SPRE Realty, Ltd. v. Dienst

In SPRE Realty, Ltd. v. Dienst, 119 AD3d 93 [1st Dept 2014] a broker introduced the husband and wife defendants to a condominium building under construction ("the Building"), brought them to the developer's office to view the layout and renderings of the Building and to a home to view an example of the developer's work, and negotiated with the developer on the defendants' behalf for a duplex condominium at the Building. Based on those negotiations, the broker sent a deal sheet to the developer for the purchase of two units at the Building. Soon thereafter, attorneys for the defendants and the developer exchanged and reviewed a contract of sale for the two units which, according to the broker, contained the same material terms as the deal sheet it had prepared. The defendants, however, pulled out of the deal, claiming they had changed their minds and were no longer in the market for a new home. The broker contacted the defendants a few months after this deal fell through to inquire whether they had any renewed interest in purchasing a home but the defendants reiterated that they were no longer seeking to purchase a residence and had no continued interest in the Building. However, approximately eighteen (18) months after the first deal fell through, the defendants purchased a duplex at the same Building but consisting of two units different from the ones for which they had previously contracted. The broker sued the defendants claiming that it was entitled to a brokerage commission on the sale and alleging that the defendants deliberately had concealed their intention to purchase the condo units at the Building in order to avoid paying the broker its commission. Defendants moved to dismiss pursuant to CPLR 3211(a) claiming that they never signed the deal sheet or contract of sale for the first duplex units and that the broker was not involved in the ultimate sale of the units. The defendants' motion to dismiss was denied by the Supreme Court and the Appellate Division affirmed. The appellate court held that the factual allegations by the broker were sufficient to establish that it was the "direct and proximate link" between the introduction of the defendants to the developer and the defendants' eventual purchase of the second duplex at the Building. The appellate court also held that the issue of whether the broker was the "procuring cause" of the eventual sale was a question of fact to be determined by the trier of fact on the evidence presented at trial (119 AD3d at 99-100.)