1 No. 97
Irving Sonnenschein, et al.,
Appellants,
v.
Douglas Elliman-Gibbons & Ives, &c., et al.,
Respondents.
_________________________________________________________________
2001 NY Int. 85
July 2, 2001
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Donald A. Hopper, for appellants.
Bettina B. Plevan, for respondents.
Real Estate Board of New York, Inc., amicus curiæ. GRAFFEO, J.: Once
oral negotiations have commenced between a seller and a potential
purchaser concerning a real estate transaction, does the brokerage
firm that produced the potential purchaser owe the seller a duty to
refrain from showing the potential purchaser additional properties? We
hold that it does not.
Plaintiffs Irving and Martha Sonnenschein purchased a condominium
apartment in a building in Manhattan in 1989 but never resided there.
Instead, they immediately listed the apartment for resale on an
exclusive basis with Phyllis Koch Real Estate, agreeing to pay Koch a
commission of 5 percent of the sale price. With plaintiffs' consent,
Koch contacted other brokerage firms seeking potential buyers,
offering to sell the property under a co-brokerage arrangement. Under
the practice in effect in the New York City real estate market at the
time, a co- broker who facilitated a transaction would receive half of
the commission due the listing broker.
In December 1990, Susan Turkewitz, a salesperson employed by defendant
Douglas Elliman-Gibbons & Ives (DEGI), a real estate brokerage firm,
contacted the Koch salesperson handling plaintiffs' listing and
indicated she had interested buyers -_ Steve and Jenny Tam -- willing
to pay $820,000 for the apartment. Rather than a 2.5 percent
commission, DEGI requested 4 percent of the purchase price.
The Koch salesperson relayed this proposal to plaintiff Irving
Sonnenschein, an experienced real estate lawyer who was representing
himself and his wife in connection with sale of the apartment.
Apparently willing to pay the requested commission if the deal closed,
Sonnenschein drafted a proposed agreement in the form of a letter from
DEGI to plaintiffs, which stated: In the event that a contract is
signed and exchanged between you and our prospective buyer, and
SNIPPETS:
Real Estate Board of New York, Inc., amicus curiæ.
Once oral negotiations have commenced between a seller and a potential purchaser concerning a
Plaintiffs Irving and Martha Sonnenschein purchased a condominium apartment in a building in
Instead, they immediately listed the apartment for resale on an exclusive basis with Phyllis
With plaintiffs' consent, Koch contacted other brokerage firms seeking potential buyers,
Under the practice in effect in the New York City real estate market at the time, a co-
In December 1990, Susan Turkewitz, a salesperson employed by defendant Douglas
Apparently willing to pay the requested commission if the deal closed, Sonnenschein drafted a
If the contract is not signed for any reason whatever, or if the contract is signed but the
Sonnenschein then forwarded an unsigned Contract of Sale to the Tams' attorney with a cover
The cover letter concluded with the statement: "The enclosed is sent with the understanding
At some point in late December, the Tams decided to purchase the Roderick apartment rather
A written contract of sale for the Roderick apartment was executed on January 4, 1991 for a
When they learned that the Tams had purchased the Roderick apartment through the efforts of
In the complaint, plaintiffs asserted that DEGI had assumed the role of plaintiffs' broker
After discovery, defendants moved for summary judgment contending they owed no duty to
Supreme Court denied the application, concluding defendants had assumed the role of
The Appellate Division granted plaintiffs' application for leave to appeal to this Court and
The preliminary question in this case is whether defendants had a broker/principal
Unless a broker and principal specifically agree otherwise, a broker cannot be expected to
Any other rule would unreasonably restrain a broker from simultaneously representing two or
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