Adam Leitman Bailey, P.C. Defeats Motion to Dismiss Clients’ Claims for Unpaid Commissions and Civil Rights Violations in Federal Court
In a wide-ranging case involving a real estate brokerage’s failure to pay commissions owed to one broker, and the brokerage’s racial discrimination against a real estate agent, religious discrimination against the broker, and retaliation against the broker for his opposition to the racist treatment of his co-worker, the agent, Adam Leitman Bailey, P.C. defeated, in its entirety, a motion by the defendant brokerage and related companies to dismiss all eleven claims asserted against it in an action in the United States District Court for the Southern District of New York.
This case comprised several separate disputes. The first was the brokerage’s failure to pay commissions owed to the broker on real estate deals he had procured. The others were the brokerage’s racial discrimination against the agent, who was African-American, and its religious discrimination against the broker, who was Jewish, and its retaliation against the broker for having opposed the brokerage’s racial discrimination against the agent.
The broker raised four claims based on the non-payment of commissions to him. One was based on a theory of breach of contract, while the others were founded upon promissory estoppel, unjust enrichment, and quantum meruit. As to these commissions claims, the defendants contended primarily that they were barred by the statute of frauds. The broker’s written agreement with the brokerage did not provide for a commission percentage on the largest of the transactions in the percentage that the broker had been promised, and it contained a provision that the agreement could not be modified by an oral agreement.
However, Adam Leitman Bailey, P.C. successfully defended all of the commissions claims against the dismissal motion. It successfully argued for application of one exception to the statute of frauds, i.e., that of part performance of an oral modification of a written agreement. Because the broker’s written agreement did not provide for the sale of any real property located in Florida, and all of the sales at issue with regard to the commissions claims involved properties located in Florida, those sales were required to be treated, at least at the pleadings stage, as having been made pursuant to the part performance exception to the statute of frauds. Moreover, because the written contract did not specify any percentage commission for the sale of property located in Florida, the commissions amount that the broker alleged was owed him on the largest transaction was not contrary to the contract, and could be valid as an oral modification that had been partly performed.
With regard to the promissory estoppel, unjust enrichment, and quantum meruit claims, the defendants argued, in large part, that those claims could not be asserted simultaneously with a contract claim. However, as Adam Leitman Bailey, P.C. argued, there is an exception to this general rule when the defendant outright denies the enforceability of the contract under which the plaintiff seeks relief, or contends that the contract does not apply to the transaction in dispute, as defendants had done in this case. The Court agreed with this argument, and upheld those claims as well.
The plaintiffs also asserted seven other claims against the defendants. The agent asserted, under 42 U.S.C. § 1981 (“§ 1981”), a Reconstruction-era civil rights statute, three causes of
action against the defendants: one for creation of a work environment that was hostile to African Americans like the agent, a second for disparate treatment on the basis of race through various employment actions that defendants carried out against the agent, and one for constructive discharge through creation of a work environment that was so discriminatory towards the agent that the agent had no reasonable alternative to resigning to curtail the abusive treatment he was receiving.
The broker also asserted, against the defendants, three causes of action under § 1981: one for creation of a work environment that was hostile towards Jews like the broker, a second for disparate treatment on the basis of religion through employment actions that defendants had carried out against the broker, including failing to pay him commissions as owed and terminating his employment with the brokerage, and a third for retaliation against him for having opposed incidents in which the defendants had unlawfully discriminated against the agent. The broker also asserted a retaliation claim under New York’s Labor Law § 740, again based on his opposition to unlawful activity by his employer.
In large part, the defendants attempted to defend against the civil rights and Labor Law claims by presenting to the court what they claimed to be evidence that the plaintiffs had supposedly used discriminatory language themselves, and contending, based on that, that it was the plaintiffs who had initiated all of the discriminatory conduct. Adam Leitman Bailey, P.C. argued that the defendants’ submission of these materials was improper on a motion under Federal Rule of Civil Procedure 12(b)(6), which is supposed to test whether the allegations in the pleading are sufficient to state claims for relief, not whether, at the pre-discovery stage, there will ultimately be sufficient evidence to prove the claims. The Court agreed with the plaintiffs’ argument, and refused to consider the materials extrinsic to the complaint.
To the extent the defendants also attempted to argue that plaintiffs had not sufficiently pled their civil rights and Labor Law claims, Adam Leitman Bailey, P.C. methodically dismantled the defendants’ arguments, and the Court agreed with the plaintiffs’ position, at times even citing the same caselaw that the plaintiffs had marshaled for their propositions. Thus, for example, the defendants contended that the plaintiffs had not pointed out coworkers similarly situated to them who had received better treatment than the plaintiffs, but the plaintiffs successfully argued that an inference of discrimination could also be made where the employer had made invidious comments about persons who were members of the employee’s race or religion. Here, the principals of the defendant employers had made racist comments about the agent and other African Americans, and had made anti-Semitic comments, such that one could draw an inference of discrimination by the defendants against both of the plaintiffs.
As to the broker’s claims for retaliation and Labor Law violations, the defendants argued that the broker had no such claims because the broker had not complained directly to the employer about the discriminatory conduct in question. As Adam Leitman Bailey, P.C., argued, and the Court agreed, the defendants’ argument did not reflect accurately either the state of the law or the facts of the case as had been alleged in the complaint. The fact that the defendants had learned of the broker’s objections to the discriminatory conduct towards the agent only through the broker’s counsel, i.e., Adam Leitman Bailey, P.C., rather than directly from the broker, did not absolve the defendants for having retaliated against the broker after so learning of the objections. Moreover, as the broker had alleged but defendants had disregarded, the broker had repeatedly expressed, directly to the defendants, his opposition to instances of the defendants’ discriminatory conduct against the agent.
Thus, Court also upheld each of the civil rights and Labor Law claims raised against the defendants. The case now proceeds to the discovery stage.
Brandon M. Zlotnick and Adam Leitman Bailey at Adam Leitman Bailey, P.C. secured this result for its client.