Upon the foregoing papers in this action by plaintiffs Amihai Ben Horin (Horin), Shay Zach (Zach), and Rotem Shein (Shein) to recover "commissions" on real estate sales, Horin moves for partial summary judgment in his favor as against defendant Metro Home Sales Corp. (Metro). Defendant EMI Progressive Equities, Inc. (EMI) moves for summary judgment dismissing Zach and Shein's claims as against it.

Metro, a corporation, is a licensed real estate broker, whose principal is Christine M. Vincent, a licensed broker (who is not a party herein). Horin became licensed as a real estate salesperson associated with Metro, and was employed by Metro as a sales agent, pursuant to an oral agreement, from December 2003 until January 2005. Horin alleges that pursuant to the terms of his oral employment agreement, Metro was to pay him 25% of all brokerage commissions earned by Metro which he caused to be listed with Metro and 25% of all commissions earned by Metro for which he was the salesperson who sold such property. Thus, Horin alleges that if he both procured the listing for a particular property and was the salesperson who sold that property, he would be entitled to receive 50% of all commissions earned by Metro with respect to that property.

EMI is a corporation engaged in the business of real estate development and a home builder in New York City. EMI would purchase real properties, when it believed the prices which the property owners sought to realize were below market value, and it would then resell such properties at a profit. Horin alleges that he became affiliated with EMI as a sales agent, pursuant to an oral agreement, from December 2003 until January 2005. Zach and Shein also commenced working for EMI in December 2003 and continued their affiliation with it until January 2005. [*2]

Pursuant to written agreements with EMI,^[FN1] Zach and Shein, as independent contractors, agreed with EMI "to work diligently and with [their] best efforts to find and refer real estate properties to [EMI], to solicit additional business and customers of [EMI], and otherwise promote the business of real estate development and home building so that each of [them would] derive the greatest profit possible." These agreements provided that the fees for such services would be determined by EMI and tendered in accordance with EMI's schedule of fees.

Horin, Zach, and Shein assert that they were advised by EMI and Metro that they each would be compensated on the basis of 15% of the net profits made on the resale of real estate which had been found by them and referred to EMI for purchase and subsequently re-sold by EMI or its nominees except that in the case of unimproved land, they would receive a fixed compensation of $5,000 for each saleable unit built on the land and subsequently sold. The net profits upon which they were to be compensated for such transactions allegedly consisted of the gross price received by EMI or its nominee, upon the sale of the property, less the purchase price of the property and the cost of any renovations and/or repairs made by EMI or its nominee to the property. Horin, Zach, and Shein also assert that EMI and Metro further advised them that if they were to sell any properties owned by EMI or its nominees at a price in excess of EMI's "asking price" for that property, they would receive, as compensation, the first $5,000 of the excess, plus 50% of the remaining monies received above EMI's asking price.

Horin claims that as a result of his efforts, Metro obtained listings and made sales of certain properties, and that he is, therefore, entitled to compensation of 50% of all commissions received by Metro upon the sales of these properties. Horin further claims that he is entitled to a commission from EMI for procuring the sale of another property. Zach and Shein claim that they, on behalf of EMI, located eight properties, which were purchased by EMI or its nominees, and that they are owed compensation of at least $210,250, subject to adjustments for repairs or renovations made by EMI on the properties, based upon their agreement with EMI to be paid commissions by EMI for procuring these sales. Zach and Shein also allege that EMI and Metro purported to provide advances to them, such as cars and automobile insurance, which were inflated, unnecessary, or fictional, as an offset to monies due to them.

On June 8, 2005, Horin, Zach, and Shein brought this action against EMI and Metro, and Moshik Regev (Regev) and Eldad Amrani (Amrani) (who are alleged to be the principals of EMI). By order dated July 19, 2007, a motion and cross motion by Regev and Amrani to dismiss the complaint as against them were granted, without opposition. This action seeks payment of the commissions allegedly owed to Horin, Zach, and Shein from the sale of the subject properties, a judgment declaring their entitlement to compensation for any of these properties which have not yet been sold at the time of trial but are thereafter sold, and a declaration that Metro and EMI may not offset any sums for advances against monies found to be due to them, and other compensatory relief based upon their employment by defendants.

