Opinion
2544/08.
Decided on April 17, 2009.
Poltorak Associates, PC, Brooklyn NY, Defendant Northbrook, Wrobel Schatz LLP, NY NY, Plaintiff.
Plaintiff, KOPELOWITZ CO., INC. (KOPELOWITZ), a real estate sales, investment and financing company, alleges that it is entitled to a "finder's fee" of at least $35,000,000.00 from all defendants, resulting from a group of limited liability companies controlled by defendant MAURICE MANN (MANN), purchasing nine New York City residential properties from A.V.J. REALTY CORP. (AVJ), a real estate holding company, and its subsidiaries, owned by the Racolin and Martinson family (THE RACOLINS). Defendants NORTHBROOK PARTNERS, LLC and NORTHBROOK MANAGEMENT, LLC (collectively known as NORTHBROOK) move, pursuant to CPLR Rule 3211 (a) (1) and (7), to dismiss plaintiff's complaint against them. Plaintiff KOPELOWITZ opposes. The Court grants the motion of the NORTHBROOK defendants in its entirety. All eleven causes of action against NORTHBROOK are dismissed. Plaintiff only asserts a contract with MANN, not NORTHBROOK. Plaintiff does not allege that KOPELOWITZ or THE RACOLINS ever had any relationship, contractual or otherwise, or any dealings with NORTHBROOK. Further, plaintiff's other causes of action are duplicative, legally improper, and merely attempt to avoid the infirmities of its breach of contract claims.
Background
Plaintiff alleges that its right to a "finder's fee" derives from a letter agreement, dated May 31, 2007 [exhibit A attached to the complaint]. The letter agreement, on KOPELOWITZ's letterhead, is from Aron Kopelowitz, on behalf of KOPELOWITZ, to MANN. It states that it is about the proposed sale of the AVJ properties owned by THE RACOLINS. Further, that it is a "confidentiality agreement . . . between the parties that enter into the agreement" and:
It is hereby agreed that Kopelowitz and Co. Inc introduced Maurice Mann, Mann Realty and any other entities associated with same; to above referenced properties, entities and individuals. Therefore in the event of any transaction Kopelowitz Co. Inc shall be entitled to appropriate compensation .In addition, the undersigned will be responsible of any willful or negligent breaches of this agreement. [sic]
MANN signed the agreement below "Agreed Accepted."
KOPELOWITZ is not a licensed real estate broker. Plaintiff's counsel admits this in p. 10 of his memorandum of law in opposition to the instant motion to dismiss.
Plaintiff alleges, in its verified complaint, that in May 2008 it "was approached by an intermediary on behalf of the Racolins as a potential buyer for AVJ [¶ 15]." Then, plaintiff alleges that it estimated the value of the properties at $375,000,000.00 [¶ 16] and sought, if were unable to directly participate in the purchase from THE RACOLINS, "to profit by introducing a potential purchaser to the Acquisition and collecting a finder's fee [¶ 17]." "Plaintiff approached Mann as a potential partner to acquire AVJ [¶ 19]." KOPELOWITZ claims that in reliance upon MANN's representations in the May 31, 2007 letter agreement, and oral representations by Mann, "to the effect that Plaintiff would profit from any Acquisition as either a partner in the Acquisition or by collecting a significant finder's fee, Plaintiff refrained from pursuing the Acquisition with the other willing potential partners [¶ 28]." Further, KOPELOWITZ alleges that it "reasonably expected and understood, based upon its familiarity with industry custom and Mann's representations, to realize a significant profit certainly in the millions of dollars in the event that the Acquisition was consummated, whether or not Plaintiff would be a partner in the actual acquisition [¶ 29]."
Then, the verified complaint mentions various offers for the AVJ properties. Plaintiff alleges that the "Acquisition closed on January 11, 2008 [¶ 37]," "for a final purchase price in excess of $349,000,000.00 [¶ 38]," and that "a series of news stories reported that Mann and Northbrook had acquired AVJ [ ¶ 46]." KOPELOWITZ, in ¶ 's 47 — 50, claims that NORTHBROOK is a real estate investment, development and management company founded by MANN, and "associated with" MANN. Further, the verified complaint alleges that various recorded real property documents for the AVJ acquisition "show a tangle of interrelated L.L.C.s [¶ 52]," in which the defendants were involved "in furtherance of Defendants' conspiracy to defraud Plaintiff and to deprive Plaintiff of the compensation owing to it pursuant to the Agreement [¶ 58]."
