Summary judgement and the broker.Real estate brokers are often forced to resort to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. in order to receive payment on commissions that their client fails to pay. Summary judgment is a tool that can help the broker obtain his commission without a trial and with minimum time and expense. Under this procedure, the broker seeks to convince the court by a motion based on affidavits and documents, and without oral testimony, that they have earned their commission: The granting of a summary judgment motion is similar to a finding after trial on the issue of liability. While this motion may be utilized by either party, until recently it was most often used by the defendant, owner or landlord to defeat a broker's right to his earned commission. The good news for brokers is that the motion for summary judgment motion for summary judgment n. a written request for a judgment in the moving party's favor before a lawsuit goes to trial and based on recorded (testimony outside court) affidavits (or declarations under penalty of perjury), depositions, admissions of fact, answers is now being used more frequently to determine a broker's entitlement to a commission. The contract of sale may be a helpful tool to the broker on a motion, but until recently, was under-utilized. This contract, signed by the seller and the purchaser, may be over-looked as a probative Having the effect of proof, tending to prove, or actually proving. When a legal controversy goes to trial, the parties seek to prove their cases by the introduction of evidence. document because it neither contains a brokerage agreement, nor is it executed by the broker. The contract, however, typically contains a "brokerage clause" which provides the name of the broker, and often includes representations by the seller and purchaser that each has dealt with no other broker. It frequently includes language that recognizes the broker as having brought the parties together. Our courts are now beginning to recognize that the brokerage clause may contain important admissions which might help the broker's motion. Moreover, courts are finding with increasing frequency that the admissions contained in the brokerage clause may support a broker's summary judgment motion. The Appellate Division In several jurisdictions, the Appellate Division is the name of a court, or division of a court, that hears appeals from lower courts.
tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to a commission. The broker relied on the brokerage clause contained in the contract of sale, which provided: "Purchaser and seller each represent to the other that they have dealt with no broker other then [the "broker"] in connection with this agreement and the transaction contemplated by this agreement... seller shall pay any brokerage commission in accordance with seller's agreement with the Broker." The Appellate Division found that the language in the contract of sale constituted an admission by the seller that the broker was the procuring cause of the sale. The court went on to give judicial recognition to the general use of the brokerage clause containing such language, and refused to accept the seller's argument that he never believed that the brokerage clause could render him liable for the commission. The court noted that the clause was not ambiguous and refused to consider the seller's evidence that attempted to prove that the broker was not the procuring cause of the sale. The broker will often bring a lawsuit for his commission on several grounds, including the express or implied contract implied contract n. an agreement which is found to exist based on the circumstances when to deny a contract would be unfair and/or result in unjust enrichment to one of the parties. An implied contract is distinguished from an "express contract. and/or a quantum meruit [Latin, As much as is deserved.] In the law of contracts, a doctrine by which the law infers a promise to pay a reasonable amount for labor and materials furnished, even in the absence of a specific legally enforceable agreement between the parties. theory. Under the express or implied contract, recovery is sought on the basis that the parties to the lawsuit entered into an actual agreement, or that an agreement should be implied by the facts of the case. A quantum meruit cause of action entitles the broker to the reasonable value of his services, even though no brokerage agreement was ever signed. The broker seeking a commission based on quantum meruit is entitled to receive an award for the reasonable and customary reasonable and customary (R&C) plan, n a dental benefits plan that determines benefits based only on “reasonable and customary” fee criteria. See also usual fee; customary fee; reasonable fee. commission paid in the geographical area where the property is located. This proof will require expert testimony Testimony about a scientific, technical, or professional issue given by a person qualified to testify because of familiarity with the subject or special training in the field. as to the reasonable value of the services that the broker performed. It is noteworthy that the Appellate Division recently found a brokerage clause in a contract of sale that was similar to the one set forth above was an admission that brokerage services were rendered and that the broker was entitled to the reasonable value of his services. A review of recent cases indicates that the court is sometimes willing to treat the broker as a third party beneficiary A third party beneficiary, in the law of contracts, is a person who may have the right to sue on a contract, despite not having originally been a party to the contract. This right arises where the third party is the intended beneficiary of the contract, as opposed to an incidental under the brokerage provision in the contract of sale between the seller and purchaser, on the theory that buyer and seller contracted for the benefit of the broker. The foregoing will demonstrate that the contract of sale can be invaluable to the broker when litigating for a commission, regardless of the theory of recovery under which the commission is sought. (Jay J. Gurfein is the principal of The Law Offices of Jay 1. Gurfein. He is a frequent lecturer at brokerage seminars and was on the faculty of New York University New York University, mainly in New York City; coeducational; chartered 1831, opened 1832 as the Univ. of the City of New York, renamed 1896. It comprises 13 schools and colleges, maintaining 4 main centers (including the Medical Center) in the city, as well as the School of Continuing Legal Education The purpose of continuing legal education is to maintain or sharpen the skills of licensed attorneys and judges. Accredited courses examine new areas of the law or review basic practice and trial principles. . Tracey B. Paer is an associate at the firm.) |
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