SUPREME COURT OF THE STATE OF NEW YORKCOUNTY.OF NASSAU.

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URC2 INC.

Plaintiff Michele M. Woodard,

-against - TRIAL/IAS Part 16

Index No. : 3050/05

AIR TECHNIQUES , INC. , and

JEFFREY S. GOLDSTEIN DECISION AFTER TRIAL

Defendants.

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Plaintiff, URC2 , Inc. , is a licensed commercial real estate brokerage firm located

in Melvile , New York State. URC2 was initially retained, by Long Island Factory

Acquisition Corp. "(LIF AC)"to find a suitable piece of property to purchase on Long

Island for the relocation of the Defendants ' business. LIF AC was a straw company set up

by GTE Operations Support Inc. ("GTE") and Verizon Communications , Inc.

Verizon ). The Defendant, Air Techniques , Inc. ("Air Techniques ), is the owner of a

business and propert located at 70 Cantiague Lane in Hicksvile, New York. The

Defendant, Jeffrey Goldstein is the President and CEO of Air Techniques. This is an

Action brought by the Plairttiffto recover ' real estate brokerage commission allegedly

due from the Defendants as a result of Air Techniques ' relocation from Hicksvile , New

Yark to a property it purchased from Underwiters Laboratories , Inc. , in Melvile , New

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York ("U.L. Propert or site ) as part of its relocation arrangement with GTEN erizon.

The real estate brokerage firm, Cushman and Wakefield of Long Island, Inc. , located in

Melvile, New York

, ("

C& W") with Ted Stratigos as its representative collected a

commission as the selling broker for the U.L. property.

In its Complaint, dated February 22 2005 , the Plaintiff seeks monetar damages

against the Defendants alleging, (a) breach of an oral brokerage agreement, entered into in

Januar 2004 (b) breach of an implied brokerage agreement, ( c) quantum meruit based

upon unjust enrichment and (d) restitution based on unjust enrichment (Defendants ' Ex.

A). The Plaintiff has the burden of proving its entitlement to the compensation claimed.

At the trial of this matter, Gar Joel Schacker testified as the principal for the

Plaintiff, United Realty Corp. ("URC2"). Gary Schlager, a Real Estate consultant

employed by West, Lane , Schlager/Oncor International of Washington, D. , also

testified on the Plaintiffs behalf. Jeffrey Goldstein testified as the President and CEO of

the Defendant Air Techniques.

Pursuant to a post trial Motion, the Action against Jeffrey Goldstein, personally,

was dismissed on the ground that he acted solely as the corporate Defendant's offcial

representative.

The Plaintiff takes the position that it was Air Technique s broker and that

Defendant Goldstein had agreed to pay the Plaintiff a commission based upon Gary

Schacker ' s efforts which the Plaintiff claims resulted in Defendant's successful purchase

of the U.L. relocation propert. The Defendants take the position that they are not

obligated to pay Plaintiff a commission as that Air Techniques (1) did not employ a broker

in the purchase of the subject U.L. property, (2) that it had no brokerage agreement with

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the Plaintiff, and (3) that the Plaintiff, through Gary Schacker, had no involvement with

the procurement of the u.L. propert.

The documentation submitted at trial included several unsigned proposals entitled

Non-Binding Letters ofIntent " for the purchase of two different properties , Grumman

in Bethpage , New York, and the u.L. property in Melvile , New York by Air Techniques

(Defendants ' Exs. F , M, N , and 0), an Agreement of Sale between Underwriters

Laboratories Inc. , and Air Techniques , Inc. , as Purchaser, dated May 25, 2004 (Plaintiffs

Ex. 49), a "Nondisclosure Agreement " dated Januar 13, 2004 (Defendants ' Ex. D), and a

Site Survey prepared for Long Island Factory Acquisition Corp. (LIF AC), by Gary Joel

Schacker, dated January 9 , 2004 (Defendant's Ex. B) and emails sent by and between

Jeffrey Goldstein, Gary Schacker, Gary Schlager, Gar R. Hucka, and Ted Stratigos

which indicated the information contained or attached to the emails was forwarded to

other individuals involved with the relocation project (Defendants ' Exs. C , F , G, I , J , K, L

M, N, 0 , P , Q, R, S , T, and X). The Brokerage clause of the Agreement of Sale ofthe

L. property to Air Techniques, dated May 25 , 2004 was submitted to support both

parties ' positions. (Defendants ' Ex. U; Plaintiffs Ex. 49).

