• Motion to Dismiss and Cross Motion for Summary Judgment Denied in Suit for Real Estate Broker’s Commission: Pinnacle Realty of NY LLC v 255 Butler LLC
  • April 25, 2013 | Author: Adam M. Rafsky
  • Law Firm: Farrell Fritz, P.C. - Uniondale Office
  • In a April 10, 2013 decision by Justice Schmidt, the court denied the defendants’ motion to dismiss and also denied the plaintiff’s cross-motion for summary judgment. Pinnacle sought to recover a real estate broker’s commission it alleged was owed from the attempted sale of real property (the “Property”) that was owned by the corporate defendant 255 Butler. At the request of the individual defendant Accad, Pinnacle located a prospective purchaser (“Steiner”) for the Property. Steiner and the defendants agreed upon a purchase price, certain conditions that were set forth in term sheets, and exchanged a draft sale contract, but the sale never occurred. Pinnacle alleged that it had informed the defendants that they would be responsible for the broker’s commission - agreed upon by the parties in a Second Term Sheet - whether they sold the Property to Steiner or not, and commenced this action for payment of the commission asserting causes of action for breach of contract, unjust enrichment, and quantum meruit.

    In lieu of answering the complaint, the defendants moved to dismiss each of the causes of action based on documentary evidence, and Pinnacle’s alleged failure to state a cause of action. The defendants moved to dismiss against the individual defendants arguing that agents of a corporate entity are generally not held liable for the corporate entity’s actions, and that any commission agreement existed between 255 Butler and Pinnacle, not between Pinnacle and the individual defendants. As to 255 Bulter, the defendants argued that the action should be dismissed in its entirety as Pinnacle failed to establish that Steiner was ready, willing, and able to purchase the Property, nor that there was a meeting of the minds as to the essential terms of the proposed sale.

    The court explained that a brokerage agreement creates a contractual agreement, such that liability for a breach depends on privity under the agreement. The court held that there was no documentary evidence that established 255 Butler was the only defendant in privity with Pinnacle, and therefore, no basis to dismiss against the individual defendants. The court further held that the documentary evidence did not conclusively disprove Pinnacle’s claim that it produced in Steiner, a buyer who was ready, willing, and able to purchase the Property, and that a meeting of the minds occurred as recorded in the term sheets. As to Pinnacle’s cross motion for summary judgment, the court held that based on recent Second Department case law that abrogates prior precedent allowing the court to exercise its de facto power under CPLR 3211(c) to convert a dismissal motion to a summary judgment motion, and based on the discretionary nature of doing so, dismissal of Pinnacle’s cross motion was justified.

    Pinnacle Realty of N.Y., LLC v 255 Butler LLC, Sup Ct, Kings County, April 10, 2013, Schmidt, J., Index No. 501003/12