Scalacustom Props., Ltd. v Birol
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Scalacustom Props., Ltd. v Birol 2013 NY Slip Op 32730(U) October 9, 2013 Supreme Court, Suffolk County Docket Number: 15774/2007 Judge: Ralph T. Gazzillo Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] Index No : 15774/2007 SIIORr FORM ORDER Supreme Comt - State of New York IAS PART 6 - SUFFOLK COUNTY Post Trial Decision PRESENT: Hon. RALPH T. GAZZILLO A.J.S .C. --------------------------------------------------------------)( ScalaCustom Properties, Ltd., Plaintiff( s), - against Ohran Birol and Nuray Birol, Defendant( s). ---------------------------------------------------------------)( The non-jury trial of this matter was held before the undersigned on June 24, 2013 . In addition to a number of items of documents pre-marked as exhibits and/or evidence, the plaintiff relied upon four (4) witnesses: Mark Thomas Scala, Ronald Scala, Ohran Birol and Nuray Birol. The defense called no witnesses but instead relied instead upon cross-examination of each witness. At the conclusion of the proceedings, in lieu of summations and after the defendants ' application for a trial order of dismissal (decided below), both sides were invited to submit written factual and legal arguments as well as any requests for findings of fact pursuant to CPLR §4213 by July 12, 2013 1 ¢ Those memoranda having since been received and reviewed, the Court's determination is as follows : To begin with, there are a number of background facts which are not in serious dispute and were stipulated and agreed to by the parties at the trial 's commencement. Specifically, there is no 1 Due to a difficulty with the transcript, the submission date was adj ourned on consent tp September 5, 2013. [* 2] Sm /av. !Jirol Index No.: 1577./1100 7 f'ag~ 1 <f V contest that this matter involves a premises located at 236 Dune Road, Quogue, New York, which cons '·ts of a condo minium unit(# 236) purchased on October 2, 1995 by the herein co-derendants/ husbmd and wife as tenants by the entirety. On April 19, 2006, the defendant Ohran Biro] signed ·'Exclusive Agency Agreement" appointing the plaintiff real estate agency as an agent to sell the premis es for $1.75 million. The plaintiff contends that on August Th, 2006, it informed Ohran Biro! that a purchaser agreed to purchase the premises for $1.75 mi ll ion in cash. The defendants, however, refused claiming that the defendant Nuray Biro! had never agreed to sell the premises. On ov011ber 27, 2006 the de:fi ndants transferred the property to uray Biro!. By summons and complaint dated May 21, 2007, the plaintiffs allege two causes of action, one for breach of contract and one for quantum meruit. Both seek damages in the amount of $ 105,000.00 . There is no counterclaim Supplementing those facts is the trial's evidence which include , of course, the testimony. As to that testimony, its essence and its major and/or most relevant contentions may summarized as follows: Mark Thomas Scala's testimony indicated that he was the real e tate agent who took the listing but he no longer works for the plaintiff real estate agency. That agreement was effective April 6, 2006 2 signed in front of him and expired on July 19 2006. /\. second agreement was executed thereafter extending the agency to September 31, 2006 and containing t e same listing or asking price of$1.75 million as well as the same six (6) per cent commission. Thereafter, the property was marketed by advertisements in The Nerv York Times provided to a multiple listing service as well as local papers. Also, a 24" by 24" sign was placed on the property, the premi. es was shown to I 6 to 18 potential buyers, and several "open-houses" were conducted. There was an initial 'all-cash" offer of$ l .55 million by a Paul Dans· that ffer was rejected as the defendants purportedly wanted more money. Dans then offered to pay the full asking price. That offer was transmitted to defendants who allegedly accepted it but shortly thereafter, Mrs. Birol 'changed her mind and didn't want to sell '' and gave no reason. The witness also indicated that in prior conversations she hadn't ever said she didn't want to sell the property. On cross-c ' amination , the witness further indi atcd that he had had conversations with Mrs. B iro ! prior to her hu. band signing the agreement. They had spoken abo t the price and other matters about a sale <luring approximately Pebruary or March of 2006 and she had indicated that she wanted to sell. (With regard