In support of his motion, Horin asserts that he was the salesperson responsible for both the listing and the subsequent sale of properties located at 43-09, 43-11, and 43-15 Hunter Street, in Long Island City, New York (the Hunter Street properties). Horin, in his affidavit, states that he [*3]personally approached Tamara Thomsen and John Orcutt, Charles Hassel, and David Garber (the Hunter Street owners), who were the owners of 43-09, 43-11, and 43-15 Hunter Street, respectively, in order to obtain their authority and approval to obtain a collective listing, on behalf of Metro, to market and sell all three lots to one purchaser. Horin claims that his efforts resulted in the signing of an exclusive agreement between the Hunter Street owners and Metro to list these properties collectively. A copy of the Brokerage Agreement, dated November 2004, between the Hunter Street owners and Metro has been submitted by Horin. It states that it is an exclusive agreement to list the property with Metro with a listing price of $8 million with a broker's commission of 4.5% of the first $8 million and 6% on any sales price over $8 million. It provides that no broker's commission shall be earned or due until there is a closing of title and the Hunter Street owners have received the full amount of the purchase price. It is executed by the Hunter Street owners and by Horin, on behalf of Metro, as the broker. Horin also obtained signed Lead Paint Disclosure and Agency Disclosure forms from each of the Hunter Street owners, which were delivered, by Fed Ex, from Steve Allen, as the attorney for the Hunter Street owners, to Horin, on behalf of Metro.

Horin asserts that on December 30, 2004, he personally met with Joseph Cerrano of Basile Builders Group to discuss his interest in purchasing the Hunter Street properties from the Hunter Street owners and that, after a one hour meeting, Joseph Cerrano made an offer and signed a binder agreement to purchase the Hunter Street properties. Horin has annexed an e-mail by him to the Hunter Street owners, dated December 30, 2004, advising them of the potential buyer's offer of $7.5 million for the Hunter Street properties. Horin has also annexed a copy of a Sales Agreement dated December 30, 2004, signed by the purchaser, Joseph Cerrano, for Basile Builders Group, which lists Horin as the broker.

Horin additionally asserts that he was the salesperson responsible for both the listing and the subsequent sale of properties located at 2834, 2836, and 2840 Brighton 3rd Street, in Brooklyn, New York (the Brighton Street properties). Horin states that on September 28, 2004, he, on behalf of Metro, obtained a listing from Aleksander Adesman for the sale of his property located at 2834 Brighton 3rd Street, in Brooklyn, New York. He also states that on September 20, 2004, he, on behalf of Metro, obtained a listing from Christine Cardona for the sale of her property located at 2836 Brighton 3rd Street, in Brooklyn, New York, and a listing from Lorraine and William Grant for the sale of their property located at 2840 Brighton 3rd Street, in Brooklyn, New York. Horin had each of these owners (the Brighton Street owners) sign a "Listing Agreement for Residential Property - Exclusive Right to Sell," an intake sheet with some basic information about the property, a Lead Based Paint Disclosure, a Multiple Listing Exclusive Service Certification, an Agency Disclosure, and a Commission Agreement. Horin's name is listed on each of these documents as the listing salesperson or real estate agent on behalf of Metro.

Horin claims to have procured Basile Builders Group Brighton 3rd LLC as the buyer for each of these properties. The Commission Agreements signed by each of the Brighton Street owners lists Basile Builders Group Brighton 3rd LLC as the purchaser, and the contract prices for these properties as $575,000, $575,000, and $445,000, with broker's commissions of $23,000, $23,000 and $17,800, for the 2834, 2836, and 2840 Brighton 3rd Street properties, respectively. On April 20, 2005, the three Brighton Street properties were sold at the prices listed in the Commission Agreements and deeds were subsequently filed, in May 2005, conveying the Brighton Street properties to Elizabeth [*4]McDonald, as agent for Basile Builders Brighton 3rd LLC, the buyer listed in the Commission Agreements.

Horin contends that since he obtained exclusive listings for Metro for the Hunter Street properties and the Brighton Street properties and since he was the procuring cause of the sales of these properties, he, pursuant to his agreement with Metro, is entitled to be paid 50% of the commissions earned by Metro upon the sales of these properties. He, therefore, seeks partial summary judgment in his favor on his breach of contract claim as against Metro with respect to his commissions for these properties.

