Opinion
Argued April 6, 2000.
May 18, 2000.
APPEAL, by permission of the Appellate Division of the Supreme Court in the First Judicial Department, from an order of that Court, entered May 18, 1999, which (1) reversed, on the law, an order of the Supreme Court (Beatrice Shainswit, J.), entered in New York County, insofar as appealed from by defendants, denying defendants' motion to dismiss the complaint, (2) granted the motion, and (3) directed the Clerk to enter judgment dismissing the complaint. The following question was certified by the Appellate Division: "Was the order of this Court, which reversed the order of the Supreme Court, properly made?"
Pursuant to an oral agreement, plaintiff was to earn a commission upon procuring a ready, willing and able purchaser of defendants' building. After allegedly aggressively marketing the building for several months, plaintiff introduced a prospective purchaser. At the time, the parties signed a letter stating that the commission had been earned and would be payable only upon the passage of title, unless failure to close title was due to defendants' willful default. Title never closed. Plaintiff sued for commissions and defendants moved to dismiss.
Supreme Court denied defendants' motion to dismiss, concluding that plaintiff allegedly earned its commission pursuant to the oral agreement and that plaintiff could not be charged, as a matter of law, with intending to modify the agreement with its letter.
The Appellate Division reversed, concluding that no commission was owing under the holding of Graff v. Billet ( 64 N.Y.2d 899), which held that there can be no default of the brokerage agreement unless the seller is bound by a written contract of sale to convey the property to the purchaser located by the broker, and that the seller remains free to convey the property to another purchaser at any time before a contract of sale is signed, without incurring any liability for a broker's commission.
On appeal to the Court of Appeals, plaintiff argued that Graff has had the effect of promoting disregard for fundamental fairness in real estate brokerage contracts and that the Court of Appeals should overrule Graff.
Kestenbaum, Dannenberg Klein, L.L.P., New York City (Michael H. Klein and Jeffery C. Dannenberg of counsel), for appellant.
Poles, Tublin, Patestides Stratakis, L.L.P., new York City (William J. Brady, III, of counsel) for respondents.
MEMORANDUM:
The order of the Appellate Division should be affirmed, with costs. The certified question should not be answered upon the ground that it is unnecessary.
We decline to accept plaintiff's invitation to overruleGraff v. Billet ( 64 N.Y.2d 899). Moreover, "the doctrine of stare decisis should not be departed from except under compelling circumstances" (Cenven, Inc. v. Bethlehem Steel Corp., 41 N.Y.2d 842, 843; see also, City of Buffalo v. Cargill, Inc., 44 N.Y.2d 7, 17). Eastern Consolidated Properties, Inc. v. Adelaide Realty Corp. and Harrow Realty Corp.
In the past, reasonable minds differed over the interpretation of a contract provision that a brokerage commission was due and payable "if and when title passes * * *, except for willful default on the part of the seller, in which case the commission shall be payable upon demand after said default." On February 14, 1985, Graff v. Billet ( 64 N.Y.2d 899) settled the doubt. The Court concluded that the broker was entitled to a commission "only if the seller and the broker's prospective buyer had already entered a sales contract, and the seller's `fault' or `default,' within the meaning of the rule, would have reference solely to a breach of that sales contract" (id., at 901). Moreover, we made clear that any ambiguity in the agreement was to be construed against the broker, who drafted it (id., at 902; see also, Pearce, Urstadt, Mayer Greer Realty Corp v. Atrium Development Assoc., 77 N.Y.2d 490, 494-496).
In the appeal now before us, plaintiff — a broker who drafted the commission agreement — virtually copied the key language we construed against the broker in Graff. Plaintiff now argues that the Court was wrong in Graff, and that the case should be overruled. This we refuse to do.
Continuity and predictability are important values for a Court. We should adhere to precedent unless it is clear that a prior decision has produced an unjust or unworkable rule. As Chief Judge Breitel observed in People v. Hobson ( 39 N.Y.2d 479, 488), the root of stare decisis is the "humbling assumption, often true, that no particular court as it is then constituted possesses a wisdom surpassing that of its predecessors." Stare decisis should be most stringently applied in cases involving contract and property rights. Indeed, considerations favoring stare decisis are "at their acme" in those cases (Payne v. Tennessee, 501 U.S. 808, 828). That is so for two reasons.
First, persons entering into contract and property transactions are guided by court decisions and tailor their agreements to conform to the law. Because "settled rules are necessary and necessarily relied upon, stability and adherence to precedent are generally more important than a better or even a `correct' rule of law" (Matter of Estate of Eckart, 39 N.Y.2d 493, 500). Indeed, Graff v. Billet has been cited dozens of times — by this Court, by lower courts, even by the United States Supreme Court. Second, in contract and property transactions, parties generally are free to draft their agreements to say what they intend, and thus avoid the effect of a prior Court interpretation if they so desire.
These principles mandate affirmance in the case at hand.Graff has been the law for more than 15 years, and we have no evidence that it has proven unworkable or produced manifest injustice. Brokers and sellers alike rely on Graff. Finally, plaintiff drafted its agreement a full decade after our decision. If plaintiff intended a different result, it should have used other language to say what it meant.
Order affirmed, with costs, in a memorandum. Certified question not answered upon the ground that it is unnecessary. Chief Judge Kaye and Judges Bellacosa, Smith, Levine, Ciparick, Wesley and
Rosenblatt concur, Chief Judge Kaye in a separate concurring opinion.