Cutler v Collura-Repp

[*1] Cutler v Collura-Repp 2010 NY Slip Op 51987(U) [29 Misc 3d 1224(A)] Decided on November 18, 2010 County Court, Suffolk County Tarantino, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on November 18, 2010
Suffolk County Ct

W. Stan Cutler, Plaintiff

against

Peggy Sue Collura-Repp and Donna Stovall, Defendants



29007/06



George A. Huwel Esq

Attorney for Plaintiff

11 New Hyde Park Rd

Franklin Square NY 11010

516-354-8500

Barbara L. Maleno Esq

Attorney for Defendant

180 Froehlich Farm Blvd

Woodbury NY 11797

516-496-7904

Andrew G. Tarantino, J., Jr.

NATURE OF THE CASE

This case was transferred for Trial pursuant to NY Civ Prac Law & Rules §325(d). Commenced by Notice of Motion for Summary Judgment in Lieu of Complaint, Plaintiff seeks the [*2]balance of $25,000.00, plus interest, due for the sale of a real estate business to Defendants. After commencement of this action, Defendant Collura-Repp was discharged in bankruptcy in the U.S. Bankruptcy Court, Eastern District of New York (Case No 8-08-73814-dte). The action then proceeded against Stovall.

Stovall claimed that she was not personally liable for any debt. She claimed that the agreements were executed by her on behalf of the corporation. She further claimed that Plaintiff violated the "no competition" clause of the agreement, and failed to pay the corporation commissions to which it was entitled. The Plaintiff did not appear for this Bench Trial. Plaintiff's counsel called Stovall as Plaintiff's witness, then rested. Defendant then called one witness. The Court reserved decision.

THE FACTS

Defendants were principals in GATEWAY TO THE HAMPTONS REALTY CORP (GTTHRC), duly incorporated in New York State September 1, 2005. On September 10, 2005, Defendants executed an agreement as Transferees with Plaintiff W. Stan Cutler, as Transferor. The agreement provided in relevant part: in consideration of the sum of $50,000.00 paid to the Transferor, at or before the ensealing and delivery of these presents by Peggy Sue Collura-Repp and Donna Stovall for Gateway to the Hamptons Realty Corp. (the "Transferee"), has granted, transferred, and conveyed and by these presents does grant, transfer, and convey unto the said Transferee and said Transferee's successors, and assigns property as hereinafter described [...] in the following asset ("Asset"):Real Estate Business known as GATEWAY TO THE HAMPTONS REAL ESTATE, including all Transferor's right, title, and interests in the Asset.

The agreement also provided: Transferor hereby represents and warrants that he/she has good and marketable title to the Asset name hereinabove[...]

The agreement was signed as follows:

Signed, sealed and Delivered____/s W. Stan Cutler______

in the Presence ofTransferor

/s Anne Principleby/s Peggy Sue Collura-Repp

L.S.by/s Donna Stovall

Attached to the Transfer Agreement was Schedule A. Schedule A provided the following: Sellers:W. Stan Cutler

Purchasers:Peggy Sue Collura-Repp and Donna Stovall for Gateway to the

Hamptons Realty Corp. [*3] Price shall be FIFTY THOUSAND ($50,000.00) DOLLARS TO BE PAID IN THE FOLLOWING MANNER:Upon Closing:$25,000.00

By a Note [FN1] from Purchaser to Seller:$25,000.00 at 6% interest payable one year from date of closing.

Schedule A contained a Non-compete Clause as follows: W. Stan Cutler and Ann Principle both and each covenant not to seek or take employment in Real Estate Sales within a Twenty Five (25) Mile radius of Speonk for a period of no less than three (3) years after closing of this sale.

Additionally, the agreement provided: There is currently a listing of real property located at [address omitted for this decision] which when sold there will be a commission of Two (2%) due to Gateway to the Hamptons Realty Corp and no commission due to Anne Principle.Schedule A was then signed by Cutler, Collura-Repp, Stovall and Principle.

A Business Certificate dated March 30, 2001 reflected that Anne M. Principle was conducting or transacting business under the name or designation of GATEWAY TO THE HAMPTONS REAL ESTATE. W, Stan Cutler does not appear on the Certificate as a named person doing business.

Defendant provided six Multiple Listing Service (MLS) reports reflecting real estate listings. The listings were dated between February 26, 2006 and July 25, 2008. The listed agents were Wm. Stan Cutler and Anne M. Principle, or Anne M. Principle alone. Principle and Cutler apparently incorporated a business named GTTH, INC (ominously similar to Gateway to the Hamptons). Based upon the submitted MapQuest information, each of the listings were within 25 miles of Speonk. Defendants witness was her brother who four years ago worked a "sting" on Principle and Cutler. He telephoned Cutler's real estate business and made an appointment to look at houses. Upon meeting Anne Principle in the Speonk-Moriches area, he was shown houses in East Quogue. These houses were within 25 miles of Speonk. Cutler was at one of the houses when Principle and Stovall's brother arrived.