KOPELOWITZ alleges [¶ 's 41 — 44] that it finally met with MANN, on January 21, 2008, to discuss "appropriate compensation" for the acquisition of the nine properties from THE RACOLINS. MANN offered KOPELOWITZ $5,000.00 and plaintiff "rejected Mann's insulting offer [¶ 44]."
Based upon these assertions, plaintiff KOPELOWITZ alleges eleven causes of action against all defendants, including NORTHBROOK:
(1) Breach of contract by disclosure of confidential information (first cause of action);
(2) Breach of contract by failing to compensate plaintiff (second cause of action);
(3) Fraudulent inducement to enter agreement (third cause of action);
(4) Fraud in obtaining confidential information (fourth cause of action);
(5) Unjust enrichment (fifth cause of action);
(6) Quantum meruit (sixth cause of action);
(7) Breach of fiduciary duty (seventh cause of action);
(8) Constructive trust (eighth cause of action);
(9) Conspiracy to defraud (ninth cause of action);
(10) Detrimental reliance (tenth cause of action); and,
(11) Fraudulent inducement (eleventh cause of action).
NORTHBROOK's motion to dismiss, for the reasons to follow, is granted in its entirety. Plaintiff's hodgepodge of claims against the NORTHBROOK defendants, non-signatories to the May 31, 2007 letter agreement, and with whom KOPELOWITZ has no relationship, fail as a matter of law.
Motion to dismiss standards
"When determining a motion to dismiss, the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory' ( see Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Milstein, Felder Steiner, 96 NY2d 300, 303; Leon v Martinez, 84 NY2d 83, 87-88)." ( Goldman v Metropolitan Life Ins. Co. , 5 NY3d 561 , 570-571). Further, the Court, in Morris v Morris ( 303 AD2d 449, 451 [2d Dept 2003]), instructed that:
In determining whether a complaint is sufficient to withstand a motion pursuant to CPLR 3211 (a) (7), "the sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail" ( Guggenheimer v Ginsburg, 43 NY2d 268, 275 [1977]. The court must accept the facts alleged in the complaint to be true and determine only whether the facts alleged fit within any cognizable legal theory [ see Dye v Catholic Med. Ctr. of Brooklyn Queens, 273 AD2d 193 [2000]. However, bare legal conclusions are not entitled to the benefit of the presumption of truth and are not accorded every favorable inference [ see Doria v Masucci, 273 AD2d 193 [2000]. When the moving party offers evidentiary material, the court is required to determine whether the proponent of the pleading has a cause of action, not whether [he or] she has stated one[ see Meyer v Guinta, 262 AD2d 463, 464 [1999]. Likewise, to succeed on a motion to dismiss pursuant to CPLR 3211 (a) (1), the documentary evidence which forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim ( see Trade Source v Westchester Wood Works, 290 AD2d 437 [2002]. [Emphasis added].
( See Euell v Incorporated Village of Hempstead , 57 AD3d 837 [2d Dept 2008]; GuideOne Speciality Ins. Co. v Admiral Ins. Co. , 57 AD3d 611 [2d Dept 2008]; Ruffino v New York City Transit Authority, 55 AD3d 817 [2d Dept 2008]; Katz v Katz , 55 AD3d 680 [2d Dept 2008]; Breytman v Olinville Realty, LLC , 54 AD3d 703 [2d Dept 2008]; NCJ Cleaners, LLC v ALM Media, Inc. , 48 AD3d 766 [2d Dept 2008])
In the instant action, plaintiff's causes of action fail to allege any material facts giving rise to any cognizable claim against NORTHBROOK and are contradicted by the documentary evidence. "Bare legal conclusions and factual claims which are flatly contradicted by the record are not presumed to be true ( see Morone v Morone, 50 NY2d 481; Kupersmith v Winged Foot Golf Club, Inc. 38 AD3d 847 [2d Dept 2007]; Meyer v Guinta, 262 AD2d 463 [2d Dept 1999])." ( Parola, Gross Marino, P.C. v Susskind , 43 AD3d 1020 [2d Dept 2007]). ( See Maas v Cornell University, 94 NY2d 87, 91; Dinerman v Jewish Board of Family Children's Service, Inc. , 55 AD3d 530 , 531 [2d Dept 2008]).
