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Vector Realty Group, Inc. v. 711 Fourteenth Street

September 22, 1994


Appeals from the Superior Court of the District of Columbia; (Hon. Michael L. Rankin, Trial Judge)

Before Steadman and King, Associate Judges, and Mack, Senior Judge. Opinion for the court by Senior Judge Mack. Dissenting opinion by Associate Judge Steadman.

The opinion of the court was delivered by: Mack

MACK, Senior Judge: Vector Realty Group, Inc. ("Vector"), a commercial real estate brokerage firm, appeals from the judgment of the trial court following its action against Cafritz, et al., owners of real property at 711 14th Street, *fn1 for a breach of a commission agreement which Cafritz challenged as having been induced by fraud. In this court, *fn2 Vector argues that the jury, having found no fraudulent inducement, was permitted, because of erroneous instructions by the trial court, to award an inadequate amount for damages for breach of contract. It also argues that the trial court erred in denying its motion to amend the judgment or in the alternative to grant a new trial. Finding merit in Vector's position, we reverse and remand with the direction that the trial court enter a judgment for Vector in the amount of $239,739.11. *fn3


After two years of negotiation, appellee 711 Fourteenth Street, Inc., through its agents, entered into an agreement on October 23, 1989, with appellant Vector in which appellee agreed to pay one-half of Vector's $617,462.31 commission for procuring a tenant for appellee's vacant office building located at 711 14th Street, Northwest, in the District. The other half of Vector's commission was to be paid by a third party, Manufacturers Real Estate ("Manufacturers") which sought to move its tenant (the District Government) from another location to the 14th Street address. The letter agreement, which was signed by appellee through its agent Conrad Cafritz, provided the payment of Vector's commission as follows:

Vector has earned a real estate brokerage commission due and payable on the following terms and conditions:

$137,984.08 is immediately due and payable.

$137,984.08 is payable upon initial occupancy by the District of Columbia as tenant.

$341,494.15 is payable upon the earliest to occur of (i) a final and unconditional commitment by the District of Columbia to purchase the property for an amount which has substantially the same economic effect as the purchase option, or (ii) the final and unconditional exercise of the option to lease for the second five year term under the lease by the District of Columbia Government.

Manufacturers and will split payments of the fees equally. *fn4

After receiving its copy of the above agreement, Manufacturers contacted Vector and, in exchange for its promise to include Vector in future business dealings, requested a $102,475.12 discount from its portion of the commission owed. Vector agreed and entered into a discounted commission agreement with Manufacturers on November 24, 1989. In the interim, appellee had made the first payment of $68,992.04 (1/2 of $137,984.08 which was due immediately) in accordance with the October 19, 1989 agreement. However, appellee failed to pay the remaining $239,739.11 *fn5 owed to Vector due to financial difficulties. Vector filed suit against appellee for the amount of the unpaid commission. Upon discovering the discounted commission agreement between Vector and Manufacturers, appellee filed a counterclaim asserting that it had been fraudulently induced to enter into the commission agreement. Appellee contended that it was led to believe Vector's commission would be split equally with Manufacturers and since this was not the case, the commission agreement with Vector was voided.

At the close of the evidence, the trial court instructed the jury that it had found as a matter of law that Vector provided a service to appellee and that it was entitled to a commission. After considering the respective special verdict forms submitted by the parties, the trial court refused to submit Vector's proposed instructions to the jury; those instructions provided that if the jury did not find fraudulent inducement in the formation of the October 19, 1989 agreement, then Vector was entitled to recover from appellee the portion of the amount of its commission that was agreed upon according to the October 19, 1989 agreement, i.e., $239,739.11. Over Vector's objection, the trial court instead submitted appellee's special verdict form which provided:

(1) Do you find that the was fraudulently induced to sign the October 19, 1989 letter and to make partial payment under that letter by ...

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