to this point, he was somewhat adamant.) He adde that he may have known them !'or as much as a year before the execution or the agreement. Although he new they both owned the property, he had accepted Mr. Birol's signature as signing for both him and his wife as she was unavailublc. Ile als added that between the signing of the first (April) agreem nt and the second (July), he had spoken with Mrs . Biro! a number of times. (On his re-direct examination , he was also adamant about this) . otwith. landing the year on the document, it appears obvious that it was signed in 2006. [* 3] Sea a " /3 irol l11clex No.: 1577./IJOO? Pug<! J o/9 The witness also admitted that he wasn't present when second offer was accepted. Also, while the property is one of two units which make up the condominium the condominium association has but two (2) separate apartments and owners. Mr. Biro! purportedly toJd him that the othcrunif s owner had "no problem" with the sale and they had congratulat d the Birols. Ronald Scala testified that he has been a licensed real estate broker for 25 years, including all times relevant to this matter. He had sent the first agency agreement to the defendants by facsimile and l'C sent the ext nsion the day after it expired. His description of hi.· various efforts to sell the property paralleled the first witness, and he added that he had personally seen the si g directly next to the front door and that it was "impossible" not to see it. As to the first offer, he testified that it was all cash but it was refused and unacceptable as "not enough money." Indeed when he spoke on the phone to Mrs. Biro] about that offer, she' made it empathic (sic) that it was not enough money." The witness indicated that her husband would, however, have accepted it. Thereafter, when the full asking price was offered Mr. Biro! was 'ecstatic '; subsequently, however, she called and said she " changed her mind ' and didn't "want to sell. · Four weeks later, the witness purportedly sold Dans - "a guy running around with a lot of money in his pocket all cash" - a waterfront property. During Scala 's cross-examination he tated that he had sold hundreds of houses where only one of the spouses igned. He also testified that he spoke with Mrs. Biro I after the second offer. He strongly contended that she had previously and telephonically accepted that offer. Subsequently, and alter her rejection he questioned her change of heart as they had prior, contrary conversations about the sale. He also stated that her husband had asked him to try to convince her to sell. Ohran Biro! testi lied that he and his wife own the property and sed it as an investment/rental property. Rentals albeit sporadic over the years, varied from $20 000.00 to $36 000.000 a season. /\!though he want d to sell, purportedly his wife didn t, and Scala "cam into th· game very late. ' In 2000 or so. Mr. Biro! was told he could get "two million ' for the unit. I fc had been off ring it for sale and "praying'· for an bid that his wifo couldn't refuse. He also indicated she was aware he was trying to sell. I le added that his fears of a real estate crash fueled his desire to sci I and that either the day he signed the agreement or the next he told his wife. I le also stated that he had previously purchased the neighboring unit -234 - for $335 ,000.00 or so and sold it for 630 000.00 within two years. As to the unit of this litigati n, he had accepted the first $1,550.000 offer '·right away' but his wife rejected it. He admi tted that Scala ' firm did ·'their job'' but contended that his wife never wanted to sell. After the first offer. his wi fc purportedly said she didn't want to sell. Ife claimed that he told Scala she was "cra7y' and didn 't want to sell it for the first offer but perhaps if they got the full amount she would and e asked Scala to talk to her. I Iis wile, however. indicated that she didn t want to sell and told her hu. band to 'get that guy (Scala) [* 4] Scala v. Biro/ Index No..