The Brokerage Clause of the May 25 2004 Agreement provided the following:

Each party represents and warants to the other party that the representing pary

has dealt with no broker, finder or like agent in connection with this transaction

other than Cushman & Wakefield of Long Island, Inc. ("Sellng Broker ) and

United Realty ("Purchaser s Broker ). Seller agrees to pay the Selling Broker and

Purchaser agrees to pay the Purchaser s Broker as well as any fees due and payable

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to West, Lane & Schlager Oncor International (as consultants to Purchaser) in

accordance with the provisions of separate agreements between the referenced

parties. The representing party agrees to , and hereby does , indemnify and save

harmless the other party and its respective legal representatives, heirs , successors

and assigns against and from any loss, liability or expense, including reasonable

attorneys ' fees , arising out of any claim or claims for commission or other

compensation for bringing about this Agreement or the transaction contemplated

hereby made by any other broker, finder consultant or like agency which are based

in whole or in par on dealing with the representing par or its representatives.

The Non-Disclosure Agreement between GTE Operations Support Inc. , and Air

Techniques restricted Air Techniques from disclosing information related to Properties

GTE researched for the relocation of Air Techniques business operations at the 70

Cantiaque Lane site to anyone. Under this agreement

, "

United Realty Inc. , shall be the

only Broker of Record for any transaction involving the Properties." The agreement was

signed on Januar 13 2004 by Gary R. Hucka for GTENerizon and Jeffrey Goldstein as

President of Air Techniques (Defendants ' Ex. D).

The Properties referred to and defined in the Non-Disclosure Agreement were

revealed in the Site-Survey prepared by Gary Joel Schacker dated January 9 , 2004.

Eleven sites were listed in the Site-Survey including sites in both Nassau and Suffolk

Counties. It is undisputed that one site on Grumman Road in Bethpage - 16.63 acres and

another listed as Edgewood - Heartland Business Center was of possible interest to Air

Techniques based upon its own requirements and preferences. The remaining sites in the

survey, according to Jeffrey Goldstein, did not fit the Air Techniques ' requirements.

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According to the Plaintiff, the Nondisclosure Agreement does supports the

Plaintiffs position that he Plaintiff was the Defendant' s broker because it named United

Realty, Inc. , as the "Broker of Record " although the "properties" are defined as those

researched and listed in the Site Survey. The sites in the survey did not include the U.

propert. That property was later placed in the "hopper" with those other properties that

were to be considered by the parties and G TEN erizon. There is no evidence to dispute

Mr. Goldstein s testimony that the Defendants ' found the U. L. without the input of

GTEN erizon, LIF AC, Gar Schlager or Gary Schacker.

Although initially GTEN erizon planned to purchase the relocation site and swap

ownership with the Cantiague Lane site, ultimately GTEN erizon bought the 70 Cantiaque

Lane site from Air Techniques and paid Air Techniques an amount to cover the cost for Air

Techniques to relocate its employees and businesses from the Cantiaque Lane site. The

new site was purchased from Underwriters Laboratory, Inc. (" L."), which had hired a

broker, Cushman Wakefield to sell the propert. Cushman Wakefield, the seller s broker

collected the only brokerage commission as a result of the entire transaction.

At the time of trial , Mr. Schacker testified that he was a principal for Plaintiff

URC2 , in the real estate business for thirt-six years, licensed in New York for twenty-six

years , and at the time of trial , , that his duties as a principal for Plaintiff involved

faciltating transactions for both buyers and sellers of commercial propert. He was paid

a commission or fee, usually based on the sales ' price , that either the seller or purchaser

paid, and that it varied as to who paid the fee. Mr. Schacker testified that he was first

contacted in October or November 2003 by Gary Schlager, who asked him to work on a

unique and secret" project. Without divulging the company name, he says Mr. Schlager

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stated it was a large corporation, and that the requirements involved finding a propert

within ten miles of Hicksvile. He was given other details , including square footage , power

and offce space requirements. He testified that he became aware of the names of the

players probably in early December of2003 , during a conference call where Gary Hucka

and Gary Schlager divulged Air Techniques and Verizon s involvement. However, he said

he did not meet with anyone until January 13 2004. On that day he met Jeff Goldstein

and Rich Povak from Air Techniques, Gary Schlager, and other Air Techniques Corporate

officers at the Hicksvile site of Air Techniques.

He further testified prior to their meeting, that he began Plaintiff s requested

research by preparing a Site Survey beginning in mid-December and finishing on Januar

2003 , which he presented at the January 13 2004 meeting (Defendants ' Ex. B).

