Does The Newmark Case "Clarify" When A Contract Is Enforceable In New York?

On January 13, 2011, the Appellate Division, First Department found that , in some cases, an email with a signature line can satisfy New York's statute of fruads.  Accordingly, in New York, if you are sending a final (but unsigned) contract to another party and do NOT want to be considered to have executed the contract (i.e. it is still subject to approval for example), you should ALWAYS state NOT FINAL or SUBJECT TO APPROVAL AND EXECUTION.  Otherwise, a New York Court may hold you to that contract.

The important section of the case is excerpted here (and the full case is provided below):


An e-mail sent by a party, under which the sending party's name is typed, can constitute a writing for purposes of the statute of frauds (see General Obligations Law § 5-701 [b] [4]; Stevens v Publicis S.A., 50 AD3d 253, 255-256 [2008], lv dismissed 10 NY3d 930 [2008]). Defendant does not dispute its authorship of the e-mails, nor that they were sent by its agent, and contrary to defendant's claims, there is no evidence that it rejected the final e-mail sent by plaintiff, which incorporated defendant's revisions. The e-mail agreement set forth all relevant terms of the agreement, including the particular commission charged by plaintiff, and thus, constituted a meeting of the minds (cf. Naldi v Grunberg, 80 AD3d 1, 13-14 [2010]).


Full case:


2011 NY Slip Op 00158 [80 AD3d 476]

January 13, 2011

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, March 9, 2011



Newmark & Company Real Estate Inc., Appellant,

v

2615 East 17 Street Realty LLC, Respondent, and Wilk Real Estate I, LLC, et al., Intervenors-Respondents.

—[*1] Law Office of Lionel A. Barasch, New York (Lionel A. Barasch of counsel), for appellant.

Sol Mermelstein, Brooklyn, for 2615 East 17 Street Realty LLC, respondent.

Arnold J. Ludwig, Brooklyn, for Wilk Real Estate I, LLC and Albert Wilk, respondents.

Order, Supreme Court, New York County (Joan M. Kenney, J.), entered April 16, 2010, which, insofar as appealed from, in this action alleging a breach of contract, denied plaintiff's motion for summary judgment, unanimously reversed, on the law, with costs, and the motion granted in the principal amount of $124,415, plus interest from June 25, 2009. The Clerk is directed to enter judgment accordingly. Appeal from order, same court and Justice, entered April 15, 2010, which granted the motion of Wilk Real Estate I, LLC and Albert Wilk to intervene, unanimously dismissed, without costs, as academic.

In the lease between defendant, as the landlord, and nonparty tenant, which was brought into the transaction by plaintiff broker, the subscribing parties represented that plaintiff was the exclusive broker for the transaction and that defendant would pay its commission. This clear representation, which was supported by additional documentary evidence, entitled plaintiff to its commission as a matter of law (Morris Cohon & Co. v Russell, 23 NY2d 569, 574-575 [1969]; Helmsley-Spear, Inc. v New York Blood Ctr., 257 AD2d 64 [1999]). We reject defendant's claim that the relevant provision does not mean what it says, but resulted from a scrivener's error (see Edward S. Gordon Co. v Blodnick, Schultz & Abramowitz, 150 AD2d 212 [1989], lv denied 74 NY2d 613 [1989]).

Although defendant did not sign the separate brokerage agreement proffered by plaintiff setting forth the details of its commission, that fact is not fatal either under the statute of frauds or as to enforceability. Several e-mail communications, supported by other documentary evidence, reflected that plaintiff and defendant were in regular contact negotiating the lease and, when the parties appeared close to agreeing to the lease terms, plaintiff e-mailed defendant a draft brokerage agreement, setting forth, inter alia, the particular commission that had been discussed. Plaintiff invited defendant's revisions and defendant sent back, also by e-mail, [*2]handwritten revisions, which did not modify the commission, but only provided that it would be paid in specified increments. Plaintiff incorporated those revisions and sent the final copy back to defendant's agent, and the record contains no evidence that defendant objected to, protested, or rejected any of the provisions in the last version of the agreement.

An e-mail sent by a party, under which the sending party's name is typed, can constitute a writing for purposes of the statute of frauds (see General Obligations Law § 5-701 [b] [4]; Stevens v Publicis S.A., 50 AD3d 253, 255-256 [2008], lv dismissed 10 NY3d 930 [2008]). Defendant does not dispute its authorship of the e-mails, nor that they were sent by its agent, and contrary to defendant's claims, there is no evidence that it rejected the final e-mail sent by plaintiff, which incorporated defendant's revisions. The e-mail agreement set forth all relevant terms of the agreement, including the particular commission charged by plaintiff, and thus, constituted a meeting of the minds (cf. Naldi v Grunberg, 80 AD3d 1, 13-14 [2010]).

