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Metro Commercial Real Estate, Inc. v. Cibc Inc.

October 25, 2012

METRO COMMERCIAL REAL ESTATE, INC.
v.
CIBC INC.



The opinion of the court was delivered by: Padova, J.

MEMORANDUM

Plaintiff Metro Commercial Real Estate, Inc. ("Metro") commenced this action seeking to recover commissions that it is allegedly owed for procuring tenants for a commercial property. The property owner, WSC Warminster Plaza Associates ("WSC"), defaulted on a mortgage it obtained on the property from Defendant CIBC, Inc. ("CIBC"). Plaintiff now seeks to obtain its commissions from CIBC. CIBC has filed a Motion to Dismiss Metro's Amended Complaint pursuant to Federal Rule Civil Procedure 12(b)(6). For the following reasons, we grant the Motion.

I. BACKGROUND

The Amended Complaint (the "Complaint") alleges that, in October 2007, WSC, the owner of property at 600 York Road in Warminster, Pennsylvania (the "Property"), entered into a construction loan agreement with Defendant CIBC. (Compl. ¶¶ 6-7.) The purpose of the loan was to fund the construction of a shopping center on the Property, to be known as Warminster Plaza, and to that end, CIBC agreed to loan WSC up to $16 million. (Id.; see Ex. B. to Compl., at 1) In connection with the loan agreement, WSC and CIBC executed (1) a Cash Management Agreement,

(2) an Assignment of Leases and Rents, and (3) a Deposit Account Control Agreement. (Compl. ¶ 7; Exs. A-C to Compl.) The Assignment of Leases and Rents provides that "[a]ll Rents and Profits . . . generated by or derived from the Property shall first be utilized solely for current expenses directly attributable to the ownership and operation of the Property." (Compl. ¶ 8; Ex. B to Compl., at 4 ¶ 6.)

On August 11, 2008, WSC retained Plaintiff Metro, a licensed real estate broker, to secure tenants for the Property. (Compl. ¶ 10.) The two parties entered into an Exclusive Leasing Listing Agreement (the "Listing Agreement") and Schedule of Sale and Leasing Commissions. (Id.; Ex. D to Compl.) In those documents, WSC agreed to pay Metro a leasing commission of 5% of the minimum base rent for the initial term of any lease entered into pursuant to the terms of the Listing Agreement, with 50% of the commission to be paid upon execution of the lease, and 50% to be paid when the tenant begins paying rent or when the tenant opens for business, whichever is earlier. (Compl. ¶ 11; Ex. D. to Compl.) CIBC was aware that the success of WSC's project and repayment of CIBC's loan was dependent upon CIBC obtaining tenants for the Property. (Id. ¶ 13.) CIBC also "knew of and accepted the terms of the [L]isting [A]greement." (Id. ¶ 14.)

Between June of 2009 and January of 2010, with Metro's assistance, WSC executed leases with five tenants for whom leasing commissions were then due to Metro pursuant to the Listing Agreement. (Id. ¶¶ 15-20.) WSC, however, did not pay Metro the commissions that were owed. (Id. ¶ 22.) As a result, on November 9, 2009, Metro filed suit against WSC in the Bucks County Court of Common Pleas. (Id. ¶ 23.) That same month, WSC defaulted on its mortgage with CIBC by failing to pay its loan at maturity. (Id. ¶ 24.)

On December 24, 2009, WSC and CIBC entered into a Forbearance Agreement. (Id. ¶ 25.) Ten months later, in October 2010, WSC and Metro entered into a settlement agreement to resolve Metro's claims for commissions, but WSC failed to make payments under the agreement. (Id. ¶ 26.)

In November 2010, CIBC took control of WSC's deposit account and sent a letter of exclusive control to the depository bank. (Id. ¶ 27.) CIBC also sent demand letters to tenants at the Property, directing them to pay rents into the deposit account, over which CIBC had exclusive control, thereby eliminating WSC's source of revenue and ability to pay commissions due under the Listing Agreement. (Id.)

In December 2010, CIBC and WSC entered into a Second Forbearance Agreement, which confirmed the actions that CIBC had taken the prior month, and WSC agreed to direct its tenants at the Property to deposit all lease payments into a bank account under CIBC's control. (Id. ¶ 28.) Pursuant to that Agreement, CIBC has taken control of the financial management and operations of the Property. (Id. ¶ 29.) CIBC has the right to approve or reject leases for space at the Property, has the right to approve or reject both routine and non-routine expenses at the Property, and has the right to terminate and replace the management company that manages the Property. (Id. ¶¶ 30-33.) At the same time, CIBC receives the benefit of the leases subject to the Listing Agreement, which amounts to more than $60,000 per month. (Id. ¶¶ 34-35.)

On October 15, 2010, Metro filed a petition to enforce its settlement agreement with WSC, and it received a judgment against WSC in the amount of $633,461.00 in June of 2011. (Id. ¶ 38.) On November 4, 2011, Metro served a demand for payment upon CIBC, requesting payments of the past due and owing lease commissions, plus interest and attorney's fees. (Id. ¶ 39.) CIBC has, however, failed and refused to pay the leasing commissions due and owing to Metro in the amount of $633,461. (Id. ¶ 40.) Metro therefore instituted this action, seeking to obtain a judgment against CIBC for the unpaid commissions.

II. LEGAL STANDARD

When considering a motion to dismiss pursuant to Rule 12(b)(6), we consider both the complaint and the exhibits attached to the complaint. Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993)). We take the factual allegations of the complaint as true and draw all reasonable inferences in favor of the plaintiff. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). Legal conclusions, however, receive no deference, and the court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286 (1986) (cited with approval in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

A plaintiff's pleading obligation is to set forth "a short and plain statement of the claim," Fed. R. Civ. P. 8(a)(2), which gives the defendant "fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555 (alteration in original) (quotation omitted). The "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 556). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citation omitted). In the end, we will dismiss a complaint if the factual ...


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