HAHN v. STONE HOUSE PROPERTIES LLC (2022)

Order, Supreme Court, New York County (Arthur F. Engoron, J.), entered May 11, 2021, which granted defendants’ motion to dismiss the complaint pursuant to CPLR 3211(a)(1) and (a)(7), unanimously modified, on the law, to deny the motion as to a cause of action for breach of fiduciary duty, and otherwise affirmed, without costs.

Although the complaint does not explicitly articulate a cause of action for breach of fiduciary duty, such a cause of action is manifest in its factual allegations, and the documentary evidence fails to utterly refute those allegations (see Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17 [1977];  Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 [2002]).  In connection with his sale of certain real property, plaintiff signed a disclosure form pursuant to Real Property Law § 443, giving his informed consent to a “dual agency with designated sales agent” relationship with defendants.  The form states that a dual agent cannot give the seller or buyer “undivided loyalty.”  Nevertheless, it does not relieve defendants from all fiduciary duty.  The form states that defendant Nikki Carchedi, of defendant Stone House Properties, “is appointed to represent the seller in this transaction.”  The complaint establishes a cause of action for breach of a fiduciary duty beyond the acknowledged “divided” duty by alleging that Carchedi failed to disclose that she had a personal stake in the sale to the buyers, who planned to subdivide the property immediately after purchase and retain her as the broker for the sale of the subdivided parcels, and that they did so, listing the subdivided parcels for almost three times the price plaintiff received in his sale (see Dubbs v. Stribling & Assoc., 96 N.Y.2d 337, 340, 728 N.Y.S.2d 413, 752 N.E.2d 850 [2001], affg 274 A.D.2d 32, 712 N.Y.S.2d 19 [1st Dept. 2000]).  We also note plaintiff's assertion that the agent representing the buyer was the son of Carchedi's longtime client about whom plaintiff had expressed concern.

The explicitly articulated causes of action were correctly dismissed.  An accounting is unnecessary since, if proven, the breach of fiduciary duty will result in defendants’ forfeiture of the commission paid to them by plaintiff but not commissions received by defendants as brokers on sales of the subdivided property (see Dubbs, 274 A.D.2d at 37, 712 N.Y.S.2d 19;  John J. Reynolds, Inc. v. Snow, 11 A.D.2d 653, 201 N.Y.S.2d 704 [1st Dept. 1960], affd 9 N.Y.2d 785, 215 N.Y.S.2d 84, 174 N.E.2d 753 [1961]).  The claims for constructive fraud, unjust enrichment, and a constructive trust are duplicative of the breach of fiduciary duty claim as they arise from the same facts and seek identical damages (see Tozzi v. Mack, 169 A.D.3d 547, 92 N.Y.S.3d 648 [1st Dept. 2019], lv denied 33 N.Y.3d 908, 2019 WL 2441517 [2019]).  Real Property Law § 442–e(3) is inapplicable, because defendants are licensed real estate brokers and were licensed at the time of the alleged breach of fiduciary duty (see 2 Park Ave. Assoc. v. Cross & Brown Co., 36 N.Y.2d 286, 291, 367 N.Y.S.2d 476, 327 N.E.2d 632 [1975]).

The Decision and Order of this Court entered herein on March 8, 2022, is hereby recalled and vacated (see M–980 decided simultaneously herewith).