Futersak v. Perl

• Citation: 27 Misc.3d 897,897 N.Y.S.2d 886
• Parties: Sam FUTERSAK a/k/a Sam Olshin, Plaintiff, v. Sheldon PERL a/k/a Shloime Perl and 700 Rockaway, LLC, Defendants.
• Decision Date: 25 March 2010
• Court: United States State Supreme Court (New York)

897 N.Y.S.2d 886

27 Misc.3d 897

Sam FUTERSAK a/k/a Sam Olshin, Plaintiff,

v.Sheldon PERL a/k/a Shloime Perl and 700 Rockaway, LLC, Defendants.

Supreme Court, Nassau County, New York.

March 25, 2010.

Daniel Hirschel, Esq., Valley Stream, for Plaintiff.

Michael Ciritto, Esq., Hempstead, for Defendants.

IRA B. WARSHAWSKY, J.

*898 Defendants move for summary judgment dismissing Plaintiff's Complaint in motion sequence no. 1. Defendants argue that Plaintiff provided Defendants with unlicensed real estate brokering services; therefore, section 442-d of the Real Property Law precludes Plaintiff's recovery. Plaintiff cross-moves for summary judgment on its causes of action for breach of contract and unjust enrichment in motion sequence no. 2. Plaintiff argues that pursuant to a written agreement with Defendants, he is entitled a percentage of the post-expense profits of Defendants' sale of a parcel of commercial real estate for which Plaintiff previously located for Defendants as their real estate finder.

BACKGROUND

Underlying this dispute was the Plaintiff's desire to purchase a parcel of commercial real estate, but not having access to sufficient capital, sought to include another party. Prior to the disputed transaction, Plaintiff Futersak knew Defendant Perl. Plaintiff also knew that Perl had sufficient capital to make the subject purchase. Futersak discussed the prospect of making a purchase and Perl was interested. According to Futersak, the intention of the parties was for him to find and locate a willing seller of real estate, for Perl's corporation to make the purchase and then Futersak would retain an ownership interest. Futersak avers that his job was to find a willing seller to whom he could introduce Defendant, but that hisinvolvement went no further and was limited to that of a finder and not a broker. According to Perl, Futersak's role was that of Defendants' "sales agent" and real estate broker.

Futersak alleges that prior to January 6, 2004, he introduced Perl to a prospective seller of real estate and that he and Perl agreed that he would retain a 15 percent interest in a subsequent sale by Perl. Perl's corporation was to purchase property located at 700 Rockaway Turnpike, Lawrence, New York, which is the only real property underlying this dispute. According to Futersak, the parties agreed that in lieu of Futersak contributing 15 percent of the down payment and maintaining a 15 percent interest in the ownership by Defendants, Futersak would only maintain a 15 percent interest in any profit realized from a subsequent sale of the property by Defendants. According to Perl, it was never the parties*899 ' intention for Futersak to have an ownership interest in the purchased real estate and that Plaintiff never paid any money toward the subject transaction at any time.

Around March 2004, Perl formed 700 Rockaway, LLC to purchase the subject property. Defendants purchased the property on March 19, 2007, for $3,600,000.00 and sold the property 10 days later on March 29, 2007, for $4,700,000.00, realizing a gross profit of $1,100,000.00. Pursuant to the terms of the written finder's agreement between the parties, Futersak was entitled to 15 percent of the $1,100,000.00 gross profit, less expenses. Futersak's specifies damages at $165,000.00. Futersak alleges that Perl concealed the fact that Defendants sold the property and realized a profit. He demanded payment, but Perl refused.

Perl acknowledges that the written agreement upon which Futersak relies calls for a payment to him of a finder's fee based upon the sale of the subject property. A copy of this agreement was annexed to Defendants' moving papers. Perl said that Futersak was not a licensed real estate broker at any time he rendered services to Defendants regarding the subject property.

Futersak states that he performed certain finding services, which included making Perl aware of the availability of the subject property for sale and presenting some background information related to the property. He says that the intention of the parties was for him to be a part-owner of the property along with Defendants, but that his ownership interest was limited to receiving a 15 percent share of any post-expense profit realized from the subsequent sale of the property by Defendants. He further notes that the written agreement was prepared by Perl. Despite the agreement's description of his entitlement to something as a finder's fee, Futersak states that the rest of the agreement reflects his understanding at the time he signed it that he would be a partner in the purchase of the subject property. Futersak also says that the agreement provides that in lieu of contributing 15 percent of the down payment for the purchase of the property, he would instead receive 15 percent of the net profit realized from a subsequent sale.

