Opinion
033638 2011
02-21-2018
SAUNDERS VENTURES INC. d/b/a Saunders and Associates, Plaintiff, v. Susan Davidson MORROW, and Laura Davidson Tweedy as Successor Trustees of the Shirley V. Davidson Family Trust and Douglas Elliman, LLC, d/b/a Prudential Douglas Elliman Real Estate and B & H Associates of NY, LLC d/b/a Prudential Douglas Elliman Real Estate, Defendants.
ANTHONY T. CONFORTI, ESQ., 250 North Sea Road, Southampton, NY 11968, Attorney for Plaintiff. LIEB AT LAW, By: Dennis Valet, Esq., 376–A Main Street, Center Moriches, NY 11934, Attorneys for Defendants.
ANTHONY T. CONFORTI, ESQ., 250 North Sea Road, Southampton, NY 11968, Attorney for Plaintiff.
LIEB AT LAW, By: Dennis Valet, Esq., 376–A Main Street, Center Moriches, NY 11934, Attorneys for Defendants.
James Hudson, J. The matter sub judice is an action sounding in breach of contract arising from a dispute over claimed commissions between two real estate agencies. To resolve the competing positions of the Plaintiff Saunders Ventures Inc. (hereinafter referred to as Saunders) and the Defendant B & H Associates of NY, LLC d/b/a Prudential Douglas Elliman Real Estate (hereinafter referred to as B & H/Douglas Elliman) on questions of law and fact, the parties submitted to a non-jury trial before the Court.
Prior to the receipt of testimony, the parties stipulated to the following: (1) that both the Plaintiff and Defendant are licensed real estate brokers; and (2) the contract for sale of the real property that is the basis of this dispute and the co-brokerage agreement signed by the parties was entered into evidence.
Initially, the Court would be remiss if it did not commend Counsel, Messrs. Conforti and Valet, for the able manner in which they represented their clients at trial and the scholarship in their respective post trial briefs. Such advocates honor the profession of law.
Plaintiff called Daniel Casey Shedrick as its first witness. Mr. Shedrick is the managing partner of "And So It Goes, LLC.," the entity that purchased 98 Day Lily Lane, Bridgehampton, NY ("the property"). Mr. Shedrick testified as to his professional relationship with Ms. Brennan–Hagen, an officer at Saunders, and the circumstances surrounding the purchase of the locus in quo . He explained that he asked Ms. Brennan–Hagen to find information on the property including the comps, covenants, and restrictions so that he could better evaluate the overall value of the property. He also noted on multiple occasions that his business protocol is to deal principal to principal. In this matter however, he could not do so because the principals were unavailable. Instead, he dealt with their attorney, Mr. Tom Osborne.
Mr. Shedrick also discussed the Residential Contract for Sale (Plaintiff's Exhibit 1). The Contract (as originally drafted) only had Prudential Douglas Elliman inserted as the Seller's agent at paragraph 27. Mr. Shedrick, after a discussion with his attorney Wayne Bruyn, added Saunders and Associates to the paragraph. After adding Saunders, Mr. Shedrick signed the Contract and tendered a down payment. He also testified that he had conversations with Melissa Osborne and Jeanine Edington about Ms. Brennan–Hagen's compensation. According to Mr. Shedrick, the closing date was originally set for July 31st, 2011. The failure to go forward on that date was because no one provided a compensation provision for Ms. Brennan–Hagen. The closing eventually did occur on August 4th, 2011, but Mr. Shedrick did not believe that Saunders was compensated for the closing. Most importantly, Mr. Shedrick added that if not for Ms. Brennan–Hagen's services, he would not have purchased the property.