Although Mr. Schacker testified that he prepared the Site Survey for Air Techniques, the

cover of the survey reads

, "

Site Survey prepared for Long Island Factory Acquisition

Corp. " dated January 9 , 2003.

Of the eleven real estate properties he presented at the January 13 2004 meeting,

Mr. Schacker said he showed "four, five, or maybe six of the sites that day," to Mr.

Goldstein, Mr. Schlager, and possibly Mr Povak. Mr. Schacker said that based on a

conversation with Mr. Goldstein, he believed Mr. Goldstein was extremely interested in the

property referred to as Gruman-O 1 on Gruan Road in Bethpage and also interested in

another propert he referred to as " 2" which was not on the market.

With respect to the Grumman-Ol property, Mr. Schacker testified that Grumman

had a selling broker, Dominic D' Angelo and that he thought he verbally communicated

interest in the property to Mr. D' Angelo. He said negotiations for the Grumman-O 1 site

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began within a few weeks after the meeting and that negotiations included him, D' Angelo

Goldstein, and Schlager.

With respect to the UL.-Melvile property, Mr. Schacker admitted that he did not

become aware of that site until he received a copy of an email dated February 13 , 2004

from Jeff Goldstein to Verizon which indicated that Amold Marcus, a general contractor

had brought the U.L. site to Air Techniques ' attention and that Mr. Goldstein had already

met with U.L. concerning the Melvile site (Defendants ' Ex. C). Mr. Goldstein felt that the

propert was very attractive , but that "no price had been discussed." Lastly, Mr. Goldstein

inquired in the email , as to "how we should proceed with all of our alternatives, with this

one seeming to us to fit all of our objectives best!!!"

Mr. Schacker testified that after the receipt of the email , he talked to Mr. Schlager

and told him how upset he was about Goldstein having met with the u.L. people. During

this conversation, Mr. Schacker said "they decided that he would contact Cushman and

Wakefield, the exclusive agent" for U.L. propert.

Mr. Schacker said he met with Ted Stratigos from Cushman and Wakefield and

advised him that he, Gar Schacker, was the broker representing Air Techniques.

Mr. Schacker said he reported his conversation with Mr. Stratigos to Mr. Schlager

and both ofthem called Mr. Goldstein. In that conference call , initiated by Mr. Schlager

he says they had a discussion with Mr. Goldstein explaining that Mr. Goldstein was

obligated to work only with Mr. Schacker and that he, Mr. Goldstein could jeopardize the

commercial relationship. When asked by his attorney on direct examination what he

meant, Mr. Schacker said, it could jeopardize their ability to collect a commercial fee

because he had not been at the first U.L. meeting.

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He further explained that

, "

my role was as a broker...There was agreement that I

was to be the broker and I would collect a fee." Mr. Schacker also explained that Mr.

Schlager initially, was to get a fee.

That contention was consistent with the email Schlager sent in response to

Goldstein s revelation that D.L. was of interest to Air Techniques. That email said the

L. property would be put into the hopper with other properties. (Defendants ' Ex . E).

Mr. Schacker says the conversation left off with Mr. Schacker cast to set up a future

meeting with the u.L. broker. He investigated the site, checked the zoning status, visited

the site , and downloaded information. He said he asked Mr. Stratigos to send him

information but that Stratigos was not cooperative. At that point in his testimony, Mr.

Schacker reiterated that he believed it was his role to put the u.L. propert into the hopper

with the other sites being investigated, in paricular, he said the Grumman-O 1 site was stil

being investigated.

Plaintiff relies upon its Ex. 33 , one of the non-binding Letters of Intent dated March

2003 written by Mr. Schlager and sent to Mr. Goldstein and u.L.' s broker. The

Brokerage Clause in it provides in a pertinent part:

United Realty (Purchaser s Broker). . . At settlement, the Sellng Broker

shall be paid by the seller. Purchasers ' broker shall be paid by Purchaser.

Mr. Schacker testified on direct examination that Plaintiffs Ex. 33 was the result of

conversations he had with Jeff Goldstein. He did not recall if it was one or two

conversations , but they did involve the brokerage and disclosure clause of the Letter of

Intent. Mr. Schacker stated:

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Q: In the conversations what did you say to Mr. Goldstein to the best of

your recollection.

A: We reviewed the clause and the situation and the proposed modifications

and I reviewed it, discussed it with Jeff Goldstein.

Q. Other than generally discussing do you recall what you said to him?

A: I told him we had to modify that agreement so that the purchaser was

paying the commission.

Q: Is that the exact words that you told him?

A: More or less

Q: Now, when you discussed that with him, what was his response to you, if

you recall the exact words, otherwise you can give me sum and substance.

