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Pietka v. Chelco Corp.





APPEAL from the Circuit Court of Cook County; the Hon. JACQUES F. HEILINGOETTER, Judge, presiding.


Defendant Chelco Corporation (Chelco) appeals from a judgment entered on a verdict for plaintiff in his action to recover a real estate broker's commission allegedly for obtaining a tenant for Chelco's property. The issues presented are that (1) the verdict was against the manifest weight of the evidence; (2) the jury was improperly instructed as to (a) plaintiff's burden of proof in establishing his authority and (b) the definition of procuring cause; and (3) the trial court erred in permitting plaintiff to impeach his own witness on the issue of procuring cause. In a cross-appeal, plaintiff contends that the trial court erred (1) in denying leave to amend his complaint by adding a claim for a monthly management commission allegedly owed under his employment contract; and (2) in denying him prejudgment interest.

Plaintiff's original complaint alleged in substance that he was a licensed real estate broker associated with defendant Building Management Corporation (Building Management), *fn1 which acted as agent of Chelco, and that he secured the Walter Frank Organization, Inc. (Walter Frank), as the tenant for Chelco's property located at 3201 West Randolph, Bellwood, Illinois (the building) — for which he was entitled to a commission. The record also indicates that Building Management is a real estate management corporation and that Chelco is a real estate holding company having title to several buildings.

Plaintiff testified that in October 1973 he was hired by Richard M. Ryan, then president of Building Management, and Wallace E. Carroll to administer and manage Building Management property — which included finding tenants and buyers; that he was initially paid a salary, but upon becoming president of Building Management and during his tenure in that post, he was also to be paid a percentage from rentals and sales; that Carroll authorized him to find a tenant for 50,000 square feet of available space in the building; that with Carroll's authorization in January 1974, he placed a sign on the building with his name and telephone number, which replaced another sign showing Building Management and Ryan's name and telephone number; that he placed an advertisement in the Sunday Chicago Tribune, distributed circulars, and made several personal contacts, and in January 1974 obtained a tenant named Stratton Hats for a portion of the building — for which he was paid a commission; that on July 23, 1974, he received a telephone message from Joyce Lowry, his secretary, concerning an inquiry about the building from Edward McGrath of Walter Frank, and he set up an appointment with McGrath to view the property on July 26; that on that date he gave McGrath and John Cranfill — Walter Frank's director of manufacturing — a tour of the property, during which McGrath indicated that Walter Frank would require an additional 25,000 square feet; that he gave McGrath a set of floor plans for the building and, after the tour, wrote a letter to McGrath and Cranfill containing information on the property and enclosing a circular concerning the building; that after confirming with Carroll and Morrow Garrison that additional space was available, he told McGrath that 75,000 square feet was rentable and thereafter made several other follow-up telephone calls; that he met with McGrath at Walter Frank's facility less than two weeks later to determine the feasibility of Walter Frank's renting the space in the building and confirmed McGrath's continued interest; that approximately three weeks after this final contact with McGrath, plaintiff was terminated by Building Management; and that, subsequently, upon learning a lease had been signed between Walter Frank and Chelco, he wrote a letter to Ryan, dated February 24, 1975, claiming a commission for procuring that lease.

Joyce Lowry testified that on July 24, 1974, she was in the employ of Building Management when McGrath called concerning the property and asked for plaintiff; that since plaintiff was not in, she described the building and took a message for him; that she referred McGrath to George Holz, who was not employed by Chelco, for a tour of the building — all of which actions plaintiff had authorized; and that she gave plaintiff the message upon his return.

Edward McGrath testified that in 1974, while employed by Walter Frank, it was his sole responsibility to find a new location for that organization, and he first learned about the property in question during the spring of 1974 when he saw a sign on the building with Ryan's name and telephone number on it, which he then called and asked for Ryan; that he did not see the Tribune advertisement nor did he recall telling an investigator in 1976 that he first heard about the building through the advertisement; that he was shown the building twice before contacting Ryan — the first time by Holz, who gave him no documents; that he met Holz 3 to 4 months before he met plaintiff; that 3 or 4 months later, he again contacted Building Management about the building, and a woman made arrangements for plaintiff to give McGrath a tour; that plaintiff picked him up, showed him the building, and sent him a confirming letter dated July 26, 1974; that plaintiff gave him no blueprints of the building and never informed him that an additional 25,000 square foot area was available; that several months later, he again called Building Management and asked for plaintiff but, upon being informed plaintiff was no longer with Building Management, he was transferred to Ryan.

