BOUCHER v. LLC (2019)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

The plaintiff, Harold E. Boucher, sued the defendants for nonpayment of his commission based on their failure to consummate a commercial real estate sale that Boucher had brokered. A Superior Court jury found that defendant C & L, LLC, had breached its contractual obligation to Boucher and that he was entitled to $ 109,000 in damages.³ C & L appeals, contending primarily that its conduct was not wrongful and therefore did not amount to a breach of the brokerage agreement as a matter of law. We affirm.

1. Bad faith or wrongful conduct. Generally when a property owner hires a broker to find a purchaser for the property, the broker earns a commission when:

“(a) [the broker] produces a purchaser ready, willing and able to buy the property on the terms fixed by the owner, (b) the purchaser enters into a binding contract with the owner to do so, and (c) the purchaser completes the transaction by closing the title in accordance with the provisions of the contract.”

Tristram's Landing, Inc. v. Wait, 367 Mass. 622, 629 (1975), quoting Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 551 (1967). The requirement that the sale be consummated before the seller owes the broker a fee is subject to an important exception. See Hillis v. Lake, 421 Mass. 537, 542 (1995). “[I]f the failure of completion of the contract results from the wrongful act or interference of the seller, the broker's claim is valid and must be paid.” Tristram's Landing, supra, quoting Ellsworth Dobbs, Inc., supra. This exception encompasses either the seller's bad faith or wrongful conduct. See Hillis, supra; Capezzuto v. John Hancock Mut. Life Ins. Co., 394 Mass. 399, 404 (1985).

Bad faith “means a purpose on the part of the [seller] to obtain without payment a profit from the [broker's] exertions.” Bonin v. Chestnut Hill Towers Realty Corp., 392 Mass. 58, 70 (1984), quoting Kacavas v. Diamond, 303 Mass. 88, 92-93 (1939). A seller's conduct is wrongful when it violates an existing legal duty or obligation without justification. See Lewis v. Emerson, 391 Mass. 517, 522, 524-525 (1984) (broker's commission due when seller unjustifiably failed to be present for closing as provided in the contract). Contrast Hillis, 421 Mass. at 542-543 (no bad faith or wrongful conduct in failing to remove hazardous waste from property where contract did not require seller to do so).

As relevant here, a seller's act of terminating a valid purchase and sale agreement in order to sell the property to a different buyer can be wrongful. See Lobosco v. Donovan, 30 Mass. App. Ct. 53, 56 (1991) (broker's fee due when seller did not attempt to honor first contract in good faith and “prevented completion of the sale so as to take advantage of a higher offer”); Kinchla v. Welsh, 8 Mass. App. Ct. 367, 369, 371-372 (1979) (broker entitled to fee when seller refused to complete transaction with first buyer in order to sell to another buyer).

C & L argues that because Boucher presented insufficient evidence of C & L's bad faith or wrongful conduct,⁴ the judge erred by denying C & L's motions for a directed verdict, for judgment notwithstanding the verdict (JNOV), and for a new trial. “The denial of a motion for directed verdict or a motion for [JNOV] both present questions of law reviewed under the same standard used by the trial judge.” O'Brien v. Pearson, 449 Mass. 377, 383 (2007). Our task, “taking into account all the evidence in its aspect most favorable to the plaintiff, [is] to determine whether, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, the jury reasonably could return a verdict for the plaintiff.” Tosti v. Ayik, 394 Mass. 482, 494 (1985), quoting Rubel v. Hayden, Harding & Buchanan, Inc., 15 Mass. App. Ct. 252, 254 (1983). A motion for a new trial involves different considerations. The trial judge must determine “whether the verdict is so markedly against the weight of the evidence as to suggest that the jurors allowed themselves to be misled, were swept away by bias or prejudice, or for a combination of reasons, including misunderstanding of applicable law, failed to come to a reasonable conclusion.” W. Oliver Tripp Co. v. American Hoechst Corp., 34 Mass. App. Ct. 744, 748 (1993). On appeal, “[w]e grant considerable deference to a judge's disposition of a motion for a new trial, especially where he was the trial judge, and we will reverse the ruling only for an abuse of discretion.” Gath v. M/A-COM, Inc., 440 Mass. 482, 492 (2003).

Viewed in this light, the evidence supports the jury's conclusion that C & L wrongfully prevented the consummation of the September 2013 sale agreement between Broadway Realty Trust (BRT) and C & L, “collectively with joint and several responsibility” as seller, and Toll Brothers, Inc., as buyer. The agreement obligated the seller to pay Boucher a broker's fee upon closing. It also required the seller to “comply with any notices given or ordinances enacted by any governing authority prior to the date of [s]ettlement for which a lien could be filed against the [p]roperty,” and conditioned the buyer's obligation to close on the seller's obtaining final subdivision approval from the town and “the satisfaction by Seller of any conditions of the final approval.”

