Halstead Prop. LLC v Gluck

[*1] Halstead Prop. LLC v Gluck 2005 NY Slip Op 51759(U) [9 Misc 3d 1123(A)] Decided on June 30, 2005 Supreme Court, New York County Smith, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 30, 2005
Supreme Court, New York County

Halstead Property LLC, Plaintiff,

against

Morton C. Gluck, Defendant.



100321/2005

Karen S. Smith, J.

Plaintiff Halstead Property, LLC's motion, pursuant to CPLR § 3212, for an order granting summary judgment in its favor against defendant Morton Gluck is hereby denied.

In this action, plaintiff Halstead Property LLC seeks to recover a real estate brokerage commission from defendant Morton Gluck arising from the sale of defendant's condominium unit. Plaintiff now moves for summary judgment on the grounds that the contract of sale between defendant and Ronald and Janie Kupferman ("Purchasers") contains a "no-broker-but" clause which entitles plaintiff to judgment as a matter of law.

The facts are contained in the moving papers and are not in dispute. In December of 2003, defendant entered into an exclusive brokerage agreement with Douglas Elliman, LLC ("Douglas"), a real estate brokerage firm, for the sale of his condominium apartment. located at 188 East 78th Street, New York, New York. That agreement, memorialized in the form of a letter from Douglas to defendant, contains the following clause: 6. In the event another licensed Real Estate Broker solicited by us is involved in the transaction, we shall pay the cooperating Broker a commission by separate agreement with such Broker and in no such event shall the commission paid by you exceed 5% of the selling price.

In August of 2004, plaintiff, a real estate brokerage firm, introduced Purchasers to defendant. On August 20, 2004, Purchasers and defendant entered into a written sales agreement for the purchase of defendant's condominium apartment. The contract contained the following clause 22. Broker: Seller and Purchaser represent and warrant to each other that the only broker with whom they have dealt in connection with this Contract and the transaction set forth herein is Mollie Sullivan (Douglas Elliman), Laurie Silverman (Halstead) and that they know of no other broker who has claimed or may have the right to claim a commission in connection with this transaction. The commission of such broker shall be paid by Seller pursuant to separate agreement.

A closing for the apartment occurred on November 19, 2004. Defendant received a total of [*2]$3,250,000.

On January 10, 2005, plaintiff commenced this action against defendant, seeking $97,500, the amount plaintiff alleges it is entitled to as a commission. Defendant served an answer, raising the affirmative defense that no privity of contract exists between himself and plaintiff, as well as a defense of the statute of frauds. Defendant has also commenced a third party action against Douglas, stating causes of action for negligent failure to represent to defendant the proper value of the property, negligent failure to convey to defendant the highest bid for the property, breach of fiduciary duty, and fraud.

Plaintiff now moves for summary judgment on the grounds that, as a result of the above cited clause in the contract for the sale of defendant's apartment, plaintiff is a third party beneficiary to the contract of sale and is entitled to recover a commission from defendant. Defendant responds that he never entered into a contract with plaintiff, and that plaintiff was not a party to the contract between himself and Purchasers and therefore is not entitled to recover thereunder.

The proponent of a motion for summary judgment under CPLR § 3212 must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence in an admissible form to demonstrate the absence of any material issues of fact (Guiffrida v. Citibank 100 NY2d 72, 81 [2003]). Once the movant has made such a showing the burden shifts to the party opposing the motion to produce evidence in an admissible form sufficient to establish the existence of any material issues of fact requiring a trial of the action. (Id.) Where a contract for sale of real property acknowledges services performed by a broker and contains an express promise by the seller to pay the broker's commission, the broker is entitled to summary judgment for a commission as a third-party beneficiary of the contract. (Joseph P. Day Realty Corp. v. Chera, 308 AD2d 148, 152 [1st Dept. 2003]).

Plaintiff has not met its burden of establishing a prima facie entitlement as a matter of law. While a clause in the sale contract that acknowledges a broker's services and states that the seller shall pay the broker's commission would normally entitle the broker to sue as a third party beneficiary, the clause in question in this contract states that the seller will pay the commission pursuant to a separate agreement. Plaintiff has failed to allege the existence of a separate agreement between itself and defendant. None of the cases cited by plaintiff state that a broker need not allege a separate agreement between itself and the seller when the brokerage commission clause expressly states that the commission will be paid pursuant to a separate agreement. (See, Helmsely-Spear, Inc. v. New York Blood Center, Inc., 257 AD2d 64 [1st Dept. 1999]; Citadel Management Company, Inc. v. The Macklowe Organization, 286 AD2d 416 [1st Dept. 2001]; Ambrose Mar-Elia Co. v. Dinstein, 151 AD2d 416 [1st Dept. 1989]; Ficor, Inc. v. National Kinney Corp., 67 AD2d 659 [1st Dept. 1979]; William B. May Co., Inc. v. Monaco Associates, 80 AD2d 798 [1st Dept. 1981]). Since plaintiff has not made a prima facie showing of entitlement to judgment as a matter of law, plaintiff's motion must be denied.

Accordingly, it is hereby

ORDERED that plaintiff's motion is denied, and it is further

ORDERED that all parties shall appear for a preliminary conference on September 9, 2005 at 9:30 a.m. in Room 581 at 111 Centre Street, New York, New York.

Dated: June 30, 2005

ENTER: [*3]

New York, New York

Karen S. Smith, J.S.C.