| Saunders Ventures, Inc. v Catcove Group, Inc. |
| 2017 NY Slip Op 05109 [151 AD3d 991] |
| June 21, 2017 |
| Appellate Division, Second Department |
[*1]
| Saunders Ventures, Inc., Doing Business as Saunders andAssociates, Appellant, v Catcove Group, Inc., et al.,Respondents. |
Conforti & Waller, LLP, Southampton, NY (Anthony T. Conforti and KennethCooperstein of counsel), for appellant.
Marcus Rosenberg & Diamond, LLP, New York, NY (David Rosenberg of counsel), forrespondents.
In an action to recover a real estate brokerage commission, the plaintiff appeals from (1) anorder of the Supreme Court, Suffolk County (Whelan, J.), dated December 4, 2014, which deniedits motion for summary judgment on the complaint and granted the defendants' cross motion forsummary judgment dismissing the complaint, and (2) a judgment of the same court enteredMarch 16, 2015, which, upon the order, is in favor of the defendants and against it dismissing thecomplaint.
Ordered that the appeal from the order is dismissed; and it is further,
Ordered that the judgment is modified, on the law, by deleting the provision thereofdismissing the complaint in its entirety and substituting therefor a provision dismissing only thesecond cause of action; as so modified, the judgment is affirmed, that branch of the defendants'cross motion which was for summary judgment dismissing the first cause of action is denied, andthe order is modified accordingly; and it is further,
Ordered that one bill of costs is awarded to the plaintiff.
The appeal from the order must be dismissed because the right of direct appeal therefromterminated with the entry of the judgment in the action (see Matter of Aho, 39 NY2d 241[1976]). The issues raised on the appeal from the order are brought up for review and have beenconsidered on the appeal from the judgment (see CPLR 5501 [a] [1]).
The plaintiff is a licensed real estate brokerage firm. The defendants are the former owners ofparcels of vacant real property located in Southampton (hereinafter the subject property), whichhad been identified by the Peconic Estuary Program as high priority for preservation andprotection.
By letter agreement dated July 17, 2009, the plaintiff and the defendants entered into anonexclusive brokerage agreement for a period of 120 days concerning the sale of the subject[*2]property at the listed price of $8 million. The brokerageagreement provided that the plaintiff would be entitled to a commission of 6% of the purchaseprice upon closing, from the proceeds of the sale.
The brokerage agreement also included an extension clause, or "tail provision," which iscommonly included in a real estate listing contract to protect a broker from loss of compensationwhen a property is sold by the owner after the termination of the listing contract to a person whowas introduced to the property by the broker (see Ackerman v Dobbs, 181 AD2d 704[1992]; Picotte Real Estate v Gaughan, 107 AD2d 996, 997 [1985]). The extensionclause provided that "[a]t the end of the term, [the defendants] will either mutually extend theagreement or [the plaintiff] should provide a written list . . . of any activelyinterested purchasers and [the plaintiff] will be protected for a period of one year thereaftershould a closing take place with [the plaintiff's] registered client."
Prior to the expiration of the brokerage agreement, in August 2009, the plaintiff's broker, LeeMinetree, arranged and attended a meeting with representatives of the defendants, The NatureConservancy of Long Island (hereinafter TNC) and the County of Suffolk, to discuss theacquisition of the subject property by the County via a "bargain sale," with TNC serving as anintermediary. According to the plaintiff, the subject property would first be conveyed by thedefendants to TNC, the intermediary, for a purchase price less than the appraised fair marketvalue, and the subject property then would be conveyed by TNC to the County, the ultimatepurchaser. Once completed, the seller would receive the bargained-for sale price for its propertyand then take a charitable deduction in an amount equal to the difference between the appraisedfair market value and the actual consideration received from the sale. After the initial meeting,the County made a formal offer to the defendants for the purchase of the subject property. Asnegotiations progressed, contracts for the two-part sale were drafted.
In January 2010, the plaintiff provided the defendants with two lists of prospectivepurchasers, which included the Peconic Land Trust (hereinafter PLT), TNC, and the County. Asevidenced by a document signed only by the plaintiff's broker on August 2, 2010, the brokeragecommission the plaintiff was willing to accept was purportedly reduced from 6% to 4%.
