FILED: NEW YORK COUNTY CLERK 11/06/ :46 PM

Transcription

1 EXHIBIT J

2 NYSCEF DOC. NO. 62!FILED: NEW YORK COUNTY CLERK 12/22/ :30 PMI RECEIVED INDEX NYSCEF: NO / /06/2017 NYSCEF DOC. NO. 6 RECEIVED NYSCEF: 12/22/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ALAN H. ROSENSTEIN, -against- Plaintiff, STRATUS CAPITAL ADVISORS, LLC and STEPHEN J. STEINER, Index No /2014 AFFIDAVIT OF STEPHEN J. STEINER IN SUPPORT OF DEFENDANTS' MOTION TO DISMISS THE COMPLAINT Defendants. STATEOFNEWYORK ) ) ss.: COUNTY OF NEW YORK ) STEPHEN J. STEINER, being duly sworn, deposes and says: 1. I am one of the Defendants in this action as well as the managing member of Defendant Stratus Capital Advisors, LLC ("Stratus"). I submit this affidavit in support of my and Stratus' motion for an Order: (1) pursuant to CPLR 32ll(a)(l), (3) and (7), and CPLR 3013, dismissing Plaintiff Alan H. Rosenstein's ("Plaintiff" or "Rosenstein") Complaint, dated October 8, 2014 (the "Complaint"), with prejudice; and (2) granting such other and further relief as to the Court seems just and proper. I have personal knowledge of the facts set forth herein unless otherwise stated. (A copy of the Complaint is annexed hereto as Exhibit "A"). Accompanying this Affidavit is a Memorandum of Law in support of this motion to dismiss. STATEMENT OF FACTS 2. Plaintiff Rosenstein is "an individual residing in New York, New York, and a real estate broker licensed in the State of New York." (Cplt '][ 1). Defendant Stratus is a Delaware limited liability company which is duly registered and authorized to do business in New York 1

3 State. (Cplt. 1[ 2; see also printout from the New York Department of State's website wbich shows that Stratus is licensed to do business in New York State, a copy of which is annexed hereto as Exhibit "B"). Both Stratus and I are real estate brokers duly licensed in the State of New York. (See printouts from the New York State Department of State, Division of Licensing's website showing that Stratus and I hold real estate broker licenses in this State, copies of which are collectively annexed hereto as Exhibit "C"). 3. According to the Complaint, this action arises from a dispute between Plaintiff and Stratus over Rosenstein's claimed entitlement to a 40% share of a $1,250,000 real estate brokerage commission (the "Commission") paid to Stratus in connection '"'ith the sale of the property located at Park Avenue, Brooklyn, New York (the "Property"). 1 Other than identifying me in paragraph 3 of the Complaint as a licensed real estate broker residing in this State, the Complaint does not mention my name again. Instead, the Complaint simply lumps me together with Stratus and alleges that Plaintiff and "Defendants" were engaged as brokers to sell the Property, that they agreed to split the Commission equally after paying 20% to another broker, and that"defendants" failed to pay Rosenstein a share ofthe Commission. 4. As set forth in the accompanying Memorandum of Law, Plaintiff lacks standing to maintain this action because he was not one of the brokers hired to sell the Property and thus is not entitled to a share of the Commission. The Complaint does not disclose that the relationship between the owners of the Property and the brokers retained to sell it was governed by a '"'Titten letter agreement dated October 2, 2013 (the "Brokerage Agreement"), a copy of which is annexed hereto as Exhibit "D". The Brokerage Agreement identified the parties as The Chocolate Factory, LLC and Century Building Associates, Inc., as o-wners (collectively, "Owners"), and Defendant I dispute certain of Plaintiffs factual assertions, but for purposes of this motion must accept them as true, except for those allegations which are inherently incredible or belied by the documentary evidence. 2

