Williams & Co. v. Collins Tuttle & Co.

M. M. Frank, J. (dissenting).

The identification of the respective parties in this litigation, contained in the footnote appended to the majority opinion, obviates the need for repetition here.

We agree that the order dated December 10, 1956, which granted the motion of the defendants, Cushman & Wakefield, Inc. and Charles E. Griffin, to dismiss the second and third causes of action, should be affirmed.

As we read and analyze the complaint, the first cause of action charges that during 1955 the managing agents of 625 Madison Avenue solicited real estate brokers in the city of New York, including the plaintiff, by a representation and a promise to each that if a prospective tenant were procured, who would enter into a lease for office space with the defendant owner, such broker would become entitled to commissions in accordance with the rates established by the real estate board. In June, 1955, the defendant Mogul employed the plaintiff to find office space and negotiate a lease for it, with the understanding that the plaintiff would be entitled to receive the commission from the lessor. During the month following, the plaintiff informed Mogul of the possibility of obtaining space at 625 Madison Avenue. Mogul authorized the plaintiff to negotiate a lease for a floor in that building. On August 5, 1955, a meeting of representatives of Collins Tuttle, Mogul and the plaintiff took place, at which Mogul furnished financial information to the managing agents and offered to lease an entire floor in the building ‘‘ upon terms which the said defendant C. T. Co. [managing agents] agreed to discuss with the defendant Madison” (owner). Thereafter, in the same month, Collins Tuttle assured the plaintiff that Mogul was acceptable as a tenant *312and would obtain space in the building. However, in September, 1955, Collins Tuttle informed the plaintiff- that the defendant Mogul was not acceptable as a tenant, “ for the reason that such tenancy would be objected to by another advertising agency which had, by that time, leased space in the said building.” It is charged that the latter statement was false and was made because the plaintiff ‘‘ had failed to offer and agree to pay a kickback ’ ” (emphasis supplied) to the managing agents and the owner. The pleading alleges that the defendants conspired to deprive the plaintiff of a valuable asset in its business by interfering and refraining from dealing with it in the further negotiation of a lease on behalf of Mogul, thereby depriving the plaintiff of the opportunity to earn the commissions which it otherwise would have received from the owner. Thereafter, the plaintiff was excluded from further participation in the negotiation and completion of the lease transaction which it had initiated. In furtherance of the scheme and design, the defendant Cushman & Wakefield continued the negotiations, a lease was consummated, and some of the defendants shared the commissions.

It is not without significance, that nowhere in the pleading is there an allegation that the lease involved the same space or that the terms of the agreement were the same or similar to those discussed by the plaintiff with any of the defendants.

The plaintiff contends that the complaint under attack is sufficient to bring it within the orbit of the rule in Keviczky v. Lorber (290 N. Y. 297) and Horn v. Isbrandtsen Co. (4 A D 2d 855) and strenuously asserts that no-extension of the rule, in the cited cases is required in order to sustain the pleading.

In the Keviczky case it was pleaded, and found as a fact after trial on the merits, that the transaction was closed upon the same terms and conditions as arranged by the plaintiff. Had it not been for the conspiracy to obtain a kickback of part of the commissions, for which purpose another broker was obviously injected into the transaction at the eleventh hour, the plaintiff would have earned and received his compensation.

In the Horn case there were allegations of an exclusive agency and an agreement expressly recognizing and protecting the plaintiff as the broker in the event of a sale to the very purchaser who actually acquired the property. The terms. of sale arranged by the plaintiff were substantially similar to those upon which the transaction was consummated, and Horn’s negotiations had reached a point so close to finality that he was about to conclude the affair successfully. It was charged that *313the defendants conspired to defraud the plaintiff and deprive him of his opportunity to complete the negotiations, and to that end the purchaser advised the plaintiff that it was no longer interested in the premises but negotiated instead through another broker. Finally, it was alleged that in furtherance of the conspiracy and as evidence thereof, an indemnification agreement was executed by the defendants to reimburse the seller in the event that they were compelled to pay the plaintiff any commissions or compensation in connection with the transaction.

It will be observed that the complaint in this action does not contain allegations of fact approximating those pleaded in the Keviczky and Horn cases. The pleading goes no further than to claim that the proposed lessee submitted a financial statement and offered to lease an entire floor upon terms which the managing agent agreed to discuss with the owner, and that the plaintiff was assured that Mogul was acceptable as a tenant and would obtain space. There is no allegation that definite space or terms had been discussed and that the lease as finally executed was for the same or similar space and term. Nor is there an allegation that the plaintiff had been requested to kickback or split commissions, the pertinent paragraph in the complaint merely charging that the assertion by the managing agent that Mogul was not acceptable as a tenant was false and was made “ because the plaintiff had failed to offer and agree to pay a ‘kickback’”. This allegation is purely conclusory, and obviously based on an antecedent assumption that a false statement was made to it because it failed to offer to split its commissions. To express it differently, instead of pleading operative facts, the pleading leaves it to us to assume that the transaction was closed on the same or similar terms as the plaintiff had offered, and that the defendants ousted the plaintiff because it failed to submit to an unexpressed demand to split commissions. The allegation actually pleaded either requires occult powers or speculation completely unsupported by facts. (See Paramount Pad Co. v. Baumrind, 3 A D 2d 655.)

