Roey Realty LLC v. Jacobowitz

2022 NY Slip Op 34310(U)

Roey Realty LLC and Esther Broyde, Plaintiffs, v. Samuel Jacobowitz, 469 East 98th Realty LLC, Chaim Schwartz, and 469 Holdings NY LLC, Defendants.

Index No. 522177/2018, Seq. Nos. 005, 013, 014

Supreme Court, Kings County

November 3, 2022

Unpublished Opinion

DECISION/ORDER

Devin P. Cohen, Judge

Recitation as required by CPLR §2219 (a), of the papers considered in the review of this Motion

Papers Numbered

Notice of Motion and Affidavits Annexed .... 1, 2

Order to Show Cause and Affidavits Annexed.

Answering Affidavits.................... 2, 3

Replying Affidavits...........................

Exhibits....................................

Other.......................................

Upon the foregoing papers^[1], plaintiff's motion for summary judgment (Seq. 005), the cross-motion for summary judgment and for sanctions filed by defendants 469 East 98th Realty LLC's, Chaim Schwartz and 469 Holding NY LLC (Seq. 013) and defendant Samuel Jacobowitz's cross-motion for summary judgment motion (Seq. 014) are decided as follows:

Introduction

Plaintiffs allege that defendants failed to pay them the commission they were due for their work in selling the subject property. Plaintiffs assert claims for breach of contract, common law entitlement to a broker commission, unjust enrichment and/or quantum meruit, tortious interference with contract successor liability, and fraudulent conveyance.

Factual Background

Plaintiff Esther Broyde states in her affidavit^[2] that she is a licensed real estate broker with plaintiff Roey Realty LLC (Broyde affidavit at ¶ 6). In January of 2018, defendant 469 East 98th Realty LLC ("469 East 98th Realty") owned property located at 469 East 98th Street, Brooklyn, New York 11212 (id. at ¶¶ 7-8). At that time defendant Samuel Jacobowitz was the principal, sole member, and manager of 469 East 98th Realty (id. at ¶ 9). In his own affidavit, Mr. Jacobowtiz confirmed this information (Jacobowitz affidavit at ¶¶ 4-5).

In early January of 2018, Ms. Broyde and Mr. Jacobowitz began discussing his retention of plaintiffs to sell the subject premises (Broyde affidavit at ¶ 11). To that end, the two of them had discussions and exchanged documents about the property's finances and a suitable listing price (id. at ¶¶ 11-14). They negotiated and ultimately signed a brokerage agreement (id. at ¶¶ 15-16; Jacobowitz affidavit at ¶¶ 6-8). .

Ms. Broyde submits a copy of the brokerage agreement, dated January 11, 2018. The agreement is between Roey Realty and "469 e 98th Street LLC". Ms. Broyde claims that this was an inadvertent misspelling, and that she and Mr. Jacobowitz intended the contract to be binding as to 469 East 98th Realty (Broyde affidavit at ¶ 18). Pursuant to the brokerage agreement, Roey Realty had the exclusive right to list the property for 90 days, and Roey Realty would earn a 3% commission if the property sells for more than $3,850,000 or a 2.5% commission if the property sells for any price up to $3,800,000.

Ms. Broyde subsequently set a listing price of $4.35 million and created a "setup", which is a marketing sheet used to advertise and sell the property (Broyde affidavit at ¶¶ 19-20). She provides a copy of the setup as well as emails exchanged with various potential buyers. Ms. Broyde describes her efforts to sell the property to potential buyers, including Chaim Schwartz (id. at ¶¶ 21-32). Ms. Broyde states that she had a series of discussions orally and in writing with Mr. Schwartz and Mr. Jacobowitz about the property (id.). Ms. Broyde provides copies of the texts and emails exchanged with them.

Mr. Schwartz acknowledges in his affidavit that he received solicitations from Ms. Broyde about the property (Schwartz Affidavit at ¶¶ 8, 13). He states that, at the time, he was not interested in the property (id. at ¶ 14). He characterizes his responses as short and polite, and contends that nothing came from these solicitations (id. at ¶¶ 14-15). He states that he never met Ms. Broyde and that she never showed him the property (id. at ¶¶ 10-12, 16). In contrast, Ms. Broyde states that she showed the property to Mr. Schwartz on March 20, 2018, and then followed up with him by email a week later (Broyde affidavit at ¶¶ 28-29).

Ms. Broyde also states that she discussed with Mr. Jacobowitz the challenges with selling the property due to the vacant commercial unit and the taxes (id. at ¶ 26). Mr. Jacobowitz does not deny that they had these discussions, but only describes his communication with Ms. Broyde to have been "minimal" (Jacobowitz affidavit at ¶ 13). Mr. Jacobowitz further claims that Ms. Broyde never identified Mr. Schwartz to him as a potential buyer (id. at ¶ 14).