On cross-examination, Mr. Shedrick testified that he had not conducted due diligence on the property himself and could not get the due diligence from B & H. Mr. Shedrick next noted that he tried to obtain information from the Defendant in 2011, when he was first interested in acquiring the property. B & H, however, was unable to define what the covenants, restrictions, and the closing costs were. Mr. Shedrick understood that B & H represented the Sellers but stated that he did not understand that Ms. Brennan Hagen represented the interests of the Sellers. In an affidavit prepared prior to trial, however, Mr. Shedrick averred that Ms. Brennan–Hagen actively represented the interest of the Sellers. Mr. Shedrick further testified that he expected Ms. Brennan–Hagen to earn her commission from the Seller. He also indicated that he never negotiated a commission in any of his property acquisitions. Moreover, Mr. Shedrick did not ask Ms. Brennan–Hagen to negotiate on his behalf, reiterating his practice of negotiating principal to principal. He testified, however, that he inserted Saunders into the contract because there was a written agreement between himself and Jeanine Edington, the Douglas Elliman representative, to split the commission. Dawn Brennan–Hagen also testified for the Plaintiff. Ms. Brennan–Hagen testified that she had a professional relationship with Mr. Shedrick for twenty-one years and corroborated his method of dealing directly with owners or listing brokers. In regards to the property, she testified that Mr. Shedrick discussed the property with her in the Spring of 2011. Ms. Brennan–Hagen explained that she dealt with Ms. Edington of B & H who was only able to provide her with limited information. This obliged Ms. Brennan–Hagen to gather more information on her own to determine the property's value. To achieve this, she testified that she performed investigations as to the surrounding properties for Mr. Shedrick and notified him of certain restrictions and surrounding property values.
Regarding her discussions with Mr. Shedrick, Ms. Brennan–Hagen testified that she provided him with a legally required disclosure and told him that Saunders was a seller's agent. She also discussed compensation with Mr. Shedrick and told him that she would be compensated through the Seller even though it was exclusive with Elliman. The rationale for this statement was the status of the proposed sale being a "co-broke." In an e-mail to Melissa Osborne, Jeanine Edington, and Wayne Bruyn, Mr. Shedrick told Ms. Brennan–Hagen that he executed a contract to sign the property. She agreed to split half of the selling agent's commission with Melissa Osborne, from which Ms. Brennan–Hagen expected to make $54,000.00. She made this clear to some people at B & H and sent a commission statement to Mr. Osborne.
At the first attempted closing on July 31st, 2011, Ms. Brennan–Hagen testified that she sensed a problem after Mr. Osborne handed her the commission checks. Ms. Brennan–Hagen realized that both checks were made to Douglas Elliman, and none to Saunders. She attempted to contact the involved parties, but was ultimately unsuccessful, leading to calling off the closing. At the second closing, Mr. Osborne did not accept Ms. Brennan–Hagen's commission statement and ultimately completing the closing without any payment to Saunders.
On cross-examination, Mr. Valet initially inquired about the qualifications of a real estate sales person and responsibilities of representing a seller. Ms. Brennan–Hagen testified that it revolved around acting in the seller's interest and providing and gathering any information needed to make a transaction on the seller's behalf. Ms. Brennan–Hagen testified that she never negotiated how the property would be paid for or the quality of the title, and she did not negotiate with Mr. Shedrick. Instead, she only gave him information pertaining to property values. She testified that she was not involved in the negotiation for the final price. Mr. Bruyn and Mr. Osborne negotiated those details.
With respect to splitting the commission, Ms. Brennan–Hagen expressed frustration with having to split it with Melissa Osborne, who was also a selling agent. Ms. Brennan–Hagen only decided to do so because Mr. Shedrick requested that she split the commission with Ms. Osborne. Ms. Brennan–Hagen then testified that Douglas Elliman was supposed to split the commission with the "co-broke" agency, meaning the payment structure was between the two agencies. She concluded her testimony by noting that she would be entitled to the commission upon the transfer of Title.
The Defendant called Jeanine Edington on its behalf. Ms. Edington is involved in real estate sales at Douglas Elliman and entered into a listing agreement with the owners of the property. Ms. Edington recalled that Mr. Shedrick contacted her to express interest in the property. Ms. Edington also testified that Ms. Brennan–Hagen contacted her to obtain information about the property the same day Mr. Shedrick contacted her expressing his interest. Ms. Edington provided Ms. Brennan–Hagen with the listing, surveys, and restrictions but did not engage in negotiations with her and was surprised by Saunders' claim for a commission. Finally, Ms. Edington noted that she knew Melissa Osborne from her employment at Douglas Elliman and that she did not object to Ms. Osborne's submission of an invoice for commission because Ms. Osborne registered Mr. Shedrick as a client at the time.
