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Kellman v. Arthur Rubloff & Co.





APPEAL from the Circuit Court of Cook County; the Hon. GEORGE A. HIGGINS, Judge, presiding.


Plaintiff, Edward Kellman, doing business as Edward E. Kellman & Co., brought an action against defendant, Arthur Rubloff & Co., a corporation, to recover one-half of the broker's commission received by defendant in connection with the sale of certain real estate for which defendant was the exclusive agent but had enlisted the aid of other brokers, including plaintiff. This appeal arises from a directed finding entered by the circuit court of Cook County in favor of defendant at the close of plaintiff's case. The pertinent facts follow.

In June or July of 1971, defendant, a licensed real estate broker, was given an exclusive listing by the Honeywell Corporation for the sale of property located at 8330 N. Austin, Morton Grove, Illinois. Defendant prepared a brochure describing the property and, as is customary in the business, mailed several thousand copies of the brochure to other brokers and potential prospects, informing them of the availability of the property. The purpose of sending the brochure to other brokers was to ask the help of brokers who specialize in finding buyers for large industrial properties. William Cowhey, then defendant's vice-president and a broker specializing in industrial real estate, testified that if another broker were the procuring cause of the sale of the property, it was customary for the exclusive agent to split the commission received with the other broker.

Plaintiff is a real estate broker specializing in industrial real estate. Plaintiff had prior similar dealings with defendant and was well acquainted with defendant's agent, Cowhey. In July of 1971, plaintiff received a copy of defendant's brochure and called Cowhey for more information. Cowhey told him that the asking price for the Honeywell property was $2.5 million. Although defendant was authorized to sell at $2 million, Cowhey testified that $2.5 million was the offering price and the exclusive agent usually quoted this higher price to other brokers. Plaintiff asked Cowhey whether defendant would pay the usual one-half commission if plaintiff found the buyer, and Cowhey agreed that if plaintiff brought in a buyer who bought the property, plaintiff would receive one-half of the commission paid to defendant for the sale. Plaintiff replied that he might have some prospects and he would see what he could do.

Plaintiff began calling his prospects in an attempt to find a buyer for the Honeywell property. One such prospect was the Chicago Show Print Co. On November 1, 1971, plaintiff called Cowhey and told him that he had a prospect who wanted to go through the property. On November 5, 1971, plaintiff, Cowhey, and two Honeywell representatives showed the property to Larry Brasher, a representative of Chicago Show Print Co. Brasher was informed that the asking price was $2.5 million. Upon leaving the building Brasher told plaintiff that Chicago Show Print Co. could use the building, but $2.5 million was a little high. He asked plaintiff if Honeywell would take $1.5 million. Plaintiff replied that he thought that was too low, but if Brasher wanted him to submit an offer, he would. Brasher said that he wanted to take it up with his superior and made no offer.

A few days later, plaintiff called Brasher and Brasher told him that he wanted information about transportation to the property. Plaintiff called Cowhey, who provided the information, and on or about November 11, 1971, plaintiff called Brasher back and gave him the information. Brasher told him that Chicago Show Print Co. was experiencing pressure at its present location and was interested in seeing a smaller property as, in plaintiff's words, "it was too much pressure to make decisions on big properties." Brasher told plaintiff that Chicago Show Print hoped to take the big property up later, but was no longer interested at that time. In an entry dated November 15, 1971, plaintiff noted on his file card, which was admitted into evidence, that Brasher had taken the American Deco building and had told plaintiff to call him in a year or so on the big space.

The next time plaintiff spoke with anyone from Chicago Show Print or from defendant was in the first week of July 1972, when Cowhey called plaintiff to inquire whether plaintiff was making any progress with Chicago Show Print on the Honeywell property. At about the same time, on July 6, 1972, Brasher called plaintiff concerning a different, smaller property that plaintiff had showed him, referred to as the Kolmar property. During their conversation, plaintiff told Brasher that the Honeywell property was still available. Brasher said that he would talk to his superior. Plaintiff's notes from that day reflect an entry that plaintiff was to check the Kolmar property.

