Opinion
No. 41574/2010.
12-05-2014
GOLI REALTY CORP., Plaintiff(s), v. John HALPERIN; Peter Halperin; SPJ, LLC ; Amerada Hess Corporation, Defendant(s).
Joseph A. Salvi, Esq, Southampton, attorney for defendants. Dwayne S. Wagner, Esq., Westhampton Beach, attorney for plaintiff.
Joseph A. Salvi, Esq, Southampton, attorney for defendants.
Dwayne S. Wagner, Esq., Westhampton Beach, attorney for plaintiff.
ANDREW G. TARANTINO JR., J.
PROCEDURAL HISTORY
Plaintiff, Goli Realty Corp, commenced this action by Summons and Complaint on November 12, 2010. Plaintiff claimed damages based upon Defendants' failure to pay real estate broker's commissions for a lease procured by Plaintiff. Plaintiff's claims included breach of contract, unjust enrichment, and tortious interference. Defendants filed a Verified Answer on December 16, 2010, in which were pleaded affirmative defenses of Statute of Frauds and Statute of Limitations. A trial without jury was conducted over two days in September 2014. The Court reserved decision.
TESTIMONY
Hossain Amirthmasebi [Amir] has owned, for about 16 years, Goli Realty which is licensed and primarily engaged in commercial real estate with nationally known companies. Amir first met Defendant Halperin in about 1990. In 2006, John Halperin telephoned Amir about securing a gas station lease for land owned by Defendants in Quogue. On June 21, 2006, Halperin emailed Amir a survey of the property for which Halperin was seeking a tenant. Amir began gathering information, prepared a marketing package, and reached out to Hess, Walgreens, and both Chase and Roslyn Banks. Amir stated he worked with Tony Pagano, the realty manager for Hess Corporation. Amir submitted a June 23, 2006, letter he sent to Pagano proposing the subject property for a Hess gas station. Amir had enclosed a data sheet, Hagstrom map site location, survey, traffic count map, zoning map, demographics, gasoline competition map and an aerial picture of the site. On about September 19, 2006, Amir escorted Pagano on a site tour. In a follow-up letter to Pagano dated September 19, 2006, Amir confirmed Hess' interest in proceeding with the subject property. Amir informed Pagano that the owners would not “take less than $180,000 as starting rent” and invited Pagano to discuss the rest of the “economic terms.”
On September 22, 2006, Amir, with Pagano's authorization, sent John Halperin a proposal. The first three (3) pages outlined the basic rent as follows:
Year 1–5$180,000 per year
Year 6–10$198,000 per year
Year 11–15$217,800 per year
Year 16–20$239,580 per year.
The proposal then continued with the following options:
Option 1Year 21–25$263,538 per year
Option 2Year 26–30$289,892 per year
Option 3Year 31–35$318,881 per year
Option 4Year 36–40$350,769 per year
Attached to the proposal was a Commission Agreement which Amir expected Halperin to sign and return. In part, the agreement provided:
“If a lease is signed, it is understood and agreed that our commission shall be computed according to the following formula:
SEVEN percent (7%) of the first three (3) years net rent
FOUR percent (4%) of the each year net rent thereafter
Which shall become due and payable to Goli Realty Corp. in its entirety upon the occupancy of the “Tenant” or the payment of the first month's rent, whichever occurs first.”
Amir testified that after sending Halperin the proposal and commission agreement, Halperin telephoned Pagano directly. On October 3, 2006, Amir received a letter from Defendants' counsel which stated:
“you inquired if SPJ was interested in receiving a proposal for the letting of the property to the Walgreen [sic] chain for the operation of a Walgreen [sic] retail store. John Halperin expressed an interest in receiving such an offer for his review.”
It also stated:
Your proposals are rejected in their entirety; and they are deemed to be without substance, authority and efficacy of any kind.”
On November 2, 2006, Amir responded to the attorney's letter. While contesting statements made by the attorney, Amir wrote
“When John Halperin gave me a listing he didn't limit me to market this property to only one entity.”
