Georgia Malone & Co., Inc. v. Rieder

In Georgia Malone & Co., Inc. v. Rieder, 19 NY3d 511 [2012] a real estate broker who prepared due diligence reports for a developer in connection with the potential purchase of commercial properties brought an action for unjust enrichment against a rival broker that acquired the reports from the developer and later obtained commission on ultimate sale of the properties (19 NY3d 511). The Court of Appeals in Georgia Malone & Co., Inc., found the relationship between plaintiff and defendant were too attenuated because they simply had no dealings with each other (id. at 517-518). The Court found that the complaint does not contain sufficient allegations to support an unjust enrichment claim against Rosewood, a co-defendant (id. at 518). In particular, the Court stated: "the complaint does not assert that Rosewood and Malone (the plaintiff) had any contact regarding the purchase transaction. And, although the complaint states that Rosewood "knew at all times" that Malone produced the due diligence reports and provided them to CenterRock (the developer) with the expectation that it would be compensated in the event a purchase agreement was reached, there is no allegation that Rosewood was aware that Malone and CenterRock had agreed to the confidential nature of the due diligence information or that Rosewood knew that CenterRock had failed to pay Malone before the documents were conveyed to Rosewood...There is no claim that Rosewood had anything other than arm's length business interactions with CenterRock or the Rieders (a co-defendant). The pleadings do not implicate Rosewood in the Rieders' alleged wrongdoing. The Rieders furnished the due diligence documents and, in exchange, Rosewood paid them $150,000. Rosewood obtained a buyer and negotiated the purchase transaction with the sellers and their broker. Hence, Malone's argument that Rosewood profited without doing any work lacks merit (id.)."