In view of the foregoing, plaintiff's challenges to the order granting the motion to intervene are academic. Concur—Tom, J.P., Sweeny, Freedman, Richter and Abdus-Salaam, JJ.

SDNY Local Counsel Celebrates Spring With Wine Tasting

E-Discovery Lessons Direct From The Federal Bar Association

For those of you wrestling with E-discovery and Rule 26 of the Federal Rules of Civil Procedure  (FRCP) discovery obligations, the FBA Website recently featured two thoughtful pieces on E-discovery in The Federal Lawyer magazine: 

Local Practices for Electronic Discovery
by Anne Shea Gaza and Jason J. Rawnsley

and

Creating the Criteria and the Process for Selection of E-Discovery Special Masters in Federal Court

by the Hon. Nora Barry Fischer and Richard N. Letttieri

also, access FBA website here.

SDNY Local Counsel supports the FBA and SDNY Local Counsel author, Luke McGrath, is Membership Chair for the FBA SDNY Chapter, so  ...

why not join?

Tell them Luke sent you.

NY Court of Appeals Rules on Internet-Related Jurisdiction

As reported in today's New York Law Journal, the New York Court of Appeals has ruled on a case in which a New York based publisher sought to hale out-of-state defendants into New York court based on the injuries suffered in New York as a result of the unauthorized down-load of copyrighted materials -- even though the suspect internet "down-loads" or other transaction activity took place as far away as Arizona and Oregon.

The case, Penguin Group (USA) Inc. v. American Buddha, No. 7, involved New York's long-arm statute and internet downloads of copyrighted material.

According to the Court, the fact that the internet is so pervasive distinguishes the case "from traditional commercial tort cases where courts have generally linked the injury to the place where sales or customers are lost."

In keeping with SDNY Local Counsel's commitment to monitor cases that may impact jurisdictional questions in state and federal Courts in New York, SDNY local counsel will keep you all updated on further developments ...

U.S. Supreme Court To Rule On Constitutional Limits (If Any) To Long-Arm Jurisdiction

SDNY Local Counsel blog-author, Luke McGrath, and Prof. Robert Pfeffer, a contributor to SDNY Local Counsel blog, gave a successful talk on March 24, 2011 on the upcoming decisions on cases pending in the United States Supreme Court on the extent courts throughout the United States may exercise jurisdiction over non-residents based upon certain types of contacts with a state. The talk was sponsored by the SDNY Chapter of the Federal Bar Association and the New York County Lawyers Association.

The two cases pending before the Court are:

J. McIntyre Machinery Ltd. v. Nicastro, U.S., No. 09-1343 (certiorari petition granted 9/28/10)

Goodyear Luxembourg Tires SA v. Brown, U.S., No. 10-76 (certiorari petition granted 9/28/10).

NYCLA and the SDNY Chapter of the Federal Bar Association are co-sponsoring the event.

See previous postings on this blog for a discussion of the cases.

During the talk we played excerpts from the oral argument before the Court. The audio of oral argument accentuated our discussion and great audience participation rounded out the event.

Thanks to everyone, including Tim Dougherty and Aleksandra Kaplun, for their support and participation in this successful event.

A is for ... the ABC's of Dispute Resolution -- Author Book-Reading

SDNY Local Counsel is honored to have participated in the organization and sponsorship of a banner-event book-reading in which Victoria Pynchon read from her naughtily titled book: A is for A**hole: The Grownups’ ABCs of Conflict Resolution.

The SDNY Chapter of the Federal Bar Association sponsored the event and a great time was had by all.

New York Law Journal Article re: SDNY Jurisdiction Based on Websites

SDNY Local Counsel author, Luke McGrath, and our contributing correspondent, Prof. Robert Pfeffer, were recently featured in the December 17, 2010 edition of the New York Law Journal. 

The Article, entitled, Jurisdiction.com:  New York's Longest Arm Yet?, discusses the recent Second Circuit decision, Chloe v. Queen Bee of Beverly Hills, LLC,  No. 09-3361-cv, __ F.3d __ 2010, WL 3035495 (Aug. 5, 2010).  Our authors posit that, after Chloe, case law in New York is now consistent:  there is clearly long-arm jurisdiction based upon "active" websites and clearly no such jurisdiction based purely on passive websites that allow no user interaction and are no more than a web-based image containing information (which, for example, do not allow a user to input information, or purchase merchandise or services).

A copy of the article (copyright The New York Law Journal), is available on-line from the New York Law Journal:  http://www.law.com/jsp/nylj/index.jsp

SDNY Local Counsel and Prof. Pfeffer will post further offerings on jurisdictional issues in the future.