Dismissal of Plaintiff's first and second causes of action
Plaintiff's first and second causes of action for breach of contract fail for lack of privity between KOPELOWITZ and NORTHBROOK. Plaintiff's claims are based upon the May 31, 2007 letter agreement between Aron Kopelowitz, for KOPELOWITZ, and MANN. NORTHBROOK is not a signatory to the letter agreement.
Further, the May 31, 2007 letter agreement is not enforceable. It is clear that the parties, KOPELOWITZ and MANN, had not reached any agreement upon essential terms, such as what "transaction" would entitle plaintiff to payment, what "appropriate compensation" would be, what work plaintiff would have to do to receive payment, and when the payment would be made. "It is rightfully well settled in the common law of contracts in this State that a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable." ( Joseph Martin, Jr. Delicatessen, Inc. v Schumacher, 52 NY2d 105, 109). ( See Express Industries and Terminal Corp. v New York State Dept. of Transp., 93 NY2d 584, 589; Willmott v Giarraputo, 5 NY2d 250, 253). "A contract is unenforceable where there is no meeting of the minds between the parties regarding a material element thereof ( see Brands v Urban, 182 AD2d 287 [2d Dept 1992])." ( Computer Associates Intern., Inc. v U.S. Balloon Mfg. Co., Inc ., 10 AD3d 699 , 700 [2d Dept 2004]). Contracts missing essential terms such as the time or the manner of performance or the price to be paid are unenforceable. ( Cleveland Wrecking Co., v Hercules Const. Corp., 23 F Supp2d 287, 292 [ED NY 1998]). "As price is an essential ingredient of every contract for the rendering of services, an agreement must be definite as to compensation." ( Cooper Square Realty, Inc. v A.R.S. Management, Ltd., 181 AD2d 551 [1d Dept 1992]).
Moreover, there is no privity between KOPELOWITZ and NORTHBROOK. Plaintiff's May 31, 2007 letter agreement was only with MANN. NORTHBROOK was not a party to the May 31 letter agreement. "Plaintiffs may not maintain a cause of action for breach of contract against those parties with whom they were not in privity." ( La Barte v Seneca Resources, Corp., 285 AD2d 974, 975 [4th Dept 2001]). "As a general rule, privity or its equivalent remains the predicate for imposing liability for nonperformance of contractual obligations." ( Smith v Fitzsimmons, 180 AD2d 177 [4th Dept 1992]). It is of no avail for plaintiff to argue that the May 31, 2007 letter agreement states that "Kopelowitz and Co. Inc introduced Maurice Mann, Mann Realty and any other entities associated with same" to the AVJ properties and that NORTHBROOK is allegedly associated with MANN. Not only does the May 31, 2007 letter agreement not purport to be an agreement by NORTHBROOK, but it makes clear that "the undersigned [MANN] will be responsible of any willful or negligent breaches of this agreement." The lack of privity between KOPELOWITZ and NORTHBROOK clearly demonstrates that the first and second causes of action for breach of contract must be dismissed. ( See Arthur Glick Leasing, Inc. v William J. Petzold, Inc. , 51 AD3d 1114 [3d Dept 2008]; Black Car Livery Ins., Inc. v H W Brokerage, Inc. , 28 AD3d 595 [2d Dept 2006]; HDR, Inc. v International Aircraft Parts, Inc., 257 AD2d 603 [2d Dept 1999]; Blank v Noumair, 239 AD2d 534 [2d Dept 1997]; W.H. Brownyard Corp. v American Intern. Group, Inc., 237 AD2d 655 [2d Dept 1997]; National Survival Games of NY v NSG of LI Corp., 169 AD2d 760 [2d Dept 1991]).
