14-2776-cv Podlin v. Ghermezian

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT



## SUMMARY ORDER

Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007, is permitted and is govern ed by Federal Rule of Appellate Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a document filed with this Court, a party must cite either the Federal Appendix or an electronic database (with the notation “summary order”). A party citing a summary order must serv e a copy of it on any party not represented by counsel.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the 1 Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 19 th 2 day of February, two thousand fifteen. 3 4 PRESENT: A MALYA L. K EARSE , 5 D EBRA A NN L IVINGSTON , 6 S USAN L. C ARNEY , 7 Circuit Judges

. 8 9 10 M ARK J. P ODLIN , P ODLIN I NTERNATIONAL R EALTY 11 L TD ., 12 13 Plaintiffs-Appellants

, 14 15 v. No. 14-2776-cv 16 17 N ADER G HERMEZIAN , D ONALD G HERMEZIAN , 18 R APHAEL G HERMEZIAN , T RIPLE F IVE W ORLDWIDE , 19 T RIPLE F IVE G ROUP L TD ., ABC C ORPORATIONS , 1-10, 20 T RIPLE F IVE W ORLDWIDE D EVELOPMENT C O

. LLC, 21 M EADOWLANDS D EVELOPMENT LLC, A MEREAM LLC, 22 A MEREAM D EVELOPMENT , LLC, M EADOW A-B 23 O FFICE , LLC, M EADOW C-D O FFICE , LLC, M EADOW 24 ERC D EVELOPER , LLC, M EADOWLANDS O NE LLC, 25 M EADOW B ASEBALL , LLC, M EADOW H OTEL , LLC, 26 27 Defendants-Appellees, 28 29 T RIPLE F IVE , L.L.C., T RIPLE F IVE P ROPERTIES , LLC, 30 T RIPLE F IVE NY, LLC, T RIPLE F IVE I NT ’ L I NC ., 31 T RIPLE F IVE H OLDINGS , L.L.C., N EW J ERSEY S PORTS 322 AND E XPOSITION A UTHORITY , C HRIS C HRISTIE , 1 G OVERNOR , C OLONY C APITAL , LLC, 2 3 Defendants

. 4 5 6 FOR PLAINTIFFS-APPELLANTS: R ICHARD D E P ALMA , Thompson Hine LLP, 7 New York, NY. 8 9 FOR DEFENDANTS-APPELLEES: K ENNETH W. T ABER (A NDREW C. S MITH , on 10 the brief ), Pillsbury Winthrop Shaw Pittman 11 LLP, New York, NY. 12 13 Appeal from a judgment of the United States District Court for the Southern District of 14 New York (William H. Pauley III, Judge ). 15

UPON DUE CONSIDERATION WHEREO F, IT IS HEREBY ORDERED, 16 ADJUDGED, AND DECREED that the judgment of the District Court is AFFIRMED

. 17

Plaintiffs-Appellants Mark J. Podlin and Pod lin International Realty (collectively, “Podlin”) 18 appeal from the District Court’s July 29, 2014 judgment; they challenge the May 28, 2014 order 19 dismissing their claims for, inter alia , ten percent of the value of th e Xanadu shopping center project 20 (now renamed American Dream@Meadowlands). We assume the parties’ familiarity with the 21 underlying facts, the procedural history of the case, and the issues on appeal. 22

“To survive a motion to dismiss, a complaint m ust contain sufficient fa ctual matter, accepted 23 as true, to state a claim to relie f that is plausible on its face.” Ashcroft v. Iqbal , 556 U.S. 662, 678 24 (2009) (internal quotation marks omitted). We review de novo the dismissal of a complaint under Rule 25 12(b)(6), accepting all factual allegations in th e complaint as true an d drawing all reasonable 26 inferences in favor of the plaintiff. TechnoMarine SA v. Giftports, Inc. , 758 F.3d 493, 498 (2d Cir. 2014). 27

