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WAS BROKER DUPED?

lease~nyreblog.JPGIn Selinger Enterprises, Inc. v. Cassuto , Selinger Enterprises sought to recover a broker's commission from David Cassuto.

According to an exclusive broker's agreement Cassuto reached on behalf of Premium Capital Funding (PCF), Selinger was to receive a broker's commission if PCF leased space from a landlord Selinger introduced. A few days later, Selinger showed Cassuto a rental space and, several months later, while Cassuto was an employed with Franklin First Financial (FFF), the latter company ending up leasing the space.

FFF and Cassuto got sued when neither of them paid Selinger a commission. After the Nassau County Supreme Court denied the defendants' motion to dismiss the case, an appeal to the Appellate Division, Second Department, followed.

The AD2 found Selinger couldn't recover on a breach of contract theory because Cassuto signed the brokerage agreement on PCF's behalf (rather than in his personal capacity). The same was true for FFF, because that company didn't execute the underlying document. However, Selinger was permitted to maintain a fraud claim against the two defendants because the pleadings adequately alleged that Cassuto was acting under FFF's direction when he signed the brokerage agreement and that it was the defendants' intent to avoid paying Selinger a brokerage fee.

That got FFF'd up!

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To download a copy of the Appellate Division's decision, please use this link: Selinger Enterprises, Inc. v. Cassuto

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