Winick Realty Group, LLC v Austin & Assoc.

[*1] Winick Realty Group, LLC v Austin & Assoc. 2007 NY Slip Op 52251(U) [17 Misc 3d 1134(A)] Decided on November 28, 2007 Supreme Court, New York County Acosta, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 28, 2007
Supreme Court, New York County

Winick Realty Group, LLC, Plaintiff,

against

Austin & Associates, Esprit International (GP), Inc., Tishman Speyer Properties, L.P., and Michael J. O'Neill, Defendants.



602027/07



Bingham McCutchen LLP

399 Park Avenue

New York, NY 10022

Attorneys for Plaintiff

Liddle & Robinson, L.L.P.

800 Third Avenue, 8th Floor

New York, NY 10022

Attorneys for Austin & Associates

Dreier LLP

499 Park Avenue

New York, NY 10022

Attorneys for Esprit International (GP), Inc.

Greenberg Traurig, LLP

Met Life Building

200 Park Avenue

New York, NY 10166

Attorneys for Defendant Tishman Speyer Properties, L.P.

Arthur R. Lehman, LLC

52 Vanderbilt Avenue, 14th Floor

New York, NY 10017

Attorneys for Defendant Michael J. O'Neill

Rolando T. Acosta, J.

Background [FN1]

In September 2006, the plaintiff and defendant Austin entered into an oral, nonexclusive agreement for brokerage services. Under the agreement, plaintiff was required to procure a retail space for Austin's client, Esprit International (GP), Inc. ("Esprit") in return for a commission. In performance of the contract, plaintiff searched for a suitable retail space and communicated to Austin, on several occasions, the potential real estate spaces available. [*2]

In October and November 2006, plaintiff began working more intensely on 600 Fifth Avenue in Manhattan ("600 Fifth Avenue"). Plaintiff inquired into 600 Fifth Avenue's availability, the owner's willingness to lease to Esprit, and other preliminary matters necessary to establish a meeting of the minds. Once satisfied that 600 Fifth Avenue was available, that the owners were interested in leasing to Esprit, and that the price and size met Esprit's specifications, plaintiff scheduled a meeting of all the interested parties. The meeting was to take place on December 4, 2006. Upon informing Austin of the meeting, plaintiff was instructed to stop working on the 600 Fifth Avenue property. Austin allegedly told plaintiff that Esprit was no longer interested in 600 Fifth Avenue and that, in any event, another broker has identified the property first. Plaintiff complied and discontinued his efforts in behalf of Austin and its client Esprit.

In April 2007, the defendant Tishman Speyer ("Tishman") and Esprit executed a lease agreement for 600 Fifth Avenue. Under Article 1 of the lease agreement, Austin is listed as the tenant's agent, and in Article 31, section 31.1, Austin is listed as the broker. Plaintiff received no portion of the commission and asserts that Austin wrongfully and in bad faith repudiated their agreement in order to keep the full commission.

As a result of the foregoing events, plaintiff's claims for relief sound in breach of contract, quantum meruit, and unjust enrichment. In response, Austin filed a motion to dismiss based on C.P.L.R. §§ 3211(a)(1) and (7).

Austin's C.P.L.R. § 3211(a)(1) Motion to Dismiss

In evaluating a motion to dismiss under C.P.L.R. § 3211(a)(1), the Court will construe every fact alleged by plaintiff as true. Fern v. International Business Machines Corp ., 204 AD2d 907 (3rd Dep't 1994). The motion will be granted only where the documentary evidence unequivocally contradicts plaintiff's factual allegations and conclusively establishes a defense as a matter of law. Goshen v. Mutual Life Ins. Co. of New York, 98 NY2d 314 (2002); 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144 (2002); Landenburg Thalmann & Co., Inc. v. Tim's Amusements, Inc., 275 AD2d 243 (1st Dep't 2000).