Further, the May 31, 2007 letter agreement was drafted by plaintiff. "[A]ny ambiguity in contract language must be construed against the party that drafted the contract, which in this instance was the plaintiff ( see Matter of Cowen Co. v Anderson, 76 NY2d 318)." ( Computer Associates Intern., Inc. v U.S. Balloon Mfg. Co., Inc., supra, at 700). The Court of Appeals instructed, in 67 Wall Street Co. v Franklin Natl. Bank ( 37 NY2d 245, 249), that "a contract must be construed most strongly against the party who prepared it and favorably to a party who had no voice in the selection of its language." The ambiguous, undefined and facially innocuous phrase "and any other entities associated with same" is not a basis to hold NORTHBROOK, an unidentified non-signatory, liable for obligations that are not even included in the sentence containing the phrase. ( See Jacobson v Sassower, 66 NY2d 991, 993; Medallion Auto, Inc. v Sanders, 272 AD2d 85 [1d Dept 2000]; Garrick-Aug Associates Store Leasing, Inc. v Wien, 271 AD2d 344, 345 [1d Dept 2000]
Next, the failure of the May 31, 2007 writing to include a specific agreement concerning compensation is fatal to plaintiff's breach of contract claims. The language of the May 31, 2007 letter agreement, for payment of "appropriate compensation" to plaintiff, is too vague. "[I]n a contract action a memorandum sufficient to meet the requirements of the Statute of Frauds [General Obligations Law § 5-701 (a) (10)] must contain expressly or by reasonable implication all the material terms of the agreement, including the rate of compensation if there has been agreement on that matter." ( Morris Cohon Co. v Russell, 23 NY2d 569, 575). ( See Davis Mamber, Ltd. v Adrienne Vittadini, Inc. 212 AD2d 424, 424-425 [1d Dept 1995]; Blye v Colonial Corp. of America, 102 AD2d 297, 299 [1d Dept 1984]
Dismissal of plaintiff's third, fourth, ninth and eleventh causes of action
Plaintiff's third, fourth, ninth and eleventh causes of action, all sounding in fraud, fail because they are inadequately pled and duplicative of the breach of contract claims. "The elements of fraud are narrowly defined, requiring proof by clear and convincing evidence ( cf., Vermeer Owners v Guterman, 78 NY2d 1114, 1116)." ( Gaidon v Guardian Life Ins. Co. of America, 94 NY2d 330, 349-350). Bare allegations of fraud, without details, such as in the instant complaint, are insufficient to sustain an action for fraud. ( Kline v Taukpoint Realty Corp., 302 AD2d 433 [2d Dept 2003]). The Appellate Division, Second Department, in Giurdanella v Giurdanella ( 226 AD2d 342, 343, held:
to establish a prima facie case of fraud, the plaintiff must establish
(1) that the defendant made material representations that were false,
(2) that the defendant knew the representations were false and made them with the intent to deceive the plaintiff, (3) that the plaintiff justifiably relied on the defendant's representations, and (4) that the plaintiff was injured as a result of the defendant's representation.
( See Kerusa Co., LLC v W10Z/515 Real Estate Ltd. Partnership, ___ NY3d ___, 2009 NY Slip Op 02482 [April 2, 2009]; Small v Lorillard Tobacco Co., Inc. 94 NY2d 43; Channel Master Corp. v Aluminum Limited Sales, Inc., 4 NY2d 403; Smith v Ameriquest Mortg. Corp., ___ AD3d ___, 2009 NY Slip Op 02586 [2d Dept March 31, 2009]; Cash v Titan Financial Services, Inc. 58 AD3d 785 [2d Dept 2009]; Shovak v Long Island Commercial Bank , 50 AD3d 1118 [2d Dept 2008]; Sellinger Enterprises, Inc. v Cassuto, 50 AD3d 766 [2d Dept 2008]; Williams v Eason , 49 AD3d 866 [2d Dept 2008]; McMorrow v Dime Sav. Bank of Williamsburg , 48 AD3d 646, [2d Dept 2008].
Plaintiff, in the instant complaint, fails to specify what alleged false statements were made, who made them, how they were made, or when they were made. CPLR Rule 3016 (b) requires that in a fraud cause of action "the circumstances constituting the wrong shall be stated in detail." Not only must plaintiff plead the essential elements of fraud, but plaintiff must support each of the elements of fraud with specific factual details from which fraud may be inferred ( See Barclay Arms, Inc. v Barclay Arms Associates, 74 NY2d 644; Cohen v Houseconnect Rrealty Corp., 289 AD2d 277 [2d Dept 2001]).
The Court of Appeals in Pludeman v Northern Leasing Systems, Inc. ( 10 NY3d 486 ), held:
Critical to a fraud claim is that a complaint allege the basic facts to establish the elements of the cause of action. Although under section 3016(b) the complaint must sufficiently detail the allegedly fraudulent conduct, that requirement should not be confused with unassailable proof of fraud. Necessarily, then, section 3016 (b) may be met when the facts are sufficient to permit a reasonable inference of the alleged conduct.
