RCLA, LLC v 50-09 Realty, LLC

[*1] RCLA, LLC v 50-09 Realty, LLC 2010 NY Slip Op 51797(U) [29 Misc 3d 1211(A)] Decided on October 19, 2010 Supreme Court, Kings County Demarest, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 19, 2010
Supreme Court, Kings County

RCLA, LLC, Plaintiff,

against

50-09 Realty, LLC, CHESKEL SCHWIMMER and ZIGMOND BRACH, Defendants.



13801/06



Attorneys for Plaintiff:

Leonard Rodney, Esq.

80 Cutter Mill Road, Suite 404

Great Neck, NY 11021

Attorneys for Defendants:

Laurence Sklaw, Esq.

Berger & Sklaw LLP

295 Madison Ave.

New York, NY 10017

Carolyn E. Demarest, J.

Defendants move, pursuant to CPLR 3212, for summary judgment dismissing plaintiff's complaint seeking to recover a commission from defendants to which it claims to be entitled under the terms of a loan agreement by which Indymac Bank (the "Bank") would advance funds to defendants for a condominium development in Long Island City, New York. Plaintiff contends, in its Amended Verified Complaint, that it was acting as an exclusive agent for the Bank in the Northeastern United States with respect to the loan application which was initiated by defendants' mortgage broker, Northmarq Capital, and was not, therefore, acting as a broker required to be licensed in New York. This issue was previously addressed upon an earlier motion, pursuant to CPLR 3211 (a) (7) to dismiss the original complaint in a decision by this court dated January 4, 2007, granting the motion based upon the earlier pleading in which plaintiff failed to plead that it was licensed though it had alleged that it had acted directly on [*2]behalf of defendants in securing the construction loan. This court denied plaintiff leave to amend it complaint in light of the supporting documents submitted which suggested that plaintiff was acting as an unlicensed broker in violation of law and would, therefore, be precluded from recovering the commission. Morever, the proposed complaint failed to allege an agreement between plaintiff and defendants, but relied upon plaintiff's status as the Bank's agent.

On appeal, the Appellate Division, Second Department reversed this court's decision and order, finding the denial of leave to amend the complaint an "improvident exercise" of discretion in that the evidence sufficiently supported plaintiff's claim that it was acting as an agent of the Bank. The Appellate Court noted "triable issues of fact regarding the relationship between the plaintiff and the defendants in the underlying transaction" (RCLA, LLC v 50-09 Realty, LLC, 48 AD3d 538 [2d Dept 2008]).

Notwithstanding such unequivocal direction from the Appellate Division that a trial is necessary to resolve critical issues in this case, defendants have again moved to dismiss the complaint. As defendants' own supporting affidavits indicate, there are numerous factual issues in dispute in this case that can only be determined upon an assessment of the credibility of the parties. Particularly significant to defendants' contention that plaintiff provided no consideration for the fee sued upon, is the recitation in the Affidavit in Opposition of William Foster, plaintiff's managing member, of the various services he supplied to the Bank in processing and underwriting the loan to defendants. Mr. Foster further directly disputes the representations contained in the Affidavit of Richard Koon in support of defendants' motion. The instant motion must be denied, with costs to plaintiff of $100 (CPLR §§ 8106, 8202).

In light of the history of this litigation and the decision and order of the Appellate Division, dated February 13, 2008, this motion is completely frivolous and should be sanctioned. See Rules of the Chief Administrator for § 130-1.1. However, such relief was not requested by plaintiff and, as defendants are entitled to notice of the court's intent to impose such sanctions sua sponte, and an opportunity to be heard (id., § 130-1.1(d)), the court will defer consideration of such sanction to the adjourned date for final settlement conference.

As a note of issue has been filed and all discovery is complete, counsel are directed to appear, with their parties, for a final settlement conference on November 8, 2010 at 10 A.M. Subject to confirmation of such date on November 8, 2010, trial of this case is scheduled to begin on December 2, 2010 at 10 A.M. A pre-trial conference will be scheduled for November 22, 2010 at 10 A.M.

The foregoing constitutes the decision, order, and judgment of the court.

E N T E R,

_______________________

Carolyn E. Demarest

J. S. C.