In addressing Metro's motion, the court notes that it is well established that a real estate broker seeking to recover a commission must show "that he or she was the procuring cause of the sale" (Friedland Realty v Piazza, 273 AD2d 351, 351 [2000]; see also Finley v Amyot, 285 AD2d 946, 948 [2001]). While, in the case at bar, Horin is a real estate salesperson seeking to share in the commission of Metro, the broker, the few reported decisions that address a real estate salesperson's right to share in a commission received by the broker apply the "procuring cause" concept utilized in direct actions by a broker for a commission (see Parisi v Swift, 121 Misc 2d 787, 790 [1983], affd 128 Misc 3d 388 [1985]; Bendevena v Fuchs Real Estate, 89 Misc 2d 466, 467 [1976]; Tongue v White, 47 Misc 2d 357, 360 [1965]; Borelli v Newbauer, 30 Misc 2d 349, 352 [1961]; Clair v Kall & Kall, 23 Misc 2d 568, 571-572 [1960]). "Whether a broker is the procuring cause of a sale generally is an issue of fact" (Cappuccilli v Krupp Equity Ltd. Partnership, 269 AD2d 822, 823 [2000]; see also Bersani v Basset,184 AD2d 996, 997 [1992]).

In opposition to Horin's motion, Metro has submitted the affidavit of Eldad Amrani, a licensed real estate sales agent employed by Metro, who is also alleged to be a principal of EMI, though this has not been specifically admitted. Amrani claims that he, and not Horin, was the procuring cause of the sale of the Hunter Street properties. According to Amrani, EMI located the Hunter Street properties, but its principals decided not to develop these properties. He claims that as a result, Regev instructed that the listing be given to Metro. Amrani also claims that he found the buyer, Basile Builders Group.

Amrani further points to Horin's deposition testimony, wherein Horin testified that Zach and Shein (who, as noted above, worked for EMI) helped him find the Hunter Street owners and get an appointment with the buyer. Amrani notes that Horin also testified that he was aware that Zach and Shein, who brought this deal to him, were employed by EMI and that they worked under Amrani and Regev. Amrani asserts that Zach and Shein tried to sell the Hunter Street properties, using Horin's real estate salesperson license, in order to receive an illegal splitting of fees.

Amrani claims that Horin did not participate in the negotiations that resulted in the sale of the Hunter Street properties. Rather, Amrani states that he, and not Horin, arranged the in-person meeting between the Hunter Street owners, their attorney, and the buyer, and conducted a complete negotiation, including a reduction in the sales price. Amrani also points out that the Hunter Street owners did not obtain the $7.5 to $8 million purchase price listed in the Brokerage Agreement propounded by Horin, but only obtained a reduced price of $7.2 million ($2.4 million for each of the Hunter Street properties).

Metro has submitted a later Commission Agreement, listing the Hunter Street properties with Metro, which is executed by the Hunter Street owners and Amrani, as the real estate agent for Metro. Metro has also submitted a letter dated June 22, 2005 from Stephen M. Raphael, Esq., as the attorney [*5]for the Hunter Street owners, stating that the purchase price on each of the Hunter Street properties was reduced from $2.5 million to $2.4 million, and that the commission to be paid by each of the Hunter Street owners was to be $96,000. In addition, Metro has submitted three Commission Agreements dated June 30, 2005, executed by each of the Hunter Street owners and by Amrani, on behalf of Metro, wherein each of the Hunter Street owners agreed to pay a commission of $96,000 as the full commission on the sale of the Hunter Street properties based on the contract sales price of $2.4 million for each of these properties. Also submitted are Lead Based Paint Disclosure Forms and Acknowledgment of Agency Forms dated February 22, 2005, executed by the Hunter Street owners, listing Amrani as the agent presenting these forms to them. Amrani further points out that Horin was not present at the closing of the sale of the Hunter properties.

Amrani also attests that he, and not Horin, was the procuring cause of the sale of the Brighton Street properties. Amrani has submitted a letter dated November 2, 2004 from an attorney to one of the Brighton Street owners, stating that Metro was to replace another broker. This letter is agreed to and executed by Amrani, on behalf of Metro. Amrani states that he completed the sale of the Brighton Street properties. Specifically, he asserts that he accepted all the incoming calls from the Brighton Street buyer, organized all information, and called the buyer's attorney, who was the attorney at whose office all of the closings took place. He notes that Horin did not appear at the closings.

Amrani claims that Zach and Shein were trying to sell the Brighton Street properties, using Horin's sales agent credentials, and then split the profits, cutting out Christine M. Vincent and Metro. He points to Horin's deposition testimony that Zach and Shein referred him to the listing for the Brighton Street properties, helped him find the buyer, and were to share in the compensation with him. Amrani further points out that Horin, Zach, and Shein listed their home addresses, personal e-mails, and cell phone numbers in relation to the transactions. In this regard, it is noted that a letter on EMI letterhead dated December 7, 2004 from Zach lists Zach as the "coordinator" with regard to the Brighton Street properties.

