Fischer Co. v. Premiere Realty Assoc., 66 N.Y.2d 520 (1985)

A real estate broker cannot recover a commission from a seller when the broker has an express agreement to act as the buyer’s agent in the transaction, as this negates any implication of employment by the seller.

Summary

Fischer Co., a real estate broker, sued Premiere Realty Assoc. (the sellers) for a commission, alleging it procured a buyer. Fischer claimed it advised Premiere that the offer was subject to a commission and that the buyer was ready, willing, and able to purchase the property. The New York Court of Appeals affirmed the dismissal of Fischer’s complaint, holding that because Fischer had a signed agreement to act as the buyer’s agent, no implied contract with the seller could exist. This express agreement negated any potential implication that Fischer was also employed as the seller’s agent.

Facts

Fischer, a real estate broker, initiated contact with Premiere in May 1983 regarding the potential sale of Premiere’s property. Negotiations ensued between Premiere and Fischer’s proposed buyer (“the Goodsteins”). These negotiations eventually terminated, and Premiere sold the property to another party. Fischer sought a commission from Premiere, claiming it had procured a ready, willing, and able buyer. However, Fischer had a signed agreement with the Goodsteins stating, “We have acted as your agent in connection with your prospective acquisition of the above premises.” Fischer did not disavow this agreement.

Procedural History

Fischer sued Premiere to recover a brokerage commission. Premiere moved for summary judgment, arguing there was no agreement to employ Fischer as their agent. The Appellate Division granted summary judgment dismissing the complaint, concluding that Fischer acted as a mere volunteer and had no right to a commission. Fischer appealed to the New York Court of Appeals.

Issue(s)

Whether a real estate broker can recover a commission from a seller when the broker has a signed agreement to act as the buyer’s agent in the same transaction.

Holding

No, because the express contract reciting that the plaintiff has “acted as [the buyer’s] agent” in the transaction negates the plaintiff’s contention that it was in fact employed as the sellers’ agent.

Court’s Reasoning

The Court of Appeals emphasized that a broker must plead and prove employment by the seller to recover a commission. The court relied on the principle that “[a] contract cannot be implied in fact where there is an express contract covering the subject matter involved.” The court found that Fischer’s explicit, signed agreement to act as the buyer’s agent directly contradicted the claim that an implied agreement existed for Fischer to also act as the seller’s agent. The court reasoned that allowing Fischer to recover a commission from the seller would undermine the express agreement with the buyer, creating a conflict of interest and potentially undermining the integrity of real estate transactions. As the court stated, the contract reciting that plaintiff has “acted as [the buyer’s] agent” in the transaction negates plaintiff’s present contention that it was in fact employed as the sellers’ agent.