Appropriate here, therefore, is the statement of the Court of Appeals in Union Car Advertising Co. v. Collier (263 N. Y. 386, 401) that “A cause of action has also been recognized where a party would have received a contract but for the malicious, fraudulent and deceitful acts of a third party, * * * lying about him. * * * There must be some certainty that the plaintiff would have gotten the contract but for the fraud. This cannot be left to surmise or speculation. * * * The courts *314will be a little slow in permitting juries to speculate upon what a competitor had reason to expect or might reasonably suppose would happen. The expressions ‘ reasonable expectation ’ or ‘ reasonably certain ’ may not be as precise as ‘ would have received, ’ and we think the latter words are preferable. ’’

This requirement cannot be supplied by mere statements of conclusion or opinion on the part of the pleader. (Newberry & Co. v. Warnecke & Co., 267 App. Div. 418, affd. 293 N. Y. 698; Portman v. Burack, 265 App. Div. 959, affd. 290 N. Y. 686; Spitzer v. Sachar, 4 A D 2d 53.) It is not enough that the plaintiff may have been the first one to bring the property to the attention of Mogul or that it was the first to initiate negotiations. (Sibbald v. Bethlehem Iron Co., 83 N. Y. 378, 384; Byrne, Bowman & Forshay v. 488 Madison Ave., 11 Misc 2d 587, affd. 286 App. Div. 826.) The pleading must sufficiently allege facts establishing that the negotiations had progressed to a point where the transaction would have been completed and the plaintiff would have earned its commissions, except for the unlawful interference by the conspirators that resulted in depriving the plaintiff of the business opportunity.

Nor do the allegations of conspiracy supply the necessary factual allegations absent in this pleading. A civil conspiracy to commit an actionable wrong is not, without more, a cause of action in itself. The tortious liability rests in the commission of a wrongful act or of a legal act by wrongful means, and not merely upon the agreement to commit the prohibited act standing alone. (See Green v. Davies, 182 N. Y. 499, 504; Rhodes v. Ocean Acc. & Guar. Corp., 235 App. Div. 340; Cohen v. Fisher & Co., 135 App. Div. 238; Moskin v. Lyden, 200 App. Div. 304; Miller v. Spitzer, 224 App. Div. 39.)

To accept the plaintiff’s argument that it need only establish the “probability ” that it would have been as successful as Cushman & Wakefield, Inc. in consummating the lease, is to ignore Union Car Advertising Co. v. Collier (263 N. Y. 386) and Horn v. Isbrandtsen Co. (4 A D 2d 855, supra) where we held that the plaintiff was entitled to the opportunity to prove ‘ ‘ that he would have completed the successful negotiations and sale had not the defendants prevented him from doing so by their tortious conduct.” There is a distinction between probabilities and reasonable certainties.

Our view with respect to this pleading goes to substance and pays no obeisance to the fetish of form. All of our courts properly endeavor to give liberal construction to pleadings. In doing so, however, Ave have not abandoned the requirements of *315the Civil Practice Act (§ 241) that the pleading shall contain a recital of the material facts. (See Al Raschid v. News Syndicate Co., 265 N. Y. 1.) It is, of course, needless to say that a plaintiff is not required to prove his cause of action in his complaint. That does not mean, however, that it is unnecessary to state a cause of action and that we may supply the missing elements in order to hold it good.

The real question here is not whether the complaint presents a technical deficiency in its drafting but whether the omissions in the pleading demonstrate the absence of a substantive case. There are certain types of actions where there has been insistence upon pleading the facts, rather than conclusions. For instance, stockholders’ derivative actions represent such a class of actions where the courts scrutinize a complaint more carefully and exact factual allegations rather than conclusory statements of wrongdoing and conspiracy. (See Gerdes v. Reynolds, 281 N. Y. 180; Lifshutz v. Adams, 285 N. Y. 180; Weinberger v. Quinn, 264 App. Div. 405, affd. 290 N. Y. 635; Kalmanash v. Smith, 291 N. Y. 142.) With the possibility of extensive and expensive pretrial examination in the offing, the courts have demanded more specificity in allegation where fraud and conspiracy are charged.

Real estate brokers are engaged in a competitive business and the courts haA^e no power to hamper those engaged therein unless competitive activities become unfair. Nor may we impose liability upon owners if they uncommittedly deal with competing brokers unless they do so tortiously.

While the courts reach out to give relief to victims of actionable fraud, misrepresentations and sharp practices, we must not encourage disappointed brokers, in this highly competitive profession, who fail at the very threshold of their endeavors, to seek unmerited recovery based upon conjecture or speculation, simply because they conclusorily allege fraud, misrepresentation or interference by others, without a clear demonstration that their own efforts would have been croAvned Avith success absent such tortious conduct.

It is not a retrogression to the formalism of common-law or code pleading to insist upon such minimum requirements in this class of actions. A broker with a valid grievance will find no difficulty in meeting the standards. A less exacting rule will inevitably result in unfounded and vexatious litigation.

For the foregoing reasons, the orders dated January 18,1957, should be modified on the law to grant leave to replead the first cause of action and should otherwise be affirmed.

*316Rabin and Stevens, JJ., concur with Breitel, J. P.; M. M. Frank, J., dissents in opinion, in which Valente, J., concurs.

Order [Dec. 10, 1956] unanimously affirmed, with $20 costs and disbursements to the respondents, Cushman & Wakefield, Inc. and Charles E. Griffin. Four orders of January 18, 1957 so appealed from reversed, with ' $20 costs and disbursements to the appellant, and the motions of the respective respondents to dismiss the first cause of action of the complaint for insufficiency are denied, with $10 costs.