Location Realty, Inc. v. Colachino, No. CV 02-0818384S (CT 4/7/2006)

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Unpublished Opinion

Location Realty, Inc. v. Frank Colachino et al. Opinion No.: 93099

No. CV 02-0818384S

Connecticut Superior Court

Judicial District of Hartford at Hartford

April 7, 2006

MEMORANDUM OF DECISION

ROBERT F. STENGEL, JUDGE.

I

The plaintiff Location Realty, Inc. has brought this action against Frank Colachino, Colvest, Ltd., Colvest/North Haven, LLC, Anthony C. Fonda and Afar, LLC for the collection of a real estate commission.

The original complaint is dated July 24, 2002 and the revised amended complaint is dated March 24, 2003 and is in five counts. The first count is as to Fonda and Afar, LLC, the second count is as to Colachino, Colvest Group, Ltd. and Colvest/North Haven, LLC. The first two counts claim a commission due based on a listing agreement effective June 1, 2000.

The third and fourth counts are against Colachino, Colvest Group, Ltd. and Colvest/North Haven, LLC. The third count is based on unjust enrichment and the fourth count is based on an acknowledgment to compensate the plaintiff in accordance with the listing agreement.

The fifth count is a claim under the Connecticut Unfair Trade Practices Act (CUTPA), this count has been removed from the case based on a decision on the defendant's motion for summary judgment.

In determining the issues in this case, the court will first refer to a relevant Supreme court case involving the same plaintiff. Then the court will discuss the claim against the Fonda defendants and then the claim against the Colachino defendants.

II

Location Realty Inc. v. General Financial Services, Inc., 273 Conn. 766 was decided in 2005 and involves the same plaintiff and the same attorneys that are involved in the instant case.

In Location, the plaintiff, a licensed real estate broker, brought an action seeking to recover a real estate commission in obtaining a lessee for defendant's property. The defendant sought summary judgment asserting that the plaintiff was barred by Connecticut General Statutes §20-325a and §20-312(b) from collecting a commission because Location was not duly licensed as a real estate broker because its president was actively involved in its brokerage business but was not a licensed broker. The trial court determined that the defendant was entitled to summary judgment on the basis that plaintiff's license was automatically void, which prevented the plaintiff its right to obtain a commission.

The Supreme Court reversed the trial court, stating that the trial court failed to consider the language and legislative history of §20-325n(c) which permits a licensee who is not duly licensed to recover if, in light of all the facts and circumstances of the case, it would be inequitable to deny the right to recover a commission that was otherwise earned.

The Supreme Court has held at page 777

This analysis brings us back to §20-312(b). Just as the entire sentence of §20-325a(a) must be read as a whole, § 20-325a(a) must be read together with §20-312(b). Reading the two provisions together, we conclude that their language strongly suggests that a corporate licensed broker, whose president was actively involved in its brokerage business but was not licensed as a broker, was not duly licensed within the meaning of §20-325a(a).

This conclusion is supported by the legislative history of chapter 392 of the General Statutes. That history indicates that the primary purpose of the legislation was the protection of the public, and that the legislature considered the requirement that all active members of a corporate or partnership licensee be themselves licensed to be central to that purpose, so as to avoid the possibility that persons not licensed as brokers could nonetheless combine in a partnership or corporation that would be so licensed.

and at page 781

It necessarily follows from this discussion that a corporate broker licensee, whose president was not licensed as a broker, may not be denied its right to recover a commission otherwise earned solely because of that licensing failure. Its right to recover must be gauged, instead, under all of the facts and circumstances of the case and whether it would be inequitable, in light of those facts and circumstances, to deny it the right to recover. One of those facts and circumstances is, of course, that the licensee may not have been duly licensed; but that fact alone is not sufficient to deny recovery. It follows, further, that the trial court's grant of summary judgment in this case was improper.

The decision in Location is relevant to the issues in the instant case.

III

Acting by its president, Michael O'Brien, the plaintiff entered into a listing agreement with Anthony C. Fonda and Afar, LLC (The Fonda defendants) relative to the development and leasing of property in North Haven. The listing agreement is plaintiff's exhibit 1. The term of the agreement is June 1, 2000 through June 30, 2001.

