Brokerage Law: Appellate Division Reinstates Unjust Enrichment Claim Against Wrongdoers

By Jeffrey R. Metz

Taking over the matter from another law firm where a commercial brokerage firm had its complaint for various causes of action, including unjust enrichment, dismissed as against all defendants except a shell limited liability company with no assets, Adam Leitman Bailey, P.C. has achieved reinstatement of the complaint against two of the wrongdoers for unjust enrichment and the possibility of moving against the two other wrongdoers in the future.

In Georgia Malone & Co. v. Rieder, et. al., Malone & Co. entered into a brokerage agreement with Rieder’s company, CenterRock, to purchase as assemblage for $70,000,000.  In connection therewith, Malone & Co. furnished Rieder and CenterRock with confidential due diligence information about the assemblage.  Rieder ultimately backed out of the deal but he and his son then sold the confidential information to another broker, Jungreis, and his brokerage firm, Rosewood.  Jungreis then transmitted the confidential information to a third party which promptly bought the property.  Jungreis received a hefty commission and then gave the Rieders $150,000.00 for the confidential information they improperly supplied to him.
At the Supreme Court level, the court, relying on a certain Appellate Division opinion, found that unjust enrichment would not lie against the Rieders or Jungreis or Rosewood.

On appeal, the Appellate Division issued a 3-2 opinion.  All five justices agreed that the unjust enrichment claim must be reinstated against Rieder and his son.   The court split however on whether Jungreis and Rosewood could be held responsible.  The majority found that the link between Malone & Co. and Jungreis and Rosewood too attenuated to hold them liable even though there was no doubt that they had profited from the use of the confidential information.

The dissent, in a lengthy opinion, found that Jungreis and Rosewood had to be held responsible.  Whether the complaint gets reinstated against them will likely be decided by the Court of Appeals, the highest court in the state.  In any event, the opinion is a quite important exposition on the area of unjust enrichment.

Jeffrey R. Metz represented Malone & Co. before the Appellate Division.

Related Attorneys

Jeffrey R. Metz

Related Content

“We are finally at the point in time when I can say thank you so much for your phenomenal work. Your faith in this case was wise and the outcome matches.” “Hard work and risk pays off for closing” “ROCKSTAR. That’s what you are…Jackie…How can I thank you enough for all the work you have done…” Adam Leitman Bailey, P.C. Prevails at Traverse Hearing, Defeats Borrower’s Motion to Vacate and Dismiss, and Wins Judgment for Lender ALBPC Twice Saves Tenant’s Business from Certain Death ALBPC Releases Daughter, Mere Accommodation Signer on Lease, from Lease and Allows Her to Avoid Nonpayment Proceeding Adam Leitman Bailey, P.C. Gets $215K for Board after a Botched Common Charge Lien Foreclosure Adam Leitman Bailey, P.C.’s “Watershed Case” Changes Condominium Development Original Promissory Note Lost—Lender Satisfied UCC 3-804 and Entitled to Judgment Q&A: A Broken Shower Non-Disclosure Agreements Defend Against Fishing Expeditions Adam Leitman Bailey, P.C. Prevails at Traverse Hearing, Defeats Borrower’s Motion to Vacate and Dismiss, and Wins Judgment for Lender (Part II) Adam Leitman Bailey, P.C. Prevails at Traverse Hearing, Defeats Borrower’s Motion to Vacate and Dismiss, and Wins Judgment for Lender (Part I) Georgia Malone & Co., Inc. v Rieder Published Decision Christopher Halligan Speaks to the New York State Bar Association on Jury Trials in Landlord – Tenant Proceedings Adam Leitman Bailey Lectures for New York State Bar Association on Easements, Adverse Possession and Arcane Laws to Overcoming Building Obstacles Adam Leitman Bailey Guest Lecturer at New York Law School’s Landlord-Tenant Class NYSBA – Removing Real Estate Development Obstacles: Zoning, Restrictive Covenants, Easements, Adverse Possession and Boundary Disputes Jeffrey Metz argues Georgia Malone & Company, Inc. v Riede at the State of New York Court of Appeals

Adam Leitman Bailey, P.C.