June 19, 2017 – Crosby & Higgins LLP Prevails on Appeal before New York State Supreme Court Appellate Division, First Department
June 19, 2017
Crosby & Higgins LLP has prevailed on behalf of its client, Atlas New York Limited Liability Company (“Atlas”), on appeal before the New York State Supreme Court Appellate Division, First Department, in Atlas New York Limited Liability Company d/b/a Atlas Real Estate New York v. Michael Eisenberg et al., Index No. 650553/16 (N.Y. App. Div. 1st Dep’t May 25, 2017). This appeal arose from a suit pending in the New York County Supreme Court, Commercial Division, where Atlas has alleged that Defendants breached an exclusive and co-exclusive brokerage agreement for brokerage services concerning approximately 140 New York City rental properties. Atlas alleges, among other things, that defendants breached their obligations by actively marketing and leasing the properties as illegal short-term rentals and blocking Atlas’ efforts to secure leases. Defendants moved to dismiss, arguing that the compensation terms in the parties’ contracts were indefinite and claiming that Atlas did not have the capacity to sue because it held its broker’s license under its registered assumed name, which, according to defendants, Article 12-A of New York State’s Real Property Law prohibits for limited liability companies.
The Commercial Division rejected defendants’ arguments, holding that Atlas was authorized to conduct business under its registered assumed name. The Commercial Division also found that the compensation terms were sufficiently definite to survive the motion to dismiss because the compensation was fixed to three alternatives. Defendants thereafter appealed to the First Department, which unanimously affirmed in all respects, holding that Atlas properly applied for a real estate broker’s license to conduct business under its registered assumed name. Among other things, the First Department took judicial notice of the fact that the Department of State authorizes a real estate brokerage limited liability company to do business under a registered assumed name. The First Department also held that the compensation terms in the brokerage agreements were sufficiently definite.