Upon cross examination, Ms. Edington testified that the first time she heard Saunders' claim for a commission was immediately before the closing. Ms. Edington believed Plaintiff did not share in the commission because of a dispute, but noted that B & H received its remuneration while the rest was held up.
After the conclusion of Ms. Edington's testimony, Mr. Conforti called Ms. Brennan–Hagen as a rebuttal witness. She testified that she provided Mr. Shedrick with Ms. Edington's contact information after speaking with Edington. In that conversation, Ms. Brennan–Hagen testified that she indicated Mr. Shedrick was interested in the property and wanted to contact Ms. Edington directly. Ms. Brennan–Hagen thought she understood that she was expecting compensation by asking Ms. Edington for the Orex information and that Orex works on a "co-broke". She thought it was something that did not need to be discussed. This concluded Ms. Brennan–Hagen's testimony.
In a non-jury trial, it falls to the Court to determine the veracity of the proof. We begin with a review of the testimony. This is a sobering responsibility in that, traditionally, determination of the credibility of witnesses is viewed as the province of the Trial Judge ( Morales v. Inzerra , 98 A.D.3d 484, 485, 949 N.Y.S.2d 433, 436 [2nd Dept. 2012] ; Tornheim v. Blue & White Food Prod. Corp ., 88 A.D.3d 867, 868, 931 N.Y.S.2d 340, 341[2nd Dept. 2011] ).
The Court's powers of discernment are presumed but must be exercised with caution, not conceit. As the Bard observed: "There's no art to find the mind's construction in the face." Justice Ralph Gazzillo best summed up this aspect of the non-jury trial when he stated:
The "Scottish Play," Act I, Scene IV.
"As to the quality of any given witness, the flavor of the testimony, its quirks, the witness' bearing, mannerisms, tone and overall deportment cannot be fully captured by the cold record; the fact-finder, of course, enjoys a unique perspective for all of this, and the ability to absorb any such subtleties and nuances" ( J & K Parris Const., Inc. v. Roe Ave., Assoc., Ltd. , 47 Misc. 3d 1227[A], 18 N.Y.S.3d 579 [N.Y. Sup. Ct. 2015] ).
After reviewing all the testimony and observing the demeanor of the witnesses, the Court finds Mr. Daniel Shedrick and Ms. Hagen–Brennan to be more credible than the witness called by the Defense, Ms. Edington.
Plaintiff argues that it is entitled to one half of the commission paid upon sale of the locus in quo because its efforts constituted the "procuring cause" of the transaction. Plaintiff contends that this understanding is reflected in the Contract of Sale (Plaintiff's Exhibit 1) and the Universal Co–Brokerage agreement (Plaintiff's Exhibit 2). These documents are critical to the resolution of this case and bear examination
Plaintiff's Exhibit 1, the Residential Contract of Sale reads in salient part at paragraph 27:
"Broker, Seller and Purchaser each represents and warrants to the other that it has not dealt with any other broker in connection with this sale other than
Prudential Douglas Elliman Real Estate (Broker) & Saunders & Company Real Estate and Seller shall pay Broker any commission earned pursuant a separate agreement between Seller and Broker."
The "Separate Agreement" referred to in Plaintiff's Exhibit 1 is the Universal Co–Brokerage Agreement 2007 (Plaintiff's Exhibit 2) which was signed by representatives of the Plaintiff and Defendant. It defines the rights and obligations of the "Exclusive Broker" as well as the "Selling Broker." The document defines the "Exclusive Broker" as meaning "the Broker(s) that have been appointed in writing the exclusive or co-exclusive sales or rental Broker(s) of residential or commercial property by the owner of such property." This agreement gives rise to the relationship referred to as a "co-broke."