· 1577-112007 Page./ 1 1(9 off lherJ back.'' He also alleged what was apparently purported to be an impediment to the sale: the right of first refusal by condominium owner of an adjoining unit (who would have had to pay the same price. J\s to the condom inium board members, they are comprised of him, hi wife, and one other; the Biro ls, however, e j oy more voting power than the other owner by a margin of 53% to 4 7%. As indicated by his testimony. the Birols have apparently been historically lax and somewhat less than faithful to the formalities and regulations of the condominium. For example, notice requirements of the by-laws (such as leasing notices and intent to sell) were not fo llowed. He also alleged that he resided in Quogue and his wife on ' helter Is land and that the "for sale" sign on the street had been removed by the police. He further contended that he questioned Mark Scala as to whether Mrs. Biro! should also sign the listing agreement but was told "it 's not necessary. ' When this wi tness spoke to her about it that day or the day after, she "was not happy" and said she didn ' t want to sell. He also contended that his wife never had met with Mark Scala before they had Ii ted their other Jones Road property. After the first offer was convey d, he said she didn ' t want to sell. Finally on redirect he contended that he was never told the offer was a cash deal. The testimony of the final witness, uray Biro!, was comparatively brief. She indicated that she first learned o f the agency agreement on or about the day her husband signed. She further stated that she had read condominium by-laws when they purchased the property and was familiar with them but never employed the notice requirements. She admitted they hold the majority of voting rights and that "we make the by-laws and "everybody docs their own thing." She claimed she rejected the $1.75 million offer because she was unwill ing to sell the property at " no pri ·c." She admitted, however, that thereafter she offered the property for sale with a number or other agents bcca sc they needed that for a marketing strategy to rent it for the summer. The listing were wi th a multiple listing service for $3.25 million and for $2.275 million and apparently actively they listed it for sale in 2009. She also indicated that she listed the Jones Road property began the instant litigation. ith the plaintiff until the plaintiff LAW First and foremost, having observed the witnesses, "the very whites of their eye ,"on direct as wel I as cross-examination, the so-called "greatest engine for ascertaining the truth." Wigmore on 7 ,·vidence, § 1367. the Court is satisfied that the exercise has been fruitfu l and more than sufficient to determine the cred ible information as well as to simul taneously filter out that which is less than [* 5] Scala>. /J ira/ Index No.: I 577./12007 f>uge 5 r~f9 reliable. Secondari ly, it should go without saying that in evaluating each witness ' contributions to the 1 esolution of the controversies in this matter- as well as all such determinations- it is hornbook law 1 the quality or the witnesses not the quantity is determinative. See, e.g. , Fisch on New York hat £1 idence. 2d ed., ' l 090. As to the quality of any given witness, the flavor of the testimony, its quirks a witness ' bearing, mannerisms, tone and overall deportment cannot be fu lly captured by the cold record; the fact-finder, of course, enjoys a unique perspective for all o f this, and the ability to abs b any such subtleties and nuances. Indeed, appellate courts ' respect and recognition of that perspective as well as its advantages is historic and well-settled in the I.aw. See, e.g. , Latora v. Ferreira, I 02 AD 3d 838 (2d Dept 2013); Hom v. Hom, I 01 AD3d 816 (2d Dept 2012). Also worthy of examination is any witness' interest in the litigation. See, e.g., 1 ~y PJI2d I :91 et seq., at p. I 72. The length of time taken by either side's case or any witness' testimony is, however, clearly non -conclusive. Lastly, it should be underscored and acknowledged that during the course of gauging a witness ' credibility as well as conducting the fact-finding analysis, the undersigned ' s cont inuous tasks also included of course, segregating the competent ev idence from that which was not, an undertaking fo r which the law presupposes a court s unassisted ability. See, e.g., People v. Brcn1'11 , 24 NY2d 168 ( 1969); Matter <~f Onuoha v. Onuoha, 28 AD3d 563 (2d Dept 2006). T hose tasks and duties aside, there is also the purpose and goal of the trial, viz., to try or test the case. It is hornbook law that the yardstick for measuring causes of actions such as the matter at bar is the same whether the trial is by bench or jury: The burden of proof rests with the plaintiff who must establish the truth and validity of each claim by a fair preponderance of the credible evidence. Stated otherwise, in order for a plaintiff to prevail on any individual claim, the evidence that supports that claim must appeal to the fact-finder as more nearly