Bennett v. Seay

392 N.E.2d 609, 73 Ill. App. 3d 944, 29 Ill. Dec. 912, 1979 Ill. App. LEXIS 3012
Appellate Court of Illinois·Decided June 27, 1979·No. Nos. 78-1486, 78-1656·Published·Cited by 4 cases

Opinion

Mr. JUSTICE McNAMARA

delivered the opinion of the court:

After a trial without a jury, the trial court entered judgment for *6,654.53 in favor of Bennett and Kahnweiler Associates (hereinafter “B&K”) and Donald Schaumberger, a B&K partner, against Gordon Strong and Company. (These are the only parties involved in this appeal.) The action by plaintiffs was for a brokers’ commission arising out of a lease renewal. On appeal Strong contends that a broker’s commission for a lease renewal may not be recovered absent an express agreement for such a commission and that the court’s finding that such an express agreement existed is contrary to the manifest weight of the evidence. Strong also maintains that if any agreement was formed, it was unenforceable under the antitrust laws. 15 U.S.C. §1 (1973).

On February 26,1964, Strong was the beneficial owner of a building located at 146-150 North Clinton Street in Chicago. Seay & Thomas, Inc., was managing agent of the building. Schaumberger, then an employee of Seay & Thomas, was assigned to secure commercial tenants for the building. He sent leasing brochures to several real estate brokers, including B&K. The brochures contained a stamped legend indicating there was a “full commission” to be paid to the broker who located suitable tenants.

On May 1, 1964, Schaumberger left the employ of Seay & Thomas and became a partner of B&K. Seay & Thomas thereafter negotiated a 10-year lease, commencing August 1,1964, with a tenant for space in the building. The lease granted the tenant an option to rent additional space in the building along with an option to renew the lease for an additional five years following the termination of the original lease. Schaumberger’s bill for *14,880 for broker’s services rendered in connection with the original lease was paid by Seay & Thomas on behalf of Strong.

In 1969, the tenant exercised the option to lease additional space in the building. Schaumberger acknowledged that neither B&K nor he had any role in the negotiation or exercise of the option. Seay & Thomas, however, paid him a commission of *2,227 in connection with the exercise of the option.

In 1974, the tenant exercised the option to renew the lease for an additional five years. The renewal was negotiated between the tenant and Charles Rau, an employee of Seay & Thomas. On November 15, 1974, Rau wrote B&K detailing his negotiation of the lease renewal and stating that he had arranged for Seay & Thomas to get a portion of any commission paid B&K for the renewal. Schaumberger agreed to pay Rau *1,654.53 out of the proceeds from the lease renewal commission. Schaumberger presented a *6,654.53 bill to Seay & Thomas for a broker’s commission on the lease renewal. Seay & Thomas and Strong refused to pay the bill.

On October 17, 1975, B&K filed an arbitration claim for a broker’s commission against Thomas F. Seay before the Chicago Real Estate Board (hereinafter “CREB”.) CREB dismissed the claim against Seay individually because he was not owner of the building. CREB found that Strong, in which Seay owned 6 to 8 percent of the outstanding shares, was the building’s beneficial owner. CREB awarded plaintiffs a commission of *6,654.53 from Strong; this amount was in accord with the CREB schedule. B&K filed an action in the trial court to recover the foregoing amount from Strong; Seay filed an action to vacate the arbitration award. After consolidation of the two suits, the parties stipulated to the evidence presented at the arbitration hearing. Additionally, Schaumberger testified that he was unaware of the exercise of the lease renewal option by the tenant and that he did not participate in any negotiations for the lease renewal. He testified that the legend “full commission” on the leasing brochure was a well-known term describing the recommended broker’s commission schedule of CREB. The schedule permitted a broker to charge commissions for the initial lease and for all subsequent options and renewals. Schaumberger sought a broker’s commission when he was informed the lease had been renewed.

On appeal Strong contends initially that plaintiffs may not recover brokers’ commissions on the renewal of a lease absent an express agreement for a renewal commission between a broker and lessor. We agree with Strong.

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Bennett v. Seay, 392 N.E.2d 609, 73 Ill. App. 3d 944, 29 Ill. Dec. 912, 1979 Ill. App. LEXIS 3012 (Ill. Ct. App. 1979).

392 N.E.2d 609 (Bennett v. Seay) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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