly complies with the requirement of
For ease of reference, we restate the language of the provision at issue, and the relevant statutory and regulatory provisions. The agreement provision at issue states, “Term: The term of this Agreement shall begin at the time Developer becomes the owner . . . and be for a period of One Hundred and Twenty, (120), months from the date of the first conveyance of an individual unit or executed lease to an unrelated party of Developer, and shall be renewable by mutual agreement by both parties.” Section 20-325a (b) provides in relevant part: “No person, licensed under the provisions of this chapter, shall commence or bring any action with respect to any acts done or services rendered . . . unless the acts or services were rendered pursuant to a contract or authorization from the person for whom the acts were done or services rendered. To satisfy the requirements of this subsection any contract or authorization shall . . . contain the conditions of such contract or authorization . . . .” (Emphasis added.) In addition,
The trial court, when addressing this issue, reasoned, inter alia, that the language in
erly relied upon
Subsection (d) of
“When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. . . . In seeking to determine that meaning,
The term “duration” is not defined in
ter 392 of the General Statutes, nor in title 20 of the Regulations of Connecticut State Agencies. Accordingly, we look to its common dictionary definition. See Casey v. Lamont, supra, 338 Conn. 479. Webster‘s Dictionary
We recognize that the provision at issue here is written in such a way that the amount of time for which the listing agreements would be in effect is capable of being measured in some sense because it specifies a ten year period that begins to run from the time of the first conveyance or lease of a unit. The problem, however, is that when the listing agreements were executed, it was entirely unclear how far into the future the parties would be bound by the provision. That is because no party, at the time the agreements were consummated, knew if or when “the first conveyance of an individual unit or executed lease” would occur with respect to parcel 13 or parcel 15. In other words, the amount of time for which the parties were bound by the agreements was indeterminate because it could only be calculated by reference to an uncertain future event. Moreover, the problem is compounded by the fact that the provision also does not provide a ceiling on the ultimate amount of time the listing agreements could last. Accordingly, as written, the parties could be bound by the provision indefinitely.
What has transpired with respect to parcel 15 is illustrative of the indefinite nature of the duration provision at issue. Namely, according to the representations of the parties, as of the date of oral argument to this court (i.e., December 2, 2020), the term of the contract as to parcel 15 had not begun, nor had development of the office space started. It has been more than seventeen years since the listing agreements were executed, yet the parties still cannot say with any degree of certainty when the term will begin or end. Under these circumstances, we cannot conclude that the listing agreements strictly complied with the plain meaning of the duration requirement of
In light of our conclusion that the term “duration,” as used in
Singer & J. Singer, Sutherland Statutory Construction (7th Ed. 2007) § 45:2, p. 15 (“It is only through custom, usage, and convention that language acquires established meanings.“) Specifically, with regard to exclusive right to sell–listing agreements in particular, a definite and measurable duration term is integral because during that time, so long as the broker uses best efforts to procure a buyer, the broker is entitled to a commission if the property sells, regardless of whether he or she is the one to actually procure the buyer. See Real Estate Listing Service, Inc. v. Connecticut Real Estate Commission, supra, 179 Conn. 133–34. In other words, for the duration of the contract, the broker is entitled to a commission even if the owner sells the property himself or herself.
Because these types of agreements implicate a property owner‘s right to alienate freely his or her own property and are highly favorable to the brokers named in the agreement, in that they allow the brokers
Moreover, exclusive right to sell listing agreements of an indefinite duration do not tend to promote the legitimate interests of the parties involved or of the general public. As one California court of appeal observed in discussing that state‘s legislatively expressed public policy against open-ended exclusive real estate listing contracts: “[T]he evil which the legislature had in mind was the practice of some brokers to obtain contracts which placed themselves in a position to claim commissions for an indefinite time without performing any services, nor, perhaps ever intending to. . . . Besides being invariably disadvantageous to the property owner, open-ended exclusive listing contracts undoubtedly were seen as tending to promote disputes and lawsuits among parties affected and as generally being contrary to the legitimate interests of not only buyers and sellers
of real estate but brokers as well. For instance, as long as a listing of this kind had not been cancelled by mutual agreement, the property owner could not employ another broker except at the risk of having to pay double commissions.” (Citation omitted; internal quotation marks omitted.) Nystrom v. First National Bank of Fresno, 81 Cal. App. 3d 759, 765–66, 146 Cal. Rptr. 711 (1978).