Then on November 6, 2006, Amir sent a proposal to John Halperin for a proposed Walgreens Drug Store which provided:
Base Rent$250,000 per annum with 10% increase every 10 year through base term.
Attached was a proposed survey delineating the construction of a pharmacy. On November 15, 2006, Amir sent another letter to Halperin wherein Amir memorialized sending Defendants both the Hess and Walgreens proposals and stated he was awaiting Halperin's decision. Amir said that the Halperins then telephoned and wanted him to proceed with both proposals, while also exploring the purchase of adjacent land to increase the area of the subject property in anticipation of zoning variances.
Amir subsequently learned that Defendants entered into a lease with Hess on September 17, 2007. The lease outlined the basic rent as follows:
Months1–60$15,000.00 per month
Months61–120$16,500.00 per month
Months120–180$18,315.00 per month
Months181–240$20,329.65 per month
Months241–300$25,501.51 per month
Months301–360$25,501.51 per month
The Renewal Options were as follows:
Months361–420$28,816.71 per month
Months421–480$32,562.88 per month
For its next witness, Goli Realty read from the Examination Before Trial taken of Anthony Pagano on November 15, 2013. In pertinent part, Pagano acknowledged that he did authorize the proposal which Amir sent to Halperin. Pagano also acknowledged that he spoke with Peter Halperin after the proposal was sent because Hess does not pay commissions and Halperin needed to work on the commission issue with Amir.
John Halperin [JHalperin] testified next as vice president and co-owner of SPJ, LLC. It was undisputed that SPJ, LLC. owned the subject property. In 2006, a Shell gas station existed on the property, but JHalperin wanted to seek out a new tenant. He knew Amir over the past years having spoken with him, but denies ever having used Amir as a broker. JHalperin stated that is was Amir who made the first call to Halperin about the property. JHalperin claimed that he told Amir that they had a proposal from CVS, and that he told Amir to explore a proposal from Walgreens. JHAlperin then testified that he told Amir that he already
“talked to a number of oil companies and 7–11, Dunkin Donuts and please don't talk to those tenants.”
JHalperin stated that he never asked Goli to solicit an oil company for the property, but that he never placed the restriction in writing.
JHalperin acknowledged negotiating a lease with Hess in 2007. It was a “ground” lease. Because Hess was to construct the building on the property, the rent was delayed to begin March 2010, instead of on the September 17, 2007, lease commencement date. The rent began March 26, 2010. He also described his familiarity with brokers in that the brokers first negotiate the commission agreement before releasing the name of the proposed tenant. He did state, however, it was not uncommon to provide the proposal and commission agreement together as Amir did.
On cross-examination, JHalperin repeated that he was not looking for oil companies, but that he wanted a drug store on the property. He did acknowledge that the rent in the lease he executed with Hess in September 2007, was the same rent in the proposal obtained by Amir.
Peter Halperin [PHalperin] testified next and recalled that Amir represented that he could deliver a Walgreens proposal. He repeated his brother's testimony that in 2006 they were not looking for an oil company for the property because gas stations pay lower rent than drug stores. He described that they were going back and forth with the town zoning board about the size of the proposed drug store when, in early 2007, he heard that the town would not approve a drug store for the property. When Mobil declined to lease the property, PHalperin went to Hess and Pagano. Consistent with his brother's testimony, PHalperin acknowledged that nothing was placed in writing to Amir restricting him from seeking an oil company proposal.
At the conclusion of Halperin's testimony the Court inquired why Defendants did not accept the Walgreens proposal if they were looking for a drug store? Halperin stated they never received an offer, but, after being shown the proposal in evidence, acknowledged it was an offer. He then commented that he did not know why they did not act on the Walgreens proposal. Then he added that they were “advised by counsel” not to sign the Walgreens proposal. When asked by the Court about the terms of the proposed commission agreement, Phalperin only offered that he believed that “Amir's commission is a tad higher” than usual.Both counsel were offered an opportunity to further inquiry of the witness after the Court's questioning.
