Werner v. Katal Country Club

234 A.D.2d 659, 650 N.Y.S.2d 866, 1996 N.Y. App. Div. LEXIS 12340
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 5, 1996
StatusPublished
Cited by17 cases

This text of 234 A.D.2d 659 (Werner v. Katal Country Club) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Werner v. Katal Country Club, 234 A.D.2d 659, 650 N.Y.S.2d 866, 1996 N.Y. App. Div. LEXIS 12340 (N.Y. Ct. App. 1996).

Opinion

—White, J.

Appeal from an order of the Supreme Court (Harris, J.), entered January 10, 1996 in Rensselaer County, which partially denied certain defendants’ motions for summary judgment dismissing the complaint against them.

In the fall of 1986, defendant Paul J. Roth, the principal [660]*660shareholder of defendant Katal Country Club (hereinafter collectively referred to as Roth), advised plaintiff Richard J. Werner, a licensed real estate broker and partner in plaintiff Birchwood Realty (hereinafter collectively referred to as plaintiff), that he was interested in selling two golf courses, the Evergreen Country Club (hereinafter Evergreen), and the Pheasant Hollow Golf Course (hereinafter Pheasant Hollow), both located in Rensselaer County. Through his efforts, plaintiff procured defendant Joseph D. Bove, Jr., who submitted a purchase offer of $4,500,000 for Evergreen to Roth on December 12, 1986. Roth rejected the offer; however, plaintiff procured two other proposed purchasers who on April 21, 1987 offered Roth $3,750,000 in cash for Evergreen. Roth accepted their offer and, in addition, granted them an irrevocable 18-month option to purchase Pheasant Hollow for $1,000,000. On the same day, Roth and plaintiff executed a commission agreement establishing a $375,000 commission to plaintiff on the sale of Evergreen and a 10% commission on the sale of Pheasant Hollow. Plaintiff did not collect these commissions because the foregoing contract was never completed and the parties thereto had no further contact after May 26, 1987.

Subsequently, Roth contacted Bove and resumed negotiations with him without plaintiffs participation. These negotiations led to an agreement by Bove to purchase Evergreen for $3,300,000. This agreement was memorialized in a proposed purchase contract drawn on July 1, 1987 by Roth’s attorney, defendant Bernhardt Karp. Notably, this contract included a paragraph acknowledging that plaintiff was the broker and that Roth would pay his commission. About this time, Roth advised plaintiff that he would have to accept a reduced commission which he refused to do. Karp thereafter drafted a new commission agreement, which he dated July 1, 1987, naming Roth1 as the broker and fixing his commission in the sum of $175,000. Karp also drafted a new proposed purchase contract designating Roth as the broker, which Bove signed on July 28, 1987. On the same day, Roth granted Bove a five-year option to purchase Pheasant Hollow for $950,000. Thereafter, Bove induced Fred Kassner to become involved in the purchase and in September 1987, assigned his contractual rights to him. After a series of transactions between Kassner, his corporation and Roth, Kassner purchased Evergreen on March 15, 1988.

"When plaintiff learned of this transaction, he commenced an action for his brokerage commission that was ultimately settled during trial in February 1993 for $330,000. "While this litiga[661]*661tion was pending, Kassner, on April 5, 1991, exercised his option to purchase Pheasant Hollow. This induced plaintiff to commence this action wherein he asserts four causes of action: one asserted against Roth based upon contract, a contractual interference claim against Roth and Bove, a demand for punitive damages, and lastly a claim against Karp sounding in fraud, contractual inference and seeking treble damages under Judiciary Law § 487 (1).

Prior to trial, Roth and Karp moved for summary judgment dismissing the complaint. Supreme Court, pursuant to CPLR 3025 (c), sua sponte amended the complaint to include the allegation of an oral commission agreement2 and proceeded to deny Roth’s motion insofar as it pertained to plaintiff’s first and second causes of action, but did grant the motion with respect to the cause of action for punitive damages. All of plaintiff’s claims against Karp were dismissed except the one predicated upon Judiciary Law § 487 (1). Roth and Karp appeal.

Roth takes exception to Supreme Court’s sua sponte amendment of the complaint, contending that he was substantially prejudiced since the amendment changed the theory of liability after extensive discovery based upon plaintiff’s claim of an express written commission agreement had been completed. An application to amend under CPLR 3025 (c) is addressed to the sound discretion of the trial court and should be determined in the same manner and by weighing the same considerations as upon a motion under CPLR 3025 (b) (see, Murray v City of New York, 43 NY2d 400, 405). Pursuant to that subdivision, leave to amend pleadings is freely given in the absence of operative prejudice (see, Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959). Moreover, since a summary judgment motion is the procedural equivalent of a trial (see, Jehle v Hertz Corp., 174 AD2d 812, 813), Supreme Court was free to invoke the provisions of CPLR 3025 (c) (see, Thailer v LaRocca, 174 AD2d 731, 732).

In our view Supreme Court did not abuse its discretion since Roth was not unduly prejudiced by the amendment. The record clearly establishes that he was aware of the oral commission agreement, having participated in its formation, and that he recognized its existence as exemplified by his attempt to induce plaintiff to reduce his commission, which would have been unnecessary had there not been an agreement between [662]*662him and plaintiff relative to the Bove transaction. Further, any prejudice can easily be alleviated by permitting Roth to conduct further discovery on this issue.

Applying the rule that unambiguous terms of a contract must be given their plain and ordinary meaning (see, Fritzsch v County of Chenango, 198 AD2d 650, 651), we reject Roth’s argument that this dispute was included in the settlement of the Evergreen action because the open-court stipulation therein is plainly limited to that action.3

Substantively, Roth argues that plaintiff cannot recover a commission because he cannot prove that he was the procuring cause of the Pheasant Hollow transaction. While that is the general rule (see, Hagedorn v Elwyn, 229 AD2d 654, 655-656), there is an exception. Even though unable to satisfy the requirements of the general rule, a broker is entitled to recover a commission where the owner terminates his or her activities in bad faith and as a mere device to escape the payment of the commission (see, Quantum Realty Servs. v ISE Am., 214 AD2d 420, 421; Sholom & Zuckerbrot Realty Corp. v 101 Fleet Place Assocs., 206 AD2d 965, 966; O'Connell v Rao, 70 AD2d 982, 983, lv denied 48 NY2d 609). Given Roth’s activities after plaintiff refused to reduce his commission, i.e., his direct negotiations with Bove, naming himself broker and the withdrawal of the July 1, 1987 proposed contract indicating that plaintiff was the broker, we agree with Supreme Court that there is a triable issue of fact as to whether Roth terminated his agreement with plaintiff in bad faith. Accordingly, Supreme Court properly sustained plaintiff’s first cause of action.

Plaintiff’s second cause of action should have been dismissed against Roth because one contracting party does not have a cause of action against the other for inducing the breach of a contract (see, Tri-Delta Aggregates v Goodell, 188 AD2d 1051, lv denied 82 NY2d 653; Bradford v Weber, 138 AD2d 860, 862).

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Bluebook (online)
234 A.D.2d 659, 650 N.Y.S.2d 866, 1996 N.Y. App. Div. LEXIS 12340, Counsel Stack Legal Research, https://law.counselstack.com/opinion/werner-v-katal-country-club-nyappdiv-1996.