R.L. Friedland Realty, Inc. v. Modern Cabinets Corp.

194 A.D.2d 657, 598 N.Y.S.2d 817, 1993 N.Y. App. Div. LEXIS 6134

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: June 14, 1993
• Status: Published

Opinions

—In an action to recover a real estate brokerage commission, the plaintiff appeals from a judgment of the Supreme Court, Westchester County (Silberman, J.H.O.), entered August 27, 1990, which, after a nonjury trial, is in favor of the defendants and against it dismissing the complaint.

Ordered that the judgment is affirmed, with costs.

The plaintiff’s brokerage agreement, in relevant part, provided for the payment of a real estate broker’s commission "upon passing of title”. In order to be entitled to a money judgment against the defendants, notwithstanding that title never passed, the plaintiff was obligated to prove that the defendants had willfully defaulted in complying with the obligations imposed upon them by virtue of a legally enforceable contract to convey the property in question (see, Lane— Real Estate Dept. Store v Lawlet Corp., 28 NY2d 36; North Site Realty Corp. v Walsh, 123 AD2d 144, 146).

The plaintiff argues, among other things, that the defendants willfully defaulted in complying with those provisions in the two related contracts, entered into between them and two related buyers, which required the production of a certificate of occupancy. An examination of one of these two contracts reveals, however, that the representative of the defendants had initialed the margin in order to signify his assent to the striking out of the typewritten provision which had stated that "seller [defendants] will produce [a] Certificate of Occupancy at or prior to closing and deliver same to [potential] purchaser” (emphasis added). The defendants’ representative had also added a provision to this contract pursuant to which the buyer would "have the right within 12 days of this agreement * * * to determine that the purchaser’s business * * * may be legally performed in said premises”. These alterations to this contract demonstrate either that no agreement had been reached at all, or that the parties had agreed that the seller would not be responsible for the production of a certificate of occupancy.

More fundamentally, even if the clause requiring the seller to produce a certificate of occupancy remained in effect, notwithstanding its having been stricken out of one of the two parallel contracts, it required at most that a certificate of occupancy be furnished at the time of closing. The weight of the evidence establishes that the buyers could not, or would not, proceed to closing without a certificate of occupancy, because without an appropriate certificate of occupancy they could not obtain the necessary financing, and because they wanted to be assured that the premises could be used for the manufacture of lighting fixtures. Although the defendants, in certain post-contract letters, indicated that they would furnish a certificate of occupancy, there is nothing in these letters which indicates that the defendants undertook to produce such a document prior to the closing. Moreover, the letters merely represented the proposed contractual modifications and were part of the on-going negotiations between the defendants and the proposed buyers, during which they were unable to resolve their differences.

Because the defendants had no contractual obligation to furnish a certificate of occupancy prior to the closing, we agree with the Supreme Court that the plaintiff failed to prove that the defendants willfully breached an enforceable contract. Therefore, the judgment under review is affirmed. Thompson, Bracken and Lawrence, JJ., concur.