Morrow Garrison testified that he did not recall when the sign in question was placed on the building or taken down, nor did he know what address and phone number were on the sign; that he had not seen the sign, but when Holz told him about it in the summer of 1974, he (Garrison) ordered plaintiff to remove it because it was unauthorized; that when it was removed, he saw Ryan's sign underneath; that Ryan took McGrath on a third tour of the building during which Ryan called Garrison, who told Ryan that an additional 25,000 square foot area was available for leasing; that plaintiff never discussed with him the leasing of the property to Walter Frank nor had he (Garrison) received a copy of the July 26, 1974, confirming letter; that he generally discussed the availability and negotiability of space in the building but denied talking to plaintiff about leasing 75,000 square feet to Walter Frank; that plaintiff had indicated to him the possibility of obtaining a tenant for the building but declined to tell him who it was; that the lease negotiations with Walter Frank commenced in September or October of 1974, and the lease was signed December 17 or 18, 1974; that in negotiating the lease, he conferred with Thomas Carroll — president of Chelco — and Wallace Carroll concerning its terms; and that final approval of the lease provisions was made by Thomas Carroll.

Wallace Carroll testified that he gave no authority to plaintiff to put up a sign or to find a tenant for the building and that he made no promise to pay plaintiff a commission for finding a tenant or to pay him a percentage of rents on various properties.

The jury rendered a verdict against Chelco for $22,038.01, upon which judgment was entered and this appeal followed.

At the commencement of trial, the trial court had denied plaintiff leave to amend his complaint to add a count (count II), asserting a claim for recovery of a monthly management commission. The court did, however, allow plaintiff to amend his complaint to allege an oral contract of employment between the parties and the terms and conditions thereof, but the prayer for relief was limited to recovery of the brokerage commission alleged in count I. The trial court denied the post-trial motion of plaintiff for prejudgment interest, and plaintiff has cross-appealed from the orders denying motions for leave to amend (count II) and for prejudgment interest.


Defendant first contends the jury's finding that plaintiff was the procuring cause of the lease between Chelco and Walter Frank was against the manifest weight of the evidence.

• 1 In general, a broker is entitled to a commission if he is the procuring cause of a consummated transaction which he was employed to negotiate (Edens View Realty & Investment, Inc. v. Heritage Enterprises, Inc. (1980), 87 Ill. App.3d 480, 408 N.E.2d 1069), and a broker may be deemed the procuring cause if he brings together the parties who ultimately consummate the transaction (Chiagouris v. Continental Trailways (1964), 50 Ill. App.2d 196, 200 N.E.2d 399) or if he is instrumental in its consummation (Edens View Realty & Investment, Inc. v. Heritage Enterprises, Inc., 87 Ill. App.3d 480, 485, 408 N.E.2d 1069, 1074; Van C. Argiris Co. v. Caine Steel Co. (1974), 20 Ill. App.3d 315, 314 N.E.2d 361; Doss v. Kirk (1956), 8 Ill. App.2d 536, 132 N.E.2d 49). Various means have been recognized as constituting a bringing together of the parties. See, e.g., Cowan v. Day (1910), 156 Ill. App. 105 (evidence that at request of broker, a third party informed ultimate purchaser that property was for sale, so that broker neither communicated with purchaser nor showed her the property); Adams v. Decker (1889), 34 Ill. App. 17 (broker merely sent to principal the party who ultimately purchased the property).

• 2 Conversely, a broker also may become the procuring cause on the basis of the negotiations he conducts, even though he does not take part in bringing the parties together initially. (See Burns v. Sullivan (1915), 192 Ill. App. 127 (abstract) (holding that negotiations carried on by second broker brought about sale, making second broker the procuring cause and not plaintiff who had originally brought parties together and introduced purchaser to seller but who were unable to come to terms until second broker re-opened negotiations).) Moreover, a real estate broker may be the procuring cause where the transaction is effectuated through information which he disseminates (Edens View Realty & Investment, Inc. v. Heritage Enterprises, Inc. (1980), 87 Ill. App.3d 480, 485, 408 N.E.2d 1069, 1074; Doss v. Kirk (1956), 8 Ill. App.2d 536, 540-41, 132 N.E.2d 49, 51), although it has been noted that in such cases, the broker actually may do more than supply information (Note, Real Estate Brokers: The Procuring Cause, 41 Chi.-Kent L. Rev. 58, 63 (1964)). Furthermore, a broker may be deemed the procuring cause of the transaction even though he did not personally introduce the parties to each other (Rigdon v. More (1907), 226 Ill. 382, 80 N.E. 901; Chiagouris v. Continental Trailways (1964), 50 Ill. App.2d 196, 198, 200 N.E.2d 399, 401), or accompany a customer to a meeting with the principal (Chicago Title & Trust Co. v. Guild (1946), 329 Ill. App. 374, 68 N.E.2d 615), or if others participated in the negotiations (see Cole v. Brundage (1976), 36 Ill. App.3d 782, 344 N.E.2d 583; Woolf v. Hamburger (1916), 201 Ill. App. 612 (abstract), or the transaction was concluded without his presence or knowledge (Hafner v. Herron (1896), 165 Ill. 242, 46 N.E. 211; Day v. Porter (1896), 161 Ill. 235, ...

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