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KENNETH D. LAUB & CO. v. BOARD OF STATE TEACHERS

January 11, 2000

KENNETH D. LAUB & COMPANY, INC., PLAINTIFF
V.
BOARD OF THE STATE TEACHERS RETIREMENT SYSTEM OF OHIO; STATE TEACHERS RETIREMENT SYSTEM OF OHIO, DEFENDANTS.



The opinion of the court was delivered by: Cedarbaum, District Judge.

OPINION

Plaintiff Kenneth D. Laub ("Laub"), through his business Kenneth D. Laub & Co., Inc., sues the Board of the State Teachers Retirement System of Ohio and State Teachers Retirement System of Ohio (collectively "STRS") for breach of contract. Laub alleges that defendants denied him a commission for a real estate transaction in violation of the terms of his agency agreement. Defendants move for summary judgment. For the reasons discussed below, the motion is granted.

BACKGROUND

The following facts are undisputed unless otherwise noted.

Kenneth D. Laub & Co., Inc. and its president Kenneth D. Laub are real estate brokers licensed in New York. In 1988, Laub entered into an agreement with Two Wall Street West Associates, L.P., the owner of a building at Two Rector Street in New York City (the "Premises"), granting Laub the exclusive authority to rent space in the Premises. The agreement provided that Laub would be paid commissions for leases Laub procured for the Premises, including lease extensions. The original term of the agreement expired in 1989 and was renewed and amended on numerous occasions in subsequent years.

In mid-1993, Laub began negotiations with the City of New York (the "City") for a renewal of the City's lease for space in the Premises occupied by the City's Department of Transportation. The City's original lease was to expire on July 31, 1995.

In December 1994, Laub was informed that ownership of the premises had been transferred to OTR, an Ohio general partnership. Laub was authorized to continue all discussions on behalf of OTR with respect to pending transactions. Laub negotiated many of the terms for a renewal lease and claims that a "meeting of the minds" was reached in January 1995 on the essential terms of a lease renewal.

On March 8, 1995, Laub and OTR signed an extension of Laub's agency contract (the "Agency Agreement"). The Agency Agreement provided that it would terminate on June 30, 1995, unless terminated earlier by either party on thirty days' notice. The provisions of the Agency Agreement at the center of the present dispute are as follows:

No commission shall be earned, due or payable to [Laub] under this Agreement for any lease not so entered into within [180 days], whether or not negotiations are pending on the date this Agreement expires or is terminated. Landlord shall not delay negotiations in order to avoid commission payment to [Laub].

(Laub Aff. Ex. 1 at S 0252.)

On April 20, 1995, OTR gave Laub notice that it was terminating the Agency Agreement. Accordingly, the agreement terminated thirty days later on May 20, 1995, and November 16, 1995 became the end of the 180-day grace period within which Laub was entitled to be paid a commission.

On July 31, 1995, the City's original lease expired. No lease extension was executed until December 13, 1996, more than a year after the 180-day grace period had expired.

Laub complains that he was entitled to a commission for the work he performed in connection with the lease extension. He acknowledges that the lease extension was not executed until well after the expiration of the time in which he was entitled to a commission. However, he contends that defendants intentionally delayed negotiations with the City in order to avoid paying him a commission and thus breached the Agency Agreement. Had defendants more vigorously attempted to obtain a lease extension with the City, Laub argues, an extension would ...


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