It does not define the term "Selling Broker" although the term "Selling Broker Commission" is held to be:
"a percentage of the gross sales price of the exclusive property. The commission payable to the Selling Broker shall be the lesser of the Selling Broker Commission as described above, or 50% of the total commission actually collected by the Exclusive Broker. No commission is due unless and until title passes to a buyer procured by the Selling Broker and the commission is collected by the Exclusive Broker"
In support of the contention that the contract between the parties and Saunder's actions relating thereto are dispositive, Plaintiff relies upon the authority found in Buck v. Cimino , 243 A.D.2d 681, 663 N.Y.S.2d 635 [2nd Dept.1997] ; Dagar Group LTD v. Hannaford Bros., Co. , 295 A.D.2d 554, 745 N.Y.S.2d 34 [2nd Dept.2002] ; Friedland Realty Inc., v. Anthony Piazza, Jr. , 273 A.D.2d 351, 710 N.Y.S.2d 97 [2nd Dept.2000] and Hentze–Dor Real Estate, Inc. v. D'Allesio , 40 A.D.3d 813, 836 N.Y.S.2d 265 [2nd Dept.2007] ). Moreover, Plaintiff asserts that the Appellate Division's affirmance of Justice Pine's denial of summary judgement reduce all issues before us to the simple question of "procuring cause" (see Saunders Ventures, Inc. v. Morrow , 133 A.D.3d 584, 18 N.Y.S.3d 712 [2nd Dept. 2015] ).
The Defense does not concede the Plaintiff's claims. Instead, the Defendant states that "(1) Plaintiff failed to negotiate the essential terms of the transaction; (2) Plaintiff failed to create an amicable atmosphere in which the negotiations proceeded; and (3) failed to engage in any activity which required a real estate brokerage license in the state of New York" (Post trial memorandum of Mr. Valet p.2). Assuming, arguendo , that such activity took place, the Defense argues that recovery is barred under RPL § 441–c (1) (a).
In support of the arguments made above, B & H point to the fact that Plaintiff never had contact with the Sellers because Defendant was the exclusive agent (Transcript p. 70 Lines 2–18) and that the Plaintiff did not negotiate the terms of sale (Transcript p. 75 lines 6–20).
Defense Counsel also draws the Court's attention to the holdings in Sibbald v. Bethlehem Iron Co. , 83 N.Y. 378 [1881], Lane–Real Estate Dep't Store, Inc. v. Lawlet Corp. , 28 N.Y.2d 36, 319 N.Y.S.2d 836, 268 N.E.2d 635 [1971], Kaelin v. Warner , 27 N.Y.2d 352, 318 N.Y.S.2d 294, 267 N.E.2d 86 [1971], Nesbitt v. Penalver , 40 A.D.3d 596, 835 N.Y.S.2d 426 [2nd Dept.2007], Greene v. Hellman , 51 N.Y.2d 197, 433 N.Y.S.2d 75, 412 N.E.2d 1301 [1980], Levy Wolf Real Estate Brokerage, Inc. v. Lizza Indus., Inc. , 118 A.D.2d 688, 500 N.Y.S.2d 37 [2nd Dept. 1986], Lanstar Int'l Realty, Inc. v. New York News, Inc. , 206 A.D.2d 411, 614 N.Y.S.2d 438 [2nd Dept. 1994], Brown & Son Realty, Inc. v. Greenberg , 195 A.D.2d 583, 601 N.Y.S.2d 7 [2nd Dept.1993], Dubbs v. Stribling & Assocs ., 96 N.Y.2d 337, 728 N.Y.S.2d 413, 752 N.E.2d 850 [2001], and Wendt v. Fischer , 243 N.Y. 439, 154 N.E. 303 [1926] ) Cardozo J.. Despite the commendable eloquence with which Defense counsel brings forth the above cases for the Court's perusal, it is apparent that the authority cited by the Defense is distinguishable from the matter before us. They shall be discussed ad seriatim .
The holding in Sibbald v. Bethlehem Iron Co. supra states:
"But in all the cases, under all and varying forms of expression, the fundamental and correct doctrine is, that the duty assumed by the broker is to bring the minds of the buyer and seller to an agreement for a sale, and the price and terms on which it is to be made, and until that is done his right to commissions does not accrue. ( Id. at 382 ), citing McGavock v. Woodlief , 20 How. [U.S.] 221 ; Barnes v. Roberts , 5 Bosw. 73 ; Holly v. Gosling , 3 E. D. Smith, 262 ; Jacobs v. Kolff , 2 Hilt. 133 ; Kock v. Emmerling , 22 How. [U.S.] 72 ; Corning v. Calvert , 2 Hilt. 56 ; Trundey v. NY & Hartf. Steamboat Co. , 6 Robt. 312 ; Van Lien v. Burns, 1 Hilt. 134 ] )."