representing what took place than the evidence opposed to it: if the evidence does not or if that evidence weighs so evenly that the factfinder is unable to indicat that there is a preponderance on either side, then the question is decided in favor of the defendan t. Only when the evidence fav oring a plaintifr s claim outweighs the evidence opposed to it may that plaintiff prevail. An action wh ich founded upon a theory of contract requires proof requires proof of 1) at least two parties with legal capacity to contract, 2) mutual assent to the term . of the purported contract , and 3) consideration. Sec generally, Restatement (Second) of Contracts§§ 9, 12, I 7: 1 Williston, Contracts (4 11i Ed) 200-09,§ 3:2; 22 NYJur2d , Contracts §§ 11 13 ; see, also, UCC 1-20 1, subs 3, 11. Perhaps in more simp le general terms, there must be a sufficiently credible demonstration of a mutual understand ing and agreement regarding the performance or forbearance of an act. See genera!~y, ./JO Corp. v. ( 'hme!ecki Asset Mgt., Inc. 51 AD3d 715 (2d Dept 2008 . There are numerous conditions attached to that general rule, including the well -settled cavea t that any ·'agrecmcnC which provides for further negotiations regarding any material term or terms is unenforceable. , 'ee, e.g., Teutul v. Teutul, 79 D3d 851 (2 d Dept 20 10). Stated otherwise, there must be a meeting o f' the minds on all of the essential terms of the contract. Murray Adler Realty Co. Inc. v. !3enej(Jre. 42 AD2d 7 I 5 (2d Dept 1973). Quantum meruil requires sufficient proof of I) pcrl'ormancc or the services in good faith, 2) the acceptance of the services by th person to whom they arc rendered, 3) the reasonable value of the services, and 4) the exp ctation of compensation [* 6] Seal 1 v. Hirol lnde:i: No.: 15 77.//2007 !'age 6 o/ 9 therefor. See, e.g. . At/us Rejf-igeration-Air Conditioning v. Lo Pinto , 3" AD3rd 636 (2006) . Moreover, the general rule regarding the entitlement of a real estate broker to a commission requires providing a purchaser who is ready, willing and able to buy the property on terms established by the seller. See, e.g. , Cr?fasi Real Estate, Inc. v. Harv. Enters. , !nc., 60 /\D2d 802 (2d Dept 2009). Although that rule is simply stated, its application has spawned significant litigation and resulted in the rule's further interpretation, refinement and qualification. For example, it has been determined that there must be an agreement to all the terms typical to uch transactions; as such, any ''agreem nt" which includes a proviso that its terms are to be thereafter arranged is in jeopardy. Kaelin v. Warner, 27 NY2d 352 (1971). Indeed, while the price may appear to be the prime focus of a bargain, for here to be the meeting of the minds required for an enforceable contract there must be an accord with respect to the other terms customary and ssential to the transaction, including a real estate transfer. lvf A. Salazar, Inc. v. Levy, 237 AD2d 583 (2d Dept 1997); llelan Realty & Development C01p. v. Skyview Meadows Development Cmp., 204 AD2d 601 (2d Dept 1994). Moreover, merely agreeing to pay ' cash' may be seductively attractive, but standing alone it will be deemed insufficient. Taibi v. Amer. Bank Note Co., I 35 AD2d 810 (2d Dept I 987). The r quirements of a valid agreement are, of course, dete1mined by the circumstances. For example, when the seller had his business on the premises and intended to remain for some months, the date he ad to vacate was required. Blai!feux v. Paznik, 162 AD2d 573 (2d Dept 1990). That is not to imply that the rule requires a fully executed contract, but there must be something more than an agreement on merely the price and closing date. Penzotti . Broda Mach. Co., 37 /\D2d 340 (4 1h Dept 1971 ). Indeed, the failure to indicate a closing date - by its lf - is not fatal as it will be presumed it will occur within a reasonable time. Kirk Assoc. Ltd. v. McDonald Equities, Inc., 155 /\02d 281 (I si Dept 1989). However, where the broker s commissi n i specifically conditioned upon performance of the contract, that requirement must be satisfied. Lane - Th e Real Estate Dept. Store v. Law/et Corp., 28 Y2d 36 (1971). Whether a buyer is "ready, willing and able" is of course, a question of fact. Satisfactory proof of the buyer' : financ ial ability does demand a demonstration that he or her have the funds on hand, or his or her exact financial status; it may be proven by other corn etent evidence. See, e.g , Mengel v. LawrenC<!, 276 AD2d 180 (1 st Dept 1949); see, also, Kirk Assoc. Ud. v. McDonald Fquities, Inc .. supra. Finally, and with reference to another issue germane to this case, where there arc multiple owners of the property, typically all must execute the brokerage agreement unlc, s the person or persons executing it are cloaked with such authority . See, generally , U-Buy Realty v. A/iota, 151 Misc.2d 485 (Civil Ct. , King· Cty. 1991). Tn cases where that authorization i.