The last witness was Mohsen Zandieh, who, after reciting his background and experience, was a declared an expert witness for the Plaintiff. Zandieh's testimony was taken out of turn upon the consent of all parties. Zandieh described various types of listings. He also discussed transactions based upon verbal communications and that the commission is earned at the time the deal is procured.
ANALYSIS
A contract implied-in-fact rests upon the conduct of the Parties. Deerkoski v. East 49th Street Development II, LLC, 120 AD3d 1387, 993 N.Y.S.2d 554 (2d Dep't 2014) [where conduct of the parties dispensed with requirement that party had to perform a condition precedent to payment]. An implied-in-fact contract may result as an inference from the facts and circumstances of the case, although not formally stated in words, and is derived from the presumed intention of the parties as indicated by their conduct. Jemzura v. Jemzura, 36 N.Y.2d 496, 330 N.E.2d 414, 369 N.Y.S.2d 400 (N.Y.1975) ; see also, Lapine v. Seinfeld, 31 Misc.3d 736, 918 N.Y.S.2d 313 (SupCt, N.Y. County 2011). A contract implied-in-fact is just as binding as an express contract arising from declared intention. Jemzura, supra, 369 N.Y.S.2d 400. This type of contract still requires such elements as consideration, mutual assent, legal capacity and legal subject matter. Maas v. Cornell University, 94 N.Y.2d 87, 721 N.E.2d 966, 699 N.Y.S.2d 716 (N.Y.1999). The elements of a cause of action for breach of contract are: (1) formation of a contract between the parties: (2) performance by plaintiff; (3) defendant's failure to perform; and (4) resulting damage. Palmetto Partners LLP v. AJW Qualified Partners, LLC, 83 AD3d 804, 921 N.Y.S.2d 260 (2d Dep't 2011) ; See also, Furia v. Furia, 116 A.D.2d 694, 498 N.Y.S.2d 12 (2d Dep't 1986) ; T.H. Cheshire & Sons, Inc. v.. Berry, 37 Misc.3d 1220(A), Slip Copy, 2012 WL 5512544 (Table) County.Ct. Suffolk,2012. In order to make out a claim in quantum meruit, a claimant must establish (1) the performance of the services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services. Candreva v. Ultra Kote Applied Technology, Ltd., 44 AD3d 601, 844 N.Y.S.2d 48 (2nd Dept.2007). See also, Pulver Roofing Co., Inc. v. SBLM Architects, P.C., 65 AD3d 826, 884 N.Y.S.2d 802 (4th Dept.2009) ; Thomas J. Hayes & Associates, LLC v. Brodsky, 101 AD3d 1560, 957 N.Y.S.2d 473 (3d Dept.2012). The plaintiff asserting a valid claim in quantum meruit “recovers the reasonable value of his performance whether or not the defendant in any economic sense benefitted from the performance.” Brennan Beer Gorman/Architects, LLP v. Cappelli Enterprises, Inc., 85 AD3d 482, 925 N.Y.S.2d 25 (1st Dept.2011). Finally, in order to plead a cause of action for unjust enrichment, a plaintiff must allege that (1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered. Genger v. Genger, 38 Misc.3d 1213(A), 2013 WL 221485 (Jan 2013).
In a matter such as this, it is the province and indeed the obligation of the trial court to assess and determine matters of credibility. Morgan v. McCaffrey, 14 AD3d 670, 789 N.Y.S.2d 274 (2d Dep't 2005) ; Matter of Liccione v. John H., 65 N.Y.2d 826, 493 N.Y.S.2d 121 (1985). Under [our] system of adversary litigation, the task of furnishing evidence rests solely upon the parties, neither the judge nor the jury having any obligation or duty in this regard. As a general rule, the party who has the burden of pleading a fact also has the burden of producing evidence and of persuading the trier of fact. Fisch on New York Evidence, Second Edition, § 1087, Lond Publications 1977/2008. “Credible evidence” is the testimony or exhibits that are found to be worthy to be believed. and reasonably tends to support the proposition for which it is offered and is evidentiary in nature and not merely a conclusion of law, nor mere conjecture. Baudille v. Kelly, 31 Misc.3d 1232(A), 932 N.Y.S.2d 759 (N.Y. Supreme, N.Y. County, 2011).Here, the burden is upon the Plaintiff to plead and prove its direct case by a fair preponderance of the credible, relevant and material evidence. Prince–Richardson on Evidence, § 3–210; Torem v. 564 Cent. Ave. Rest., 133 A.D.2d 25, 518 N.Y.S.2d 620 (1st Dep't 1987). Based upon the court's observations of Hossain Amirthmasebi's [Amir's] demeanor, as well as the manner and substantiated nature of his testimony, it finds him to be a credible witness. Based upon the court's observations of John Halperin's and Peter Halperin's demeanor, as well as the manner and unsubstantiated nature of their testimony, it does not find them to be credible.
