Sholom & Zuckerbrot Realty Corp. v. Citibank, N.A.
| Decision Date | 09 June 1994 |
| Citation | 205 A.D.2d 336,613 N.Y.S.2d 588 |
| Parties | SHOLOM & ZUCKERBROT REALTY CORP., Plaintiff-Appellant, v. CITIBANK, N.A., Defendant-Respondent. |
| Court | New York Supreme Court — Appellate Division |
Before SULLIVAN, J.P., and ASCH, NARDELLI and TOM, JJ.
Order, Supreme Court, New York County (Diane A. Lebedeff, J.), entered on or about April 15, 1993 which, inter alia, granted defendant-respondent Citibank, N.A.'s ("Citibank") cross-motion for summary judgment dismissing the complaint and denied plaintiff-appellant Sholom & Zuckerbrot Realty Corp.'s ("S & Z") motion for certain discovery, unanimously reversed, without costs, the cross-motion is denied in its entirety, plaintiff's motion is granted, and the parties are directed to proceed to discovery.
This action concerns a commercial warehouse located at 1320 Viele Avenue, Bronx, New York (the "Property"). In July 1988, Citibank issued a $1,100,000 mortgage on the Property to a Ms. Marlene Waschitz, pursuant to which Citibank became the primary mortgagee. In 1990, Ms. Waschitz defaulted on the mortgage payments and attempted to sell the Property through S & Z, a licensed commercial real estate broker. S & Z, however, was unable to procure a buyer.
Citibank subsequently commenced a mortgage foreclosure proceeding, during the pendency of which Gary Nadel ("Nadel") of S & Z began a dialogue with Jay Marcus ("Marcus"), a Vice-President of Citibank. Plaintiff alleges that Marcus made the initial contact with Nadel and informed him that Citibank was anxious to find a buyer or a tenant for the Property, and that it wanted S & Z to act as a broker. Defendant, on the other hand, asserts that S & Z first established contact with Citibank, which is a common practice of brokerage houses once a foreclosure action is commenced. Marcus informed Nadel that Citibank was looking for a price of $9,000,000 in the event of a sale or a lease with a rental of $5 per square foot, to which Nadel allegedly responded that the sales figure was realistic but that the rental figure was too high. In any event, Nadel purportedly told Marcus he would see what he could do.
There is no dispute that plaintiff subsequently brought several prospective tenants and/or buyers to see the Property with defendant's knowledge and consent. There is also no dispute that the eventual tenant, Gary Plastic Packaging Corp. ("Gary Plastic"), was produced by plaintiff. The lease transaction which was thereafter negotiated was structured so that Viele Realty Corp. ("Viele Realty"), a junior lienor, entered into a lease agreement as the lessor with Gary Plastic, the lease being contingent on Viele Realty's subsequent purchase of the Property, which occurred when it was the only bidder at the foreclosure sale. Citibank, as a result of the foregoing, enjoyed an enhanced position as first mortgagee as it held a larger mortgage (it provided capital to Viele Realty to purchase the Property) and benefitted from the new tenant which provided a renewed cash flow.
Plaintiff thereafter sought a broker's fee from Citibank on the basis of the alleged oral agreement. Citibank refused, indicated that it never owned the Property and was therefore not liable, and told plaintiff to look to the new owner or tenant for its fee. This action ensued.
Plaintiff contends that after being repeatedly frustrated in its efforts to depose Marcus, it made a motion to compel his examination before trial. Citibank cross-moved for summary judgment dismissing the complaint and for the imposition of sanctions pursuant to 22 NYCRR 130-1.1. The IAS court granted defendant's cross-motion to the extent of dismissing the complaint, no sanctions were assessed, and denied plaintiff's motion as moot. We now reverse.
Initially, defendant argued that it could not be liable for a brokerage commission because it never owned the Property, which contention was correctly rejected by Justice Lebedeff. Although Citibank now claims that it has...
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