A: He basically approved it, realized that's the way it had to be and said

okay, do it.

Q: After you had that conversation or conversations, is that when you sent

this copy that' s been received in evidence as 33 to Mr. Goldstein?

A: Yes

Mr. Schacker testified that Cushman and Wakefield refused to share its

commission. When asked on direct examination, what effect this had, Mr. Schacker

testified that "It stalled the negotiations on the project."

Jeffrey Goldstein s testimony established that he was a well-educated experienced

business man, with an Engineering Degree , a Masters of Business , who was also a

Certified Public Accountant. As an offcer of Air Technique , in 1997 he became involved

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with GTE which was subsequently purchased by Verizon which conducted business on

property adjacent to Air Technique s property located at 70 Cantiaque Lane in Hicksvile

New York. By June 2003 , the GTE site was involved in environmental testing which

eventually resulted in remediation and dirt removal affecting the operations of Air

Technique s adjacent property. It was determined that Air Techniques would have to move

and that GTEN erizon would pay to relocate Air Techniques. Gar Hucka, was charged

with relocating GTE/Verizon properties. He agreed to find a new site for Air Techniques

business , which included the 70 Cantiaque Lane site and the 600 West John Street site

located around the corner from the Cantiaque Lane site and also involved relocating 350

employees. Mr. Goldstein testified that despite Mr. Hucka s claims, he took the position

thathe himself as the principal for Air Techniques would also look for a suitable relocation

site, independent ofGTENerizon s efforts.

According to Mr. Goldstein, there is no question that Mr. Schacker did send and

receive email and telephone communication from Ted Stratigos, the selling broker on the

L. propert. The emails in evidence establish that Mr. Schacker sent proposals on behalf

of Air Techniques to Mr. Stratigos in the form of proposed non-binding letters of intent

and directly through the emails(PlaintiffsEx. 37). Mr. Schacker testified that

Defendant' s Exhibit F is a revised response to a previous non-binding Letter ofIntent

which had provided that both the Sellers and Buyer s brokers were to be paid by the Seller.

The revision contained an increase in the sellng price, inclusion of "option parcel" as part

of the deal , and a change in the total acreage for sale. Regarding the brokerage clause, Mr.

Stratigos added the following language:

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As mentioned, Cushman & Wakefield is being paid by separate agreement by Seller

and other brokers involved on behalf of the Purchaser (including United Realty and

Gary Schacker) wil be the responsibility of the Purchaser for compensation, if any.

We are responding to you under those conditions, with the express understanding of

Jeff Goldstein.

This email supports Mr. Goldstein s position that he was directly involved in the

negotiations with U.L. and the Plaintiffs position that Defendant Air Techniques was

responsible for paying Plaintiffs commission.

Several other emails confirm that Mr. Schacker had Mr. Goldstein s authority to

negociate the deal with respect to the u.L. property.

Two April 19, 2004 emails indicate that Mr. Goldstein authorized Mr. Schacker to

set up a meeting with Ted Stratigos (Plaintiffs Ex. 40).

Some of the emails focused primarily on the issue of how Mr. Schacker was to

receive his fee before and after the Contract of Sale was executed on the U.L. property. On

April 21 , 2004 , by email fromSchackerto Goldstein, Mr. Schacker indicated that he had

confirmed from Ted Stratigos that a contract of sale for the u.L. propert would be issued.

The email advised Mr. Goldstein about an "inducement resolution" from Suffolk County

IDA, and asked Mr. Goldstein to "reaffirm that you intend to pay the commission if the

deal closes on u.L. It is 3. 5% (Plaintiffs Ex. 42).

The focus of some of the other emails turned to the issue of who would pay Mr.

Schacker s commission, when a contract of sale became imminent. On May 7 2004 Mr.

Schacker emailed Mr. Goldstein asking that he "review, advise, sign, and return" an

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attached Commission Agreement based upon Schacker s understanding that a u.L. contract

had been achieved. The Agreement provided for a commission calculated at " 5% of the

entire consideration paid " upon consummation of the sale of the u.L. propert to Air

Techniques (Plaintiffs Ex. 43). It is undisputed that Mr. Goldstein did not sign the

Agreement and simply ignored the inquiry concerning the Commission Agreement. In

fact, in response to Mr. Schacker s May 11 2004 email to Mr. Goldstein regarding the

Commission Agreement, and Mr. Schacker s desire for a response before he left on

vacation, Mr. Goldstein, in an email sent that same day responded

, "

Enjoy your trip. . . we

wil speak next week" (Plaintiffs Ex. 44). Mr. Goldstein failed to directly respond to Mr.

