MASSEY KNAKAL REALTY OF BROOKLYN, LLC, d/b/a MASSEY KNAKAL REALTY SERVICES, Plaintiff,
NEVINS REALTY CORP., RAY MCKABA, and CULLEN & DYKMAN, LLP, as Escrow Agent, Defendants. Index No. 651746/2011
Motion Date: 1/30/13
Hon. Eileen Bransten, J.S.C.
In this action by a real estate brokerage company to recover a commission allegedly earned pursuant to an exclusive real estate brokerage listing agreement, Plaintiff. Massey Knakal Realty of Brooklyn, LLC, d/b/a Massey Knakal Realty Services moves pursuant to CPLR 3211(b) to dismiss the Second Affirmative Defense of Defendants Ray McKaba and Nevins Realty Corp. (jointly, "Defendants") on the ground that it is without merit,  Defendants oppose.
On or about December 17, 2010, Plaintiff and Defendants purportedly entered into a written real estate brokerage listing agreement (the "Agreement"). (Affidavit of Stephen Palmese ("Palmese Aff.") ¶ 4, Ex. C). Under the Agreement, Plaintiff would market and promote the sale of the following parcels of real property located in Brooklyn: 350 Livingston Street, 325 Schermerhorn Street, 345 Schermerhorn Street and 62-64 Flatbush Avenue (Block: 167, Lots: 13, 50, 42, 27, 28 & 36) (the "Properties"). (Palmese Aff. ][ 4, Ex. C). McKaba endorsed the Agreement on behalf of Nevins Realty Corp., and Ken Krasnow endorsed the Agreement on behalf of Plaintiff as "Managing Director." (Palmese Aff. Ex. C; Affidavit of Paul Massey, Jr. ("Massey Aff.") ¶ 5).
Pursuant to the Agreement, Plaintiff had the exclusive right to sell the Properties during the term of the Agreement. (Palmese Aff. ¶ 4, Ex. C). Defendants agreed to refer all offers and inquiries to Plaintiff but reserved the right to cancel the Agreement upon written notice. (Palmese Aff, ¶ 4, Ex. C). The Agreement also provided that Defendants would pay Plaintiff a commission of three percent (3%) upon the sale of the Properties, whether they were sold by Plaintiff, by another broker, or directly by Defendants. (Palmese Aff. ¶ 4, Ex. C).
In mid-January 2011, Plaintiff received an undated letter from McKaba instructing Plaintiff to cease and desist marketing the Properties. (Palmese Aff. ¶ 6-8, Ex. D). Plaintiff alleges that, after receiving the letter, Paul Massey, Jr., Plaintiffs CEO, spoke with McKaba on the telephone and that McKaba assured him that the Agreement had not been terminated. (Massey Aff. ¶ 11-12). Plaintiff argues that it continued to market the Properties, sending Defendants periodic updates of viewings and offers. (Palmese Aff. ¶ 10, Ex. E). Defendants deny these allegations. (Affirmation of Steven Landy ("Landy Affirm.") Ex. I at ¶¶ 20-25).
In mid-February 2011, an investigative report for a trade journal revealed that Krasnow was not licensed as a real estate broker in New York State. (Affidavit of Michael Wlody ("Wlody Aff") ¶ 6). Although Krasnow had previously held a New York State broker's license, he had neglected to renew it. (Wlody Aff ¶ 5, Ex, F). As such, Krasnow was unlicensed at the time he signed the Agreement.
Following publication of the investigative report, Plaintiff removed Krasnow from his position. (Wlody Aff. ^f 6). The Secretary of State also took action to sanction Plaintiff for "allowing an unlicensed broker to supervise two branch offices, " in violation of RPL §§ 440-a and 441-c. (Wlody Aff. ¶¶ 10-12, Ex. G).
In April 2011, Plaintiff learned that Defendants, acting on their own, were in contract to sell the Properties for $30 million. (Palmese Aff. If 11). Plaintiff filed its verified complaint on June 27, 2011, asserting causes of action for (i) breach of contract, (ii) declaratory relief, (iii) quantum meruit, (iv) fraud and (v) contractual attorneys' fees. (Landy Affirm. Ex. H). Defendants filed their verified answer on August 4, 2011. (Landy Affirm. Ex. I). Plaintiff now moves to strike Defendants' Second Affirmative Defense. Defendants oppose.
Pursuant to CPLR 3211(b), "[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit." In bringing a motion to dismiss an affirmative defense, the plaintiff bears the burden of demonstrating that the defense is without merit as a matter of law. 534 E. 11th St. Hous. Dev. Fund Corp. v. Hendrick, 90 A.D.3d 541 (1st Dep't 2011). On such a motion, "the defendant is entitled to the benefit of every reasonable intendment of the pleading, which is to be liberally construed." Id. at 542. "A defense should not be stricken where there are questions of fact requiring trial." Id.
CPLR 3018(b) defines affirmative defenses as "matters which if not pleaded would be likely to take the adverse party by surprise or would raise issues of fact not appearing on the face of a prior pleading, " including "facts showing ...