Defendant has failed to meet its very heavy burden.[FN2] The documents submitted by [*3]defendant simply do not unequivocally contradict plaintiff's claims or establish a defense as a matter of law. Plaintiff's breach of contract claim alleges that Austin wrongfully and in bad faith repudiated their oral agreement to render brokerage services to avoid paying plaintiff a commission.[FN3] Indeed, plaintiff specifically alleges that defendant falsely pretended that Esprit was no longer interested in 600 Fifth Avenue and that even if Esprit were interested in 600 Fifth Avenue, another broker (defendant Michael O'Neill) was entitled to the commission for first identifying the property to Austin. (See, Plaintiff's reply memorandum of law, p. 2.) Plaintiff submitted evidence that it first identified and brought 600 Fifth Avenue to Austin's attention on September 22, 2006. Austin's evidence, on the other hand, shows that defendant Michael O'Neill identified 600 Fifth Avenue on September 27, 2006. Therefore, the question of who first identified the property, plaintiff or defendant Michael O'Neill, is a dispositive question for the trier of fact to decide, not for the Court to impose.

Moreover, the undisputed fact that Esprit eventually leased 600 Fifth Avenue begs the questions of what exactly plaintiff was told and why plaintiff was asked to cease all efforts in behalf of Austin and Esprit, since clearly Esprit was still interested in leasing 600 Fifth Avenue. Therefore, because plaintiff's allegations have not been conclusively refuted by the documentary evidence, Austin's 3211(a)(1) motion to dismiss is denied.

Austin's C.P.L.R. § 3211(a)(7) Motion to Dismiss

In general, the Court must liberally construe all pleadings. C.P.L.R § 3026. In deciding a C.P.L.R. § 3211(a)(7) motion, the Court must accept all the allegations of the complaint as true, accord plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within a cognizable legal theory. CBS Corp. v. Dumsday, 268 AD2d 350 (1st Dep't 2000); see also Polonetsky v. Better Homes Depot, Inc., 97 NY2d 46 (2001)(motion must be denied if "from [the] four corners [of the pleading] factual allegations are discerned which taken together manifest any cause of [*4]action cognizable at law"); Weiner v. Lazard Freres & Co., 241 AD2d 114 (1st Dep't 1998) ("so liberal is th[is] . . . standard that the test is simply 'whether the pleading has a cause of action,' not even 'whether he has stated one'"). Furthermore, the pleading will be deemed to allege whatever may be implied from its statements by reasonable intendment. Foley v. D'Agostino, 21 AD2d 60 (1st Dep't 1964).

In support of its breach of a brokerage agreement claim, plaintiff alleges that Austin employed plaintiff to render brokerage services and that plaintiff was the procuring broker for the resulting lease agreement. It is undisputed that Austin entered into an oral nonexclusive or "open" agreement for brokerage services, which entitles a broker to a commission only if the broker is the first to find a ready, willing, and able lessor on terms acceptable to the client/lessee. See, Real Estate Transactions, 5th Ed., Lefcoe, George, Matthew Bender & Company, Inc., 2005, p. 35-36. Under all brokerage agreements, a broker must be the procuring proximate cause of the lease to earn a commission. Id.

Specifically, plaintiff alleges that he first identified the 600 Fifth Avenue location to Austin on September 22, 2006. Plaintiff further alleges that he was the procuring proximate cause of the lease. Plaintiff contends that he researched the availability of 600 Fifth Avenue, sent a floor plan to Austin, determined that the property met Esprit's needs, ascertained that Tishman (the lessor) would entertain a lease proposal, discussed the approximate range of rentals, and arranged a meeting of the interested parties. In other words, plaintiff alleges he performed his end of the bargain.

Austin calls into question whether the plaintiff's efforts are sufficient to meet the procuring proximate cause standard. Austin asserts that the actual lease was not executed until April 2007 and that for the months between December 2006 and April 2007, negotiations and other work central to the final lease agreement were carried out without plaintiff's involvement. To this, plaintiff counters that but for the defendants Austin and Michael O'Neill's bad faith repudiation and conspiracy to cut plaintiff out of the negotiations, plaintiff would have carried out the negotiations to fruition.

