Opinion ID: 773408
Heading Depth: 3
Heading Rank: 2

Heading: Contacts Analysis

Text: 30 With respect to the contract claim against Pitney Bowes and PREFCO, and the quantum meruit claim against all defendants, the court must first compare the laws of New York and Connecticut to determine if they conflict. See Curley, 153 F.3d at 11.Each state requires that real estate brokers working in the respective state be licensed in order to bring actions for commissions, see Conn. Gen. Stat. § 20-325a (2000); N.Y. Real Prop. L. § 442-d (2000); however, Fieger was licensed in New York only. Consequently, although the New York and Connecticut real estate licensing statutes do not directly conflict, the application of each statute will lead to a different result: Under New York law, his claims are not barred, while under Connecticut law, they are. Because there is a conflict, we must resolve the choice-of-law issue, using New York choice-of-law principles. 31 New York employs two different choice-of-law analyses, one for contract claims, another for tort claims. See Lazard Freres & Co. v. Protective Life Ins. Co., 108 F.3d 1531, 1539-41 (2d Cir. 1997). With regard to the Pitney Bowes and PREFCO contract claim, it is clear that the contract law analysis would apply. With respect to a quantum meruit claim, we are not aware of any published NewYork decision that has stated the appropriate conflict-of-law test to apply to such a claim. Under New York law, a quantum meruit claim is a claim in quasi-contract. See Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 69 (2d Cir. 2000); Futterman Org., Inc. v. Bridgemarket Assocs. L.P., 718 N.Y.S.2d 40, 41 (App. Div. 1st Dep't 2000) (quantum meruit claims rest on implied contract); Landcom, Inc. v. Galen-Lyons Joint Landfill Comm'n, 687 N.Y.S.2d 841, 842 (App. Div. 4th Dep't 1999) (quantum meruit is a quasi-contract claim). Fieger's claimed entitlement to a commission payment sounds more in contract than in tort, arising as it does from the benefit allegedly conferred upon defendants by plaintiff's business advice. Accordingly, the court will apply New York's choice-of-law analysis for contract claims to Fieger's quantum meruit claim. 32 Under the contracts analysis, the court evaluates the center of gravity or grouping of contacts, with the purpose of establishing which state has the most significant relationship to the transaction and the parties. Zurich Ins. Co. v. Shearson Lehman Hutton, Inc., 618 N.Y.S.2d 609, 612 (N.Y. 1994) (quoting Restatement (Second) of Conflict of Laws § 188 [1]). In developing this test, the New York Court of Appeals relied on the Second Restatement of Conflict of Laws, which in addition to the traditionally determinative choice of law factor of the place of contracting, offers four other factors to be considered in establishing this `most significant relationship': the places of negotiation and performance; the location of the subject matter; and the domicile or place of business of the contracting parties. Id. (citing Restatement (Second) of Conflict of Laws § 188[2]). Additionally, with regard to the law governing financial transactions arranged in New York, New York has emphasized the state's role as an international financial center, see Intercontinental Planning, Ltd. v. Daystrom, Inc., 300 N.Y.S.2d 817, 826-27 (N.Y. 1969), and considered the state's need to ensure that its licensed professionals are paid for services provided within the state, see Rosenberg & Rosenberg, P.C. v. Hoffman, 600 N.Y.S.2d 228, 229 (App. Div. 1st Dep't 1993) (discussing need for state's licensed brokers to be compensated); see also Istim, Inc. v. Chemical Bank, 575 N.Y.S.2d 796, 799 (N.Y. 1991) (noting, in the context of a suit over an attorney's lien, that New York's undisputed interest in protecting its attorneys' ability to be paid for legal services rendered is paramount). 33 The district court, relying on Madison Realty, Inc. v. Neiss, 676 N.Y.S.2d 672, 673 (App. Div.2d Dep't 1998) (internal citation and quotation marks omitted), based its conflict-of-law analysis primarily on the principle that [c]ontracts referring to the transfer of title to land are governed by the law of the place where the land is situated. Id. This statement is true when the validity of a conveyance itself is in question. See James v. Powell, 279 N.Y.S.2d 10, 15 (N.Y. 1967) (choice of law as to legal consequences of conveyance should be determined by jurisdiction empowered to deal with the [r]es). Notwithstanding, New York courts have recognized the governmental interest underlying state licensing statutes, to wit, that a state may have a strong interest in regulating the activities of real estate brokers who perform services in connection with the sale of... property located within that state. Madison Realty, 676 N.Y.S.2d at 674 (Florida real estate licensing statute); see Marina Mgmt. Corp v. Brewer, 572 F.2d 43, 47 (2d Cir. 1978) (The [Connecticut] license requirements furnish supervision and regulation of the real estate business and make possible the elimination of the incompetent and unscrupulous agent.); cf. Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92, 98 (2d Cir. 2000) (applying New York law in a suit alleging defamation arising from a report indicating improper appraiser bias by plaintiff where, inter alia, the appraisal of which is at the heart of this suit-is located in New York). 34 In contrast, when an action involves real estate but does not challenge the title to, or succession or conveyance of, property, the situs of the property is viewed as one in `the spectrum of significant contacts' considered in connection with the conflict-of-law analysis. Madison Realty, 676 N.Y.S.2d at 673 (quoting Stolarz, 81 N.Y.2d at 226). Stated another way, in these cases the situs of the property is not dispositive of our choice-of-law analysis. 35 Although the district court placed heavy reliance on the situs rule, it evaluated three cases in which the situs of the property was just one of several factors in a conflict-of-law analysis. In Madison Realty v. Neiss, 676 N.Y.S.2d 672, 673 (App. Div. 2d Dep't 1998), the state court applied the center of gravity or grouping of contacts theory to determine that Florida law applied to a claim by a New York broker for commission on sale of Florida property. The Madison Realty court noted that the brokerage fee was earned in connection with the transfer of property, the purchaser was registered with the seller's agent in Florida as a potential purchaser, and eventually an offer for the property was made in Florida to the seller's agent in Florida. On these facts, Florida's contacts were greater than New York's. In Rosenberg & Rosenberg, P.C. v. Hoffman, 600 N.Y.S.2d 228, 229 (App. Div. 1st Dep't 1993), which the district court rejected, the state court applied an interests analysis to a New York real estate broker's claim for a commission for securing financing from a New York bank for the purchase of a New Jersey condominium, and found that New York had the primary interest in the deal because the work to secure the financing had been performed in New York. The court stated: 36 [T]he interest of New York in seeing that its licensed brokers are compensated on contracts arising from initial contacts in New York and made in New York for obtaining financing from whatever source and the fact that a New York source was found and the loan commitment issued and the loan agreement closed in New York would indicatethe propriety of the application of New York law. 37 Id. at 229. The district court also rejected reliance on Advance Realty Associates, Inc. v. First Bank National Association, No. 89 Civ. 4843 (SWK), 1991 WL 64153, at  (S.D.N.Y. Apr. 15, 1991). In conducting an interests analysis, the Advance Realty court found that New York had the primary interest in a claim by a New York broker for commission on the sale of Georgia property because the broker's principal place of business was New York while the purchaser's was Minnesota; the relationship was initiated through a series of conversations in New York, Nebraska, and Minnesota; the broker procured a buyer in New York; and discussions regarding the commission and negotiations regarding the property sale occurred in New York. Id. 38 Cases from other jurisdictions support the approach of considering the situs of the real estate that is the subject of a transaction as just one of several contacts assessed in an interests analysis. In an almost century-old case concerning the application of the situs rule, Selover, Bates & Co. v. Walsh, 226 U.S. 112, 123 (1912), the plaintiff claimed that the law of Colorado must apply to the interpretation of a contract drafted in Minnesota because the contract covenanted certain rights to property in Colorado. The Supreme Court stated: The contention is that the [Minnesota] statute, as applied, affected the transfer of land situated in another state, and outside of, therefore, the jurisdiction of the state of Minnesota. In other words, it is contended that the law of Colorado, the situs of the property, is the law of the contract. Id. at 123. The Court disagreed, holding that the contract was strictly personal, and [i]t in no way affects the land or seeks any remedy against it. Id. It relied on Polson v. Stewart, 45 N.E. 737 (Mass. 1897), in which the court had explained: 39 It is true that the laws of other states cannot render valid conveyances of property within our