| Douglas Elliman, LLC v Silver |
| 2016 NY Slip Op 00675 [136 AD3d 658] |
| February 3, 2016 |
| Appellate Division, Second Department |
[*1]
| Douglas Elliman, LLC, Doing Business as PrudentialDouglas Elliman Real Estate, Respondent-Appellant, v Rhona Silver et al.,Appellants-Respondents. |
Smith, Buss & Jacobs, LLP, Yonkers, NY (Jeffrey D. Buss and Jennifer L.Stewart of counsel), for appellants-respondents.
Meyer, Suozzi, English & Klein, PC, Garden City, NY (Robert N. Zausmer ofcounsel), for respondent-appellant.
In an action to recover a real estate broker's commission, the defendants appeal (1),as limited by their brief, from so much of an order of the Supreme Court, Suffolk County(Emerson, J.), dated September 25, 2013, as denied that branch of their motion whichwas pursuant to CPLR 4404 (a) to set aside a jury verdict in favor of the plaintiff andagainst them and for judgment as a matter of law or, in the alternative, to set aside theverdict as contrary to the weight of the evidence and for a new trial, and (2) from ajudgment of the same court, entered July 17, 2014, which, upon the order and upon thejury verdict, is in favor of the plaintiff and against them in the total sum of$2,147,128.13, and the plaintiff cross-appeals from so much of the same judgment aswas entered upon an order of the same court dated May 9, 2014, inter alia, granting thatbranch of the defendants' motion which was for an award of attorneys' fees relating to aprior trial in this action which, at the plaintiff's request, ended in a mistrial, and grantingits motion for pre-verdict interest only to the extent of awarding it pre-verdict interestfrom June 20, 2009, in effect, awarded the defendants attorneys' fees in the sum of$60,000 and awarded it pre-verdict interest only to the extent of awarding such interestfrom June 20, 2009.
Ordered that the appeal from the order dated September 25, 2013, is dismissed; and itis further,
Ordered that the judgment is reversed, on the law, that branch of the defendants'motion which was pursuant to CPLR 4404 (a) to set aside the jury verdict and forjudgment as a matter of law is granted, the complaint is dismissed, the order datedSeptember 25, 2013, is modified accordingly, the order dated May 9, 2014, is vacated,and the matter is remitted to the Supreme Court, Suffolk County, for a new determinationof that branch of the defendants' motion which was for an award of attorneys' fees; and itis further,
Ordered that one bill of costs is awarded to the defendants.
The appeal from the intermediate order dated September 25, 2013, must be dismissedbecause the right of direct appeal therefrom terminated upon the entry of the judgment inthe action (see Matter of Aho, 39 NY2d 241, 248 [1976]). The issues raised onthe appeal from that order are brought [*2]up for reviewand have been considered on the appeal from the judgment (see CPLR 5501 [a][1]).
In this action to recover a real estate broker's commission, the plaintiff, a real estatebrokerage firm, alleged that it was entitled to a commission for the sale of certain realproperty known as the Huntington Town House by the defendants to Lowe's HomeCenters, Inc. (hereinafter Lowe's). The plaintiff acknowledged that there was no writtenbroker's agreement and it was not involved in the final negotiations leading to theultimate sale of the property. It contended, however, that it had an oral agreement withthe defendant Rhona Silver in which a commission was implied. According to theplaintiff, it was the procuring cause of the sale because it generated a chain ofcircumstances that proximately led to the sale, but Silver intentionally excluded it fromthe negotiations in order to avoid the payment of a broker's commission. Following atrial, the jury returned a verdict in favor of the plaintiff.
