Helmsley-Spear, Inc. v. New York Blood Center, Inc.

• Decision Date: 01 April 1999
• Docket Number: INC,HELMSLEY-SPEA
• Citation: 687 N.Y.S.2d 353,257 A.D.2d 64
• Court: New York Supreme Court — Appellate Division
• Parties: , 1999 N.Y. Slip Op. 2767, 1999 N.Y. Slip Op. 2768 , Plaintiff-Appellant, v. NEW YORK BLOOD CENTER, INC., Defendant-Respondent.

Page 353

687 N.Y.S.2d 353

257 A.D.2d 64, 1999 N.Y. Slip Op. 2767, 1999 N.Y. Slip Op. 2768

HELMSLEY-SPEAR, INC., Plaintiff-Appellant, v. NEW YORK BLOOD CENTER, INC., Defendant-Respondent.

Supreme Court, Appellate Division, First Department, New York.

April 1, 1999.

James E. Schwartz, of counsel (Carb, Luria, Cook & Kufeld LLP, attorneys) for plaintiff-appellant.

Hal S. Shaftel, of counsel (Louis M. Solomon, on the brief, Solomon, Zauderer, Ellenhorn, Frischer & Sharp, attorneys) for defendant-respondent.

JOSEPH P. SULLIVAN, J.P., PETER TOM, ALFRED D. LERNER and ISRAEL RUBIN, JJ.

SULLIVAN, J.P.

Plaintiff, Helmsley-Spear, Inc., a licensed real estate broker, appeals from the denial of its motion for summary judgment against defendant New York Blood Center, Inc., the owner of the property in question, in this action to recover commissions due under a separate brokerage agreement between the two. The facts are essentially undisputed.

In 1995, Henry Widmaier, a duly licensed broker with Helmsley-Spear, learned that the Blood Center was interested in selling its commercial building at 22 Ericsson Place, located in the Tribeca section of Manhattan. In 1996, Widmaier brought to the Blood Center's attention a potential buyer. Widmaier asserts that the prospective buyer was Joseph P. Lombardi, an architect, active in real estate in the Tribeca area, who had formed several limited partnerships and limited liability companies to purchase commercial properties for conversion to residential use. The Blood Center maintains that the prospective buyer was North Moore-Ericsson Owners LLC. Widmaier had numerous discussions with Lombardi, John F. Wurmser, the Blood Center's chief financial officer, and other Blood Center representatives regarding a sale of the property.

At a May 8, 1996 meeting in which Widmaier actively participated, and at which Lombardi and Martin Shaw, an attorney, were present, an agreement was reached for the sale of the building at a price of $8,250,000 and with a closing date on or about May 30, 1997. On that same date, Helmsley-Spear and the Blood Center signed an agreement which authorized Helmsley-Spear to provide brokerage services in connection with the proposed sale of the property. If Helmsley identified a buyer for the property, it would, at the closing of title, receive a commission of 6% of the first million dollars of purchase price and 3% of the balance. The next day, Martin Shaw wrote to the Blood Center confirming the terms and conditions of the sale to "our client's investment group", identified as "North Moore--Ericsson Owners, LLC", as purchaser. It is undisputed that North Moore--Ericsson Owners, LLC never existed, but was merely a nominee under which Lombardi and his partners, Jack Lefkowitz and Abraham Berkowitz, were going to take title.

Three weeks later, on May 31, 1996, the Blood Center, as seller, and 27 North Moore Associates, LLC, Lombardi's chosen nominee, as purchaser, signed a contract of sale agreeing to an $8,250,000 purchase price and a May 30, 1997 closing date. North Moore is a limited liability company consisting of Lombardi and Lefkowitz and Berkowitz, who supplied the financing in other conversions.

Paragraph 18 of the contract of sale, in relevant part, provided:

Purchaser and Seller each represents to the other that they have dealt with no broker other than Helmsley-Spear, Inc. (the "Broker") in connection with this Agreement and the transaction contemplated by this Agreement; and that neither the Purchaser nor Seller knows of any other broker which has claimed or may have the right to claim a commission or any other compensation in connection with such transaction.... Seller shall pay any brokerage commission in accordance with Seller's agreement with the Broker and shall indemnify and hold Purchaser harmless from any claim of the Broker for such commission.

The transaction closed on or about May 28, 1997, with title passing to North Moore. Under the brokerage agreement's formula, Helmsley-Spear claims entitlement to a commission of $277,500, which the Blood Center refuses to pay. Helmsley-Spear's complaint asserts two causes of action, one in contract and the other based on quantum meruit. After joinder of issue, Helmsley-Spear moved for summary judgment, arguing that the Blood Center's admission in the contract of sale of Helmsley-Spear's participation in the transaction was dispositive as to its entitlement to a commission. In opposing the motion, the Blood Center argued, inter alia, that Helmsley-Spear was not the procuring cause of the sale since it had introduced North Moore-Ericsson Owners, LLC, as a prospective purchaser, whereas an allegedly different entity, North Moore, was the eventual purchaser.

The IAS court denied the motion, finding that the difference in the name of the proposed purchaser (Ericsson versus North Moore) presented a factual issue as to the identity of the entity Widmaier had introduced to the Blood Center, thus placing in issue Helmsley-Spear's assertion that it was the procuring cause. It also found a factual issue as to whether the initial round of negotiations with the original proposed purchaser, North Moore-Ericsson Owners, LLC, in which even the Blood Center admits that Helmsley-Spear represented the purchaser, had collapsed, leading to an agreement with North Moore on different terms. Since the language of the contract of sale constitutes an admission by the Blood Center that Helmsley-Spear was the procuring cause, there are no factual issues to warrant denial of the motion and, accordingly, we reverse.

Where a contract of sale admits the broker's performance of services, the broker is entitled to summary judgment on its claim for commissions. (Holiday Management Assocs. v. Albanese, 173 A.D.2d 775, 570 N.Y.S.2d 643; May Co. v. Monaco Assocs., 80 A.D.2d 798, 437 N.Y.S.2d 91.) The pertinent language in paragraph 18 of the contract of sale is virtually identical to that held to constitute an admission in May Co. The Blood Center, somehow perceiving significance in the semantical...