Plaintiff's lack of specificity in the complaint does not meet the Pludeman fraud threshold of presenting facts that "are sufficient to permit a reasonable inference of the alleged conduct." Mere conclusory statements alleging the wrong in the pleadings are insufficient. ( McGovern v Nassau County Dept. of Social Services, ___NY3d ___, 2009 NY Slip Op 02572 [2d Dept March 1, 2009]; Sargiss v Magarelli , 50 AD3d 1117 [2d Dept 2008]; Dumas v Firoito, 13 AD3d 332 [2d Dept 2004]; Sforza v Health Ins. Plan of Greater New York, 210 AD2d 214, 215 [2d Dept 1994].
Also, plaintiff's fraud causes of action must be dismissed because they arise from and improperly duplicate plaintiff's breach of contract claims. "A cause of action alleging fraud does not lie where the only fraud claim relates to a breach of contract." ( Tiffany at Westbury Condominium v Marelli Dev. Corp. , 40 AD3d 1073 , 1076 [2d Dept 2007]). ( See Heffez v L G General Const. Inc ., 56 AD3d 526 [2d Dept 2008]; McGee v J. Dunn Const. Corp. , 54 AD3d 1010 [2d Dept 2008]; Sellinger Enterprises, Inc. v Cassuto, supra; Clement v Delaney Realty Corp., 40 AD3d 519 [2d Dept 2007]).
Plaintiff's fraud claims rehash its contract claims. Plaintiff allegations for the fraud and fraud related causes of action are: "Defendants fraudulently induced Plainitff to enter the Agreement, by falsely representing that the Confidential Information would be held in confidence and that Plainitff would be compensated in the event of any resulting transaction" [¶ 82 of complaint]; "Defendants fraudulently obtained the Confidential Information by falsely representing that the Confidential Information would be held in confidence and that Plainitff would be compensated in the event of any resulting transaction" [¶ 85 of complaint]; "Defendants conspired with others as yet unknown to defraud Plainitff and to avoid Defendants' obligations to Plaintiff pursuant to the Agreement" [¶ 105 of complaint]; and, "Defendants fraudulently induced Plaintiff to materially alter its position to its detriment, by inducing Plainitff to forego pursuing the Acquisition with other potential partners" [¶ 111 of complaint]. These allegations are conclusory and fail to allege that NORTHBROOK had any legal duty to KOPELOWITZ independent of plainitff's contractual claims. "This legal duty must spring from circumstances extraneous to, and not constituting elements of, the contract." ( Clark-Fitzpatrick, Inc. v Long Island R. Company, 70 NY2d 382, 389). ( See Heffez v L G General Const. Inc., supra; Kaufman v Torkan , 51 AD3d 977 [2d Dept 2008]; Ross v DeLorenzo , 28 AD3d 631 [2d Dept 2006]; Krantz v Chateau Stores of Canada, Ltd., 256 AD2d 186 [1d Dept 1998]; McKerrnin v Fanny Farmer Candy Shops, Inc., 176 AD2d 233 [2d Dept 1991]).
Plaintiff's ninth cause of action for conspiracy to defraud must be dismissed. "New York does not recognize an independent cause of action for civil conspiracy to commit a tort." ( Roche v Claverack Co-op Ins. Co. , 59 AD3d 914 [3d Dept 2009]). "[A] mere conspiracy to commit a fraud is never of itself a cause of action." ( Brackett v Griswold, 112 NY 454, 467). However, "allegations of conspiracy are permitted only to connect the actions of separate defendants with an otherwise actionable tort." ( Alexander Alexander of New York, Inc. v Fritzen, 68 NY2d 968, 969). Plaintiff, in the instant complaint, fails to connect the actions of NORTHBROOK "with an otherwise actionable tort." ( See Cash v Titan Financial Services, Inc., supra; Crispino v Greenpoint Mortg. Corp., 2 AD3d 478 [2d Dept 2003]; Pappas v Passias, 271 AD2d 420 [2d Dept 2000]; SRW Associates v Bellport Beach Property Owners, 129 AD2d 328 [2d Dept 1987]).
Dismissal of plaintiff's fifth and sixth causes of acton
Plaintiff's fifth and sixth causes of action for unjust enrichment and quantum meruit must fail because KOPELOWITZ is legally prohibited from collecting a commission. As previously noted, plaintiff's counsel admits that KOPELOWITZ is not a licensed real estate broker.