The Defendant, however, overlooks the language in Sibbald which says:
"It was not meant by these cases, and we do not mean, that the broker must of necessity be present and an active participator in the agreement of buyer and seller when that agreement is actually
concluded. He may just as effectually produce and create the agreement, though absent when it is completed and taking no part in the arrangement of its final details." ( Id. at 382 ).
The Defense quotes Lane–Real Estate Dep't Store, Inc. v. Lawlet Corp., supra which states:
"it is a well-settled rule in this State that in the absence of an agreement to the contrary, a real estate broker will be deemed to have earned his commission when he produces a buyer who is ready, willing and able to purchase at the terms set by the seller ( Id. at 42 [319 N.Y.S.2d 836, 268 N.E.2d 635]citing Hecht v. Meller , 23 N.Y. 2d 301 [296 N.Y.S.2d 561, 244 N.E.2d 77] ; Levy v. Lacey , 22 N. Y. 2d 271 [292 N.Y.S.2d 455, 239 N.E.2d 378] ; Wagner v. Derecktor , 306 N.Y. 386 ; O'Hara v. Bronx Consumer Ice Co. , 254 N.Y. 210 ; Colvin v. Post Mtge. & Land Co. , 225 N.Y. 510 ; Reis Co. v. Zimmerli , 224 N.Y. 351 ; Davidson v. Stocky , 202 N.Y. 423 ; Smith v. Peyrot , 201 NY 210 ; Gilder v. Davis , 137 N.Y. 504 ).
This Court finds, however, that in order to reconcile the holding in Lane with Dagar Grp., Ltd. v. Hannaford Bros. Co. , supra and its ilk, we must by necessity interpret the criteria in Lane as being non-exclusive.
The case of Kaelin v. Warner , supra is of small use in that the facts adduced therein showed that the sale arranged by the Plaintiff broker never took place between the owner of the property and the prospective purchaser. ( Id. at 355, 318 N.Y.S.2d 294, 267 N.E.2d 86 ).
The Defendant cites to Nesbitt v. Penalver , supra which held that the "essential terms" of the contract to support a claim for a commission must include "purchase price, the time and terms of payment, the required financing, the closing date, the quality of title to be conveyed, the risk of loss during the sale period, adjustments for taxes and utilities, etc." ( Id. at 598, 835 N.Y.S.2d 426 ).
What Defendant does not acknowledge in citing Nesbitt , however, is that the case involved an application of the Statute of Frauds to a series of letters which a party claimed was an enforceable contract for the sale of realty. It confined its analysis to the rights and obligations of the seller and purchaser exclusively and did not address a broker's rights under the circumstances. ( Id. at 598, 835 N.Y.S.2d 426 ).
In another case cited by the defense, Greene v. Hellman , supra at 205–206, 433 N.Y.S.2d 75, 412 N.E.2d 1301, the Court warned of the dangers in setting the bar too low in order to obtain a right to a real estate commission:.
"It has long been recognized that a broker, save when he enjoys the benefit of a special agreement to the contrary, does not automatically and without more make out a case for commissions simply because he initially called the property to the attention of the ultimate purchaser ( citations omitted ). If that were enough, given the enterprise which our competitive society prizes in its brokers and its salesmen, a veritable morass of claims to proprietary rights in their prospects would result."
Defendants protestations to the contrary, we find that the rule in Greene actually favors the Plaintiff's cause. The learned Court further opined that:
"That is not to say that, in order to qualify for a commission, the broker in all instances must have been the dominant force in the conduct of the ensuing negotiations or in the completion of the sale. But, however variable the judicial terminology employed to express the requirement that the broker must be the procuring cause, it has long been recognized that there must be a direct and proximate link, as distinguished from one that is indirect and remote, between the bare introduction and the consummation" ( Id. at 206, 433 N.Y.S.2d 75, 412 N.E.2d 1301 citing Lord v. United States Transp. Co. , 143 App. Div. 437, 454–455, 128 N.Y.S. 451 ).
In the case before us the testimony of Mr. Shedrick and Ms. Brennan–Hagen provide the "direct and proximate link." Far from a mere "tip-off," Ms. Brennan–Hagen's services were extensive and of such a nature that Mr. Shedrick would not have consummated the sale without them.
