CONTRACTS - COUNTEROFFER NOT REJECTED

Gator Hillside Vil., LLC v Schuckman Realty, Inc., 2018 NY Slip Op 01178, Decided on February 21, 2018, Appellate Division, Second Department:

"The plaintiff is the owner of a shopping center in Smithtown, which had commercial space for lease. The defendant is a real estate brokerage firm. One of its agents, Ari Malul, sent the plaintiff a letter of intent on behalf of a client, proposing to begin negotiations on a 10-year lease agreement. The initial proposal included an obligation by the plaintiff to pay the defendant a brokerage fee based on a certain rate. Negotiations ensued between Malul and James Goldsmith, the president of the plaintiff. During the negotiations, Goldsmith made it clear that the plaintiff would not pay the brokerage fee demanded by the defendant. In an email to Malul dated October 30, 2011, Goldsmith made a take-it-or-leave-it counteroffer in which the plaintiff would pay the defendant a commission of five percent of the rent for the first five years of the lease agreement if [*2]it wanted to move forward on the deal. Malul did not object to or reject the offer, but instead indicated that he would speak to his client regarding a good faith deposit. Subsequently, the lease agreement was entered into between the plaintiff and the client, with no further discussions of the brokerage fee. The defendant then demanded from the plaintiff a brokerage fee based on the rate set forth in its initial letter of intent. The plaintiff refused to pay that amount, and eventually commenced this action seeking a judgment declaring the amount of the brokerage commission due. The defendant served an answer with counterclaims seeking payment of the brokerage fee. The plaintiff moved for summary judgment on the complaint and, in effect, dismissing the counterclaims. The Supreme Court granted the motion and entered a judgment declaring that the brokerage commission due to the defendant is five percent of the rent for the first five years of the lease agreement, equaling $24,650, and dismissed the defendant's counterclaims. The defendant appeals.

"[T]he existence of a binding contract is not dependent on the subjective intent of [the parties]" (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397, 399; see Civilized People, Inc. v Milk St. Café, Inc., 129 AD3d 761, 762; Minelli Constr. Co., Inc. v Volmar Constr., Inc., 82 AD3d 720, 721). "In determining whether the parties entered into a contractual agreement and what were its terms, it is necessary to look, rather, to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds" (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d at 399; see Civilized People, Inc. v Milk St. Café, Inc., 129 AD3d at 762; Minelli Constr. Co., Inc. v Volmar Constr., Inc., 82 AD3d at 721). "That means, simply, that the manifestation of a party's intention rather than the actual or real intention is ordinarily controlling" (Mencher v Weiss, 306 NY 1, 7; see Hotchkiss v National City Bank of N.Y., 200 F 287, 293 [SD NY], affd 201 F 664 [2d Cir], affd 231 US 50).

Here, the plaintiff established, prima facie, its entitlement to a judgment declaring that the brokerage commission due was five percent of the rent for the first five years of the lease agreement by submitting evidence that the defendant did not reject the counteroffer, but instead proceeded to have its client enter into the lease agreement. "While mere silence, when not misleading, cannot be construed as acceptance, a counteroffer may be accepted by conduct" (Daimon v Fridman, 5 AD3d 426, 427 [citation omitted]; see McIntosh v Niederhoffer, Cross & Zeckhauser, 106 AD2d 774, 775; John William Costello Assocs. v Standard Metals Corp., 99 AD2d 227, 231; cf. Matter of Albrecht Chem. Co. [Anderson Trading Corp.], 298 NY 437, 440). The defendant's conduct of moving forward with the lease agreement upon receiving the plaintiff's counteroffer established that the objective manifestation of the parties' intent was an agreement to the brokerage rate set forth in the counteroffer (see Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d at 399; Civilized People, Inc. v Milk St. Café, Inc., 129 AD3d at 762; Minelli Constr. Co., Inc. v Volmar Constr., Inc., 82 AD3d at 721). In opposition, the defendant failed to raise a triable issue of fact."