The Statute of Frauds does not prohibit a plaintiff from pursuing a quantum meruit claim when there is no specific agreement concerning the amount of a commission, if the writing provides sufficient assurance that there was an agreement that plainitff would provide services and would be paid. However, the May 31, 2007 letter agreement between KOPELOWITZ and MANN does not mention NORTHBROOK and lacks any indication that NORTHBROOK hired KOPELOWITZ or agreed to compensate KOPELOWITZ. Plaintiff is unable to demonstrate a quantum meruit claim against NORTHBROOK. The Court, in Atlas Refrigeration-Air Conditioning, Inc. v Lo Pinto ( 33 AD3d 639 , 640 [2d Dept 2006]), held that "[i]n order to establish 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 were rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services." Further, quantum meruit, as a quasi-contractual claim, is "imposed by law where there has been no agreement or expression of assent, by word or act, on the part of either party involved. The law creates it, regardless of the intention of the parties, to assure a just and equitable result." ( Bradkin v Leverton, 126 NY2d 192, 195). It "rests upon the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another." ( Miller v Schloss, 218 NY 400, 407).
In the instant action, with the absence of any evidence of a business relationship between plaintiff and NORTHBROOK, it cannot be shown how NORTHBROOK was enriched at plaintiff's expense. "The essential inquiry in any action for unjust enrichment or restitution is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered." ( Paramount Film Distributing Corp. v State, 20 NY2d 415, 421, cert denied, 414 US 429). "To prevail on a claim of unjust enrichment, a party must show 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." ( Old Republic Nat. Title Ins. Co. v Luft , 52 AD3d 491 , 491-492 [2d Dept 2008]). (See Anesthesia Associates of Mount Kisco, LLP v Northern Westchester Hosp. Center , 59 AD3d 473 , 481 [2d Dept 2009]; Cruz v McAneney 31 AD3d 54 , 59 [2d Dept 2006]; Citibank, N.A. v Walker , 12 AD3d 480, 481 [2d Dept 2004]).
Moreover, plaintiff cannot sustain causes of action for unjust enrichment and
quantum meruit because it is not a licensed real estate broker. Real Property Law (RPL) § 442-d, entitled "Actions for commissions; license prerequisite," states: No person, copartnership, limited liability company or corporation
shall bring or maintain an action in any court of this state for the recovery of compensation for services rendered, in any place in which this article is applicable, in the buying, selling, exchanging, leasing, renting or negotiating a loan upon any real estate without alleging and proving that such person was a duly licensed real estate broker or real estate salesman on the date when the alleged cause of
action arose. "It is, of course, the law that commissions cannot be recovered by a real estate broker who is unlicensed while his services were rendered." ( Galbreath-Ruffin Corp. v 40th 3rd Corp., 19 NY2d 354, 362). "In order to collect a real estate brokerage commission, a claimant must be licensed at the time the cause of action arises (see Real Property Law § 442-d) . . . If the broker was unlicensed at the time the services which form the consideration for the claimed commission were rendered, the services were illegally performed." ( Mavco Realty Corp. v M. Slayton Real Estate, Inc., 112 AD3d 575, 577 [2d Dept 2004]).
Plaintiff, in opposition to NORTHBROOK, contends that the transaction in question was the sale of AVJ, THE RACOLINS' real estate holding company, not the actual real estate, and that plaintiff earned its commission as a finder, not a broker. Therefore, RPL § 442-d does not apply. However, "[w]here the dominant feature of the transaction at issue is the transfer of real property, one who does not have a real estate broker's license is barred from collecting a fee for endeavors in the nature of brokerage services." ( Panarello v Segalla , 6 AD3d 515 , 516 [2d Dept 2004]). ( See Berg v Wilpon, 271 AD2d 629 [2d Dept 2000]; Sorice v DuBois, 25 AD2d 531 [1d Dept 1966]). Plaintiff's own papers clearly show that the contemplated transaction was a sale of real estate. The May 31, 2007 letter agreement between KOPELOWITZ and MANN refers to "the sales of the above reference properties." Plaintiff's counsel, in his affirmation in opposition [exhibit 1], attached copies of portions of recorded deeds, mortgages, an acquisition loan mortgage, a security agreement, and fixture flings. This clearly demonstrates that the dominant feature of THE RACOLINS' sale of AVJ's assets was the sale of real estate, not AVJ, a real estate holding company. For plaintiff's counsel to allege that plaintiff acted as a finder, not a broker, is chameleon-like behavior, attempting to evade RPL § 442-d's licensing requirements.