Perl states that when contemplating the written agreement with Futersak, he agreed to pay Futersak 15 percent of the post-expense profit of a subsequent sale of the property as a "finder's fee" if Futersak acted as his "sales agent" in obtaining the subject property. According to Perl, Futersak carried out negotiations on his behalf with the seller for the purchase of the property. Complaining ostensibly that Plaintiff violated a fiduciary *900 duty to him, Perl states that Futersak failed to notify Perl of a lis pendens on the property.Perl implies that this was a surprise even though he claims to having just spent considerable time and resources performing his own due diligence, prior to the purchase. He fails to explain how his extensive due diligence failed to reveal the existence of the purported lis pendens.

Perl made reference to a copy of the Contract of Sale for Defendants' purchase of the property and asserts that this document conclusively establishes that Futersak's services were that of a broker and not a finder. Futersak was not a party to the Contract of Sale. Section 14.01 of that contract states: "If no broker is specified in Schedule D, the parties acknowledge that this contract was brought about by direct negotiation between Seller and Purchaser and that neither Seller nor Purchaser knows of any broker entitled to a commission in connection with this transaction " [emphasis added]. In paragraph 15 of Schedule D, specific reference is made to section 14.01 and it reads "Broker, if any (§ 14.01): NONE" [capital letters in original]. Paragraph 16 of Schedule D reads "Party to pay broker's commission (§ 14.01): *10", apparently making reference to paragraph 10 of the Notes to Contract annexed to the contract of sale. Paragraph 10 of the Notes to Contract states: "Buyer shall pay the entire fee owed to Samuel Olshen [sic] or Buyer shall provide Seller with a release from Samuel Olshen [sic] in the form annexed hereto."

Standard for Summary Judgment

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact ( Smalls v. AJI Indus., Inc., 10 N.Y.3d 733, 735, 853 N.Y.S.2d 526, 883 N.E.2d 350 [2008] ). When presented with a motion for summary judgment, the function of a court is "not to determine credibility or to engage in issue determination, but rather to determine the existence or non-existence of material issues of fact" ( Quinn v. Krumland, 179 A.D.2d 448, 449-450, 577 N.Y.S.2d 868 [1st Dept.1992] ); (see also S.J. Capelin Assoc., Inc. v. Globe Mfg. Corp., 34 N.Y.2d 338, 343, 357 N.Y.S.2d 478, 313 N.E.2d 776 [1974] ).

To grant summary judgment, it must clearly appear that no material and triable issue of fact is presented ( Sillman v. Twentieth Century-Fox Corp., 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 144 N.E.2d 387 [1957] ). It is a drastic remedy, the procedural equivalent of a trial, and will not be granted if there is any doubt as to the existence of a triable issue ( Moskowitz v. Garlock, 23 A.D.2d 943, 259 N.Y.S.2d 1003 [3d Dept.1965] ).

The evidence will be considered in a light most favorable to the opposing party *901 ( Weiss v. Garfield, 21 A.D.2d 156, 249 N.Y.S.2d 458 [3d Dept.1964] ). The proof submitted in opposition will be accepted as true and all reasonable inferences drawn in favor of the opposing party ( Tortorello v. Carlin, 260 A.D.2d 201, 206, 688 N.Y.S.2d 64 [1st Dept. 2003] ). The opposing party must come forward with an affidavit of an individual with personal knowledge, or with an attorney's affirmation to which appended material in admissible form, and the failure to do so may lead the Court to believe that there is no triable issue of fact ( Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ).

Defendants' Motion for Summary Judgment

Defendants' motion for summary judgment dismissing Plaintiff's Complaint makes one argument relying upon section 442-d of the Real Property Law, which reads in part:

No person shall bring or maintain an action in any court of this state for the recovery of compensation for services rendered, and is, 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.

A plain-meaning reading of the statute reveals that a real estate broker's license is a prerequisite to recover compensation for real estate brokerage services. Thus, the key question is whether section 442-d applies to the services rendered by Futersak in the underlying transaction. If section 442-d applies to the underlying transaction here, the statute forecloses Futersak's recovery ( Berg v. Wilpon, 271 A.D.2d 629, 707 N.Y.S.2d 861 [2d Dept.2000] ). But for the application of section 442-d, Defendants' motion fails. Because Defendants argue that Futersak acted as a broker and Futersak argues that he was merely a finder, the question of

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