A federal court sitting in diversity must apply the choice-of-law rules of the state in which 28 the court is located; the district court thus prope rly applied New York choice-of-law principles. See 29 Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496-97 (1941). In New York, the first inquiry in a 30 choice-of-law analysis is into the exis tence of an actual conflict of laws. See Fieger v. Pitney Bowes Credit 31 Corp. , 251 F.3d 386, 393 (2d Cir. 2001). As regards New York and New Jersey, “[e]ach state requires 32 that real estate brokers working in the respective state be licensed in order to bring actions for 33 commissions,” but Podlin “was licensed in New York only. Consequently . . . the application of each 34 statute will lead to a different result: Under New York law, his claims are not barred,” but under 35 New Jersey law, they are. Id. at 394. “Because there is a conflic t, we must resolve the choice-of-law 36 issue, using New York choi ce-of-law principles.” Id. 373 In contract suits, “the court evaluates the ‘cente r of gravity’ or ‘grouping of contacts’, with 1 the purpose of establishing which state has ‘the most significant relationship to the transaction and 2 the parties.’” Id. (quoting Zurich Ins. Co. v. Shearson Lehman Hutton, Inc. , 618 N.Y.2d 609, 612 (1994)). 3 New York courts consider (1) the place of contracti ng, (2) the place of negotiation, (3) the place of 4 performance, (4) the location of the subject matter, and (5) the domicile or place of business of the 5 contracting parties. See id. In this case, the place of contracting and place of negotiation are both 6 New York, the place of performance is New Jersey (and Edmonton, insofar as Podlin was physically 7 located in Edmonton while he was calling and emailing people located in New Jersey), the location 8 of the subject matter is also New Jersey, the domicile of Defendants is alleged in the complaint to be 9 New York, and Podlin’s domicile is Georgia. “In a ddition, the policies underlying conflicting laws in 10 a contract dispute may also be considered in instances where they are readily identifiable and reflect 11 strong governmental concerns.” Madison Realty, Inc. v. Neiss , 676 N.Y.S.2d 672, 673 (App. Div. 1998). 12 In this case, “the interest of New York in seeing that its licensed brokers are compensated ,” 13 Rosenberg & Rosenberg , P.C. v. Hoffman , 600 N.Y.S.2d 228, 229 (App. Div. 1993), and New York’s 14 recognition of other states’ “strong interest in regu lating the activities of real estate brokers who 15 perform services in connection with the sale of [in-state] property,” Madison Realty , 676 N.Y.S.2d at 16 674, leave the case in equipoise. 17

In Madison Realty , a plaintiff who was a licensed New York real estate broker informed one 18 of the defendants of the availability of certain real property in Florida and “assisted [that defendant] 19 in negotiating the purchase of the property”; the plaintiffs thereafter sued to recover “a commission 20 for procuring the sale.” Id. at 673. The Appellate Division, Second Department, held that the 21 plaintiff could not recover because he was not license d as a real estate broker in Florida, and Florida 22 had the most significant relationship to the case, placing heavy weight on the location of the 23 property that gave rise to the claim. Id. at 673-74. In Rosenberg & Rosenberg , by contrast, the Appellate 24 Division, First Department, held that the New York real estate broker plaintiff was entitled to sue 25 for his commission for securing his client financin g to purchase a condominium in New Jersey, even 26 though the plaintiff was not licensed in New Jersey. 600 N.Y.S.2d at 229. The court emphasized that 27 the contract arose “from initial contacts in New York and [was] made in New York,” and that “a 28 New York [financing] source was found and the loan commitment issued and the loan agreement 29 closed in New York.” Id. Finally, in TDH-Berkshire Inc. v. Korff , 823 N.Y.S.2d 20 (App. Div. 2006), a 30 more recent case, the Appellate Division, First Depart ment, held that the plaintiff could not recover 31 a commission for successfully finding a purchaser for a parcel of New Jersey real estate, because he 32 was licensed as a real estate broker in New York, but not New Jersey. Id. at 21. Although the client 33 was domiciled in New York, “all information c oncerning the subject property came through 34 defendants’ New York offices, [and] the final sale of the property was closed here,” the court stated 35 that “the heaviest weight is given to the location of the property being transferred.” Id. The court 36 concluded that, “[i]n light of the out-of-state locus of this property, as well as plaintiff’s admission 37 that over 100 meetings were held at the property site . . . New Jersey law must apply.” Id. 384 Unlike Rosenberg & Rosenberg , in which the location of the subject matter realty was really the 1 only connection to New Jersey, this case includes extensive New Jersey involvement beyond the 2 location of the Meadowlands. As far as appears from Podlin’s complaint, nearly all of his 3 performance of the contract was directed toward N ew Jersey and took place (at least partly) in New 4 Jersey, since Podlin was calling and emailing pe ople who were physically located there. Those 5 contacts, in combination with TDH-Berkshire ’s indication that the locus of the property is entitled to 6 the heaviest weight, albeit not dispositive weight, demonstrate that the district court was correct in 7 holding that New Jersey had the most significant relationship to the facts of this case, and 8 consequently applying New Jersey law. 9