On July 10, 1972, plaintiff called Brasher and told him that the Kolmar property was not available but the Honeywell property was. Brasher again stated that he would consult his superior and call plaintiff back. When Brasher did not call back, on July 11, 1972, plaintiff called him. When plaintiff asked him about the Honeywell property, Brasher became irritated and told plaintiff to quit pushing him, that if he was ready to do anything on it, he would call plaintiff and plaintiff was not to call him. A notation in plaintiff's file, dated July 11, 1972, reads, "Not likely. Drop it unless he calls. Rude and harsh." Brasher never did call plaintiff back, nor did plaintiff call him again at any time relevant to this litigation. On July 14, 1972, Cowhey tried to contact plaintiff. Plaintiff called him back and, Cowhey testified, told him that Chicago Show Print had no interest in the Honeywell property.

In early October 1972, about October 1, Brasher called defendant directly, as a result of Brasher's either seeing the "For Sale" sign on the building or reading defendant's newspaper ad. No one from defendant had had any contact with Brasher or anyone from Chicago Show Print since the showing of the property on November 5, 1971. On October 2, 1972, Cowhey called plaintiff to ask the name of the prospect to whom plaintiff and he had showed the Honeywell property, and plaintiff told him it was Chicago Show Print. Cowhey did not tell plaintiff that Brasher had contacted Cowhey directly. Cowhey took Brasher through the Honeywell property again on October 2. Brasher made an offer of $1.5 million for the property, which offer defendant submitted to Honeywell. Honeywell accepted the offer and Honeywell and Chicago Show Print entered into a real estate sales contract on November 8, 1972. After the deal was closed, defendant received the full commission of $75,000. Plaintiff made a demand upon defendant for one-half of the commission, but defendant refused to pay plaintiff any part of the commission.

Plaintiff then filed this action, alleging essentially that defendant had agreed to pay plaintiff half the commission received if plaintiff found a buyer who purchased the property, that plaintiff brought in and introduced a prospective purchaser to defendant, that this prospect did purchase the property, and that defendant received a $75,000 commission on the sale but would not, after demand, pay plaintiff the one-half commission to which plaintiff had become entitled.

A bench trial ensued. At the close of plaintiff's case, defendant moved for a directed verdict. *fn1 Although this was a bench trial, the court ordered that a directed verdict*fn1 for defendant be entered and that plaintiff's action be dismissed. In doing so, the court specifically mentioned the Pedrick standard (Pedrick v. Peoria & Eastern R.R. Co. (1967), 37 Ill.2d 494, 229 N.E.2d 504), and said that even considering all the evidence most favorably to plaintiff, plaintiff had simply not met his burden of proof.

• 1 This was error. Section 64(3) of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 64(3)) specifically requires the trial court sitting without a jury to weigh the evidence when ruling on defendant's motion for judgment at the close of plaintiff's case. Thus, rather than consider the evidence in the light most favorable to plaintiff, as in a jury case, the court must weigh all the evidence, and then not simply decide whether plaintiff has made out a prima facie case, but make a final determination and enter judgment for defendant if plaintiff has not met his burden of proof by a preponderance of the evidence. (Bau v. Sobut (1977), 50 Ill. App.3d 732, 735, 365 N.E.2d 724.) As we further noted in Bau, a reviewing court should not reverse the trial court's ruling on such a motion unless the ruling is manifestly erroneous. Bau v. Sobut (1977), 50 Ill. App.3d 732, 735.

While the parties and the trial court exhibited some confusion about the proper motion and standard to be used in the instant case, it is apparent from the record that the court did find, based on all the evidence, that plaintiff had not met his burden of proof, and plaintiff would hardly be in a position to complain about the fact that in doing so the court mistakenly applied a standard more favorable to plaintiff's case.

We therefore consider whether the trial court's ruling in favor of defendant was manifestly erroneous. The court entered judgment on the ground that plaintiff had not met his burden of showing that he was the procuring cause of the sale, and therefore was not entitled to share in the commission. On appeal, defendant argues persuasively in support of this finding, citing cases holding that merely being the first to show the property sold to the ultimate purchaser is not sufficient to establish the broker as the procuring cause of the sale. Thus, in Roegner v. Frey (1918), 209 Ill. App. 303 (abstract), defendant had listed his apartment building with plaintiff broker for sale. Plaintiff showed defendant some vacant land and suggested a trade, but no agreement was reached. Subsequently, defendant responded to a newspaper ad offering to trade the same lots. Defendant and the owner entered into negotiations and a trade resulted. In an action by ...

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