Schacker s e-mail inquiry concerning the Commission Agreement dated May 2004.

simply ignored the issue.

In another email to Mr. Goldstein sent on May 18 , 2004 , again Mr. Schacker

requested him to sign and return the Commission Agreement. (Plaintiff sEx. 45)

In a March 28 , 2004 email from Mr. Goldstein to Mr. Schacker and Mr. Schlager

Mr. Goldstein confirmed that unresolved issues remained with the Grumman propert, that

the "u.L. site is the winner " and "we are moving forward." (Plaintiffs Ex. 47). Mr.

Schlager responded to this email within twenty minutes stating,

: "

". please coordinate with

Schacker on the u.L. brokerage fee you indicated you would pay. He has worked hard

and, as you know, his compensation is back loaded and contingent. I think it would (sic)

right thing to do ' and honorable for you to pay Schacker a market fee. This was a

difficult mission and we had to keep it mostly covert for a long time . . . the site went

public ' only a couple of weeks after you heard about it from your GC friend , etc.

(Plaintiffs Ex. 49). Mr. Goldstein s email response was the following:

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I am a man of my word , and wil do something for Gar (Schacker)...the difficulty

is GTE or Verizon put you guys on the case, without our knowledge, and this was

for their benefit, not really ours. They needed to search the market; we already had

Grumman, Heartland, and the u.L. without anyone s assistance.

* * *

I am sure Gary served a purpose to you and Verizon.. .1 have no idea, why he did

not have some agreement with them, but that is his problem...nonetheless, I intend

to work something out with him...not as a broker, and certainly not as our broker. .

. we never engaged him. . .and 3. 5% on an $8MM land deal is not in our budget

but I wil work something out.

Jeff

(Plaintiffs Ex. 47)

In a June 4 2004 email to Mr. Goldstein, Mr. Schacker strongly expressed his

feelings about the rising dispute, stating:

I feel compelled to write to you to express my disappointment in your reluctance to

finalize our agreement now that you have signed the u.L. contract.

You agreed to pay my fee as regards to this transaction when it became clear that

Cushman and Wakefield' was not wiling to share , and upon that agreement on

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your par, I discontinued further discussion with Cushman about sharing of fees

feeling comfortable that you would comply with your agreement. We certainly

. .

have enough documentation to demonstrate all our roles in the process, and I am

confident that if you review your notes you wil find my fee is well deserved. A

fair and reasonable fee for the work I performed is $276 500.

* *

I implore you to finalize an agreement with me in writing at this time so that we can

continue to have a mutually satisfactory relationship and I can continue to assist

you in bringing this contact to a successful conclusion.

* * *

I am concerned that if you do not respond quickly, I wil be constrained to take

action to protect my interest.

* * *

I look forward to hearing from you soon.

gjs (Plaintiffs Ex. 48)

The contract of sale between u.L. and Air Techniques dated May 25 , 2004

establishes that this email was sent after Air Technique finalized its contract of sale, but not

before the closure of the deal.

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Mr. Goldstein responded just as strongly to Mr. Schacker s June 5 , 2004 emails

and within three hours of its receipt. He characterized Mr. Schacker s prior telephone call

and the latest email as a threat and set forth his position on the issue of the fees which had

been the subject of several ofMr. Schacker s previous emails. Mr. Goldstein s response

follows in part (Plaintiffs Ex. 48):

We did not, and have never engaged you or your firm.

You were hired, engaged, or given some task by Verizon, GTE, Long Island

Acquisition Corp. (Or whatever the name was), or Gary Schlager, but not Air

Techniques, AT Realty, or me

* * *

You appeared on the scene after having done some review of real estate on LI.

At that first meeting, and I am told you had no knowledge of us prior to that, we

advised you, Gar, and Gar that most of the sites were unacceptable, and did not

meet our criteria. After our road trip we reiterated that all but Grumman and

Heartland were not workable or acceptable. . .

As part of our involvement with Verizon/GTE, we later advised the group of the

u.L. site , which we went to without you or any other broker, and represented to

them (U.L.) that we were not represented by any broker. . .

Quite franly, your efforts were counter productive, and delayed our ability to

move forward with the only possible sites. The constant distractions, meetings

visits etc. on sites that were unacceptable from the beginning, delayed our decision

making.

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You actually wanted at one point to advise U.L. that we were not interested, and I

insisted you say nothing and stay out of the way!

When you approached the selling broker for u.L. to split the fee that was also

without my knowledge and approval (Plaintiff Ex. 48).