borders which our laws say are void, for the plain reason that we have exclusive power over the res. But the same reason inverted establishes that the lex rei sitae cannot control personal covenants, not purporting to be conveyances between persons outside the jurisdiction, although concerning a thing within it. 40 Id. at 738 (internal citation omitted); see Coldwell Banker & Co. v. Karlock, 686 F.2d 596, 599 (7th Cir. 1982) (finding that [a] real estate brokerage contract is generally characterized as a contract for personal services rather than a contract conveying an interest in land, and performing a conflict-of-law analysis by assessing contacts with brokerage arrangements, including, inter alia, the situs of the property); Dorothy K. Winston & Co. v. Town Heights Dev., Inc., 376 F. Supp. 1214, 1218-19 (D.D.C. 1974) (concluding that situs rule did not control contacts analysis and Florida broker's law did not bar commission for a District of Columbia broker who procured a purchaser for property in Florida); see also Scott/Hubbard Co. v. Sika Chem. Co., 694 F. Supp. 1311, 1314-15 (N.D. Ill. 1988) (holding that the situs of an acquired Missouri corporation was not determinative of choice-of-law question as to finder's fee contract between a finder and a purchaser, both non-Missouri corporations); Ames v. Ideal Cement Co., 235 N.Y.S.2d 622, 628 (Sup. Ct. New York County 1962) (holding, in the analogous context of choice-of-law in relation to the sale of personal property, that compensation for arranging the sale is assessed apart from underlying sale). 41 Applying New York's contract conflict-of-law test, the district court determined that Connecticut had the primary contacts with the controversy because the situs of the property was in Connecticut, the defendants are Connecticut corporations, the defendants' interest was solicited in Connecticut and the final agreement between defendants and SBC was consummated in Connecticut. In this case, we believe that the district court's analysis was too focused on the final transaction between SBC and PREFCO XXII, rather than on Fieger's services which form the basis of his contract claim against Pitney Bowes and PREFCO, and his quantum meruit claim. The present case more closely resembles the Rosenberg case, which the district court rejected, than Madison Realty upon which it relied, because Fieger's claims do not address the validity of the conveyance or negotiation in Connecticut, but rather his involvement with the negotiations and the structuring of the financing in New York. But see Agency Rent-A-Car Sys. v. Grand Rent-A-Car Corp., 98 F.3d 25, 30 (2d Cir. 1996) (in evaluating contacts of defendant-licensees in the context of personal jurisdiction analysis under New York's long-arm statute, noting that [i]ndeed, we question whether, in an age of e-mail and teleconferencing, the absence of actual personal visits to the forum is any longer of critical consequence). 42 Fieger negotiated with UBS, SBC, Merrill Lynch and Pitney Bowes from his office in New York. He met and communicated with representatives of the four companies in New York and Switzerland; these communications are the heart of Fieger's efforts on behalf of defendants to secure the SBC deal. UBS's letter to Fieger setting forth the terms of the financing was sent from its New York offices to Fieger's New York office. Pitney Bowes provided the term sheet to Fieger in New York and authorized his contact with SBC in New York on Pitney Bowes's behalf by a letter sent to New York. Pitney Bowes confirmed Fieger's role as its representative by letter to SBC in New York in May 1997. In the summer of 1997, SBC hired Merrill Lynch in New York, and Pitney Bowes responded positively to the New York solicitation for interest. To the extent that Fieger reached into Connecticut, the earliest communication from plaintiff to Pitney Bowes in Connecticut occurred in June 1997. Notably, it was UBS, not Fieger, that solicited Pitney Bowes's interest in the project in Connecticut. Finally, while defendants are located in Connecticut, because defendants operate a national business, it should come as little surprise to them that their activities might be assessed under the laws of a state other than Connecticut. 43 We conclude that the majority of the relevant contacts are with New York. When coupled with New York's policy interests in recognizing the importance of the state's professional brokers in arranging complex international financing transactions, New York has the more significant interest in the relationship between Fieger and defendants. Accordingly, New York law applies to the contract claim against Pitney Bowes and PREFCO, as well as to the quantum meruit claim. 1