Dismissal of plaintiff's seventh and eight causes of action
Plaintiff's seventh and eight causes of action for breach of fiduciary duty and imposition of a constructive trust fail because plaintiff fails to state any facts that would give rise to a fiduciary relationship. The Court of Appeals, in EBC 1, Inc. v Goldman, Sachs Co. ( 5 NY3d 11 , 19-20), held:
A fiduciary relationship "exists between two persons when one of them is under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation" (Restatement [Second] of Torts § 874, Comment a). Such a relationship, necessarily fact-specific, is grounded in a higher level of trust than normally present in the marketplace between those involved in arm's length business transactions (see Northeast Gen. Corp. v Wellington Adv., 82 NY2d 158, 162 [1993]). Generally, where parties have entered into a contract, courts look to that agreement "to discover . . . the nexus of [the parties'] relationship and the particular contractual expression establishing the parties' interdependency" (see id. at 160). "If the parties . . . do not create their own relationship of higher trust, courts should not ordinarily transport them to the higher realm of relationship and fashion the stricter duty for them" (id. at 162).
Plaintiff is unable to state any facts demonstrating a special relationship of trust between itself and NORTHBROOK. Plaintiff's bare allegations in the complaint, "Defendants entered into a fiduciary relationship with Plaintiff [¶ 96]," and "Defendants breached their fiduciary duties to Plaintiff by usurping the business opportunity presented to them by Plaintiff [¶ 97]," are devoid of any supporting facts.
Further, plaintiff's counsel citing Northeast Gen. Corp. v Wellington Adv. supra, in his memorandum of law in opposition to the motion [pp. 8 and 11], contends that plaintiff was only seeking a finder's fee. He states, at p. 8, that "[o]nce Kopelowitz introduced Defendants to the Acquisition, it had not no further obligation to do anything at all to earn its finder's fee. Rather, it had already earned the fee by virtue of the introduction; all that was required to trigger Defendant's indebtedness to Kopelowitz was the consummation of the Acquisition (in the event of any transaction')." However, the Court in Northeast Gen. Corp. v Wellington Adv. held that a finder's fee agreement does not support a claim for breach of fiduciary duty. The Court instructed, at 160, that "[u]nless the particular agreement establishes a relationship of trust, one will not spring from a finder's contract in and of itself, for without some agreed-to nexus, there is no relationship of trust and, thus, no duty of highest loyalty." Further, the Court instructed at 162-163:
Also a finder is not a broker, although they perform some related functions. Distinguishing between a broker and finder involves an evaluation of the quality and quantity of services rendered. The finder is required to introduce and bring the parties together, without any obligation or power to negotiate the transaction, in order to earn the finder's fee . . . While a broker performs that same introduction task, the broker must ordinarily also bring the parties to an agreement. A broker in New York, unlike a finder, thus carries a defined fiduciary duty to act in the best and more involved interests of the principal.
[ Emphasis added]
Plaintiff's failure to demonstrate a fiduciary relationship with NORTHBROOK, as well as the failure of plaintiff's causes of action for breach of contract and unjust enrichment, means that the constructive trust cause of action must also be dismissed. A fiduciary relationship, some kind of contractual relationship and unjust enrichment are all essential elements of a constructive trust cause of action. "In the development of the doctrine of constructive trust as a remedy available to courts of equity, the following four requirements were posited: (1) a confidential or fiduciary relation, (2) a promise, (3) a transfer in reliance thereon and (4) unjust enrichment. ( Sharp v Komalski, 40 NY2d 119, 121). ( See Simonds v Simonds, [ 45 NY2d 233 (1978)] at 241-242; McGrath v Hilding, 41 NY2d 625, 628-629; A.G. Homes, LLC v Gerstein, 52 AD2d 546, 547 [2d Dept 2008]; Williams v Eason, 49 AD2d 866 [2d Dept 2008]; O'Brien v Dalessandro, 43 AD2d 1123 [2d Dept 2007]).
