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COMPLAINT STATED CAUSES OF ACTION FOR BREACH OF REAL ESTATE BROKERAGE CONTRACT, QUANTUM MERUIT, UNJUST ENRICHMENT AND PROMISSORY ESTOPPEL, STATUTE OF FRAUDS DID NOT APPLY, COMPLAINT SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined that plaintiffs’ complaint stated causes of action for breach of contract, quantum meruit, unjust enrichment and promissory estoppel. The contract between plaintiff, a real estate broker, and defendant, a real estate developer, gave plaintiff the exclusive right to broker sales of luxury apartments in return for a reduced commission rate. The complaint alleged defendant accepted plaintiff’s services for two years but refused to pay after defendant received the benefits of the bargain:

Plaintiffs’ failure to identify in the complaint the specific national real estate sales and marketing agency with which plaintiffs were going to partner, along with the terms of such partnership, is not fatal to plaintiffs’ breach of contract claim. The alleged contract would imply a covenant of good faith and fair dealing pursuant to which plaintiffs would propose reasonable entities and defendants would reasonably accept or reject those proposals … . … As to the start and end date of the agreement, it can be inferred from the allegations in the complaint … . With regard to the identity of the promisor, the complaint indicates that all negotiations and interactions were with defendant Kuzinez. …

The complaint should not have been dismissed pursuant to the statute of frauds. As an initial matter, defendants did not move to dismiss based on the statute of frauds and plaintiffs were not afforded the opportunity to address the issue … . Moreover, the statute of frauds is inapplicable here as General Obligations Law § 5-701(a)(10) specifically exempts contracts to pay compensation to licensed real estate brokers, which is the type of contract alleged by plaintiffs.

The declaratory judgment cause of action, which seeks a declaration that plaintiffs have the right to serve as exclusive broker for all residential sales for the subject development, should be reinstated based on our finding that the complaint sufficiently alleges a claim for breach of contract.

Additionally, the quantum meruit, unjust enrichment, and promissory estoppel claims state causes of action. As to quantum meruit, the complaint alleges that plaintiffs provided services to defendants at a reduced cost or no cost, based on the promiseof the oral agreement …. As to promissory estoppel, the complaint alleges that defendants promised plaintiffs that they would serve as exclusive broker and that, in reasonable reliance on that promise, plaintiffs agreed, among other things, to substantially reduced commissions … . Elhanani v Kuzinez, 2019 NY Slip Op 04042, First Dept 5-23-19

 

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