Commercial Division Blog

Posted: May 27, 2017 / Categories Commercial, Contracts, Real Property

Broker's Claim Dismissed; it Was Not Procuring Cause of Transaction

On May 8, 2017, Justice Scarpulla of the New York County Commercial Division issued a decision in Bracha NY, LLC v. Moncler USA Retail LLC, 2017 NY Slip Op. 30996(U), dismissing a broker's claim for a commission on a real estate sale because it was not the procuring cause of the transaction, explaining:

To state a claim for a brokerage commission, a plaintiff must plead the following three elements: (1) that it is a duly licensed broker, (2) the existence of 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 transaction. . . .

A broker is not entitled to a commission by merely bringing the property to the buyer's attention. To be the procuring cause of the transaction, a broker must establish a direct and proximate link, as distinguished from one that is indirect and remote, between the introduction by the broker and the consummation of the transaction.

The Complaint is replete with information that undermines Keller Williams' claim that it was the procuring cause of the lease. For example, Keller Williams pleads that: 1) nothing of substance occurred between Moncier SP A and Keller Williams after 2012; 2) the New Owner, with whom Keller Williams never dealt, purchased 650 Madison Avenue in September 2013; 3) Keller Williams did not participate in the lengthy negotiations that ultimately resulted in a lease with the New Owner; and 4) the Lease covers different space and is on different terms than those set forth in the May 2012 Proposal. Keller Williams' role was limited to introducing the Moncier Defendants to the Premises and unsuccessfully attempting to facilitate a lease with the Prior Owner over a period of several months in 2011 and 2012. The documentary evidence shows that the Lease was later negotiated over the course of nearly one year, involved many substantive changes, and that Keller Williams had no role in any of the negotiations. Keller Williams has therefore not pled sufficient facts to show either that the Moncier Defendants agreed to pay it a commission or that it was the procuring cause of the Lease.

(Internal quotations and citations omitted) (emphasis added).