In or around September 2010, the defendants replaced TNC with PLT as the intermediary.On September 21, 2010, the defendants and PLT executed a contract of sale for the subjectproperty. This contract, as amended on January 26, 2011, and further amended in June 2011,closed on August 31, 2011. One week later, PLT conveyed six parcels, consisting of 13.9026acres, to the County for the purchase price of $2,432,955.
The plaintiff commenced this action against the defendants in December 2011, allegingbreach of contract and unjust enrichment. The plaintiff alleged that it was entitled to recover thesum of $97,318.20, representing a 4% commission on the sale of the subject property, since itwas the procuring cause of the sale, and that the defendants would be unjustly enriched shouldthey be permitted to keep the entire proceeds of the sale. The plaintiff subsequently moved forsummary judgment on the complaint and the defendants cross-moved for summary judgmentdismissing the complaint. The Supreme Court granted the defendants' cross motion, denied theplaintiff's motion, and dismissed the complaint. The plaintiff appeals.
"To prevail on a cause of action to recover a commission, the broker must establish (1) that itis duly licensed, (2) that it had a contract, express or implied, with the party to be charged withpaying the commission, and (3) that it was the procuring cause of the sale" (Douglas Elliman, LLC v Silver, 136AD3d 658, 659 [2016]; see Town & Country Southampton v Grey, 299 AD2d541, 541 [2002]). "Where the broker is not involved in the negotiations leading up to thecompletion of the deal, the broker must establish that [it] created an amicable atmosphere inwhich negotiations proceeded or that [it] generated a chain of circumstances that proximately ledto the sale" (Dagar Group v Hannaford Bros. Co., 295 AD2d 554, 555 [2002])."Although as a general rule a real estate broker will be deemed to have earned a commissionwhen the broker produces a purchaser who is ready, willing, and able to purchase the property onterms acceptable to the seller, the broker's right to a commission may be varied by agreement"(Pantigo Realty v Estate of Schrenko, 249 AD2d 525, 525 [1998]).
[*3] Here, the Supreme Court improperly granted that branch ofthe defendants' cross motion which was for summary judgment dismissing the first cause ofaction, which was to recover damages for breach of contract. Contrary to the court's conclusionthat, as a matter of law, the closing had to take place by the end of the one-year protection period,i.e., November 14, 2010, there is an ambiguity in the brokerage agreement as to whether thecommission was to be earned when the contract of sale was executed or only upon a successfulclosing within the one-year period set forth in the extension clause (see Feinberg Bros.Agency v Berted Realty Co., 70 NY2d 828 [1987]; Steve Elliot, LLC v Teplitsky, 59 AD3d 523 [2009]; Sopher vMartin, 243 AD2d 459 [1997]). This ambiguity should be decided by a trier of fact (seeGreiner-Maltz Co. v Kalex Chem. Prods., 142 AD2d 552 [1988]). There is also a triableissue of fact as to whether the plaintiff was the procuring cause of the sale by creating anamicable atmosphere in which negotiations proceeded or generating a chain of circumstances thatproximately led to the sale (see Dagar Group v Hannaford Bros. Co., 295 AD2d at554).
Alternatively, if the plaintiff cannot establish that it was the procuring cause of the sale, itnevertheless may be entitled to recover a commission if the defendants terminated the plaintiff'sactivities in bad faith and as a mere device to escape the payment of the commission (seeWerner v Katal Country Club, 234 AD2d 659 [1996]). A triable issue of fact exists as towhether the defendants terminated negotiations with TNC in bad faith so as to deprive theplaintiff of a commission (see Trylon Realty Corp. v Di Martini, 40 AD2d 1029 [1972],affd 34 NY2d 899 [1974]). Accordingly, we reinstate the first cause of action.
The Supreme Court, however, properly granted that branch of the defendants' cross motionwhich was for summary judgment dismissing the second cause of action, which was to recoverdamages for unjust enrichment. "The existence of a valid and enforceable written contractgoverning a particular subject matter ordinarily precludes recovery in quasi contract for eventsarising out of the same subject matter" (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70NY2d 382, 388 [1987]). Here, there is no dispute as to the existence of a valid written contractwhich details the circumstances under which the plaintiff would be entitled to a commission.Thus, the Supreme Court properly dismissed the second cause of action.
The plaintiff's remaining contentions are without merit. Mastro, J.P., Dillon, Roman andBrathwaite Nelson, JJ., concur. [Prior Case History: 45 Misc 3d 1226(A), 2014 NY Slip Op51734(U).]