Commercial Division Blog
Plaintiff Not Entitled to Broker's Commission Because Not Procuring Cause of Purchase
On December 2, 2015, the Second Department issued a decision in Excel Realty Advisors, LP v. Engel Burman Group, LLC, 2015 NY Slip Op. 08804, holding that the plaintiff was not the procuring cause of a sale and thus was not entitled to a commission and, because it did not have an express contract, was not entitled to a finder's fee, explaining:
In order to be entitled to recover a broker's commission, a real estate broker must establish, among other things, that it was the procuring cause of the sale. Here, on those branches of its motion which were for summary judgment dismissing the first cause of action, and the second cause of action insofar as asserted against it, both of which alleged breach of contract, [the defendant] established, prima facie, that the plaintiff was not a procuring cause of [its] purchase of certain assisted-living facilities as part of a joint venture with Harrison Street. In opposition, the plaintiff failed to raise a triable question of fact on that issue.
The plaintiff contends that the Supreme Court erred by, inter alia, reading the first and second causes of action as seeking only to recover a real estate broker's commission because it was, in fact, entitled to a finder's fee for its services in bringing Engel Burman and Harrison Street together. However, to be entitled to a finder's fee, the plaintiff would have to prove that it had an express, special agreement to act solely as a finder. Entitlement to a finder's fee requires an express contract, but recovery based on quantum meruit is predicated on an implied contract. Here, the plaintiff alleges entitlement to a finder's fee based on an express oral contract, and he is not entitled to recover a finder's fee in quantum meruit.
(Internal quotations and citations omitted) (emphasis added).