Defendant Nicholas Harris, C & L's agent, knew that BRT owed back taxes on the property, and that Donald Shute, BRT's trustee and principal, had failed to make progress payments on the taxes as agreed with the town. The evidence permitted the jury to find that Harris also understood, at least a month before terminating the agreement, that the town was demanding payment of all back taxes before approving the subdivision. The jury could reasonably conclude that C & L failed to pursue readily available, commercially reasonable options for paying the back taxes and proceeding with the agreement with Toll Brothers.⁵ Instead, Harris contacted Long Built Homes, Inc., which agreed to purchase the property and front the tax money. Only after securing Long Built's interest, and just days before the deadline the town had set for payment, did Harris approach Toll Brothers and present them with an ultimatum: either front the tax funds within twenty-four hours, or terminate the agreement. C & L then entered into a sale agreement with Long Built for a slightly higher price than the agreement with Toll Brothers and no provision for Boucher's commission.

Given this evidence, the jury could conclude that C & L wrongfully prevented the completion of the agreement with Toll Brothers, not because of BRT's tax liability, but because C & L preferred to do business with Long Built.⁶ See Lobosco, 30 Mass. App. Ct. at 55-56. The judge did not err in denying the motions for directed verdict and JNOV, and did not abuse his discretion in determining that the verdict was not against the weight of the evidence.⁷

2. Lack of consideration. We are not persuaded by C & L's contention that the agreement between BRT and C & L, as sellers, and Toll Brothers, as buyer, fails because no consideration flowed to C & L. Consideration need not move directly from the promisee to the promisor:

“It is established in our law that the physical movement of consideration -- whether from promisee directly to promisor, from promisee to a third party at the promisee's direction, or from a third person at the promisee's direction to the promisor -- is irrelevant, so long as the promisee incurs a detriment or the promisor receives a benefit.”

New Bedford Inst. for Sav. v. Gildroy, 36 Mass. App. Ct. 647, 657 n.13 (1994). See Marine Contrs. Co. v. Hurley, 365 Mass. 280, 286 (1974); 2 Corbin, Contracts § 5:11 (1995). Here, the agreement contains a mutual exchange of promises between the parties: Toll Brothers promised to pay BRT and C & L a certain sum in exchange for BRT's and C & L's promise to transfer title to the property, pay Boucher's broker fee, and perform various other actions. The agreement is supported by adequate consideration.

3. Verdict slips. C & L argues for the first time on appeal that the special verdict slips were defective and allowed the jury to enter a verdict for Boucher without concluding that C & L engaged in any bad faith or wrongful conduct. The special verdict slips are indeed confusing. They stated incorrectly -- and contrary to the trial judge's oral instructions ⁸ -- that if the jury concluded that Boucher fully performed his contract with C & L or Harris, the jury should skip the questions asking whether the agreement failed to close because of Harris's or C & L's bad faith or wrongful conduct.

Regardless, Boucher's and C & L's counsel jointly prepared the verdict slips and consented to their use. Because C & L raised no objection at trial, it has waived this argument on appeal. See Century Fire & Marine Ins. Corp. v. Bank of New England-Bristol County, N.A., 405 Mass. 420, 421 n.2 (1989) (“An issue not raised or argued below may not be argued for the first time on appeal”).

Conclusion. The judgment for plaintiff Boucher, and the orders denying C & L's motions for judgment notwithstanding the verdict, and for a new trial, are affirmed.

So ordered.

Affirmed.

FOOTNOTES

3.   The trial judge dismissed Boucher's claim under G. L. c. 93A that the defendants had engaged in unfair and deceptive trade practices.

4.   C & L does not dispute that the first two conditions of Tristam's Landing were satisfied. Boucher procured a buyer for the property, Toll Brothers, Inc., that was ready, willing and able to buy the property on terms acceptable to the owner, and Toll Brothers entered into a binding contract to do so.

5.   In particular, Boucher had introduced Harris to Richard Smith, an officer at the Bank of New England, who testified that the bank would likely have been willing to make a loan to Harris that included up-front payment of the tax liability.

6.   To the same effect, the evidence included statements made by Claire Harris, C & L's managing member, indicating that she disliked working with Toll Brothers.

7.   The trial judge's finding that C & L's conduct was not unfair or deceptive within the meaning of G. L. c. 93A does not preclude its conduct from being wrongful under the Tristram's Landing exception. “[N]ot every unlawful act is automatically an unfair (or deceptive) one under G. L. c. 93A.” Mechanics Nat'l Bank of Worcester v. Killeen, 377 Mass. 100, 109 (1979).

8.   In his final charge, the judge correctly instructed the jury that they could find for Boucher only if they concluded there was “evidence of bad faith or wrongful acts or interference by the seller.”