Mr. Goldstein testified that he communicated with Mr. Schacker for the purpose of

keeping GTENerizon informed of the progress of the negotiations, not only on the U.

property but also the Heartland propert and the frontrunner Grummanlethpage propert.He further testified that keeping Mr. Schacker in the loop was

par of "the process " set up

by GTENerizon and for the benefit ofGTENerizon, not Air Techniques. Mr. Goldstein

compared the Grumman proposed deal where the selling broker had agreed to split its

brokerage commission with Mr. Schacker with the u.L. propert deal in which the seller

broker, Ted Stratigos, would not share its commission with Mr. Schacker and

acknowledged that the commission was a continuing source of friction between the paries.

For example, one revised proposal Letter ofIntent, regarding the U.L. propert

indicated that "purchaser s broker shall be paid by the purchaser." (Defendants ' Ex. F;

Plaintiffs Ex. 33). Another regarding the Gruman property indicated that both the buyer

and seller s commissions are paid by the seller (Plaintiffs Ex. 33). Both proposals were

dated March 11 2004, and apparently signed by Mr. Schacker and Mr. Schlager, as

communicators of the proposals. No Letter ofIntent was ever signed by the purchaser, Air

Techniques or the seller U.

Mr. Goldstein said he reviewed the brokerage clause in Plaintiffs Ex.33 regarding

the buyer s obligation to pay the brokers commission to United Realty. He testified that he

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believed he told Mr. Schlager that it was totally unacceptable. He also said that he was

never advised that such a Letter ofIntent was sent to Mr. Stratigos.

The most persuasive language in support of the Plaintiff s position is found in the

Brokerage Clause of the Contract of Sale between U.L. and Air Technologies , which

provides that United Realty is the purchaser s broker and that the purchaser s broker

commission was to be paid by the purchaser under a separate agreement (Plaintiff sEx.

49/Defendants ' Ex. U).

Mr. Goldstein testified that the only reason that the clause was in there was because

Ted Stratigos and Cushman and Wakefield were concerned about Gary Schacker and

United Realty entangling them with a claim or law suit. When asked if he could have just

indemnified u.L. and its broker, Mr. Goldstein testified that they were not wiling, "so at

the time he chose to agree " to the terms of the brokerage agreement in the Contract of

Sale.

Gary Schlager testified his office is located in Washington, D.C. and for that

reason, when GTENerizon retained him for the New York transaction, he needed a local

broker and therefore he contacted the Plaintiff United Realty to find a suitable relocation

property for the Defendants ' businesses. He confirmed that although he was paid monthly

by Verizon, he was able to collect 40% ofMr. Schacker s brokerage fee , which was to be

paid by the seller, initially. He said he knew Mr. Schacker from meetings of the Society of

Industrial Realtors and he had a good relationship with him. He said he was not happy

when he found out that Mr. Goldstein had contacted and toured the UL. property without

input from the team and he told Mr. Schacker to advise the UL. sellng broker that he was

the buyer s broker. He testified that in subsequent telephone conference calls with Mr.

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Goldstein and Gar Hucka, Mr. Goldstein was advised of the importance of negotiating

through Mr. Schacker on the U.L. property. He further said that Mr. Goldstein had agreed

to tell the U.L. broker, Ted Stratigos, that Mr. Schacker was the broker and that he should

receive 3.5% of a 7% commission.

The Cour credits Mr. Goldstein s testimony that he felt compelled to satisfy the

Seller s concerns by including the Plaintiff in the Brokerage Clause of the Contract. Mr.

Schacker himself, admitted that the commission issue was stalling the negotiations on the

entire deal. It was apparent from the beginning of the project that Mr. Schacker believed

he would get paid from the Seller, similar to the agreement that had been reached with the

Grumman selling broker who had agreed to split the commission fee ifthe deal with

Grumman had been completed. The various Letters of Intent some of which were misdated

and therefore confusing as to when they were sent and what was attached, evidenced that

there was an ongoing dispute over the commissions. Mr. Goldstein testified that there was

also more than one draft of the Contract of Sale in the U.L. deal. His explanation that he

was mistaken when he testified at his deposition that United was not mentioned in the

brokerage clause of the final contract of sale, even if untrue , does not require the Cour to

discredit all ofMr. Goldstein s testimony. Particularly his testimony that no final amount

had been negotiated between Air Techniques and Mr. Schacker (Plaintiffs Ex. 49) is

credible. There is no question that Ex. 49 required a separate agreement for the payment of

the commission by the Buyer s broker.