The case of Levy Wolf Real Estate Brokerage, Inc. v. Lizza Indus., Inc., supra , is also but a slender reed for the Defense. Once again, Defendant does not set forth the distinguishing facts in Levy from the matter at hand. In Levy the Court emphasized that "There being no evidence in the record that the Plaintiff initiated any negotiations or discussed with the parties any of the basic and material details upon which they would reasonably have had to agree before a lease could be executed" ( Id. at 689, 500 N.Y.S.2d 37 ).
Lanstar Int'l Realty, Inc. v. New York News, Inc., supra , falls from the same analysis. In denying a claim for a brokers commission, the Lanstar Court noted:
"the totality of [Plaintiff's] efforts consisted of little more than bringing the property to the attention
of the defendants (citations omitted). There was no evidence in the record that Lanstar initiated any negotiations or discussed with the parties any of the basic material details upon which they would reasonably have had to agree before executing a contract of sale. Moreover, the record is devoid of any evidence that the defendants ever promised to pay Lanstar a commission." ( Id. at 412, 614 N.Y.S.2d 438 ).
We remind the Defendant that in the instant case the Plaintiff provided services without which, as Mr. Shedrick testified, the sale would not have taken place. More importantly, Lanstar is distinguishable from the instant suit because Saunders and B & H did in fact have a contract providing for a commission (Plaintiff's Exhibits 1 and 2).
Brown & Son Realty, Inc. v. Greenberg , supra , provides no succor for the Defendant. In Brown the Court found no evidence that the Plaintiff had been the procuring cause of the sale of the realty. The facts before us indicate otherwise vis-à -vis the actions of Ms. Brennan–Hagen. Additionally, the Brown Court observed "we find no evidence of a contractual relationship, promise, or agreement between the broker and the appellants-buyers under which the broker might claim a commission from them." ( Id. at 584, 601 N.Y.S.2d 7 ).
The Plaintiff relies heavily on the rule found in Dagar Grp., Ltd. v. Hannaford Bros. Co. , supra and, understandably, the Defendant attempts to distinguish this holding (as well as the decisions of Buck and Friedland ).
In relevant part Dagar states:
"To earn a commission, a broker must prove that he or she had a contract, either express or implied, with the party to be charged with paying the commission and that he or she was the procuring cause of the sale (see Buck v. Cimino , 243 A.D.2d 681 ). Where the broker is not involved in the negotiations leading up to completion of the deal, the broker must establish that he created an amicable atmosphere in which negotiations proceeded or that he generated a chain of circumstances that proximately led to the sale ( Id. ). However, it is not enough to merely establish that the broker called the property in question to the attention of the potential buyer or lessor (see Lanstar Intl. Realty v. New York News , 206 A.D.2d 411 )." ( Id. at 554, 745 N.Y.S.2d 34 ).
B & H's argument against the Court utilizing the above authority is that these cases involved situations where the broker had already been the procuring cause of the sale but was "cut out" at the last minute. Contrary to the Defendant's contentions, the Court finds that this was exactly the same treatment meted out by the Defendant to Saunders in the case at bar.
We must also remind the parties of the holding of the Appellate Division in this very case where it clearly inferred that the standard for recovery required the Plaintiff to prove that it had created "an amicable atmosphere in which negotiations proceeded or generated a chain of circumstances that proximately led to the sale" ( Saunders Ventures, Inc. v. Morrow , supra at 585–586, 18 N.Y.S.3d 712 ).
The aforementioned cases, cited by both the Plaintiff and Defendant, clearly illustrate that the Plaintiff has satisfied the criteria of being "the dominant force" in the completion of the sale (see Greene v. Hellman , supra at 206, 433 N.Y.S.2d 75, 412 N.E.2d 1301 ). The Plaintiff has also proven to the Court's satisfaction that it had a written contract with the Defendant which defined its status as a co-broker at paragraph 27 (Plaintiff's Exhibit 1). It would appear that it has met its burden to obtain a judgment. One last argument of the Defense, however, gives us pause and must be addressed.