Taking the evidence in the light most favorable to the plaintiff, plaintiff's papers establish that it was prevented from participating in the remaining lease negotiations due to the defendant's bad faith repudiation. Collins Tuttle & Co., Inc. v. Ausnit, 95 AD2d 668, 669 (1st Dep't 1983) (denying summary judgment to the defendant stating "[i]n general, the rule is that if a promisor himself is the cause of the failure of performance of a condition upon which his own liability depends, he cannot take advantage of the failure. Even when there are additional terms to be agreed upon, a defendant who is sued for a commission cannot be heard to complain where it was her own act which prevented the natural progress of the transaction.... That this deal might have foundered on a genuine [*5]disagreement between the parties, in which case there would have been no liability, does not alter the consequences when the seller's actions prevented any possibility of finalizing an agreement.") (internal quotations and citations omitted) It remains a question of fact as to whether plaintiff can prove bad faith repudiation, but this question cannot be resolved on the papers submitted.

As to plaintiff's claim for quantum meruit, he has alleged that at the behest of Austin, plaintiff researched and found a suitable location for Esprit to operate its flagship store. Further, plaintiff asserts that its actions were undertaken pursuant to an oral agreement to render brokerage services and that plaintiff and Austin had previously contracted for similar work, for which plaintiff had been compensated without incident. Moreover, plaintiff alleges that he is a broker who regularly performs these services and that therefore, he had an expectation of compensation under the parties' agreement. Plaintiff claims entitlement to one half of the gross commission obtained by Austin.

In opposition to defendant's motion to dismiss plaintiff's unjust enrichment claim, plaintiff alleges that Austin was listed as the procuring broker on the final lease agreement, that Austin received the standard brokerage commission and that Austin benefitted from the receipt of the total commission instead of sharing the over $1 million commission. Finally, plaintiff states that Austin, in bad faith, repudiated its oral agreement to deprive plaintiff of its commission. Given these allegations, which the Court is constrained to take as true for the purposes of the instant motions, Austin's motion must be denied.

Finally, contrary to Austin's contentions, the Court is unpersuaded that the finding of a contract precludes plaintiff from pleading the causes of action for quantum meruit and unjust enrichment, which are quasi-contractual claims. Indeed,"separate causes of action or defenses shall be separately stated and numbered and may be stated regardless of consistency." C.P.L.R. § 3014 (emphasis added)

Accordingly, based on the foregoing, it is hereby

ORDERED that defendant Austin & Associates' motion to dismiss is DENIED in its entirety; and it is further

ORDERED that plaintiff's motion for leave to amend the complaint is granted.

Dated: November 28, 2007ENTER [*6]

___________________________________

Rolando T. Acosta, J.S.C.

Bingham McCutchen LLP

399 Park Avenue

New York, NY 10022

Attorneys for Plaintiff

Liddle & Robinson, L.L.P.

800 Third Avenue, 8th Floor

New York, NY 10022

Attorneys for Austin & Associates

Dreier LLP

499 Park Avenue

New York, NY 10022

Attorneys for Esprit International (GP), Inc.

Greenberg Traurig, LLP

Met Life Building

200 Park Avenue

New York, NY 10166

Attorneys for Defendant Tishman Speyer Properties, L.P.

Arthur R. Lehman, LLC

52 Vanderbilt Avenue, 14th Floor

New York, NY 10017

Attorneys for Defendant Michael J. O'Neill Footnotes

Footnote 1: This decision has been edited for publication.

Footnote 2: In support of its 3211(a)(1) motion to dismiss, Austin submitted a copy of the following documents: 1. Consulting and Advisory Services agreement between defendants Austin and Esprit signed on April 20, 2006; 2. Lease proposal submitted by defendant Tishman Speyer to Austin regarding 600 Fifth Avenue on December 6, 2006; 3. Retail Location Survey submitted by defendant Michael O'Neill (not a party to this motion) to Austin identifying the 600 Fifth Avenue dated September 27, 2007; and 4. Email exchange between plaintiff and Austin's Vice President, Jack Abelson instructing plaintiff to "cease and desist all efforts on behalf of Esprit for this property" dated November 20, 2006 as well as emails from plaintiff informing Austin of a meeting plaintiff had scheduled between Austin and defendant Tishman Speyer and other emails plaintiff sent out to secure 600 Fifth Avenue for Esprit.

Footnote 3: Plaintiff's complaint, ¶ 7: Just before the scheduled meeting was to take place, Austin canceled the meeting, directed Winick to cease working on 600 Fifth Avenue, and, when Winick questioned this instruction, Austin provided Winick with a series of pretextual and false explanations for the cancellation.