| Land Man Realty, Inc. v Faraone |
| 2010 NY Slip Op 01413 [70 AD3d 1246] |
| February 18, 2010 |
| Appellate Division, Third Department |
| Land Man Realty, Inc., Respondent, v Barbara Faraone etal., Defendants and Third-Party Plaintiffs-Respondents. Weichert Realtors Northeast Group etal., Third-Party Defendants-Appellants, et al., Third-PartyDefendant. |
—[*1] Dreyer Boyajian, L.L.P., Albany (Donald W. Boyajian of counsel), for respondent. David W. Morris, Saratoga Springs, for defendants and third-party plaintiffs-respondents. Couch White, L.L.P., Albany (Michael T. Wallender of counsel), for New York StateAssociation of Realtors, Inc., amicus curiae.
Malone Jr., J. Appeal from an order of the Supreme Court (Williams, J.), entered July 20,2009 in Saratoga County, which denied a motion by third-party defendants Weichert RealtorsNortheast Group and Lorraine Conoby for summary judgment dismissing the amendedthird-party complaint against them.
Defendants owned a parcel of property located in the Town of Wilton, Saratoga County.Sometime in late 2003 or early 2004, defendants decided to sell the parcel and, prior to formallylisting it with third-party defendants Weichert Realtors Northeast Group and Lorraine Conoby(hereinafter collectively referred to as Weichert), they allegedly orally agreed to allow plaintiffto offer the property for sale to Capital District Properties, LLC (hereinafter CDP), amongothers, and allegedly offered plaintiff a 10% commission if it successfully negotiated a sale. InSeptember 2004, defendants entered an exclusive listing agreement with Weichert to sell theproperty as it had not been sold, although CDP continued to express interest in purchasing it.Thereafter, plaintiff began sending correspondence to defendants, as well as Weichert, in whichplaintiff claimed that, should CDP purchase the property, as the procuring cause of that sale itwould be entitled to the 10% commission allegedly promised by defendants. Weichert apparentlydid not respond to the letters and, when asked by defendants how they should respond, adviseddefendants to consult with their attorney, third-party defendant Robert W. Pulsifer. In August2006, CDP purchased the property and, pursuant to the exclusive listing agreement, Weichertreceived a 7% commission from defendants.
Plaintiff then commenced this action against defendants, claiming that it was the procuringcause of the sale to CDP and, thus, was entitled to a 10% commission pursuant to the oralagreement. Defendants, in turn, commenced a third-party action against Pulsifer and Weichert,claiming that they failed to take "any action to clarify [plaintiff's] claim" or "to protect[defendants] from [plaintiff's] claimed commission." Weichert subsequently moved for summaryjudgment dismissing the amended third-party complaint against it. Supreme Court denied themotion, finding that a question of fact existed as to whether Weichert owed a fiduciary duty todefendants with respect to plaintiff's claim. Weichert appeals.
"In New York, it is well settled that a real estate broker is a fiduciary with a duty of loyaltyand an obligation to act in the best interests of the principal" (Dubbs v Stribling &Assoc., 96 NY2d 337, 340 [2001] [citations omitted]). This duty requires the broker torefrain from taking any action adverse to its principal's interest with respect to any part of thetransaction giving rise to the fiduciary relationship (see Lamdin v Broadway Surface Adv.Corp., 272 NY 133, 138-139 [1936]; Reiser, Inc. v Roberts Real Estate, 292 AD2d726, 729-730 [2002]). Here, Weichert admits that it owed defendants a duty to act in defendants'best interests with respect to the exclusive listing agreement. Although that listing agreementrequires Weichert to pay a 3% commission to any cooperating broker, plaintiff does not rely onthat co-broker commission provision but, rather, seeks a commission directly from defendantsbased upon the alleged oral agreement, which, if it exists, is independent of the listingagreement.
Indeed, plaintiff specifically averred that its "agreement was with [d]efendant [BarbaraFaraone] and not [Weichert] and had nothing to do with a possible 'co-broke' commission."Because Weichert was not a party to the alleged oral agreement giving rise to the 10%commission to which plaintiff contends it is entitled—which, if valid, was negotiated longbefore Weichert entered into the listing agreement with defendants—Weichert does notowe any duty to defend defendants against plaintiff's claim or otherwise intervene on defendants'behalf. Consequently, contrary to defendants' assertions, Weichert had no obligation to evaluatethe legal [*2]validity of plaintiff's claim or advise defendantshow to respond to it (see Killough vShiels, 45 AD3d 1159, 1161 [2007]; Matter of Duncan & Hill Realty v Departmentof State of State of N.Y., 62 AD2d 690, 701-702 [1978], lvs denied 45 NY2d 709,821 [1978]; see also Real Property Law § 443). Any claim that plaintiff couldmake with respect to the cooperating broker commission set forth in the exclusive listingagreement is beyond the scope of the claims pleaded in these actions. Accordingly, we find thatWeichert is entitled to summary judgment dismissing the third-party claim against it.
Cardona, P.J., Mercure, Kavanagh and McCarthy, JJ., concur. Ordered that the order isreversed, on the law, with costs against both parties filing respondents' brief, motion of third-party defendants Weichert Realtors NortheastGroup and Lorraine Conoby granted, summary judgment awarded to said third-party defendantsand amended third-party complaint dismissed against them.