Mr. Goldstein contended throughout the proceedings that as to the U.L. property,

Mr. Schacker acted as a messenger and not a broker and that the Plaintiffs efforts if

helpful , were required basically by GTE/Verizon and that no separate agreement was even

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reached between Mr. Schacker and Mr. Goldstein or anyone else representing Air

Techniques because Mr. Schacker insisted on a 3.5% commission.

The Defendant contends that in order for the Plaintiff to succeed and collect a

commission from the Defendant, the Plaintiff must establish that either the Plaintiff was the

primary cause of the deal or there was an agreement to pay the Plaintiff the commission

claimed.

The question of whether the Plaintiff was the primar cause is irrelevant in this

particular case because the contract of sale specifically named the Plaintiff as the buyer

broker and that the buyer would pay the commission to the Plaintiff, if any, pursuant to a

separate agreement. See Helmsley-Spear New York Blood Center 257 AD2d 64 (lst

Dept. 1999). The Cour held, where a contract of sale admits the broker s performance of

services , the broker is entitled to Summar Judgement on its clause for commissions.

Where, as here, the brokerage clause in the Helmsley Spear contract of sale was basically

the same as the one in this case, the Plaintiff is entitled to the reasonable value for his

servIces.

The Court of Appeal' s decision in Alfed K Greene v. Magnaut Hellman

51NY2dI97(l980) does not preclude a finding that Mr. Schacker is entitled to a

commission based upon the facts and issues raised in this case.

In Greene, the Court of Appeals first addressed the authority of one co-defendant

(Driscoll) to bind the property owner (Hellman). Driscoll had made arrangements with the

plaintiff broker (Greene) to procure a buyer for the Hellman property. After reviewing the

facts in the Greene case, which are in no way similar to the circumstances which brought

Mr. Schacker together with the Air Techniques Defendants , the Court of Appeals found

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that Driscoll had no autho.rity to bind Hellman. Here, Mr. Schacker s authority to act on

the Defendants ' behalf was evidenced by Mr. Goldstein s own testimony and emails.

Additionally, the court' s ruling in Greene that

, "

So also , the consequent failure to establish

apparent authority was not offset by the lack of exception by Hellman to Gordon

insertion of Greene s name in the purchase offer." The Court' s ruling is not controllng in

this case. The Court of Appeals based its reasoning on the written offer which immediately

preceded the eventual contract of sale in which the purchaser recited that he had "received

a statement covering West Wayne Plaza from Alfred K. Greene. " which preceded the

following sentence

, "

It is understood and agreed that any brokers ' commission due on the

transfer of the property shall be the obligation of the seller, and the (buyer) shall not be

obligated for a broker s commission if transaction shall fail to close for any reason..." The

Court therefore held that

, "

The first sentence in a brokerage clause merely acknowledged

that Greene had provided Gordon with' a statement' covering the premises. It in no way

declared that a commission was due on that account or that Greene had been the procuring

cause. Instead it carefully avoided the familiar boiler plate used to indicate which broker

if any brought about the sale... So in the clause s second and only other sentence, the

purchasers did no more than assure itself as sophisticated purchasers usually do, that the

obligation for ' any ' brokerage commission on the sale was to the seller s and not the

buyer s. Fairly read, this language manifested no intention to create a third pary

beneficiary.

Significantly, to the contrary, in this case the actual Contract of Sale designated

United Realty as the buyer s broker, and the parole evidence rule , precludes Mr. Goldstein

from excusing Air Techniques from the stated obligation.

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Therefore , the question remaining is what is the reasonable value where no separate

agreement was finalized.

The documentar and testamentar evidences support the Plaintiffs claim that he

requested that the amount of the commission be based upon a percentage of the sale price

but does not support a claim that the Defendant agreed to that percentage or a specific

amount. There is no question that Mr. Goldstein said he would take care of the

commission and promised him some amount but that amount was never finalized. Mr.

Schacker s testimony was vague as to the discussions leading to the alleged oral agreement

and Mr. Goldstein denies that they agreed to the 3.5% reflected in the unsigned Letters of

Intent.

Even though the Defendants ' listed the Plaintiff as its broker , it cannot be implied

that the Defendants ' agreed to pay the 3. 5% Plaintiff claim.

Plaintiffs testimony that the unsigned Letters of Intent represent the Defendants

assent to pay a 3.5% commission is not credible, in light of the Plaintiffs vague testimony

regarding the specific terms of the oral agreement, allegedly reached in "one or two

telephone conversations with Mr. Goldstein. Additionally, Mr. Goldstein s testimony that

he never agreed and took exception to paying the Plaintiff 3.5% and that he did not

authorize any Letter of Intent which promised payment based on that percentage or any

percentage is also credible.

