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  • Tom Holman

Court Denies Owners Motion to Dismiss in Breach of Contract Complaint Seeking Brokerage Commissions

On September 3, 2014, in a Suffolk County Supreme Court case, Lighthouse Vacation Props. v Kessler, 2014 N.Y. Misc. LEXIS 3925 (N.Y. Sup. Ct. Sept. 3, 2014), Justice Joseph C. Pastoressa denied Defendants’ motion to dismiss the Plaintiffs’ complaint in this action to recover money allegedly due and owing for real estate brokerage services.

In the complaint, Plaintiffs pled two causes of action both for breach of contract. The first was to recover the agreed commissions in relation to the sale of the Defendants’ property on Fire Island. The second was to recover the reasonable value of the services performed for the Defendants such as work, labor and services to find a buyer.

Plaintiffs allege that the Defendants agreed to pay a brokerage commission in the amount of 5% of the purchase price of the property which was outlined in a brokerage agreement. According to the complaint, in or about October 2013, Plaintiffs presented the Defendants with an all-cash offer of $510,000.00 which the Defendants accepted. However, without cause or just reason, Defendants failed to execute the contract. Plaintiffs proceeded to get a second offer on the property in the amount of $540,000.00. The Defendants subsequently informed the Plaintiffs that they had decided to work with an unrelated broker to finalize the sale and have refused to have any contact with the Plaintiffs.

Plaintiffs allege that because they obtained 2 buyers who were ready, willing and able to purchase the property at prices and on terms satisfactory and agreeable to the defendants, the Defendants are in breach of the parties’ brokerage agreement.

Defendants moved, pre-answer, to dismiss the complaint for failure to state a cause of action. The court held that the Plaintiffs’ complaint set forth sufficient facts to state a cause of action for recovery. “A real estate broker is generally entitled to recover a commission upon establishing that he or she (i) was duly licensed…, (2) had a contract, express or implied, with the party to be charged with paying the commission…, and, (iii) procured a buyer ready, willing, and able to purchase on the seller’s terms.” The court held that Plaintiffs complaint was sufficiently detailed to “give adequate notice of the transactions and occurrences constituting the alleged wrong.”

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