The New Jersey real estate broker licensing stat ute, N.J.S.A. 45:15-3, provides that “[n]o 10 person . . . shall bring or maintain any action . . . for the collection of compensation for the 11 performance of any of the acts mentioned in R.S. 45:15-1 et seq. without alleging and proving that 12 he was a duly licensed real estate broker at the ti me the alleged cause of action arose,” which Podlin 13 cannot do. The “acts mentioned” are extremely broad; relevant for this appeal, the statute bars suits 14 by a person who “attempts to negotiate a sale, exch ange, purchase or rental of real estate or an 15 interest therein . . . or assists or directs in the proc uring of prospects or the negotiation or closing of 16 any transaction which does or is contemplated to result in the sale, exchange, leasing, renting or 17 auctioning of any real estate.” N.J.S.A. 45:15-3. Podlin ’s actions in attempting to negotiate a takeover 18 of the Xanadu project by Defendants fall within th e ambit of the statute, and Podlin is thus barred 19 from bringing an action to recover any compensation deriving from those actions. 20

Podlin’s argument that he is seeking comp ensation under an employment contract, not 21 seeking compensation for brokering a real estate tr ansaction, is unavailing. Even drawing all factual 22 inferences in Podlin’s favor, it still appears fr om the allegations in Podlin’s complaint that the 23 primary purpose of his agreement with Triple Five was securing and redeveloping the Xanadu 24 project. Defendants may have kept Podlin busy with other projects in between, but Podlin alleges 25 facts that demonstrate that Defendants’ only real interest in Podlin was his New Jersey political 26 connections. Podlin himself alleges that the primary focus of his work was the Meadowlands deal, 27 and he also alleges facts indicating that Defendan ts saw him as a consultant, not an employee, and 28 treated him accordingly. In fact, Podlin quotes a statement from Nader Ghermezian that seems to 29 indicate that the entire contract it self was contingent on Podlin securing the Meadowlands project 30 for Triple Five. And even Podlin admits that his “s alary” was “an artificially low figure designed only 31 to meet minimal living costs.” Am. Compl. ¶ 76. Ulti mately, the work for which Podlin seeks to be 32 compensated through this suit is not whatever work he may have done on Triple Five’s projects in 33 Libya or the Congo – he seeks to recover dama ges with respect to the Meadowlands deal, and 34 nothing else. 35

Second, Podlin argues that, when a plaintiff brokers a deal that includes the sale or lease of 36 both personalty and realty, the New Jersey real estate br oker licensing statute only bars suit as to the 375 recovery of compensation traceable to the realty. Podlin is correct. In Kazmer-Standish Consultants, Inc. 1 v. Schoeffel Instruments Corp. , 445 A.2d 1149 (N.J. 1982), the Su preme Court of New Jersey held that, 2 when a broker not licensed as a real estate broker negotiates the sale of an entire business, which 3 includes some realty and some personalty, the broker may “recover a commission on the portion of 4 the sale of an ongoing business attributable to pers onal property even if the sale includes an interest 5 in real estate.” Id. at 1152. Podlin’s complaint, however, fails to allege that there was any personalty 6 involved in the Xanadu deal. His complaint focuse s entirely on the realty involved. We must, of 7 course, draw all reasonable factual inferences in his favor – but we may not read allegations into his 8 complaint that are not there. Thus, the New Jersey re al estate broker licensing statute bars Podlin’s 9 claim for his commission in its entirety, whether pl ed in contract, unjust enrichment, or quantum 10 meruit, and the district court properly dismissed those claims. 11

We also affirm the district court’s dismissal of Plaintiffs-Appellants’ remaining claims for 12 substantially the reasons stated by the distri ct court in its well-reasoned opinion and order. 13

CONCLUSION 14

For the reasons stated above, we AFFIRM the District Court’s judgment. 15

16 FOR THE COURT: 17 Catherine O’Hagan Wolfe, Clerk 18 19