Kopelowitz & Co. Inc. v. Mann

• Decision Date: 12 April 2011
• Parties: KOPELOWITZ & CO., INC., appellant,v.Maurice MANN, et al., defendants,Northbrook Partners, LLC, et al., respondents.
• Court: New York Supreme Court — Appellate Division

83 A.D.3d 793
921 N.Y.S.2d 108
2011 N.Y. Slip Op. 03037

KOPELOWITZ & CO., INC., appellant,
v.
Maurice MANN, et al., defendants,Northbrook Partners, LLC, et al., respondents.

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

April 12, 2011.

[921 N.Y.S.2d 110]

Poltorak, P.C., Brooklyn, N.Y. (Elie C. Poltorak of counsel), for appellant.Wrobel & Schatz, LLP, New York, N.Y. (Philip R. Schatz of counsel), for respondents.WILLIAM F. MASTRO, J.P., ANITA R. FLORIO, JOHN M. LEVENTHAL, and SANDRA L. SGROI, JJ.

[83 A.D.3d 794] In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Schack, J.), dated April 17, 2009, as granted those branches of the motion of the defendants Northbrook Partners, LLC, and Northbrook Management, LLC, pursuant to CPLR 3211(a)(1) and (7) which were to dismiss the first, second, fifth, sixth, seventh, eighth, and tenth causes of action insofar as asserted against those defendants.

ORDERED that the order is modified, on the law, by deleting the provisions thereof granting those branches of the motion of the defendants Northbrook Partners, LLC, and Northbrook Management, LLC, which were pursuant to CPLR 3211(a)(7) to dismiss the fifth and sixth causes of action insofar as asserted against them, and substituting therefor a provision denying those branches of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

[83 A.D.3d 795] The plaintiff, a real estate sales, investment, and financing company, alleged that around “mid 2007,” the Racolin/Martinson family (hereinafter the Racolins) decided to sell AVJ Realty Corp. (hereinafter AVJ), a real estate holding company that, along with its subsidiaries, held title to certain residential properties in New York. The Racolins sought to accomplish this by an “off-market offering.” In or around May 2007, the plaintiff was approached by an intermediary on behalf of the Racolins regarding the possibility of

[921 N.Y.S.2d 111]

the plaintiff purchasing AVJ. Shortly thereafter, the plaintiff approached Maurice Mann, the owner of Mann Realty Associates (hereinafter Mann Realty), about potentially becoming a partner to acquire AVJ or, alternatively, to earn a finder's fee for introducing a potential purchaser to the Racolins. Prior to disclosing the AVJ offering to Mann, the plaintiff entered into a nondisclosure letter agreement with Mann and Mann Realty (hereinafter together the Mann defendants). The letter agreement provided, inter alia, that the Mann defendants would maintain strict confidentiality with the plaintiff, that no communications would take place with any other parties regarding properties held by AVJ or sales of such properties, and that in the event of any transaction involving the Mann defendants, the plaintiff would be entitled to “appropriate compensation.”

Upon receipt of and in reliance on the letter agreement, the plaintiff disclosed to Mann the AVJ offering and conveyed to him a package of documents pertaining to the offering. The plaintiff asserted that, as a result of the letter agreement, it refrained from pursuing the acquisition with other willing partners. Shortly thereafter, Mann informed the plaintiff that he had placed an offer with AVJ in excess of $300 million and assured the plaintiff that he would protect its interests and that the plaintiff would “profit handsomely” from an acquisition of AVJ. Subsequently, Mann informed the plaintiff that he was contracting to purchase AVJ. In January 2008 AVJ allegedly was acquired by a group of entities including the Mann defendants, for a final purchase price in excess of $349 million.

The plaintiff alleged that it repeatedly demanded a meeting with Mann to discuss compensation, but Mann continuously delayed and stalled any meeting. Eventually, on January 21, 2008, Mann met with the plaintiff, at which time the plaintiff demanded reasonable compensation pursuant to their letter agreement. The parties could not agree on a compensation sum. The plaintiff alleged that, shortly thereafter, it learned that the Mann defendants and Northbrook Partners, LLC, a real estate investment, development, and management company, together [83 A.D.3d 796] had acquired AVJ and that Northbrook Partners, LLC, had been founded by Mann and that he was authorized to bind Northbrook Partners, LLC.

The plaintiff commenced this action on July 21, 2008, asserting 11 causes of action against the Mann defendants, as well as Northbrook Partners, LLC, and Northbrook Management, LLC (hereinafter together the Northbrook defendants), seeking reasonable compensation for the services leading up to the acquisition, as well as compensation pursuant to the letter agreement, and damages as a result of the defendants' breach of the letter agreement. The plaintiff further alleged that Mann was a founder and managing partner of the Northbrook defendants, and that the Northbrook defendants were involved in the acquisition and were specifically formed to assist in depriving the plaintiff of compensation under the letter agreement. The Northbrook defendants moved to dismiss the complaint pursuant to,...