| Land Man Realty, Inc. v Weichert, Inc. |
| 2012 NY Slip Op 02558 [94 AD3d 1221] |
| April 5, 2012 |
| Appellate Division, Third Department |
| The Land Man Realty, Inc., Respondent, v Weichert, Inc.,et al., Appellants. |
—[*1] Dreyer Boyajian, L.L.P., Albany (Samuel C. Breslin of counsel), for respondent. Couch & White, L.L.P., Albany (Michael T. Wallender of counsel), for National Associationof Realtors, Inc. and another, amici curiae.
Malone Jr., J. Appeal from an order of the Supreme Court (R. Sise, J.), entered September29, 2011 in Saratoga County, which partially denied defendants' motion for summary judgmentdismissing the complaint.
Plaintiff, a real estate firm and participant in the Capital Region Multiple Listing Service(hereinafter CRMLS), commenced this action against defendants Weichert Realtors NortheastGroup (hereinafter Weichert Northeast) and Lorraine Conoby, an agent with WeichertNortheast—both participants in CRMLS—as well as defendant Weichert, Inc.(hereinafter Weichert), alleging unjust enrichment and breach of contract arising out of theAugust 2006 sale of a parcel from Barbara Faraone and Babs Property Development (hereinaftercollectively referred to as Faraone) to Capital District Enterprises, LLC.[FN*] In their answer, defendants asserted [*2]that the action wasprecluded by the Code of Ethics and Standards of Practice of the National Association ofRealtors, which requires its members to submit claims such as plaintiff's to binding arbitration.Prior to the completion of any discovery, defendants moved for summary judgment dismissingthe complaint. After finding that the action was not subject to binding arbitration, Supreme Courtgranted defendants' motion with regard to the first cause of action alleging unjust enrichment, butdenied the motion with regard to the second cause of action alleging unjust enrichment and thethird cause of action alleging breach of contract. Defendants appeal.
Initially, we agree with Supreme Court that this action is not subject to binding arbitrationpursuant to article 17 of the Code of Ethics and Standards of Practice of the National Associationof Realtors. As is relevant here, article 17 provides that realtors who are associated with differentfirms shall submit to arbitration "specific non-contractual disputes as defined in Standard ofPractice 17-4." Standard of Practice 17-4 defines five distinct situations, none of which areapplicable here. In the absence of an express and unequivocal agreement between the parties, it isnot necessary for this dispute to be submitted to arbitration (see Gangel v DeGroot, 41NY2d 840, 841 [1977]; Matter ofMassena Cent. School Dist. [Massena Confederated School Employees' Assn., NYSUT,AFL-CIO], 82 AD3d 1312, 1315 [2011]).
Next, defendants claim that Supreme Court erred by denying that part of their motion seekingdismissal of the second and third causes of action. With respect to Weichert only, we agree. Insupport of their motion for summary judgment, defendants presented evidence that Weichert'srelationship with Weichert Northeast was limited to that of a franchisor and that Weichert had nocontrol over Weichert Northeast's operations or finances. This was sufficient to establish thatWeichert cannot be held liable for the acts allegedly undertaken by Weichert Northeast withrespect to plaintiff's claims (see Repeti vMcDonald's Corp., 49 AD3d 1089, 1090 [2008]). Plaintiff's bare claim in oppositionthat discovery was necessary to reveal the nature of Weichert's role in the transaction at issue wasinsufficient to demonstrate that a material issue of fact exists (see Joseph P. Carrara & Sons, Inc. v A.R. Mack Constr. Co., Inc., 89AD3d 1190 [2011]). Accordingly, summary judgment dismissing both causes of actionagainst Weichert is warranted.
With respect to the remaining defendants, Weichert Northeast and Conoby, to establish anunjust enrichment claim against them, as alleged in the second cause of action, plaintiff mustestablish only that these "defendants were enriched, the enrichment came at plaintiff['s] expense,and permitting defendants to retain what plaintiff[ ] seek[s] to recover would be against equityand good conscience" (ARB UpstateCommunications LLC v R.J. Reuter, LLC, 93 AD3d 929, 933 [2012] [internal quotationmarks and citations omitted]; seeMandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 178 [2011]; Augur v Augur, 90 AD3d 1111,1112 [2011]). Plaintiff alleged that because it was a participant in CRMLS and had procured thebuyer for Faraone's property, pursuant to the terms of defendants' CRMLS exclusive listingagreement with Faraone, it was entitled to receive from defendants a 3% commission and that,when defendants failed to pay such commission to plaintiff, defendants were enriched atplaintiff's expense. Moreover, pursuant to CRMLS rules and regulations, by filing the listing[*3]agreement with Faraone in the CRMLS system, defendantsagreed to compensate another CRMLS participant who procured a buyer for the listed property.Thus, if plaintiff in fact procured a buyer for Faraone's property, it was entitled to a 3%commission on the sale. Because issues of fact exist with respect to, among other things, whetherplaintiff in fact procured the buyer for Faraone's property, and whether defendants were enrichedat plaintiff's expense, summary judgment dismissing this cause of action was properly denied.
As for the third cause of action for breach of contract, the listing agreement entered into bydefendants and Faraone contains a provision by which, under certain circumstances, acooperating participant of CRMLS would be paid a 3% commission by defendants. Plaintiffargues only that, as a third-party beneficiary of that contract, it is entitled to the 3% commissionbecause it was the procuring agent for the buyer of Faraone's property. In order for plaintiff torecover as a third-party beneficiary, plaintiff must establish that it was an intended beneficiaryunder the contract (see SaratogaSchenectady Gastroenterology Assoc., P.C. v Bette & Cring, LLC, 83 AD3d 1256, 1257[2011]). On this record, issues of fact exist, including, as discussed above, whether plaintiffprocured the buyer for Faraone's property and whether plaintiff was an intended or incidentalbeneficiary of the contract. Accordingly, this part of defendants' motion for summary judgmentwas likewise properly denied.
Defendants' remaining contentions have been considered and determined to be without merit.
Mercure, A.P.J., Rose, Garry and Egan Jr., JJ., concur. Ordered that the order is modified, onthe law, without costs, by reversing so much thereof as denied that part of defendants' motion forsummary judgment dismissing the second and third causes of action against defendant Weichert,Inc.; motion granted to that extent and complaint dismissed against said defendant; and, as somodified, affirmed.
Footnote *: Plaintiff previously commencedan action against Faraone seeking damages arising out of this same real estate transaction.Faraone impleaded the instant defendants and, ultimately, this Court granted defendants' motionfor summary judgment dismissing the third-party complaint (Land Man Realty, Inc. v Faraone, 70 AD3d 1246 [2010]).