251 F.3d 386 (2nd Cir. 2001), 00-9050, Fieger v. Pitney Bowes Credit Corp.

Docket Nº:Docket No. 00-9050
Citation:251 F.3d 386
Party Name:A. GARY FIEGER, PLAINTIFF-APPELLANT, v. PITNEY BOWES CREDIT CORPORATION, PITNEY BOWES REAL ESTATE FINANCING CORPORATION AND PREFCO XXII LIMITED PARTNERSHIP, DEFENDANTS-APPELLEES.
Case Date:May 31, 2001
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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251 F.3d 386 (2nd Cir. 2001)

A. GARY FIEGER, PLAINTIFF-APPELLANT,

v.

PITNEY BOWES CREDIT CORPORATION, PITNEY BOWES REAL ESTATE FINANCING CORPORATION AND PREFCO XXII LIMITED PARTNERSHIP, DEFENDANTS-APPELLEES.

Docket No. 00-9050

United States Court of Appeals, Second Circuit

May 31, 2001

Argued February 20, 2001

Appellant appealed from a judgment of the United States District Court for the Southern District of New York (Sidney H. Stein, Judge), dismissing Appellant's complaint as barred by Connecticut's real estate broker licensing statute, Connecticut General Statute § 20-325a(a).

Affirmed in part, vacated in part and remanded for further proceedings.

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Clarence S. Barasch (Lionel A. Barasch, of counsel), New York, New York, for Plaintiff-Appellant A. Gary Fieger.

John M. Callagy, Kelley Drye & Warren, New York, New York, for Defendants-Appellees Pitney Bowes Credit Corporation, Pitney Bowes Real Estate Financing Corporation and Prefco Xxii Limited Partnership.

Before: Meskill, Parker, and Katzmann, Circuit Judges.

Katzmann, Circuit Judge

Plaintiff-Appellant A. Gary Fieger ("Fieger" or "plaintiff") appeals from a judgment of the United States District Court for the Southern District of New York (Sidney H. Stein, Judge), dismissing his contract and quantum meruit claims as barred by Connecticut's real estate broker licensing statute, Connecticut General Statute § 20-325a(a). Fieger contends that the district court erred in applying Connecticut law because under the applicable New York conflict-of-law principles, the court should have applied New York law, under which his claims are not barred. He also argues that even if Connecticut law applies, because he acted as a financial advisor rather than a real estate broker, Section 20-325a(a) does not bar his claims. For the reasons stated below, we affirm the judgment of the district court to the extent that it dismissed Fieger's contract claim against PREFCO XXII, but we vacate as to the contract claim against Pitney Bowes and PREFCO, and the quantum meruit claim, both of which should have been assessed under New York law. We remand to the district court for further proceedings consistent with this opinion.

BACKGROUND

Fieger operates a financial advising business from his home office on the Upper East Side of Manhattan. Defendants-Appellees Pitney Bowes Credit Corporation ("Pitney Bowes"), and its directly or indirectly wholly owned subsidiaries, Pitney Bowes Real Estate Financing Corporation ("PREFCO") and PREFCO XXII Limited Partnership ("PREFCO XXII") (together, "defendants"), are real estate financing businesses with their principal places of business in Connecticut. Pitney Bowes has financed real estate development projects nationwide, including projects in California, Pennsylvania, Indiana, Georgia, Texas and Virginia.

In 1994, the Swiss Bank Corporation ("SBC") began to search for potential investors for its new American headquarters in Stamford, Connecticut, which was scheduled to be built by late 1997. In 1996, SBC sent a request for proposals ("RFP") to a few real estate investors to solicit their interest in financing the SBC headquarters. In the RFP, SBC stated that it wished to finance its headquarters through a sale-leaseback arrangement, and was seeking an investor to purchase the partially completed office building and trading pavilion, and to lease the facility back to SBC. Pitney Bowes responded to the RFP, but SBC did not act on that response.

Fieger claims that in 1995, SBC officials and Fieger's Swiss business associate, Karl Steiner Holding Corporation ("Steiner"), informed him about the Stamford project. In late 1995, SBC officials in New York advised Fieger that SBC had decided to structure the deal as a sale and leaseback. In September 1996, Fieger received a copy of SBC's RFP. In late 1996, he met with representatives of Union Bank of Switzerland ("UBS") in New York to discuss potential joint real estate financing opportunities, including the proposal for the SBC

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headquarters. In pursuing this possibility, Fieger communicated with UBS at its New York offices and with SBC officials in Switzerland and New York.

