Apr 18

Rubin and Gross win unanimous appellate victory on brokerage commission

Howard Rubin and Douglas Gross won a unanimous victory at the First Department, Appellate Division on April 6, 2017. In this dispute, Goetz Fitzpatrick represents Eastern Consolidated Properties, a real estate brokerage firm. Eastern sued several defendants – related development companies – for failing to pay it a contractual brokerage commission, and then failing to honor a settlement agreement.

Read Real Estate Weekly‘s article on the case, quoting Mr. Rubin.

Eastern had requested a One Million Dollar brokerage commission from the buyer, but orally agreed with the buyer to accept a half commission of $500,000. Buyer argued that Eastern was not entitled to a commission because it was not the procuring cause of the sale, but the appellate court held that Eastern did not have to prove that it was the procuring cause in the context of this settlement agreement. It held that accepting a half commission was sufficient consideration to uphold the oral settlement agreement. Finally, the principal of the buyer could be sued personally because he contended that his oral agreement did not bind the buyer.

The defendants moved to dismiss Eastern’s complaint, but Justice Charles E. Ramos denied that motion on June 29, 2016. Justice Ramos also granted Eastern’s motion to amend the complaint to add the individual owner of the buyer as a defendant. The appellate court affirmed the decision of Justice Ramos in its entirety, thus allowing Eastern’s lawsuit to proceed. Gross argued the appeal.

Read the First Department’s full decision here.

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