In response to Amrani's assertions, Horin contends that with respect to the issue of who was the procuring cause of the sale of the Hunter Street properties and the Brighton Street properties, Metro improperly relies upon his deposition testimony without having given him a copy of the transcript. He argues that this violates CPLR 3116(a). Such argument, however, is unavailing since Horin does not assert that the testimony quoted from his deposition was in any way inaccurate (see Matter of Ventura v Gotham Per Diam, Inc., 14 AD3d 753, 754 [2005]).

Horin further argues that in any event, based solely on the fact that he was the one who obtained the exclusive listing for the Hunter Street properties and the Brighton Street properties, he is entitled to be paid 25% of the commissions earned by Metro as the listing broker. Such argument is rejected. Horin has not shown any document or otherwise established the existence of any agreement with Metro to be paid a commission based solely upon obtaining a listing for a property, which would entitle him to judgment, as a matter of law, for these commissions.

While Horin has offered evidence that he obtained the initial listings for the sale of the subject properties, that he had the sellers execute certain documents, and that he met with the purchasers, in order for a plaintiff to show that he or she was the procuring cause of the sale of the properties and to succeed on his or her claim that he or she was wrongfully deprived of a commission on the sale of such property, he or she must prove that he or she was "a direct and proximate link, [*6]as distinguished from one that is indirect and remote, between the bare introduction [of the buyer and seller] and the consummation [of the sale]" (Greene v Hellman, 51 NY2d 197, 206 [1980]; see also Hentze-Dor Real Estate v D'Allessio, 40 AD3d 813, 816 [2007]; Finley, 285 AD2d at 948). Commissions are not automatically earned and a case for commissions is not made out simply because one "initially called the property to the attention of the ultimate purchaser" (Greene, 51 NY2d at 205; see also Hentze-Dor Real Estate, 40 AD3d at 815; Finley, 285 AD2d at 948; Clair, 23 Misc 2d at 572).

Here, Amrani has introduced opposing evidence that further negotiations were conducted by him, and that new documents were executed, naming him as the sales agent, which may have superseded the documents obtained by Horin. Such evidence supports Amrani's claim that he was the one who brought the subject sales to fruition and that he completed such sales. Indeed, Metro (as discussed above) has shown that a lower purchase price was realized on the sale of the Hunter Street properties than that listed in the Brokerage Agreement that named Horin as the sales agent, and which provided that "[n]o broker's commission shall be earned or due until there is a closing of title. . . and [the Hunter Street o]wners have received the full amount of the purchase price" and that "[i]f said purchase price is not paid. . . the said commission is not to be considered as earned and is not due and payable." "Whatever preparatory work the broker does to produce a ready, willing and able buyer is irrelevant [where] he [or she] agrees to forego [a] commission until passage of title" on the agreed upon terms (Bersani, 184 AD2d at 997).

It is noted, however, that "in order to qualify for a commission, a broker need not have been involved in the ensuing negotiations or in the completion of the sale" (Hentze-Dor Real Estate, 40 AD3d at 816; see also Buck v Cimino, 243 AD2d 681, 684 [1997]). "Where the broker is not involved in the negotiations leading up to the completion of the deal [,though,] the broker must [,at least,] establish that he [or she] created an amicable atmosphere in which negotiations proceeded or that he [or she] generated a chain of circumstances that proximately led to the sale" (Dagar Group v Hannaford Bros. Co., 295 AD2d 554, 555 [2002]; see also Hentze-Dor Real Estate, 40 AD3d at 816; Friedland Realty, 273 AD2d at 351). Here, the evidence raises triable issues of fact as to whether Horin was responsible for a meeting of the minds between the buyers and sellers and was, thus, the procuring cause of the subject sales so as to entitle him to commissions on such sales (see Slade v Shaarei Tikvah-Scarsdale Conservative Congregation, 286 AD2d 383, 383 [2001]; Bersani, 184 AD2d at 997). There also remains a dispute as to how the Hunter Street properties come to be listed with Metro. Consequently, Horin's motion for summary judgment must be denied.