To prevail on a cause of action to recover a commission, the broker must establish(1) that it is duly licensed, (2) that it had a contract, express or implied, with the party tobe charged with paying the commission, and (3) that it was the procuring cause of thesale (see Stanzoni Realty Corp.v Landmark Props. of Suffolk, Ltd., 19 AD3d 582, 583 [2005]; Steven FineAssoc. v Serota, 273 AD2d 375 [2000]; Friedland Realty v Piazza, 273AD2d 351 [2000]; Ormond Park Realty v Round Hill Dev. Corp., 266 AD2d523, 524 [1999]). "[T]he duty assumed by the broker is to bring the minds of the buyerand seller to an agreement for a sale, and the price and terms on which it is to be made,and until that is done his right to commissions does not accrue" (Sibbald v BethlehemIron Co., 83 NY 378, 382 [1881]). To establish that a broker was the procuring causeof a transaction, the broker must establish that there was "a direct and proximate link, asdistinguished from one that is indirect and remote, between the bare introduction and theconsummation" (Greene v Hellman, 51 NY2d 197, 206 [1980]; see Hentze-Dor Real Estate, Inc. vD'Allessio, 40 AD3d 813, 815-816 [2007]). Where, as here, the broker is notinvolved in the negotiations leading up to the completion of the deal, the broker mustestablish that it " 'created an amicable atmosphere in which negotiationsproceeded or that [it] generated a chain of circumstances that proximately led to thesale' " (Buck v Cimino, 243 AD2d 681, 684 [1997], quoting 2 Warren'sWeed, New York Real Property § 6.01 [4] [a] [4th ed 1998]; see Talk of the Town Realty vGeneve, 109 AD3d 981, 982 [2013]; Zere Real Estate Servs., Inc. v Parr Gen. Contr. Co., Inc., 102AD3d 770, 773 [2013]; Hentze-Dor Real Estate, Inc. v D'Allessio, 40 AD3dat 816; Dagar Group v Hannaford Bros. Co., 295 AD2d 554, 555 [2002];Friedland Realty v Piazza, 273 AD2d 351 [2000]).
The Supreme Court should have granted that branch of the defendants' motion whichwas pursuant to CPLR 4404 (a) to set aside the jury verdict and for judgment as a matterof law. In evaluating the legal sufficiency of the evidence, a reviewing court mustconsider the evidence in the light most favorable to the nonmovant, and afford that partyevery favorable inference that may properly be drawn from the facts presented (seeSzczerbiak v Pilat, 90 NY2d 553, 556 [1997]; Cohen v Hallmark Cards, 45NY2d 493, 499 [1978]; Rumford v Singh, 130 AD3d 1002, 1004 [2015]; Bzezi v Eldib, 112 AD3d772, 774 [2013]). In order to grant judgment as a matter of law, the court mustconclude that there is no valid line of reasoning or permissible inferences which couldpossibly lead rational persons to the conclusion reached by the jury on the basis of theevidence presented at trial (see Szczerbiak v Pilat, 90 NY2d at 556; Cohen vHallmark Cards, 45 NY2d at 499; Tapia v Dattco, Inc., 32 AD3d 842, 844 [2006]; Velez v Goldenberg, 29 AD3d780, 781 [2006]).
Here, there was no valid line of reasoning which could have led to the conclusionthat the plaintiff was the procuring cause of the sale. Viewing the trial evidence in thelight most favorable to the plaintiff, it showed that in 2004, Lowe's regional real estatemanager, Wade Laufenberg, discussed the possibility of acquiring the subject propertywith Barry Newman, who had an ownership interest in the property along with thedefendant Rhona Silver. In order to develop the property in the way Lowe's intended, itwould need certain approvals from the Town of Huntington. At that time, the Townindicated disapproval of the project. Sometime in late 2004, Silver began working withEsther Muller, a broker employed with the plaintiff, to develop condominiums on theproperty, which would require rezoning approval by the Town. By September 2005,Silver decided that she simply wanted to sell the property. Muller's stepson, who workedin the Town's zoning and planning office, suggested to Muller that Silver sell theproperty to Lowe's. Muller gave this information to Faith Hope Consolo, who chaired theplaintiff's retail division. Consolo put together a team that contacted Laufenberg andsuggested that Lowe's purchase the Huntington Town House property. Laufenberg toldthe plaintiff's brokers that he previously had attempted to acquire the [*3]property, and they assured him that they could work out adeal with Silver. According to the plaintiff's brokers, Silver agreed orally that if theycould negotiate a deal with Lowe's, Silver would pay them a commission. The plaintiff'sbrokers further testified that nobody mentioned Barry Newman and they did not knowthat Silver was not the sole owner of the property.
