Opinion
655168/2018
06-23-2020
HOPKINSON ASSOCIATES LLC, Plaintiff, v. GREENWICH VILLAGER COMPANY, L.P., Defendant.
McLaughlin & Stern, LLP, New York, NY (Alan E. Sash of counsel), for plaintiff. Bragar Eagel & Squire, P.C., New York, NY (Raymond A. Bragar of counsel), for defendant.
McLaughlin & Stern, LLP, New York, NY (Alan E. Sash of counsel), for plaintiff.
Bragar Eagel & Squire, P.C., New York, NY (Raymond A. Bragar of counsel), for defendant.
Gerald Lebovits, J.
Plaintiff Hopkinson Associates LLC sued defendant Greenwich Villager Company L.P. for allegedly failing to pay plaintiff $249,855.01 in brokerage commission. Defendant moves under CPLR 3212 for summary judgment dismissing plaintiff's amended complaint. Plaintiff cross-moves under CPLR 3212 for summary judgment awarding it the commission plus interest.
BACKGROUND
Steven Jacobson is a licensed real-estate broker and plaintiff's managing member. Defendant owns and manages real estate property. In December 2013, Jacobson found a vacant retail space in the West Village in Manhattan, which was owned and operated by defendant. Jacobson also found a potential tenant for the space, a local charter school operated by nonparty Rajesh Bhatt. Bhatt formed an entity called 644WV LB to serve as the formal tenant under a lease with defendant. Jacobson called Joshua Roth, defendant's head of retail leasing, to notify him that he had an interested party. Roth gave Jacobson permission to show the retail space. Roth, Jacobson, and Bhatt toured the retail space multiple times in or around January 2014.
On February 3, 2014, Jacobson sent a letter of intent to Roth on Bhatt's behalf. The letter stated that Bhatt was interested in renting the retail space and that defendant was responsible for paying a brokerage commission to plaintiff. Roth sent a draft of a commission agreement to Jacobson in July 2014. The draft provided that defendant would pay plaintiff $249,855.01 in commission. Jacobson agreed on the total commission to be paid but proposed additional edits to which defendant did not agree.
Plaintiff and defendant continued to work together without a written contract. On January 13, 2015, and March 4, 2015, Jacobson sent emails to defendant with proposed commission agreements. Both draft contracts called for defendant to pay plaintiff $249,855.01 in commission. The first $62,403.75 of that sum would be paid after the Board of Standards and Appeals ("BSA") granted a necessary special permit allowing 644WV LB to use the retail space for its desired use as a pre-school facility.
On February 26, 2015, defendant and 644WV LB signed a lease for the space. The lease provided that it would commence, and 644WV LB would owe rent to defendant, only once the BSA granted the necessary special permit. The lease, as amended in October 2015, also provided that if no permit were obtained within a specified period, the lease would be declared null and void. The BSA did not grant the permit. As a result, on January 20, 2016, 644WV LB terminated the lease without ever paying rent. Defendant therefore declined to pay plaintiff a brokerage commission.
Plaintiff sued defendant, seeking its commission of $249,855.01. Defendant now moves for summary judgment under CPLR 3212 dismissing plaintiff's claims. Plaintiff cross-moves for judgment in its favor awarding the claimed commission plus interest.
Defendant's motion for summary judgment is granted. Plaintiff's cross-motion is denied.
DISCUSSION
A party moving for summary judgment "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact." ( Jacobsen v New York City Health & Hospitals Corp. , 22 NY3d 824, 833 [2014], citing Alvarez v Prospect Hosp. , 68 NY2d 320, 324 [1986].) Once the movant has shown prima facie of entitlement, the burden then shifts to the opposing party to produce "evidentiary proof in admissible form sufficient to require a trial of material questions of fact." ( Fair v Fuchs , 219 AD2d 454, 455 [1st Dept 1995].)
A "broker is not entitled to commissions for unsuccessful efforts." ( Orenstein v Brum , 27 AD3d 352, 353 [1st Dept 2006].) For example, when a prospective tenant and landlord enter into a lease conditioned upon the occurrence of a contingency (e.g. , approval of the fee owners or obtaining a special permit) and the contingency does not occur, the broker is not entitled to commission on the lease unless the parties have agreed otherwise. (See Brodskey v Gazzola , 183 AD2d 1051, 1052 [3d Dept 1992] ; Stanton v Spearman , 16 AD2d 837, 837-838 [2d Dept 1962] ; Hubbard v Tobin , 15 Misc 2d 65, 67-68 [Sup Ct, Westchester County 1958] ; see also Geller v New England Indus., Inc. , 535 F2d 1381, 1385-1386 [2d Cir 1976] [applying New York law].) Here, the lease provided that it would not commence until the BSA had issued the necessary special permit, and that failure to obtain the permit within a specified period of time would void the lease. And it is undisputed that the prospective tenant terminated the lease before it commenced due to the failure to obtain the permit from the BSA. This court concludes as a matter of law that in these circumstances plaintiff does not have a common-law right to a brokerage commission.
Plaintiff contends that it became entitled to a commission merely upon execution of the lease on the terms agreed by the parties, whether or not the lease was later terminated because the premises could not be used by the tenant. But the lease itself made the tenant's ability to use the premises a key term of the agreement. The parties' failure to satisfy that term (through no fault of defendant here) ousted plaintiff's common-law right to a commission. (See David Day Realty, Inc. v Farkas , 75 AD2d 783, 783 [1st Dept 1980] [finding that broker did not earn a commission on the sale of a building where, among other things, "the prospective purchasers conditioned the purchase upon an examination of the premises by a structural engineer which examination never occurred"]; Stanton , 16 AD2d at 837-838 [holding that where a proposed sale was made subject to a contingency that did not come to pass, the broker would not be entitled to a commission unless the sellers had assumed the risk of the sale's failing to go through].) Indeed, plaintiff's own proposed commission agreement provided that plaintiff would not receive the first installment of the commission until the BSA granted the necessary special merit.
Plaintiff also asserts a quantum meruit claim to the commission. But to recover in quantum meruit, a plaintiff must prove an expectation of compensation for the services it rendered. (See Soumayah v Minnelli , 41 AD3d 390, 391 [1st Dept 2007].) Here, as discussed above, plaintiff lacked that expectation. The special-permit condition of the lease was not satisfied.
Accordingly, it is hereby
ORDERED that defendant's motion under CPLR 3212 for summary judgment dismissing the complaint is granted and the complaint is dismissed, with costs and disbursements to be taxed by the Clerk of the Court upon submission of an appropriate bill of costs; and it is further
ORDERED that plaintiff's cross-motion under CPLR 3212 for summary judgment in its favor is denied; and it is further
ORDERED that defendant shall serve a copy of this order with notice of its entry on plaintiff and on the office of the General Clerk and on the office of the County Clerk, which shall enter judgment accordingly.