The court now turns to EMI's motion for summary judgment dismissing Zach and Shein's claims as against it. In support of its motion, EMI asserts that since Zach and Shein are not licensed as real estate brokers, they are precluded by Real Property Law § 442-d from recovering a commission from it. Real Property Law § 442-d provides that "[n]o person . . . shall bring or maintain an action in any court of this state for the recovery of compensation for services rendered . . . in the buying [or] selling [of] any real estate without alleging and proving that such person was a duly licensed real estate broker or real estate sales[person] on the date when the alleged cause of action arose."

It is undisputed that Zach and Shein were not licensed by the New York State Department of State as a real estate broker or real estate salesperson. Zach and Shein assert, however, that EMI employed them as independent contractors, and that they never acted in the capacities of real estate [*7]brokers or real estate salespersons. They state that they merely procured business for EMI and never engaged in the buying, selling, exchanging, renting, or leasing of, or the negotiating of a loan upon, any real estate. They argue that their claims in this action should, consequently, not be barred under Real Property Law § 442-d due to their failure to possess licenses.

Zach and Shein's argument must be rejected. Real Property Law § 440(1) defines a "real estate broker" as "any person. . . who, for another and for a fee [or] commission . . . lists for sale, sells, . . . buys . . . or attempts to negotiate a sale . . . [or] . . . purchase . . . of an . . . interest in real estate." Shein testified, at his deposition, that his primary function was to do real estate related work, and that he negotiated the purchase prices for property, and brought about the meeting of the minds between the buyers and sellers. Zach similarly testified, at his deposition, that he and Shein brought about the meeting of the minds of the buyers and sellers with respect to the subject properties, and that he sold the EMI properties. Moreover, the contracts relied upon by Zach and Shein between them and EMI (as discussed above) state that Zach and Shein were to "find and refer real estate properties to [EMI]," and Zach and Shein's complaint itself alleges that EMI would purchase real property for resale.

"Where the dominant feature of the transaction at issue is the transfer of real property, one who does not have a real estate broker's license is barred from collecting a fee for endeavors in the nature of brokerage services" (Panarello v Segalla, 6 AD3d 515, 516 [2004]; see also Real Property Law § 442-d; Berg v Wilpon, 271 AD2d 629, 629 [2000], affg 180 Misc 2d 956 [1999]; Sharon Ava & Co. v Olympic Tower Assocs., 259 AD2d 315, 316 [1999]; Fortune Mgt. Co. v Stockade Mobile Home Park, 246 AD2d 739, 741 [1998]; Levinson v Genesse Assocs., 172 AD2d 400, 401 [1991]; Sorice v DuBois, 25 AD2d 521, 521 [1966]; J. I. Kislak, Inc. v Carol Mgt. Corp., 7 AD2d 428, 431 [1959]). Zach and Shein may not contravene the statutory prohibition of Real Property Law § 442-d by characterizing themselves as independent contractors who "procured business" for EMI, which consisted of "find[ing] and refer[ring] real estate properties to [it]" for its purchase (see Berg, 271 AD2d at 629; Levinson, 172 AD2d at 401; Myles v Litas Investing Co., 152 AD2d 731, 731 [1989]).

Thus, since the services performed by Zach and Shein for EMI fall within the definition of brokerage services defined in Real Property Law § 440, they are barred from any recovery therefor by Real Property Law § 442-d. Consequently, EMI is entitled to summary judgment dismissing Zach and Shein's claims for commissions relating to the transfer of real property (see Panarello, 6 AD3d at 517; Berg, 271 AD3d at 629; Sharon Ava & Co, 259 AD2d at 316; G.C. Fortune Mgt. Co., 246 AD2d at 741; Sorice, 25 AD2d at 521). Accordingly, the third and fourth causes of action brought by Zach and Shein against EMI are dismissed.

However, EMI has admitted that Shein and Zach were retained in its employ in some manner. The fifth, seventh, eighth and ninth causes of action seeking declaratory relief relating to compensation, damages for fraud, unjust enrichment and quantum meruit for services rendered remain viable and are not dismissed ^[FN2]. [*8]

Horin's motion for partial summary judgment in his favor as against Metro is denied. EMI's motion for summary judgment dismissing Zach and Shein's claims as against it is granted to the extent of dismissing the third and fourth causes of action against it and is otherwise denied.

The parties are directed to appear for conference before this Court in Room 756 of 360 Adams Street, Brooklyn, at 9:45 A.M. on October 31, 2007.

This constitutes the decision and order of the court.

E N T E R,

J. S. C.