Soon thereafter, UBS in New York proposed to Pitney Bowes in Connecticut that Pitney Bowes become involved with a large financing project, but did not reveal to Pitney Bowes the location of the property as Stamford or the identity of its owner as SBC. In a letter dated April 11, 1997, UBS informed Pitney Bowes that the property was located in Stamford and owned by SBC. UBS told Pitney Bowes that it was working with someone-Fieger-who had an inside connection at SBC and who might be able to help Pitney Bowes negotiate the transaction without competition. Pitney Bowes was attracted to the possibility of a preemptive deal. UBS requested that Pitney Bowes prepare a term sheet for financing a private transaction between Pitney Bowes and SBC. On April 14th, Fieger faxed the Swiss Bank RFP to UBS. On April 23rd, Pitney Bowes sent UBS the financing proposal for the Stamford project. The next day, UBS sent Fieger a letter in which it stated:

Nevertheless, we also understand that in the event a financing is consummated involving, among others, Pitney and Swiss Bank or their respective affiliates, UBS will be paid on the closing date an advisory/arranging fee of 1% of so-called "PREFCO Cost" out of the financing. (For your information, this advisory/arranging fee has already been included among the items intended to be paid out of the 2% Transaction Fee assumed by Pitney in the attached financing proposal.)

On April 29th, UBS sent Fieger a similar letter, along with the Pitney Bowes financial proposal which Fieger was to submit to the appropriate persons at SBC. The letter included slightly different terms with regard to the advising fee:

Nevertheless, we also understand that in the event a financing is consummated involving, among others, Pitney and Swiss Bank or their respective affiliates, UBS will be paid on the closing date an [sic] placement/arranging fee of.75% of the so-called `PREFCO Cost' out of the financing. (For your information, this advisory/arranging fee as well as the Fieger Associates Inc. advisory fee not to exceed.75% have already been included among the items intended to be paid out of the 2.5% Transaction Fee assumed by Pitney in the attached financing proposal.)

Pitney Bowes claims that it never discussed the payment of fees with Fieger, nor did it see the April 29th UBS letter until after the present lawsuit had been commenced.

On April 29, 1997, PREFCO mailed to Fieger's New York office a copy of the Pitney Bowes term sheet for the proposed transaction. This letter stated that "[i]ncluded in our pricing is fees and expenses of 2.5%." The term sheet was set to expire by its terms on May 15, 1997, and stated that it was "not a commitment by PREFCO to enter into this transaction, nor should it be construed as an offer to perform any undertaking." The next day, Fieger forwarded the Pitney Bowes proposal to SBC at its New York office. On May 6th, Pitney Bowes sent a letter to SBC stating: "This letter will confirm that PREFCO and its advisors are aware of [the April 29th] submission and that Mr. Gary Fieger of A. Gary Fieger Associates, Inc., in his capacity as a real estate consultant on this project, was authorized by PREFCO and its advisors to submit that proposal to you." SBC did not act on the PREFCO proposal, which expired by its terms. In early June 1997, Fieger wrote

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to Pitney Bowes in Connecticut to update Pitney Bowes on his contacts with SBC.

Rather than pursuing a private transaction, SBC hired Merrill Lynch to act as its financial advisor for the headquarters project. Merrill Lynch sent out an RFP to numerous potential investors, including Pitney Bowes, in order to solicit interest in the project. In June 1997, Merrill Lynch sent confidentiality agreements and equity offering memoranda to prospective investors, including Pitney Bowes. Fieger received a copy of this mailing because Merrill Lynch believed he was acting as Pitney Bowes's advisor. In June 1997, Fieger received a letter from SBC which stated that SBC would send Fieger the RFP "consistent with all our recent conversations." At the end of the month, Fieger forwarded the Merrill Lynch documents to Pitney Bowes in Connecticut and noted in his cover letter that, although "[s]ome of the criteria have changed as an outgrowth of re-thinking on the part of SBC,... the essence of the deal is substantially the same." He continued:

It is my opinion, having been involved, for more than a year, in discussions with SBC relative to the financing of this deal, that your offer of April 29th, 1997, which A. Gary Fieger Associates Inc. transmitted, on your behalf, was a very competitive and aggressive bid and should prevail at the end of the day.

In mid-July, Pitney Bowes responded to the RFP by submitting to Merrill Lynch a financing proposal that had been prepared without Fieger's involvement. This proposal was considerably more detailed that the April 29th Pitney Bowes submission which Fieger had made to SBC.

On July 18, 1997, Pitney Bowes sent a letter to Fieger describing its long-term involvement with the SBC Stamford project and stating:

The purpose of this letter is to make it clear to you that PREFCO has not engaged you or your company to represent it in connection with this proposed transaction. Our only interest in dealing with you in April was in connection with a privately negotiated transaction, based on our understanding that you had special business connections with SBC and the Project. PREFCO has very...

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