New England Commercial Brokerage Inc. v. Kendall Homes LLC
Absent bad faith, a commercial broker that signs a contract to represent the original prospective purchaser may not be able to prove breach of contract, if another business entity that is connected to the original prospective purchaser agrees to purchase, and the purchase is not consummated. Allegedly, the defendant, Kendall Homes, agreed that the plaintiff, New England Commercial Brokerage, would possess the exclusive right to represent Kendall, if Kendall purchased property in Manchester between July 12, 2006 and July 12, 2007. The contract provided, "The Buyer (previously defined as Kendall Homes, LLC) will pay to the broker (previously defined as New England Commercial Brokerage, Inc.) a fee of 6% of the amount of the purchase price of the property purchased by you for the professional services, performed by the broker." The plaintiff sued Kendall Homes, alleging that Kendall agreed to purchase the Manchester property for $640,000 and failed to pay the plaintiff broker a commission of 6 percent. The court found that Reinhard Von Hollander, a principal of Kendall Homes, signed the purchase agreement on behalf of a third party, Maiden Builders LLC, and that the purchase agreement was contingent on Maiden Builders' receipt of a zoning change. Eventually, Von Hollander decided that the contract was not economically feasible. Maiden Builders decided to forfeit the deposit. The plaintiff failed to prove bad faith by Kendall Homes or Reinhard Von Hollander. "[T]here was no evidence," wrote the court, "of any subterfuge or nefarious behavior." Material conditions were not resolved, wrote the court, and Kendall Homes never progressed beyond the negotiating stages. The plaintiff failed to prove that Kendall Homes breached the brokerage contract or breached the implied covenant of good faith and fair dealing. The court granted judgment to Kendall.