4 Stratus and non-parties Redstone Capital Group, LLC ("Redstone") and Roman Khodosh ("Khodosh"), as co-brokers. The first paragraph of the Brokerage Agreement reads: This letter (the "Agreement") will confinn that you, The Chocolate Factory, LLC, and Century Building Associates, Inc. collectively with its subsidiaries, related entities, affiliates, representatives and/or nominees ("Owner") have engaged Stratus Capital Advisors, LLC, Redstone Capital Group, LLC and Roman Khodosh, (collectively, "Agent") as a real estate broker, on the terms and conditions set forth herein, to arrange the sale of the above referenced property {the "Property"). (Exhibit "D" at 1) (emphasis added). 5. While Plaintiff Rosenstein signed the Brokerage Agreement, he did so as "Managing Member" of "Redstone Capital Group, LLC" and not in his individual capacity. (ld. at 5). Similarly, I also signed the Brokerage Agreement as "Managing Member" of Stratus and not in my individual capacity. Thus, the signature blocks of the Brokerage Agreement read: STRATUS CAPITAL ADVISORS, LLC By: /~S~/ Stephen J. Steiner Managing Member REDSTONE CAPITAL GROUP, LLC By: ~/S~/ Alan H. Rosenstein Managing Member (Exhibit "D" at 4-5) (emphasis added). 6. Pursuant to the Brokerage Agreement, the Owners engaged Stratus, Redstone and Khodosh as co-brokers for a term of twenty-four (24) months unless terminated earlier upon thirty (30) days' written notice. (ld. at~ 1, 5). The Brokerage Agreement further provided that from October 2, 2013 through February 28, 2014 the co-brokers "shall have the 'Exclusive Right to Sell' the Property," and that from March L 2014 through the end of the Agreement's tenn the 3

5 "employment of Agent shall be on a non-exclusive basis." (/d. at, l(a)-(b)). Paragraph 3 of the Brokerage Agreement provided that at closing Owners agreed to pay the co-brokers "a commission, in cash, equal to one and one-half percent (1.5%) of the first $65 million ($65,000,000) of gross purchase price and, in addition, five percent (5%) of the excess gross purchase price above $65 million," which was "to be divided among the co-brokers in accordance with their separate agreement." (ld. at mf 3(a)). A December 9, 2013 addendum to the Brokerage Agreement provided that the co-brokers would be entitled to an additional $125,000 if the Property was sold to "the HK Organization or an affiliate... for a gross purchase price equal to or in excess of$68 miljion." (ld. at 5). 7. The closing of the sale of the Property took place on or about August 12, 2014, at which the Owners wire transferred the Commission directly to Stratus. The v.rire transfer confirmation reads: 0.1'1!! OESCIW'TIOH Fedwire Credit VIII: First American Tn.'S!, Fsb/ : Fnt American Tide ln!mancesait Lake City UT Ref: Chase Nyc/Ctr/Bnt--Sttatus capital Advisors LLC New York, NY 10162/Ac Rfb=OIB F&t Am Tr CO Obi= The Chocolate Fadory. LLC 2tmad: 0812l1S78J1C Tm Ff AMOUNT $1, (A copy of the wire transfer confirmation reflecting the Owners' payment of the Commission directly to Stratus is annexed hereto as Exhibit "E"). 8. On August 13, 2014, Stratus then wired $375,000 of the Commission to Khodosh for his share, which we agreed would be thirty percent (30%). The wire transfer confirmation to Khodosh's company, RK Capital Group LLC, reads: ~ _.,,..,..~» ~,.,. "'""'" ~ ~ ~ "~"".,~....., ~~ ~~ -~~.,.::.. ~..: :....:.:,,:,." o -.u"',.~"'"'"'~: :~;:.: :~::. ~-::. ~::d-.: r-~~ et~1;']14 OligOOgWreTrnfer ONU~E WIRETRNtSFER!.t'C: RK CARTALGROUPLLC GLEN H 00. ~fi lls REF: COWISSION ~PARK Al/ftiUE BRO 01\!.YN. tfnr!l :XS ~~..,. ~ H-w-., >0.,,... o < u ~~~" "'~" u ~...,u. ~' ~ ~...,.. ~- ~~~ ~ M7t!W\1 '.;J,..t\JW.W.,..,.._.,.,.,.._... ace 4...,..,.. u...,..,,.,.,..,._.,... u. ~ *... ~...,...,.,,.....,.. ~'*""' ~~~".,,, ~M-... ~.,,....,...,....,.,.....,,.. -~ ~ ~.,.,.,.,._N.. ~,.~ ~ "' ~, -~~ ~.~.. ~,....,.~.. " ""' " #.. ~... ~.,.,..~.,,.,..,."'*"""'"''"" ~ (A copy of the wire transfer confirmation reflecting Stratus' payment of a thirty percent share of the Commission to Khodosh is annexed hereto as Exhibit "F"). 4

