Phila. judge orders $90K-plus in damages to be paid to real estate firm for breach of contract

A Philadelphia Common Pleas Court judge has ordered a limited partnership to pay a Montgomery County real estate agency more than $90,000 for breaching an oral agreement by which the defendant would pay the plaintiff a commission if the Realtor obtained a tenant for the defendant’s property.

Judge Albert Snite, Jr., in an order made public this week, determined that 10551 Decatur Road Partners, LP owes King of Prussia-based Sidney E. Gable Associates $92,083.80 for breaching the agreement between the plaintiff and a man identified as Sam Markowitz, the defendant’s authorized representative and controlling partner.

Records show that a two-day bench trial was held in the case earlier this month.

The real estate company had filed its complaint against the defendant back in early January of last year.

In his ruling, Snite wrote that he would not engage in a “lengthy discussion about the facts” because the plaintiff presented an un-rebutted case at trial in which it was determined that the defendant, on numerous occasions, orally agreed to pay the real estate agency the 6 percent commission.

“Defendant never explicitly denied Plaintiff’s testimony,” Snite wrote.

The judge noted that while the agreement was clear as to the 6 percent commission, it wasn’t clear as to the terms of payment.

“The oral agreement does not fail for lack of definiteness because in the real estate industry payment terms are not something that must be predetermined,” Snite wrote. “In the absence of precise terms for payment, if the Court was upholding the oral agreement, the terms of payment would be the same as those contained in the exclusive agent agreement with the Flynn Company.”

Snite went on to note that while the parties agree that the defendant had an exclusive listing agreement with the Flynn Company, the plaintiff maintained that it had an open listing agreement with the tenant and that it was permitted to collect a full commission from the defendant without a signed agreement because the commission letter constituted a written memorandum under the Real Estate Licensing and Registration Act.

Under the RELRA, the plaintiff’s ability to collect the 6 percent commission without written agreement is dependent upon the existence of an “open listing agreement,” Snite wrote, and in this case there was no open listing agreement because the defendant had an exclusive listing agreement with the Flynn Company.

Without an open listing agreement and a written agreement, the judge wrote, the plaintiff’s written memorandum is not sufficient evidence of an oral agreement under the RELRA.

As such, the real estate agency cannot enforce the defendant’s oral agreement to pay the 6 percent commission.

However, the plaintiff is entitled to a 3 percent commission, which in this case comes to $92,083.80.

The plaintiff had claimed damages in excess of $184,000, with the damages calculated by taking the 6 percent commission and interest claimed by the real estate company and dividing the figure in half.

“The entire rational[e] surrounding Defendant’s payment schedule was so Defendant could pay Plaintiff as the property generated revenue,” Snite wrote. “The property has been sold and Plaintiff’s damages in the amount of $92,083.80 are due immediately.”