A properly executed contract is a veritable Gibraltar of the law and it suffers few impediments. This has long been recognized from the beginnings of our Common Law, witness the venerable maxim "Pacta sunt servanda " ( Pleickhardt v. Lippman , 174 Misc. 2d 552, 555, 665 N.Y.S.2d 806, 808 (Sup. Ct. Suffolk Co., Underwood J. 1997). This deference continues unto the present day. "[T]he autonomy of parties to contract is itself a sacred and protected public policy that should not be interfered with lightly" ( 159 MP Corp. v. Redbridge Bedford, LLC , 160 A.D.3d 176, 186–87, 71 N.Y.S.3d 87, [2nd Dept. Jan. 31, 2018], 2018 WL 635946, at *6] ).
Agreements must be kept, (see Richard Hyland, Pacta Sunt Servanda: A Meditation , 34 Va. J. Int'l L. 405 [1994] ).
An area where the Court will intrude upon the precincts of a contract is where breach of a fiduciary duty is alleged ( Rich v. New York Cent. & H.R.R. Co. , 42 Sickels 382, 87 N.Y. 382, [1882], Mandelblatt v. Devon Stores, Inc. , 132 A.D.2d 162, 521 N.Y.S.2d 672 [2nd Dept. 1987] ).
This obliges the Court to consider Defendant's claim that if Plaintiff was representing the Sellers in this particular transaction, its interactions with the prospective purchaser violated the fiduciary duty imposed by RPL § 443. In pertinent part, this Statute requires a written disclosure (and acknowledgment) of the fiduciary status of the Seller's and buyer's agent. Ms. Brennan–Hagen's testimony indicates that written disclosure was made.
Defense Counsel also cites to the immortal Cardozo's decision in Wendt v. Fischer , 243 N.Y. 439, 154 N.E. 303 (1926) wherein he stated, with his usual sagacity:
"If dual interests are to be served, the disclosure to be effective must lay bare the truth, without ambiguity or reservation, in all its stark significance Finally, we are told that the brokers acted in good faith, that the terms procured were the best obtainable at the moment, and that the wrong, if any, was unaccompanied by damage. This is no sufficient answer by a trustee forgetful of his duty. The law 'does not stop to inquire whether the contract or transaction was fair or unfair. It stops the inquiry when the relation is disclosed, and sets aside the transaction or refuses to enforce it, at the instance of the party whom the fiduciary undertook to represent, without undertaking to deal with the question of abstract justice in the particular case Only by this uncompromising rigidity has the rule of undivided loyalty been maintained against disintegrating erosion." ( Id . at 443–444, 154 N.E. 303, citations omitted ).
Defense counsel points out that the principle enunciated in Wendt , finds modern voice in the case of Dubbs v. Stribling & Assocs., 96 N.Y.2d 337, 728 N.Y.S.2d 413, 752 N.E.2d 850 (2001). The Court stated that:
"In New York, it is well settled that a real estate broker is a fiduciary with a duty of loyalty and an obligation to act in the best interests of the principal (citations omitted). Where a broker's interests or loyalties are divided due to a personal stake in the transaction or representation of multiple parties, the broker must disclose to the principal the nature and extent of the broker's interest in the transaction or the material facts illuminating the broker's divided loyalties" ( Id. at 340-41, 728 N.Y.S.2d 413, 752 N.E.2d 850 ).
The Defendant's argument, like the proverbial house built upon sand, falls when it is challenged. It presupposes that the Plaintiff either represented the purchaser and/or did not safeguard the Seller's interest. Both of these contentions are fallacies. As pointed out by the Saunders Appellate Court, in opposing the motion for summary judgment, the Plaintiff alleged that it had " put the purchaser in touch with the property's exclusive broker because only the exclusive broker was permitted to contact the seller." ( Id. at 586, 18 N.Y.S.3d 712 ). As the trier of fact, this Court finds this allegation to have been proven. The fact that Saunders was contractually bound not to contact the Seller does not support the position that it represented another's interest. Quite the opposite. We find that all of Ms. Brennan–Hagen's interactions with Mr. Shedrick were for the benefit of the Seller and the ultimate transaction of sale bears witness to her labors on the Seller's exclusive behalf. Having discharged its obligations under the contracts in question (Plaintiff's Exhibits1 and 2), Saunders is entitled to the negotiated compensation provided by same.
Accordingly, the Court finds that the Plaintiff has proven, by a fair preponderance of the credible evidence, that it was the procuring cause of the successful sale of the realty in question. As such, it is entitled to one half of the Broker's commission as provided by the contract between the parties.
Settle judgment.