Michael O'Brien had known Fonda since the early 1990s. Fonda is a developer, he had about 30-40 transactions with Michael O'Brien where commissions were paid. Fonda was allowed to maintain a desk in plaintiff's office. When Michael O'Brien was asked if Fonda was like a mentor, he replied that Fonda was like a broker and father all rolled into one.

Michael O'Brien testified that he has been president of the plaintiff since 1995. His real estate career started with Beazley Real Estate in residential for 4-5 years, then with McCutcheon-Burr in commercial for 6-7 years, then with Roncali who were involved with convalescent homes, it was there he became aware of Location Realty, which he purchased in 1995.

It was while he was president of plaintiff that he got to know Fonda and engaged in real estate transactions with him.

As to the transactions here, there came a point where Fonda did not wish to remain with the transaction. Michael O'Brien instituted a luncheon meeting in December of 2000 at the First and Last Tavern with himself, Fonda and Frank Colachino. The outcome of the meeting was that Fonda was allowed to be removed from the transaction and his place was taken by Colachino.

Michael O'Brien testified that through his meetings and negotiations with CVS and Liberty Bank he obtained them as tenants for the North Haven project. Ultimately the leases for CVS and Liberty Bank were executed by Colachino as he had assumed ownership of the property.

It is not seriously contested that Michael O'Brien was the procuring factor in obtaining CVS and Liberty Bank for the project. Michael O'Brien testified that he met with CVS 75-100 times in negotiating the lease. By securing these tenants for the project, the benefits incurred to the Colachino defendants.

As to Colachino taking over the project, the plaintiff refers to exhibit 79, which is a letter from Location Realty to Peter Alter and Tony Fonda. The letter states in part the following:

As the closing for North Haven is tentative for March 6 and it appears you intend to assign the deal to Frank Colachino, Location Realty, Inc. will require written acknowledgment that the lease commissions will be paid as called for in the exclusive listing agreement.

Location never received written acknowledgment from Fonda or Colachino relative to the issue of commissions.

The plaintiff also refers to exhibit 7, which is the lease with Liberty Bank and exhibit 4 which is the lease with CVS. The landlord in both cases is Colachino.

The lease with Liberty Bank indicates in paragraph 31,

31. Broker.

Lessor and Lessee each represent and warrant to and with each other that they respectively (a) have not had any dealings, negotiations or consultations with any real estate broker, finder or any other party entitled to a commission in connection with this Lease; (b) have not been induced to enter into this Lease by any real estate broker, finder or other party entitled to a commission; and (c) have not incurred and will not incur any liability for finder's fees, brokerage fees or other commissions payable in connection with this Lease, except Location Realty, Inc., to whom Lessor shall pay a commission in accordance with a separate letter agreement between the Broker and Lessor. Lessor shall indemnify and save Lessee harmless from and against any loss or damage arising from Lessor's breach of its representation and warranty contained in this Section 31, and Lessee shall indemnify and save Lessor harmless from and against any loss or damage arising from Lessee's breach of its representation and warranty contained in this Section 31.

  The lease with CVS indicates in paragraphs 23 and 40
  23. Broker: Michael O'Brien
  Location Realty
  921 Saybrook Road
  Middletown, Connecticut 06457
  (See Article 40 of Part II)
  Broker—

40. Landlord and Tenant each represent and warrant that it has had no dealings or conversations with any real estate broker other than the Broker(s) named in Section 23 of Part I. Landlord and Tenant each agree to defend, indemnify and hold harmless the other against all liabilities arising from any claim of any other real estate brokers, including cost of counsel fees, resulting from their respective acts. Landlord warrants and agrees that it shall be solely responsible for any and all brokerage commissions owing to said Broker(s), as a result of the negotiation and execution of this Lease.

The plaintiff in its Trial Brief contend that the documents and testimony show that in exchange for the transfer to them to develop the subject property, Colachino assumed the obligations of Fonda including the obligation to pay commissions to plaintiff under the listing agreement. Plaintiff argues that there was an assignment of rights and an assumption of liabilities even though no formal document was entered into between Fonda and Colachino. The main thrust of the plaintiff in its trial brief is a claim against Colachino. It is only as to the issue of damages and in its conclusion that plaintiff maintains a claim against Fonda.

Fonda argues...