The plaintiff's brokers arranged for a meeting with Laufenberg and Silver onNovember 29, 2005, at which Silver stated that she wanted $38 to $46 million for theproperty and she would not "tie up" the property. On December 13, 2005, Laufenbergsubmitted a proposal to the plaintiff in which Lowe's would purchase the property eitherfor $27 million subject to certain contingencies, or for $17 million with no contingencies.Silver rejected the proposal on the ground that it was too low and she would not acceptany contingencies. On December 30, 2005, Laufenberg submitted a second proposalthrough the plaintiff in which Lowe's would purchase the property for $28 millionsubject to certain contingencies. Silver rejected this proposal on the same grounds as thefirst. On January 30, 2006, Laufenberg submitted a third proposal in which Lowe'swould lease the property for 20 years at a cost of $1.5 million per year. According to theplaintiff's brokers, Silver indicated to them that she would consider this offer and discussit with her accountants, but she never followed through with the brokers or took theiradvice of making a counterproposal to Laufenberg.
Unknown to the plaintiff's brokers, on February 6, 2006, Silver entered into a writtenagreement to sell the property to Dan Shovolian for $37.5 million. By June 6, 2006, thatdeal had unraveled to such an extent that Silver and Newman commenced an action inthe Supreme Court for specific performance on the contract. Sometime in the spring of2006, someone apparently working for Shovolian contacted Laufenberg and representedthat Shovolian was the owner of the Huntington Town House property and wasinterested in making a deal with Lowe's. Laufenberg independently verified thatownership of the property had not been transferred, and he reached out to Newman todiscuss the status of the property. Upon failure of the Shovolian deal, Newman andLaufenberg began negotiations again on the possibility of Lowe's purchasing theproperty. They entered into a contract of sale on February 6, 2007, in which Lowe'sagreed to purchase the property for $38.5 million with no contingencies. Closing of thetitle occurred in June 2007.
There was no valid line of reasoning or permissible inferences from the evidencepresented at trial that could have led the jury to the conclusion that the plaintiff generateda chain of circumstances which proximately led to the subject sale. Contrary to theplaintiff's contention, there was no evidence that the parties were "in the midst ofnegotiations instituted by the broker, . . . which were plainly and evidentlyapproaching success" when Silver purposely excluded the brokers so that she couldconclude the bargain without their aid and avoid payment of commissions about to beearned (Sibbald v Bethlehem Iron Co., 83 NY at 384). To the contrary, theevidence showed that the plaintiff's brokers procured three offers, all of which weresignificantly lower than what Silver indicated she would consider, and those negotiationscame to an end when Silver independently found a buyer willing to pay her asking priceon the terms she sought. When that deal eventually fell through, Newman andLaufenberg, who had worked together in the past, began negotiations, without anybroker intervention, that led to the subject sale. Consequently, the defendants' motion toset aside the jury's verdict should have been granted.
Following the jury's verdict, the defendants moved, inter alia, for an award ofattorneys' fees relating to a prior trial in this action that ended in a mistrial at theplaintiff's request when one of its witnesses became unavailable. The plaintiffcross-appeals, inter alia, from so much of the judgment as, in effect, awarded thedefendants counsel fees relating to the prior trial. Because the trial court's award ofcounsel fees was predicated in part on the plaintiff's ultimate success and because it wasotherwise based upon matter not appearing on the face of the supplemental joint recordon appeal, we vacate the order dated May 9, 2014, awarding counsel fees, and remit thematter to the Supreme Court for reconsideration of that branch of the defendants' motionwhich was for an award of counsel fees relating to the first trial.
In light of our determination, we need not reach the parties' remaining contentions.Dillon, J.P., Dickerson, Hinds-Radix and Maltese, JJ., concur.