· lacking, some have turned upon the broker ' s knowledge of the existence of the other owner or owners. Id Others have pivoted on the non-. igning owner ' s knowledge of or participation in the marketing of the property by the broker; in such cases, estoppcl may bar an untimely claim of lack of binding authority. Cf, Jill Real Estate\'. Smy les, 150 AD2d 640 (2d Dept 1989) (wife knew of and actively participated in the transaction) : Farr v. Newman, 18 AD2d 54 (4 1h Dept 1963) (when told of offering price, wife said, [* 7] Srnla v. Biro/ /11dex No. : 15 77./i ]()IJ7 !'age 7 v/9 .. Very well. That is good. "). f'TNDINGS OF FACT AND CONCLUSIONS OF LAW Focusing n w upon those requirements on the matter at bar's and causes of action, and after reviewing tbe evi d nee under the light of the law and logic, the undersigned finds that the plaintiffs and his witness' recitation of the facts are the more credible. Indeed, their proffered testimonial evidence was mor than suf 1ciently persuasive, appeared the more trut ful and earnest, and its credibility was not convincingly undermined by cross-examination. Also, and as is often the case with "lay-witnesses" who are alien to the courtroom, any perceived flaws were slight and/or not of such consistency or consequence as be inexcusable or pollute the entire presentation. Conversely, the undersigned rejects the defendants' testimony and their contentions as to the facts. Indeed, while the defendants words have been memorialized wi thin the cold record, some of the quality of that testimony has not. However, having observed- first-hand- their testimony, the undersigned must note that its flavor was undermined and contaminated by its presentation. Indeed, some of those impediments to credibility by nature de hors the record but would be perceived by an objective, neutral and casual onlooker who was able to observe, hear and sense faint subtleties. Additionally, and whi le the majority of the defense was presented by Mr. Biro!, his testimony was further stained by his wile s conduct3. Stated othcrwis , some of the di ficulty with both defendants ' testimony is not what was said, but how. Also , and again contrary to that offered by the defendants the plaintiffs version of the facts is not only harmonious, it is logical. Moreover, and as was also noted, of th two versions, the plaintiff's proffered testimony was the more persuasive. In simplest terms, in the competition for credibility between the two versions, the plaintifrs outweighed that of the d fcndants. Indeed , it has been demonstrated that Mr. Biro! was vested with the real if not at least the apparent authority to enter into the agreement despite the absence of his wifo's signature to the brokerage agreemen t. There can be no dispute that Mrs. Biro! was aware of the agreement. Moreover, it has been satisfactorily demonstrated that she was a party t numerous conversations about selling the property and/or the agreement with all the witnesses. Some of those conversations may have been prior to any written agreement, but clearly some followed . Equall y clearly she rejected the first offer; hut that r~jcction was of the amount of the bid and not of the listing. The latter omission and her neglc t were subsequently compounded . Spccificall_ , when an offer more to her liking was fin ally made she initially accepted and it was not until afterward' that she choose to withdraw her implici t consent Manifestly, however, having had had knowledge of and participated in the transaction, her di sclaimer was as untimely as it was inconsi stent with her prior acts and ' During his cross-examination an unprecedented event occurred: I [ ·r inappropriateness was so conspicuous, disqui "ting and out of order as to require the undersigned to interject, 11,vh·e. Trial record pages 64, 108-09. [* 8] Scala 1 ¢. Biro! Index No.: 1577./12007 l'agr: 8 u.f9 om1ss10ns. Jill Reul /!.,'state v. Smyles; }'arr v. Newman, supra. Therefore, as to which account of the facts is the more accurate faithful to the truth, the Court finds for the plain ti ff. That, however does not end the