Business case + holdings

Global Realty Servs., LLC Plaintiff(s),v. 4061 Hylan LLC Defendant(s)

Facts:

Plaintiff, Global Realty Services, LLC is a limited liability corporation in New York.

Plaintiff, Schuckman Realty Inc. is a domestic corporation in New York.

Both Plaintiffs are real estate brokerages involved in commercial transactions which includes “high value” tenants for vacant commercial properties.

Defendant 4061 Hylan LLC. is a domestic limited liability real estate holding corporation in New York, same as Defendant Golden Hand.

Defendant Jhong Uhk Kim is the owner and operator of both of these corporations, which makes him a commercial real estate developer and landlord in Staten Island.

Plaintiffs filed a Summons and Complaint of breach of contract on November 10, 2016 due to defendant Kim not paying a commision of one-hundred thousand dollar for the Plaintiffs services.

Plaintiffs called three witnesses Howard Seidenfeld, Stanly Schuchman, and Steve Gilman and offered five documents into evidence.

Defendants only called Mr. Kim as a witness and six documents into the evidence.

Plaintiffs endeavored to establish that they entered a commercial brokerage agreement with the Defendants’, specifically Kim.

The Plaintiffs wanted a sum of $694,260 for damages in the Defendants’ failure to pay a commission for their services, however, defendants deny any existence of a contract.

Plaintiff Howard Seidenfeld testified that a phone call between himself and Defendant Kim was held in 2005, where Mr. Kim requested for his commercial real estate services about seeking a high value commercial tenant.

Due to this phone call, Seidenfeld contacted the Director of Real Estate at CVS, Mr. Al Calegari to schedule a meeting with Defendant Kim.

Seidenfeld, Calegari, and Kim met up several times to discuss the details about a potential tenancy, which also led to a walk of the desired property. Defendant Kim contacted Mr. Seidenfeld to request a letter outlining the amount of commission, which was discussed to be an amount of $100,000 payable upon securing City Planning approvals or a “full customary commission”.

Mr. Seidenfeld stated that Defendant Kim agreed to these terms at the time of the phone call, in doing so implying a verbal contract. This oral commission was transferred to a written letter by Mr. Seidenfeld abiding the terms discussed in the phone call, however no alternate commission or calculating method was specified. Defendant Kim did not ever answer this letter.

A separate agreement was made between the Plaintiffs as co-brokers where Global Realty Services ordered $60,000 and Schuckman Realty demanded $40,000 upon “city planning approval”.

Defendant Kim has a complete different memory of these events. Kim states that Mr. Seidenfeld called him to propose CVS in renting his property. Defendant Kim does claim that a brief initial meeting was held between Mr. Calegari and Mr. Seidenfeld, but states that he does not recall any other meetings held around that topic afterwards. Defendant Kim also stated that he hired an attorney in Connecticut to sort out negotiations but cannot recollect the name. Mr. Kim admits to inquiring about the amount of

commission but claims to have never received a formal letter. The Court does not credit Defendant Kim’s recollections.

Even though there are conflicting stories in this case, CVS began a commercial real estate lease on May 8, 2008, which was signed by Defendant Kim and the representatives from CVS.

The Court found satisfactory evidence that the parties entered into an express contract. Therefore the Plaintiffs are also entitled to investigate the possibility of an implied contract.

Defendant Kim breached the commercial real estate contract when he failed to pay the commission following the agreed upon payment date, July 2012.

Defendants point out that the Plaintiffs acknowledged that they never provided the Defendants with a formal written agreement. Therefore, they argue for a Statute of Frauds which is not applicable to this case because “a commission agreement with a real estate broker does not fall within the Statute of Frauds”.

Defendants also raise the General Obligations Law §5-701(a)(1) since it was unclear whether City Planning approval could be fully performed in one year, although both parties agree that this would be very unlikely.

Defendant Kim debates that it would be legally impossible to reach an agreement on terms of the real estate brokerage due to Mr. Kim not owning all of the properties that he aspired to rent, but it was an unpersuasive argument to the court due to credible testimony by the Plaintiffs.

The Supreme Court of New York recognized that a commercial real estate contract existed and was formed orally between the Plaintiffs and the Defendants. It was conceded that Defendant Kim breached the contract by not paying the commission of $100,000 for the plaintiffs services.

Due to this, the Plaintiffs seek $694,260 for the damages which, due to the Court's decision, ends up being a combined sum of $100,000 in damages with $60,000 going to Global Realty and $40,000 going to Schuckman Realty all coming from Jhong Uhk Kim personally. This decision was mainly based on the absence of methods used to calculate the commission in the contract.

Issues:

Whether a commercial real estate contract between the Plaintiffs (Global Realty Services and Schuckman Realty) and the Defendant Jhong Uhk Kim exists and if so if there is a breach in that contract.

Holding:

The Supreme Court of New York recognized that a commercial real estate contract existed and was formed orally between the Plaintiffs and the Defendants. It was ruled that the Plaintiff’s services had a direct correlation to the Defendants success in finding a lease. It was conceded that Defendant Kim breached the contract by not paying the commission of $100,000 for the Plaintiffs services.

Rationale:

Although Defendant Kim’s recollections of the events were not credited by Court, both the Plaintiffs and Defendants stated and agreed that a phone call between the two of them was held discussing CVS potentially leasing of Defendant Kim’s property. This action led to the proof of a verbal contract existing due to both of them agreeing that the call indeed took place.

In addition both the Plaintiff and the Defendant agreed that an initial meeting was held between Mr. Calegari from CVS, Mr. Seidenfeld, and Mr. Kim to discuss the rental in more detail.

Furthermore the physical lease between CVS and the Defendant Kim proved that Mr. Kim owed the Plaintiff money for their services.

Finally the physical letter written by Mr. Seidenfeld discussing the rate of commission that was sent to Mr. Kim shows that Mr. Kim did not obey the guidelines of the verbal contract due to him not responding.