ZACCARO CO INC v. Ding K. Wai also known as John Wai, et al., Defendants–Respondents. (2018)

Order, Supreme Court, New York County (Manuel J. Mendez, J.), entered April 5, 2017, which, to the extent appealed from as limited by the briefs, granted the cross motion of defendants Ding K. Wai a/k/a John Wai and Sentry Operating Corp. (together, the seller) to dismiss the amended complaint pursuant to CPLR 3211(a)(7), unanimously affirmed, with costs.

Plaintiff P. Zaccaro, Co., Inc., a real estate broker for the seller, seeks a commission for the sale of a certain parcel of property.  The motion court correctly dismissed the amended complaint, as Zaccaro also acted as a broker for the buyer of the property (former defendant DHA Capital, LLC), and therefore engaged in an impermissible dual agency without full disclosure (see Douglas Elliman LLC v. Tretter, 84 A.D.3d 446, 448, 922 N.Y.S.2d 74 [1st Dept. 2011], affd 20 N.Y.3d 875, 955 N.Y.S.2d 851, 979 N.E.2d 1178 [2012] ).

Plaintiffs' argument that Zaccaro was merely a finder instead of a real estate broker is unavailing.  The amended complaint, which was verified by Zaccaro's president, alleges that plaintiffs were DHA's real estate brokers.  This statement constitutes a formal judicial admission (Bogoni v. Friedlander, 197 A.D.2d 281, 291, 610 N.Y.S.2d 511 [1st Dept. 1994], lv denied 84 N.Y.2d 803, 617 N.Y.S.2d 137, 641 N.E.2d 158 [1994] ).

Furthermore, a finder has no obligation to negotiate the real estate transaction in order to obtain its fee (Northeast Gen. Corp. v. Wellington Adv., 82 N.Y.2d 158, 163, 604 N.Y.S.2d 1, 624 N.E.2d 129 [1993] ).  Here, the amended complaint indicates that plaintiffs were obligated to negotiate the sale of the premises.  In particular, the amended complaint alleges that DHA authorized plaintiffs “to act as the licensed real estate brokers along with [defendant] Nest Seekers to the extent needed and/or requested to assist in the negotiation of terms relating to the [sale] of the Premises between DHA and the Seller” (emphasis added).  It also alleges that “DHA and/or the Seller would pay to each of the Plaintiffs and to Nest Seekers a Commission ․ in consideration for the Plaintiffs and Nest Seekers assisting DHA in the negotiation of the terms relating to the Sale of the Premises” (emphasis added).

Plaintiffs' contention that the seller was not injured by Zaccaro's dual agency is unavailing.  Where, as here, the duty of undivided loyalty is breached, plaintiff broker forfeits its right to a commission, “regardless of whether damages were incurred” (Douglas Elliman LLC v. Tretter, 84 A.D.3d 446, 448, 922 N.Y.S.2d 74 [1st Dept. 2011], affd 20 N.Y.3d 875, 955 N.Y.S.2d 851, 979 N.E.2d 1178 [2012] ).