Daniel Garrett dba Garrett Realty v. James J. Santorelli et al. (2010)

MEMORANDUM OF DECISION ON APPLICATION FOR PREJUDGMENT REMEDY

The plaintiff, Daniel Garrett (Garrett), brings this application for a prejudgment remedy pursuant to General Statutes § 52-278a et seq., together with a motion for disclosure of assets sufficient to secure a prejudgment attachment, if issued.   Garrett's proposed summons and complaint for a real estate commission due is based upon an alleged breach of an exclusive right to sell and is brought in three counts, namely, breach of contract, quantum meruit and as a claim for wages due under the provisions of General Statutes § 31-70 et seq.

After a hearing, the court finds sufficient evidence to support the following findings.   Garrett is a licensed real estate broker under the laws of the state of Connecticut.   On July 19, 2009, Garrett, as broker, entered into a written exclusive right to sell listing contract with the defendants, James J. Santorelli and Sandra Santorelli (Santorelli), for the premises known as 2101 Briarwoods Lane, Danbury, Connecticut.   The effective dates of the agreement were July 20, 2009 through June 30, 2010.   The agreement provided that Santorelli would pay Garrett a commission of 7 percent “of the agreed upon sale price if during the term of this Contract:  (a) The LISTED PROPERTY is sold;  or (b) [Santorelli, Garrett] or anyone else finds a buyer ready, willing and able to buy the LISTED PROPERTY for no less than the LISTED PRICE.”   The contract listing price was $399,000.  (Plaintiff's exhibit 2.)

By late summer or early fall of 2009, Garrett had procured a buyer for the premises at a sale price of $360,000.   However that deal was not consummated because the potential buyer could not obtain a mortgage as the premises appraised at less than the contract price.   Thereafter as a result of discussions between Santorelli and Garrett, Santorelli conveyed title to the premises to an entity wholly owned by them and known as De Rosso Investments, LLP (De Rosso), a Wyoming corporation, by warranty deed dated November 14, 2009 and recorded November 19, 2009.   The deed stated no amount of consideration, but by virtue of tax stamps affixed to the deed, state and local conveyance taxes were computed based on a sale price of $360,000.  (Plaintiff's exhibit 3.) Garrett testified that after he learned of the transaction, Santorelli instructed him to report the transfer on the multiple listing service as a sale.   The defendant, Sandra Santorelli, testified that De Rosso is a business entity wholly owned by her husband, James I. Santorelli, and that De Rosso was created and title to the property was transferred to De Rosso upon the advice of Garrett.   Sandra Santorelli testified that although she understood that there was a real estate conveyance tax exemption available to her and her husband for the transfer of the property to a business entity wholly owned by them, they choose to state a sale price, and in fact pay a total of $2700 in conveyance taxes, simply to create a comparable sale for use in bolstering the appraised value of their property for a future sale.   She also testified that the choice of Wyoming as the situs for De Rosso was also made at the suggestion of Garrett for Wyoming's favorable tax laws.

In June 2010, prior to the expiration of the listing contract between Santorelli and Garrett, Santorelli acting on behalf of De Rosso entered into a new listing agreement with Garrett for the property which remains in effect through the date of this prejudgment attachment hearing.   By the end of June 2009, a breakdown in the personal and business relations between Santorelli and Garrett occurred.   It is not entirely clear nor is it especially relevant what caused the breakdown.   Garrett commenced this proceeding against Santorelli by application for prejudgment remedy on August 18, 2010, claiming that he is due a commission on the “sale” of the property by Santorelli to De Rosso.

In order to grant a prejudgment remedy, the plaintiff must demonstrate the existence of “probable cause” to sustain the validity of the claim.  “[T]he plaintiff does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim ․ The legal idea of probable cause is a bona fide belief in the existence of facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances in entertaining it ․ Probable cause is a flexible common sense standard.   It does not demand that a belief be correct or more likely true than false ․” (Internal quotation marks and citations omitted).  Village Line Corporation v. Children's Store, Inc., 31 Conn.App. 652, 657-58, 626 A.2d 813 (1993).

At the conclusion of the hearing held on this matter on October 12, 2010, counsel for both the plaintiff and the defendants agreed that the sole issue upon which this matter would turn is whether the transfer of the property from Santorelli to De Rosso could be considered a sale under the terms of the exclusive right to sell listing contract.   A sale is commonly understood as “the exchange of goods for a price in money.”   See Webster's New illustrated Dictionary, 1968 by Books, Inc. No money or other consideration was exchanged between Santorelli and their wholly owned business entity De Rosso.   Indeed, for all practical purposes in this case De Rosso is Santorelli.   The exchange was disguised as a sale at the invention of Garrett and Santorelli to bolster comparable sales figures in anticipation of the need for an appraisal for a future sale.   There is no credible evidence upon which this court can make a finding that there has been a sale of the property under the terms of the exclusive right to sell listing contract.

For the foregoing reasons, the court finds that the plaintiff has failed to meet his burden of establishing facts sufficient for this court to make a finding of probable cause to proceed under any of the three theories of liability put forth by the plaintiff.   The plaintiff's application for prejudgment remedy is therefore denied.

Michael G. Maronich, Judge

Maronich, Michael G., J.