Commercial Division Blog
Broker Entitled to Fee Under Agreement Even Though Not Procuring Cause of Sale
On January 19, 2017, the First Department issued a decision in Eastern Consolidated Properties, Inc. v. 5 East 59 Realty Holding Co., LLC, 2017 NY Slip Op. 00421, holding that a broker was entitled to a fee on a sale for which he allegedly was not the procuring cause, explaining:
Contrary to the contentions of defendants 5 East 59 Realty Holding Company, LLC and Alexandros Demetriades, the language of the written commission agreement is unambiguous. Pursuant to the agreement, defendant 5 East 59 Realty Holding expressly agreed to pay plaintiff a fee of 1.75% of the purchase price if plaintiff introduced defendants to the party (and any related entities) that ultimately purchased the property at a closing. Plaintiff introduced Paulo Agnelo Malzoni to defendants. Malzoni was the principal of the ultimate purchaser of the property. Thus, plaintiff is entitled to its fee.
Defendants' argument that plaintiff is not entitled to a fee because it was not the "procuring cause" or "direct and proximate link" for the sale is unavailing, because the parties entered into an agreement that did not make the fee contingent on plaintiff's negotiation of the transaction.
(Internal quotations and citations omitted).