Ms. Broyde claims that, on April 25, 2018, she emailed Mr. Schwartz to ask if he was still interested (Broyde affidavit at ¶ 31). Mr. Schwartz responded the same day by email that he was "going to make [his] numbers" and asked "what will make the deal happen?" (id.). Ms. Broyde replied the same day that "$3.7mm will do it." Ms. Broyde followed up but Mr. Schwartz did not respond (id. at ¶¶ 31-32).

Mr. Jacobowitz and Mr. Schwartz each claim that, in or around May 2018, Mr. Jacobowitz's brother-in-law, Jacob Stern, introduced Mr. Jacobowitz to Mr. Schwartz, who then expressed his interest in the property (Jacobowitz affidavit at ¶ 17; Schwartz affidavit at ¶ 22). Mr. Schwartz states that Mr. Stem showed him the property and that he (Mr. Schwartz) did not remember Ms. Broyde ever mentioning it (Schwartz affidavit at ¶ 23). Mr. Jacobowitz states that he and Mr. Schwartz negotiated the sale of the property without ever mentioning the plaintiffs (Jacobowitz affidavit at ¶¶ 17-18). Mr. Jacobowitz confirmed that the transaction price was $3.5 million (id. at ¶ 19).

On June 11, 2018, Mr. Schwartz created defendant 469 Holdings NY LLC ("469 Holdings"), of which he was the sole member (Broyde affidavit at ¶ 35; Schwartz Affidavit at ¶ 24; see also 469 Holdings operating agreement at [III] [a]). By Assignment of Membership Interest, dated July 23, 2018, Mr. Jacobowitz assigned his interest in 469 East 98th Realty to Mr. Schwartz. By deed, dated July 23, 2018, 469 East 98th Realty transferred the property to 469 Holdings (Jacobowitz affidavit at ¶ 20; Schwartz affidavit at ¶ 24). These documents do not disclose the consideration given for these transactions. However, plaintiffs provide a "loan disbursement statement" that shows 469 Holdings borrowed $3.52 million to finance this transaction.

Analysis

All parties move for summary judgment. Defendants separately request sanctions against plaintiffs for, they claim, plaintiffs' fraud on the court. I will address the sanctions first and then the motions for summary judgment.

Defendants' Application for Sanctions

Defendants seek sanctions based on emails plaintiffs provided to them. Defendants claim that plaintiffs fabricated these emails to support allegations is the complaint. The first email, dated January 24, 2018, from Ms. Broyde to Mr. Jacobowitz, states "My client, Chaim Schwartz, would like to get in today to tour the building." Defendants contend that Ms. Broyde never sent that email to Mr. Jacobowitz. Ms. Broyde was asked at her deposition if she sent the email. She replied, "It's not an e-mail, it's a document, and this is how I sent it to my attorney, my previous attorney, she asked me who the buyer was" (Broyde EBT at 72-73).

Defendants provide a copy of a similar email, also sent from Ms. Broyde to Mr. Jacobowitz on the same date and time, but which states "My client would like to get in today to tour the building." Ms. Broyde testified at her deposition that she sent that email to Mr. Jacobowitz (Broyde EBT at 78).

The second email, dated April 13, 2018, purports to show that Ms. Broyde advised Mr. Jacobowitz, "As per the exclusive agreement, below is the list of potential buyers that have seen the the [sic] listing and have shown interest" and the list of persons includes Chaim Schwartz. Defendants contend that Ms. Broyde never sent that email. When asked if she sent that email to Mr. Jacobowitz, she testified "This is not an e-mail, it's a document." (Broyde EBT at 77). She was then asked, "Was this document ever sent to Mr. Jacobowitz on April 13, 2018?" and she responded, "No" (id.)

Plaintiffs provided the alleged emails as attachments to a settlement demand letter. Plaintiffs assert that they did not produce the emails in discovery or file them with the court. Moreover, plaintiffs argue that the court should not consider these emails because they were part of a settlement demand. Pursuant to CPLR 4547, statements made during settlement discussions are inadmissible as proof of liability or damages (McQueen v Bank of New York, 57 Mise 3d 481, 484 [Sup Ct, Kings County 2017]). Accordingly, I will not accept them as such.

The Court of Appeals holds that a party who knowingly attempts "to hinder the fact finder's fair adjudication of the case and his adversary's defense of the action" by, among other things "fabrication of evidence, perjury, and falsification of documents" has committed a fraud on the court (CDR Creances S.A.S. v Cohen, 23 N.Y.3d 307, 320-21 [2014]). Such fraud must be proved by clear and convincing evidence (id. at 320).

The Court of Appeals cautioned that dismissal "is an extreme remedy that 'must be exercised with restraint and discretion'" (id. at 321, citing Chambers v NASCO, Inc., 501 U.S. 32, 44 [1991]). However, dismissal may be appropriate where the deceit is repeated, intentional, and goes to matters central to the case (id.). By contrast, isolated instances of perjury that do not go to material issues may warrant a lesser sanction, such as awarding attorney fees and costs or precluding...