inquity. Initially there is the d fensc ' s post-trial oral motion to dismiss. ft is grounded upon allegations that there was no proof that Dans, the prospective buyer, had the ''financial abil ity" to satisfy the purchase price. That application is dismissed. In so opining, the undersigned begins with the fact that such a contention is inconsistent with the stipulation entered into the record at the trial ' s beginning which included an acknowledgment that the sale was an all-cash deal. As further noted in the transcript, that stipulation was a product of a pre-trial conference held in chambers with both attorneys. Noticeably absent from the record, however, is any objection to or qualification of that statement by counsel. Also, and independent of the stipulation, the record contains sufficient evidence to demonstrate Dans ' finances, contentions which were neither rebutted nor even controverted during the trial. As to that evidence, and for example, the record discloses that Dans purchased another nearby waterfront property within weeks of his second offer to the Birols. Additionally, he was described as " a guy running around with a lot of money in his pocket, all cash.' As indicated above, financial ability may be proven indirectly by competent proof sufficient to support the contention. See, e.g. , Mengel v. Lawrence, supra; see, also, Kirk Assoc. Ltd. v. McDon ald EquWes, Inc., supra. fn the matter at bar, the proffered testimony was sufficient support. Undeniabl y, however the agency agreement in pertinent part indicates that the"[ o Jwner(s) understand and agree to pay the commission ... if [the] property is sold or transferred or is the subject of a contract of sale within six months of[thcJ agreement, involving a person' who was shown the property by the agent. Clearly, there was no such contract and that is an impediment to the plaintiff's cause. Lane - The Real Estate Dept. Store v. Law/et Corp. Secondaril y, and perhaps more profound, under the facts of this case the formal offer is an insufficient basis to support its enforcement. While it may contain the price and closing date (standing alone. insu fficient - Penzotti v. Broda Mach. Co. supra.), it also antici pates a formal contract would '' be discussed. and agreed to mutually by the parties (sic) attorneys. " Beyond peradventure. a full, complete and all-encompassing real estate contract is not required, but anyone with experience with such matters knows that there a myriad matters - s me mundane but some major - which must be negotiated and agreed to before a contract is mutuall y acceptable. Indeed, most of those albeit " boilerplate" terms arc contained in the now somewhat historic and familiar "I3loombcrg form" real estate contract (and its ever-present " rider''). T hose requirements - and more - have since been reproduced and supplemented by the typical (and som what intimidating) contract [* 9] Scala v. Btrvl Inc/ex No .. 1577.J/2007 l'ar.e 9 of9 generated by an attorney ' s word-processor4 . Obviously, the offer need not contain verbiage which totally mirrors a full contract (id.), but there must some evidence that there is more than a mere agreement in principle or to agree. Kaelin v. Warner , supra. For example, there should be some mention of tl1e issues customary and essential to such a transfer. M A. Salazar, Inc. v. Levy, supra; He/an Realty & Development Cmp. v. Skyview Meado ws Development Corp . supra. In the matter at bar. no formal contact ever executed; additionally, the bare-boned binder is insufficient. Law and logic, therefore, dictate that the · offer' at bar is at best an invitation for further negotiations, and any reliance upon it wa misplaced. As a result, it is opinion of the undersi gned that it is unenforceable under either of the plaintiff' ,' two causes of action. This determination is not disturbed by the piaintiff's post-trial a guments or legal authorities. for the reason. above-stated, the undersigned is disinclined to adopt its view. In sum , ha ing failed to satisfy the law, each of the plaintiff's two (2) causes of action are dismissed. The foreg oing constitutes the decision of the Court. La. Lr 3. IO Dated: Riverhead, NY Richard Bartel, Esq. Attorney for the Plaintiff 179 Montauk TIigh way, Box 5 Remscmburg, N.Y . 11960 Cartier, Berstein, Auerbach & Dazzo P.C. Attorneys for Defendants l 00 Austin Street Patchoguc,N .Y. 11772 4 The cont nts of which are only limited by the author's imagin ation .
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