Furthermore, as to custom, the testimony of Scalzo, a licensed, experienced commercial real estate broker in Connecticut, who owns his own real estate franchise, indicates that it is considered best practices for a commercial real estate broker to set forth a measurable, definite duration for exclusive right to sell–listing agreements. Specifically, he testified that with regard to the “Exclusive Right to Sell–Listing Agreement” document that was used for the Woodland agreement and then photocopied and altered to serve as two of the documents comprising the listing agreements29: “I wouldn‘t know if it is [a legal and proper agreement] or not. I only use the [Connecticut Association Realtor (CAR)] forms because they teach us it has to have certain font. It‘s got to have a beginning date, end date.” At another point during his testimony, Scalzo explained that it is his company‘s policy to use CAR forms “because we go to real
For these reasons, we conclude that the listing agreements here, which fail to set forth a measurable, definite duration, did not strictly comply with
II
Section 20-325a (d) provides in relevant part: “Nothing in . . . subdivisions (2) to (7), inclusive, of subsection (b) of this section or subsection (c) of this section shall prevent any licensee from recovering any commission . . . if it would be inequitable to deny such recovery and the licensee . . . with respect to a commercial real estate transaction, has substantially complied with subdivisions (2) to (6), inclusive, of subsection (b) of this section or subdivision (2) of subsection (c) of this section.” (Emphasis added.) “Therefore, subsection (d) provides that, when . . . there is no strict compliance with the requirements of subsections (a), (b) and (c),
an action for a real estate commission under
First, we address whether the listing agreements here substantially complied with the requirements of
In the present case, we conclude that the listing agreements did not substantially comply with
Failing to specify the duration of a listing agreement when that term is imperative to the parties’ understand-
ing of their respective rights under the contract is a shortcoming of much greater magnitude than the type that this court previously has concluded constituted substantial compliance with
Even if we were to conclude that the listing agreements did substantially comply with
The plaintiffs argue that the court improperly found that equitable considerations do not entitle them to recovery. Specifically, the plaintiffs contend that they worked hard to market the parcels over several years before Jeanette Haddad‘s death and that the defendants
wrongfully prevented them from marketing the Abbey Woods units. We disagree with the plaintiffs that the court improperly concluded that equity does not entitle them to recovery.
There is evidence in the record to support the court‘s determination that it would not be inequitable to deny the plaintiffs relief; therefore, the finding was not clearly erroneous. Specifically, there was no sale or lease with regard to either parcel until March, 2013. Because exclusive right to sell/lease–listing agreements are inherently results driven, in that a commission is only due if a sale or lease is accomplished, it is not inequitable to deny recovery in an instance where a result was not achieved until nearly ten years after the listing contract was executed, and approximately two months after one of the named brokers had died.
In addition, as the court noted in its findings, after the fall of 2007, the real estate market conditions “[softened] to the point where the parties no longer felt that monthly, or even quarterly, in person meetings were necessary. In the words of Paul Kuehner, ‘things went quiet,’ and there were very few, if any, communications between the parties [after 2007].”31 Moreover, with regard to the efforts made by the brokers to procure buyers or tenants for the subject parcels, the court found that (1) “[f]rom early 2006 through the fall of 2007, [Garland Warren, Theodore Haddad, Sr., and Theodore Haddad, Jr., on behalf of Jeanette Haddad and Scalzo] diligently contacted possible buyers and lessees of the site in discharge of the broker‘s duties pursuant to the listing agreements” and (2) “[f]rom early to mid-2007, Jeanette Haddad and Scalzo continued to make best efforts to find prospective buyers or lessees . . . .”
These findings support the contention that the plaintiffs’ diligent effort with regard to marketing parcels 13 and 15 only lasted for approximately two years. After the fall of 2007, the brokers were not expending much time or energy on this project, they did not prepare any prospect lists,32 and they did not spend any
Furthermore, with regard to the plaintiffs’ contention that the defendants wrongfully prevented them from performing their obligations under the listing agreements, the court made explicit findings to the contrary. Specifically, it found that (1) the defendants did not
take the property off the market, (2) if Jeanette Haddad or Scalzo found a valuable and qualified prospect, the defendants would have been happy to entertain it, and (3) the defendants waited for a prospective buyer to meet their demands, and in the meantime explored all available options. These findings are supported by the evidence and, thus, are not clearly erroneous.
We further acknowledge that, as the plaintiffs point out, the evidence is uncontroverted that the defendants did not notify the Haddads or Scalzo of the site plan approval for, or construction of, the Abbey Woods apartments. It is likewise uncontroverted, however, that after Theodore Haddad, Jr., learned of Abbey Woods in 2013, at which point it was already constructed, neither he, nor his father, made any effort to seek out potential tenants. They did not bring any potential tenants to the property, spend any time or money marketing the property, or even reach out to the defendants to discuss acting as a broker for the apartment units. As such, even if it was improper for the defendants not to notify the Haddads or Scalzo of Abbey Woods, in light of all of the facts, we are not convinced that it is inequitable to deny the plaintiffs commissions with respect to these apartments because, once they became aware of the apartments, they made no effort to lease them. Moreover, the fact that Theodore Haddad, Jr., was “shocked” to learn of Abbey Woods in 2013, is indicative of the lack of attention that was being given to this property, a property that the brokers would have needed to use best efforts to lease or sell to be entitled to commissions in the first place. See Real Estate Listing Service, Inc. v. Connecticut Real Estate Commission, supra, 179 Conn. 133–34 (under exclusive right to sell listing, “the broker incurs an obligation to use his best efforts during the contract period to procure a buyer“).
Because the listing contract did not strictly or substantially comply with
The judgments are affirmed.
In this opinion the other judges concurred.