R.E. Broker Liability

Estrada v. Metropolitan Property Group, Inc.

Court: Supreme Court of New York, Appellate Division, First Department
Index #: (not available)
Citation: 2013 N.Y. Slip Op. 06639
Plaintiff: Brian Estrada
Defendant: Metropolitan Property Group, Inc., et al.

Facts: Plaintiff had previously pursued a claim in the lower court against the Defendant, a broker, for fraud and misrepresentation pertaining to the size of an apartment that the Plaintiff had purchased. The apartment was advertised by the Defendant to be of a greater square footage than the actual size, and the Plaintiff claimed to have relied on the Defendant's representation of the apartment's size in deciding to purchase the apartment. The lower court, in dismissing the Plaintiff's complaint, stated that the Plaintiff failed to do his due diligence and the reliance on the representation by the Defendant was not reasonable. The Plaintiff is appealing the lower court's ruling.

Holding: The Appellate Court, in agreement with the lower court, dismissed the Plaintiff's appeal. The Court stated that the Plaintiff could not have reasonably relied on the alleged misstatements about the apartment's square footage in deciding to purchase the apartment. The Court reasoned that the advertisements by the Defendant, which had a discrepancy in the apartment's square footage, should have alerted the Plaintiff that the advertisements were inaccurate with respect to the square footage and merely sales puffery. Therefore, the Plaintiff should have taken the opportunity to inspect the apartment before agreeing to purchase it.

Submitted:Michelle Maratto Itkowitz, Esq , http://www.itkowitz.com

Precis: Faisal Sheikh


Excel Realty Advisors, LP v. Engel Burman Group, LLC

Court: Supreme Court, Appellate Division, Second Department
Citation: ___ AD3d ___, ___ NYS2d ___, 2015 NY Slip OP. 08804 (2nd Dept., 2015)

Facts: The Plaintiff commenced this action, alleging that it was entitled to compensation for the services it provided, among other things, procuring a joint-venture partner for the Defendant Engel Burman Group, LLC, also known as Engel Burman Group (hereinafter referred to as “Engel Burman”), in certain transactions related to the purchase of assisted-living facilities. The complaint alleged that the Plaintiff produced the Defendant Harrison Street Real Estate Capital, LLC (hereinafter referred to as “Harrison Street”), as the joint-venture partner for Engel Burman. The complaint further alleged that the Plaintiff had a "broker agreement" with Engel Burman, whereby Engel Burman agreed to pay the Plaintiff a commission of 2% of the total dollar value of any transaction involving the purchase, development, or financing by the joint venture of any assisted-living facilities. Engel Burman moved for summary judgment, dismissing various causes of action. The Supreme Court granted the Defendant’s motion. Plaintiff appealed.

Holding:The Appellate Division affirmed the Supreme Court’s ruling.

In order to be entitled to recover a broker's commission, a real estate broker must establish, among other things, that it was the procuring cause of the sale. In this case, the causes of action that alleged breach of contract, Engel Burman established that the Plaintiff was not a "procuring cause" of Engel Burman's purchase of certain assisted-living facilities as part of a joint venture with Harrison Street. In opposition, the Plaintiff failed to raise a triable question of fact on that issue.

The Plaintiff contended that the Supreme Court erred by reading the first and second causes of action, as seeking only to recover a real estate broker's commission because it was, in fact, entitled to a finder's fee for its services in bringing Engel Burman and Harrison Street together. However, to be entitled to a finder's fee, the Plaintiff would have to prove that it had an "express, special agreement to act solely as a finder." In opposition to Engel Burman's prima facie showing of entitlement to judgment as a matter of law dismissing the first and second causes of action, the Plaintiff failed to raise a triable issue of fact that it did have such an agreement. Accordingly, the Supreme Court properly granted those branches of Engel Burman's motion, which were for summary judgment dismissing the first cause of action, and the second cause of action insofar as asserted against it.

The Supreme Court also properly granted those branches of Engel Burman's motion which were for summary judgment, dismissing the causes of action alleging unjust enrichment and seeking recovery in quantum meruit. Entitlement to a finder's fee requires an express contract, but recovery based on quantum meruit is predicated on an implied contract. The Plaintiff alleged entitlement to a finder's fee based on an express oral contract, and he is not entitled to recover a finder's fee in quantum meruit. As to the cause of action alleging unjust enrichment, the Plaintiff failed, in opposition to Engel Burman's prima facie showing, to raise a triable issue of fact as to whether Engel Burman was enriched at the Plaintiff's expense.

Prevailing Attorneys:Rosenberg, Calica & Birney, LLP www.rcblaw.com

Precis: Faisal Sheikh


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