The Halperins testified that they told Amir that they did not want an oil company for the property. Yet, Peter Halperin testified that he told Amir that Halperin already “talked to a number of oil companies” about leasing the property and that Amir should not “talk to those tenants.” A further assault on Defendants' credibility was their failure to dispute the testimony of Pagano regarding Pagano's telling Halperin that Hess would not pay Amir's commission and that Halperin needed to work on that issue. And, not the least of the credibility issues, was that if Halperin did not want an oil company on the property, why then did they fail to consider the Walgreens proposal? It was after some testimony that Peter Halperin stated that they were “advised by counsel” not to sign the agreement. In the end, and in just a few short months, the Halperins entered into a lease agreement with Hess for the same rent as was offered in the proposal first presented by Amir.
There is no dispute that the Halperins asked Amir to obtain lease offers for the subject property. Halperin then sent Amir a copy of the property survey. Clearly, the agreement for brokerage services was implied-in-fact. Amir then immediately performed his part of the agreement, worked on extensive marketing analyses, and procured both a Hess proposal and a Walgreens proposal to lease the property. Amir expected to be paid for his services. The circumstances were such that an agreement was derived from the presumed intention of the parties as indicated by their conduct. Accordingly, whether by implied contract, or based upon quantum meruit, Plaintiff is entitled to payment for its services. The only measure of the value of Amir's services was the proposed commission agreement which both he, and his expert, testified was customary in the industry. The only defense to the commission structure was an unsubstantiated belief that is was a “tad” higher than usual. The terms of the commission agreement provided that the commission is due and payable in full based upon the rent (excluding the option periods) upon the occupancy of the tenant or the payment of the first month's rent, whichever occurs first. Based upon the agreement, and the rents projected for years 1 through 30, Amir is owed TWO HUNDRED NINETY THREE THOUSAND NINE HUNDRED SIXTY TWO DOLLARS ($293,962.00).
Amir has also established his claim based upon unjust enrichment. Defendants were enriched by avoiding payment of a real estate broker's commission at Amir's expense. It is against equity and good conscience to permit the Defendants to retain what is sought to be recovered
Although Amir has established his case against SPJ, LLC, as owner of the property, he failed to establish, at this time, a cognizable claim against John Halperin and Peter Halperin individually. Also, without an agreement that Hess is liable for the commission, Amir failed to establish a claim against Hess.
Based upon the above, it is
ADJUDGED and ORDERED that the action against John Halperin, Peter Halperin and Amerada Hess Corporation is dismissed upon the grounds that Plaintiff failed to proved a claim against these parties by a preponderance of the evidence; and it is further
ADJUDGED and ORDERED that Plaintiff has proven by a preponderance of the credible evidence that based upon breach of an implied contract, quantum meruit, and unjust enrichment, it has been damaged in the sum of TWO HUNDRED NINETY THREE THOUSAND NINE HUNDRED SIXTY TWO DOLLARS ($293,962.00), together with statutory interest from March 26, 2010, when the first rent was paid to Defendant, together with costs and disbursements; and it is further
ADJUDGED and ORDERED that Plaintiff, in accordance with the commission agreement, shall be entitled to such additional commissions when and if the lessor, Amerada Hess, exercises its option to extend the lease.
This constitutes the decision and order of the Court.
Submit Judgment.