Arbitration Award Against Brokerage Firm Seeking to Recover Commission

In a arbitration filed by a brokerage firm, Casa Blanca Real Estate (“Casa Blanca”), against our clients, Charles and Fabienne Abrecht (“the Clients”), an arbitrator issued an award against Casa Blanca concluding that Casa Blanca was not entitled to a brokerage commission after the brokerage agreement between the parties had expired and there was no showing of bad faith by the Clients, even though the property was ultimately sold to buyers first introduced to the property by Casa Blanca.

Specifically, the arbitrator found that the brokerage agreement between the parties entitled Casa Blanca to a commission if the property was sold to any individual introduced by Casa Blanca to the property,up to ninety (90) days after the expiration of the brokerage agreement. The arbitrator found that the ultimate buyer made an offer to purchase the Co-Op Apartment did not result in “a contract of sale for the Property [. . .] within ninety (90) days of the Term’s end.” Based on this simple fact, Casa Blanca was not entitled to its claimed condition.

Next, although Casa Blanca made a claim for quantum meruit for services rendered as the procuring cause of the transaction, although bad faith on the part of the Clients was the key allegation in the Complaint. Casa Blanca did not present any evidence of bad faith on behalf of the Clients. Moreover, Casa Blanca’s counsel made no reference to that theory in his opening or closing statements. Instead, he argued in his opening statement: “if Casa Blanca is shown to be the procuring cause, they’re entitled to their commission irrespective of any bad faith by the Abrechts.” Thus, the allegation that Respondents had engaged in bad faith was implicitly abandoned. The arbitrator found that the Clients did not engage in bad faith in their decision to proceed with a new broker to sell the Property after the brokerage agreement with Casa Blanca had expired to the individual introduced to the Property originally by Casa Blanca.

The arbitration was held before Gerald M. Levine and conducted pursuant to the AAA International Rules of Arbitration. The award was issued on March 18, 2024.


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