6 9. Approximately two weeks later, Plaintiff raised the issue of his purported entitlement to a share of the Commission. This resulted in several s exchanged between Rosenstein and Stratus on August 27 and 28, 2014, in which Rosenstein took the position that he was entitled to a 40% share of the Commission because he was an "Agent" in this transaction "as defined by the October 2, 2013 Fee Agreement letter" and because he signed the Brokerage Agreement. (A copy of the August 27-28, chain is annexed hereto as Exhibit "G"). Rosenstein's August 28, reads: I am entitled to a commission because I am an "Agent" in this transaction as defined by the October 2, 2013 Fee Agreement letter between yourself, Roman [Khodosh], Alex [the O~ners' representative]. and I. I am also a signatory to that letter, as are you. Further, I did a considerable amount of work on this deal which is a big part of why it got done. As to our split of the commission, you and I agreed that each of us would get 40% of the commission. and Roman would get 20%. This agreement followed our practice of splitting commissions evenly as in our prior two deals. Please transfer my commission to me along with the proper accounting no later than close of business on Wednesday September (ld.) (emphasis added). 10. Redstone is precluded from participating in the sp1it of the brokerage fee because, in addition to not being a ''procuring cause" ofthe sale 2, the records of the New York Department of State reflect that Redstone is not a licensed real estate broker in the State ofnew York. Annexed hereto as Exhibit "H" are copies of printouts from the website of the New York State Department of State, Division of Licensing which demonstrate that Redstone is not a licensed real estate broker, and that while Rosenstein is licensed he holds an "individual broker" license which is for his Although not at issue on this motion as Defendants are constrained to accept the factual allegations of the Complaint as true, it should be noted that the reason Redstone did not receive a share of the Commission is because neither Redstone nor its principal Rosenstein had any involvement in the marketing and sale of the Property to the purchaser. This is evidenced by the fact that the Complaint does not identify who the purchaser was, and the Complaint's allegations about the sale are all asserted "upon information and belief." ~ Cplt.,, ). 5

7 "personal" use only. The New York State Real Estate Broker/Associate Broker application makes clear that individuals who are issued an "individual broker" license may "do business using his/her personal name only," and are prohibited from presenting his/herself as being "associated with any firm or company in a real estate transaction." (A copy of the form Real Estate Broker application printed off the New York State Department of State, Division of Licensing's website is annexed hereto as Exhibit "1"). 11. As discussed in the accompanying Memorandum of Law, Real Property Law ("RPL") 442-D precludes unlicensed real estate brokers from bringing or maintaining any action for the recovery of a share of a commission, even if its principal held a valid real estate broker license at the time of the sale. It appears that Rosenstein has brought this action in his individual capacity instead of on behalf of his company Redstone in an effort to circumvent the provisions of RPL 442-D, which Rosenstein appears to recognize bars Redstone from participating in the split of the brokerage fee. CONCLUSION 12. For the reasons set forth in the accompanying Memorandum of Law, the Complaint in its entirety should be dismissed with prejudiceq ~ ~.- s~ to before me this I L day of December 2014 /~-~.~. "'--- l>lch STEPHEN J/SJNER......_ DANIEL KIM Notary Public- Stale of New Yolk NO. OtK1630t927 Qualified in Queens County My Commission Expires Apr