Plaintiff's counsel wants the Court to impose a constructive trust, which would award plaintiff millions of dollars in damages. He asserts, on p. 18 of his memorandum of law in opposition to the motion, that equity has converted the defendants into trustees, quoting from Simonds v Simonds, supra at 241, with respect to court's creating constructive trusts as equitable relief, in that" the Court does not restrict itself by describing all the specific forms of inequitable holding which will move it to grant relief, but rather reserves freedom to apply this remedy to whatever knavery human ingenuity can invent' ( Bogert, Trusts and Trustees [2d ed rev, 1978], § 471, at p. 29)." "Knavery" is defined as "rascality" (Webster's New Collegiate Dictionary 632 [1981]). "Rascality" is defined as "the character or actions of a rascal" (Webster's, supra at 950); and, a "rascal" is "a mean, unprincipled, or dishonest person" (Webster's, supra at 932). To not dismiss the constructive trust cause of action could potentially reward plaintiff KOPELOWITZ with millions of dollars for exhibiting both knavery and rascality in trying to create a constructive trust with NORTHBROOK, when KOPELOWITZ had no fiduciary relationship with NORTHBROOK.
Dismissal of plaintiff's tenth cause of action
Plaintiff's tenth cause of action for detrimental reliance must be dismissed because plaintiff fails to present the essential elements of detrimental reliance and improperly duplicates its defective causes of action for breach of contract, fraud, and breach of fiduciary duty. Plaintiff's alleges that "Plaintiff acted in reasonable reliance on the Agreement in choosing to forego pursuing the Acquisition with other potential partners, thereby materially altering its position to its detriment [¶ 108 of complaint]." "Detrimental reliance" is synonymous with "equitable estoppel." ( Holm v C.M.P. Sheet Metal, Inc., 89 AD2d 229, 234-235 [4th Dept 1982]). Equitable estoppel "rests upon the word or deed of one party upon which another rightfully relies, and, so relying, changes his position to his injury. When this occurs it would be inequitable to permit the first to enforce what would have been his rights under other circumstances." ( Metropolitan Life Ins. Co. v Childs Co., 230 NY 285, 292-292). ( See E.F.S. Ventures Corp. v Foster, 71 NY2d 359, 368-369 (1988); Triple Cities Constr. Co. v Maryland Cas. Co., 4 NY2d 443, 338).
In Airco Alloys Division, Airco, Inc. v Niagara Mohawk Power Corporation ( 76 AD2d 68, 81-82 [4th Dept 1980], the Court instructed:
Equitable estoppel prevents one from denying his own expressed or implied admission which has in good faith been accepted and acted upon by another. The elements of estoppel are with respect to the party estopped: (1) conduct which amounts to a false representation or concealment of material facts; (2) intention that such conduct will be acted upon by the other party; and (3) knowledge of the real facts. The party asserting estoppel must show with respect to himself: (1) lack of knowledge of the true facts; (2) reliance upon the conduct of the party estopped; and (3) a prejudicial change in his position.
Equitable estoppel "is imposed by law in the interest of fairness to prevent the enforcement of rights which would work fraud or injustice upon the person against whom enforcement is sought and who, in justifiable reliance upon the opposing party's words or conduct, has been misled into acting upon the belief that such enforcement would not be sought." ( Nassau Trust Company v Montrose Concrete Products Corp., 56 NY2d 175, 184). Plaintiff's conclusory and self-serving allegations against NORTHBROOK for equitable estoppel are inadequate. As explained in Metropolitan Life Ins. Co. v Childs Co., at 292, plaintiff fails to demonstrate what words or deeds of NORTHBROOK it relied upon to its detriment.
Further, plaintiff's allegation that it acted in reliance on the May 31, 2007 letter agreement cannot be used to avoid the defects in plaintiff's breach of contract claims. Claims for equitable estoppel that are duplicative of dismissed breach of contract claims are properly dismissed. ( Guerrero v West 23rd Street Realty, LLC, 45 AD3d 403404 [1d Dept 2007], lv denied 10 NY3d 707). ( See Alpha Manhattan LLC v UBS Real Estate Securities, Inc., 2008 NY Slip Op 32976 (U) [Sup Ct, New York County 2008]).
Conclusion
Accordingly, it is
ORDERED, that the motion of defendants NORTHBROOK PARTNERS, LLC and NORTHBROOK MANAGEMENT, LLC, pursuant to CPLR Rule 3211 (a) (1) and (7), to dismiss the complaint against them is granted in its entirety.
This constitutes the decision and order of the Court.