Brewer v. Better Business Brokers & Consultants, Inc.

Citations: 727 So. 2d 1081; 1999 Fla. App. LEXIS 2160; 1999 WL 94979Docket: No. 97-03824

Court: District Court of Appeal of Florida; February 25, 1999; Florida; State Appellate Court

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Jane Zentek and James B. Paternostro, the defendants, are appealing a final judgment favoring Better Business Brokers, which arose after the trial court set aside a jury’s verdict in favor of the defendants. The original case began in 1992 when Better Business sued Norman Brewer for breach of contract regarding a real estate commission owed for selling Brewer’s property. In 1994, Better Business amended its complaint to include Zentek and Paternostro, accusing them of tortious interference with its relationship with Brewer. Brewer later settled with Better Business and was dismissed from the case.

The trial, which took place in June 1997, ended with the jury ruling in favor of the defendants. The trial judge questioned the jury's understanding of the parties involved, but the jurors clearly identified the defendants and the plaintiff. Better Business then moved to set aside the jury’s verdict, which the trial court granted, prompting this appeal. The appellate court evaluated the trial court's decision by considering the evidence in the light most favorable to the defendants. 

The factual background includes Brewer signing an exclusive listing agreement with Better Business on June 11, 1991, which obligated him to pay a commission if the property sold within a specified period or to someone aware of the property’s availability through Better Business. Paternostro was approached by an agent from Better Business about the property, acknowledged prior knowledge of it, and ultimately made an offer to purchase for $160,000. After initial rejection, Brewer indicated willingness to reconsider the offer, setting a proposed closing date contingent on Paternostro securing financing, which he subsequently obtained. The appellate court reversed the trial court’s order setting aside the jury's verdict, indicating an error in the trial court's action.

The bank's commitment for a loan was valid for sixty days, contingent on a high-value appraisal and a successful "Phase I" environmental audit of the property. Paternostro and Brewer agreed that Brewer would pay for the audit, after which Paternostro would order the appraisal. In September 1991, Better Business incorrectly informed both parties that the environmental audit was clean. Based on this misinformation, the bank ordered an appraisal, which matched the purchase price, but required a written environmental audit report to proceed. The written report revealed that the property failed the audit and recommended a further "Phase II" audit. Paternostro sought a refund of the $1,500.00 appraisal fee, arguing it was ordered based on Better Business's incorrect information. After speaking to both the agent and the owner of Better Business, Ms. Hirsch, and receiving a refusal for a refund, Paternostro proposed to extend the purchase agreement contingent on a clean Phase II audit, which Ms. Hirsch also rejected. Consequently, Paternostro deemed the deal dead as of September 22, 1991, a conclusion supported by Ms. Hirsch's testimony. The bank subsequently withheld financing, leading to the expiration of the loan commitment in early October 1991. Environmental concerns arose from a nearby gasoline station, prompting additional tests by Brewer, the seller. By December 1991, tests indicated that contamination was flowing away from Brewer's property. Upon receiving this satisfactory report, Brewer contacted Paternostro, who declined to purchase the property. Instead, Paternostro met with Brewer and his attorney, ultimately affirming his decision not to buy. Subsequently, Zentek, Paternostro's fiancée, organized Double J, Inc. to acquire the property on February 20, 1992. Double J entered into a long-term lease with Paternostro, which would cover the mortgage and provide additional income after two years, along with an option for Paternostro to purchase the property upon lease termination.

Better Business alleged that Double J was a facade to avoid commission payments, a theory supported by substantial evidence. However, Zentek testified that she had considered purchasing the Brewer property prior to Better Business listing it and chose to use a corporate entity to limit personal liability. She denied any control by Paternostro over the acquisition process. Zentek was the sole shareholder and officer of Double J, which adhered to all corporate formalities. The trial judge indicated the jury could consider whether Double J was the alter ego of Zentek. The trial court found no evidence to support Better Business's claims, ruling in its favor as a matter of law. Nevertheless, evidence showed that Double J, not Zentek or Paternostro, purchased the property and that neither had learned of it through Better Business. Despite conflicting evidence about Double J’s purpose, the review must favor Zentek and Paternostro. The decision was reversed and remanded for a final judgment in their favor, with judges Northcutt and Quince concurring.