Here, the Court finds that there was no implied contract to pay Mr. Schlager at the

rate of3.5% of the purchase price. A contract canot be implied in fact where the facts are

inconsistent with its existence (See, La Vine v. La Vine, 148 D.2d 926).

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The Cour credits the Plaintiff s testimony that he participated in the negotiations

which led to the contract as the emails show. The Court is also convinced, that Mr.

Schacker set up meetings , communicated offers and participated in drafting proposed

Letters of Intent at his request. Despite the Defendants ' testimony that the Plaintiff was a

hindrance to the project, Mr. Goldstein admitted that he authorized Mr. Schacker to set up

meetings and relay Air Techniques ' offers. Most importantly by his own admission , he

communicated the offer with respect to the price that he ultimately paid for the propert

through Mr. Schacker (See Plaintiff sEx. 41).

Unfortunately, the statements made by Mr. Goldstein that he would "take care of it"

when the issue of Mr. Schacker s commission threatened to stall the project is not to be

equated with an agreement to pay a specific commission. Simply put, although the

opportunity was available, Mr. Schacker and Air Techniques attempted but never reached

an agreement as to the amount to be paid to Mr. Schacker.

Mr. Schlager s testimony does not support a different conclusion. Throughout the

project, Mr. Schlager had an interest in Mr. Schacker s obtaining a high commission

agreement from whomever would pay. Mr. Schlager had a private agreement that Mr.

Schacker had to obtain a commission agreement from someone other than GTENerizon.

was Mr. Schlager who urged Mr. Goldstein to pay Mr. Schacker, because it was "the right

thing to do " and because Mr. Schlager would have benefitted from the agreement as Mr.

Schacker had agreed at the very outset of the project to give Mr. Schlager 40% of the

commission Mr. Schacker received (Plaintiffs Ex. 55). Hence , the Court does not credit

Mr. Schlager s allegations that Mr. Goldstein agreed to the 3.5% commission.

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As previously set forth Mr. Schacker was an integral par of the process that lead

to the deal. His expertise, time, and efforts demonstrated through the emails, Letters of

Intent, the setting up of meetings and telephone calls are useful evidence in quantifying the

value of his participation.

Although the Court canot find an implied contract of 3 . , in this case, the

broker can recover in quantum meruit for the brokerage services he testified he performed.

In cases where the Appellate Division has reversed a lower court for failing to grant the

broker Summary Judgement on the issue ofliabilty for the broker s commission, the

Appellate Court remands the matter for a determination of the brokers damages. (See

Holiday Management Associates, Inc. Vincent M Albonse 173 AD2d 775 (2d Dept

1991); Wiliam B. May Co. , Inc. Monaco Associates et al., 80 AD2d 798 (1 sl Dept 1981 J).

The Court is faced with determining the value of the Plaintiff s efforts based upon

the theory of quantum meruit.

Mr. Schacker had an expectation of being paid by Air Techniques. Mr. Goldstein

agreed that some amount should be paid but not the $276 500 which represented the 3.

of the purchase price Mr. Schacker demanded. He was aware of Mr. Schacker s efforts

authorized some of them and did not insist that he stop his efforts.

The contract of sale naming the Plaintiff as the broker was signed on May 25 , 2005

and the Plaintiff became involved in the U.L. deal some time after February 13 2005 when

he found out the UL. propert would be put into the hopper for the relocation project.

According to his own testimony, Mr. Schacker s efforts were divided between the

Grumman - 01 site for which he did not expect payment from the Defendants and the D.

site, and presumably between unrelated work from other clients during this three-month

- 23 -

period. Based upon all of the evidence, the Court finds that the $276 500 demanded by the

Plaintiff was not agreed to and does not represent a reasonable fee under the circumstances.

Therefore, this amount wil be divided by three, resulting in a fee of$92 166. 66 payable by

the Defendant Air Techniques. This amount wil fairly and reasonably compensate the

Plaintiff for his efforts from the Defendants who the Court finds benefitted from the

Plaintiffs efforts in the purchase of the U.L. property. The Plaintiff is entitled to interest

on the $92 166. 66 from the date of this decision.

The Court declines to award attorneys' fees because the Plaintiff has not

provided any authority agreement or proof supporting such award.

Settle judgment upon notice.

DATED: January 11 2008Mineola, NY

ENTER:

HON. MICHELE M. WOODARD

G:\DECISION AFTER TRIALIURC2 Inc. v. Air Techniques,wpd

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