Commercial Division Blog
Posted: February 12, 2016 / Categories Commercial, Contracts
Jury Verdict Awarding Brokerage Commission Based on Oral Brokerage Agreement Overturned
On February 3, 2016, the Second Department issued a decision in Douglas Elliman, LLC v. Silver, 2016 NY Slip Op. 00675, overturning a jury verdict awarding a brokerage commission based on an oral brokerage agreement, explaining:
To prevail on a cause of action to recover a commission, the broker must establish (1) that it is duly licensed, (2) that it had a contract, express or implied, with the party to be charged with paying the commission, and (3) that it was the procuring cause of the sale. The duty assumed by the broker is to bring the minds of the buyer and seller to an agreement for a sale, and the price and terms on which it is to be made, and until that is done his right to commissions does not accrue. To establish that a broker was the procuring cause of a transaction, the broker must establish that there was a direct and proximate link, as distinguished from one that is indirect and remote, between the bare introduction and the consummation. Where, as here, the broker is not involved in the negotiations leading up to the completion of the deal, the broker must establish that it created an amicable atmosphere in which negotiations proceeded or that it generated a chain of circumstances that proximately led to the sale.
The Supreme Court should have granted that branch of the defendants' motion which was pursuant to CPLR 4404(a) to set aside the jury verdict and for judgment as a matter of law. . . . Here, there was no valid line of reasoning which could have led to the conclusion that the plaintiff was the procuring cause of the sale.
(Internal quotations and citations omitted) (emphasis added).