Douglas Elliman LLC v. Tretter, 3679 601185/09

• Decision Date: 05 May 2011
• Docket Number: 3679 601185/09
• Parties: Douglas Elliman LLC, etc, Plaintiff-Appellant-Respondent, v. Franklin Tretter, et al., Defendants-Respondents-Appellants.
• Court: New York Supreme Court — Appellate Division

2011 NY Slip Op 03713

Douglas Elliman LLC, etc, Plaintiff-Appellant-Respondent,
v.
Franklin Tretter, et al., Defendants-Respondents-Appellants.

3679 601185/09

Appellate Division of the Supreme Court of the State of New York

ENTERED: MAY 5, 2011

Gonzalez, P.J., Tom, Sweeny, Richter, Manzanet-Daniels, JJ.

Cascone, Cole & Collyer, New York (Michael S. Cole of counsel), for appellant-respondent.

Gallet Dreyer & Berkey, LLP, New York (Randy J. Heller of counsel), for respondents-appellants.

Order, Supreme Court, New York County (Marcy S. Friedman, J.), entered April 6, 2010, which denied plaintiff's and defendants' motions for summary judgment, modified, on the law, to grant plaintiff's motion, and otherwise affirmed, without costs.

On July 22, 2008, the defendants, Franklin and Sheila Tretter, retained plaintiff Douglas Elliman Real Estate to sell their cooperative apartment, 785 Park Avenue, #11C. Ms. Barbara Lockwood was the Douglas Elliman broker in charge of the exclusive agency listing. The brokerage agreement contained an asking price of $1.65 million and provided for a 6% commission due to Douglas Elliman from the proceeds of the sale. Ms. Lockwood arranged for a photo shoot and preparation of the floor plan, and she began to show the Tretters' apartment at open houses and by appointment. On November 3, 2008, an individual who ultimately would not purchase the apartment made an oral offer of $1.5 million, which was acceptable to the Tretters, subject to the co-op board's approval. This deal fell through on November 20, 2008 because the prospective purchaser's father, the would-be guarantor, refused to provide the requisite financial information to the co-op board. Meanwhile, on November 7, 2008, Ms. Lockwood met Taurie Zeitzer at an open house in the Tretters' apartment. Throughout November, while the initial bidder was providing all the information necessary for the board package, Lockwood communicated with Ms. Zeitzer and her husband via e-mail, offering to show them additional apartments, including another apartment at 785 Park Avenue. In total, Lockwood showed Ms. Zeitzer and her husband five other properties. However, within a week after the deal with the initial bidder fell through, Lockwood revisited apartment 11C with them, and Ms. Zeitzer and her husband began negotiations for the purchase of that residence. Before November 26, 2008, Ms. Zeitzer and her husband made an offer of $1.4 million. As this offer was $100,000 less than the previous bidder's offer, Mr. Tretter asked to meet with Ms. Lockwood. This meeting apparently took place on December 1, 2008. On December 9, 2008, Lockwood sent Mr. Tretter the deal sheet, which listed a reduced $70,000 commission (5% of $1.4 million). On December 16, 2008, two days before the contract was signed, Douglas Elliman confirmed in writing its agreement to reduce its commission from 6% to 5%.

On December 18, 2008, the Tretters entered into a contract with Ms. Zeitzer and her

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husband to sell their apartment for $1.4 million. The contract listed Ms. Lockwood as the broker, and it explicitly stated that the sellers were responsible for paying the broker's commission. The buyers were represented by counsel on the contract, and Mr. Tretter, an attorney, represented himself and his wife. The contract explicitly provides a purchase price of $1.4 million (para. 1.16), and states that the sellers are solely responsible for the broker's commission (para. 12.2). After signing the contract, Ms. Zeitzer's father assisted in securing co-op board approval and negotiating unresolved board issues directly with the Tretters. On February 27, 2009, Douglas Elliman sent a letter to the buyers' attorney, asking that the commission either be paid to it or held in escrow pending the resolution of any dispute with the Tretters. The closing took place on March 6, 2009.

On April 20, 2009, Douglas Elliman commenced this action for its $70,000 commission. In their answer, the Tretters asserted that the firm was not entitled to a commission because Lockwood breached her fiduciary duties to them. The parties moved and cross-moved for summary judgment. The court denied both motions, finding issues of fact whether Lockwood acted as a dual agent. Both parties appeal.

We find as a matter of law that Ms. Lockwood did not act as a dual agent. A real estate broker is deemed to have earned his or her commission when he or she produces a buyer who is ready, willing and able to purchase the property, and who is in fact...