Stovall left the real estate business in June 2006. She was the vice president of GTTHRC when the transfer agreement with Cutler was signed. She testified that she signed the agreement as an officer of the corporation; she did not, nor did she intend to, sign the agreement in her individual capacity. The house in the agreement was subsequently sold for $830,000.00, but Cutler never paid the 2% commission to GTTHRC. Stovall acknowledged that the commission would be owed to GTTHRC, not to her individually. [*4]

DISCUSSION

In a matter such as this, it is the province and indeed the obligation of the trial court to assess and determine matters of credibility. Morgan v McCaffrey, 14 AD3d 670, 789 NYS2d 274 (2d Dep't 2005); Matter of Liccione v Michael A., 65 NY2d 826, 493 NYS2d 121 (1985). Here, the burden is upon the plaintiff to plead and prove its direct case by a fair preponderance of the credible, relevant and material evidence with the same burden imposed upon the Defendant respecting her claim against the Plaintiff. Prince-Richardson on Evidence, §3-210; Torem v Central Avenue Rest, 133 AD2d 25, 518 NYS2d 620 (1st Dep't 1987). This Court credits Stovall's testimony which is undisputed by reason of the Plaintiff's non-appearance for trial.

General Obligations Law, § 5-701, referred to as the Statute of Frauds, states: Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking: (2) is a special promise to answer for the debt, default or miscarriage of another person.

When an agent acts on behalf of a disclosed principal, the agent will not be personally liable for a breach of contract unless there is clear and explicit evidence of the agent's intention to be personally liable. Weinreb v Stinchfield, 19 AD3d 482, 797 NYS2d 521 (2d Dep't 2005). An agent is not personally bound, in the absence of clear and explicit evidence of an intent to be bound personally, even though he signed a contract without any language limiting his signature. Id. The Court should refrain from foisting an obligation on an agent, absent requisite clear and unequivocal evidence, to be gathered from the writing itself, that the agent intended to assume such a liability. Savoy Record Company Inc. v Cardinal Export Corp, 15 NY2d 1 (1964).

The first question is whether Stovall signed in her individual capacity, or on behalf of GTTHRC? The agreement clearly indicated that Cutler executed a Transfer of the business to "... Stovall for Gateway to the Hamptons Realty Corp." [emphasis added]. GTTHRC was entitled the "Transferee." Further indication that Stovall acted as an agent for GTTHRC was evidenced by Schedule A which identified the purchasers as "... Stovall for Gateway to the Hamptons Realty Corp. [emphasis added]. Stovall testified that it was her intention to have signed the agreement for the corporation, as evidenced by the word "by" appearing before their signatures. The agreement lacked any indication that Stovall would assume personal liability for the corporate Transferee. Based upon the writing itself, Stovall's undisputed testimony, and absent clear and unequivocal evidence to the contrary, this Court finds that Stovall did not assume personal liability for the debt of GTTHRC.

The next question is whether Stovall made a special promise to answer for the debt or default of the GTTHRC? (GOL §5-701). Upon careful review of the agreement, the Court finds that there is no expressed or unequivocal language in the agreement whereby Stovall made any promise or representation to assume such an obligation. Absent a writing to memorialize such a promise, this Court cannot foist such an obligation upon Stovall. Cutler's claim against Stovall must fall based upon the Statute of Frauds.

Stovall's claims against Cutler must also fall. There is no doubt that despite the 25-mile "no [*5]compete" clause, Cutler continued to conduct real estate business in the local area. Cutler continued that business with almost an identical name, GTTH INC.It is also undisputed that Cutler owes $16,600.00 to GTTHRC for the 2% commission owed on the sale of the property named in the agreement. This Court, however, cannot award Stovall any judgment for a debt due GTTHRC. 0GTTHRC was never named as a party. Therefore, the Court cannot award GTTHRC any judgment.

One remaining point begs discussion. Did Cutler have the right to sell the business? The certificate of business was filed by Anne Principle. Although Principle was named in the "no-compete" clause, her name appeared only as a witness to the signed agreement. Principle was not named as Transferor, or Seller, of the business she owned. Yet, Cutler was the named Transferor. After the transfer by Cutler, Cutler or Principle continued their business as GTTH INC. Should the contract be voided upon these facts? Cutler, apparently now residing out of state, still has not paid the $16,600.00 commission owed to GTTHRC. The Court finds that, at a minimum, Cutler came to this Court with unclean hands.

By reason of the above, it is hereby

ORDERED that the complaint is hereby dismissed in its entirety.

This constitutes the decision, judgment and order of this Court.

Enter

_______________________________

Judge Footnotes

Footnote 1: Neither party produced a Note to the Court. Evidence of this arrangement was submitted in the form of the Transfer Agreement with Schedule A.