Mendelson v. Fleischmann

• Decision Date: 16 May 1973
• Docket Number: No. 73 Civ. 652.,73 Civ. 652.
• Citation: 386 F. Supp. 436
• Parties: Max MENDELSON, Plaintiff, v. Charles FLEISCHMANN and James H. Eastland, Jr., Defendants.
• Court: U.S. District Court — Southern District of New York

386 F. Supp. 436

Max MENDELSON, Plaintiff, v. Charles FLEISCHMANN and James H. Eastland, Jr., Defendants.

No. 73 Civ. 652.

United States District Court, S. D. New York.

May 16, 1973.

Dreyer & Traub, New York City, for plaintiff.

Gold, Farrell & Marks, New York City, for defendant.

James H. Eastland, Jr., pro se.

MEMORANDUM AND ORDER

BRIEANT, District Judge.

Plaintiff, a citizen of California presently residing in Spain, is a licensed real estate broker in New York. He brought an action in Supreme Court, New York County, to recover brokerage commissions in excess of $10,000.00 from defendants. Defendants, residents and individual citizens of Ohio, removed the action to this Court on diversity grounds 28 U.S.C. § 1441(b).

They now move, alternatively, to dismiss for lack of personal jurisdiction over them, and improper venue, or to transfer to the Southern District of Ohio pursuant to 28 U.S.C. § 1404(a) for the convenience of the parties and witnesses and in the interests of justice.

Jurisdiction of the person was obtained in state court pursuant to New York CPLR § 302(a)(1), which reads in part as follows:

"§ 302. Personal jurisdiction by acts of non-domiciliaries

(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:

1. transacts any business within the state."

Defendants owned or controlled real property (the "Mercantile Library Building") located in Ohio. Part of that property was ultimately, on July 3, 1969, leased in writing for a term of years to Garfinckel, Brooks Brothers, Miller & Rhoads, Inc. (hereinafter "Brooks"). In that lease plaintiff was recognized as broker, and landlords covenanted with the tenant to pay his brokerage fee in accordance with a separate written agreement. This brokerage fee is the subject of the first cause of action pleaded.

Thereafter, the landlord and tenant agreed upon a novation, by which a new lease, on different terms, for a different parcel (the "Formica Building"), also owned by defendants was leased to Brooks instead of the original store site. The new lease contains the same recital concerning landlords' obligation to plaintiff for brokerage.

With what seems unseemly greed, plaintiff claims separately and additionally for this compensation in his second cause of action pleaded. Whether he may get paid twice, because the parties changed their minds and renegotiated after the first lease was signed is not relevant to the jurisdictional question.

Defendants state without contradiction that the brokerage agreement was not made in New York. They concede, grudgingly, on oral argument, that in the course of performance, plaintiff had one meeting in New York, characterized as "the brief January 30 trip to New York."

Undisputed documents belie defendants' contention that the trip to New York was of no significance. On January 8, 1969 defendant Eastland, then trustee for co-defendant Fleischmann in respect to the realty, wrote plaintiff (Exhibit H annexed to Brandon affidavit) in part as follows, after setting forth in detail proposed financial terms for a lease with Brooks:

"As you know, we have tried to work out the many possible variations in order to arrive at a proposition which is economically feasible for both of us, and the one presented here is certainly the only one which we can possibly live with.

As I have pointed out to you Mr. Fleischmann is certainly interested in working out an arrangement with Brooks Bros. and he suggests that you bring Mr. MacIntosh to Cincinnati for a closer look at the building and a personal meeting in order to conclude the lease arrangement.

Please let us hear from you and we will work out a mutually agreeable date for a meeting."

Thereafter, on January 30, 1969, such a "personal meeting" was held by prearrangement at 346 Madison Avenue, in this City. That was the office of one MacIntosh, a Brooks vice-president who had negotiating authority for the tenant.

Plaintiff and both defendants attended that meeting. Lease terms were negotiated. Plaintiff prepared the usual broker's memorandum of those discussions (Exhibit I) setting forth his understanding of "the issues discussed and/or areas in which informal agreement was reached." Discounting usual brokers' optimism, these terms set forth in a three page single spaced typewritten proposed agreement comprise considerable detail, and are indicative of substantial and meaningful performance by the broker, and more than a mere "brief trip to New York" by defendants. True it is that further negotiations were pursued elsewhere, up until the day the lease was signed in Ohio, by defendants, as the last to sign.

On February 12, 1969, plaintiff's memorandum was, on Eastland's instructions, delivered to a New York lawyer with instructions to prepare a draft of lease. On February 12, 1969, purportedly on the authorization of Eastland, plaintiff wrote MacIntosh in New York a letter, not numbered, but attached to Exhibit K.

The New York lawyer on March 19, 1969 mailed the proposed lease to defendant Eastland in Cincinnati.

The documents compel an inference that a material part of the performance of the brokerage contract did in fact take place in New York. The scope of the broker's work is to produce a ready, willing and able customer on terms satisfactory to the owner. This contemplates negotiation. The place for such performance, provided it is not purely fortuitous is important for jurisdictional purposes.

Selection of New York as a place for the negotiating conference and meeting of January 30, 1969 was in no sense "purely fortuitous". Cf. Hunter v. Calvaresi, 45 Misc.2d 96, 256 N.Y.S.2d 356 (1964). It was the place where MacIntosh, the Brooks vice-president who had the authority to negotiate for the tenant, maintained his office, and was also the place where Brooks' lawyer, who was to draft the formal lease, had his office. Defendants do not deny that the performance of the brokerage contract in New York was purposely envisioned, nor could they, since they were individually present in New York, and participating with plaintiff in negotiations at the January 30th meeting. By attending without objection the...