Broker triumphs over Charles Cohen affiliate in $2.1M commission suit

From left: Broker Herb Goldberg, landlord Charles Cohen and 333 Westchester Avenue in Westchester

Edward Warren & Co., a brokerage formerly based in Manhattan, triumphed in a recent lawsuit against New York landlord Charles Cohen‘s Westchester Building Company, the company that owns buildings managed by his Cohen Brothers Realty, over a $2.1 million commission from 2008’s reported third largest commercial leasing deal in New York State.

Though Westchester Building Company and Cohen Brothers Realty are legally separate entities, they share the same principal employees and offices.

Edward Warren and Herb Goldberg, a longtime broker who previously worked at Warren, but has since moved to Manhattan-based City Connections, won the case Sept. 25 in Westchester Supreme Court. They were awarded the full commission amount, plus 9 percent interest on the total judgment, amounting to a total of $2.1 million.

Goldberg told The Real Deal that in September 2008 he closed the third largest commercial leasing deal in New York State that year on behalf of Amalgamated Life Insurance at the Westchester property, but never received the 3 percent commission, after Westchester Building Company claimed that it was uncertain of which brokerage Goldberg worked for.

“It was very emotional when the decision came in. I really felt like I was taking on Goliath… The little guy prevailed,” Goldberg said.

Amalgamated, which had been headquartered in Manhattan since its inception, was looking for new premises outside of the city in 2007, and eventually inked a $60 million lease for 132,000 square feet at 333 Westchester Avenue in White Plains.

Goldberg was a broker for Edward Warren, now based in Larchmont, N.Y., for more than 18 years when he formed a relationship with Amalgamated, but had moved to City Connections by the time the deal closed. When hired by City Connections, Goldberg presented a waiver from David Schlamm, the founder of City Connections, to Westchester Building Company, stating that City Connections was not entitled to a commission for the Amalgamated deal and the commission, as agreed between both brokerages, would go to Edward Warren.

Westchester Building Company claimed that it was confused, Goldberg said, over which brokerage he worked for and therefore who Westchester Building Company should pay.

“Lots of brokers move their licenses — there’s always a list you give of deals that will stay at your previous company. There’s always an arrangement. This was not unusual,” Goldberg said.

When it allegedly became apparent, in September 2008, that Cohen did not intend to pay, Goldberg and Edward Warren & Co. filed the suit against Cohen.

“Shocked is not the word,” he said. “It was as though they were picking out what they could to get off without paying me.”

Westchester Building Company has since chosen to appeal the decision, said Jay Itkowitz, an attorney with law firm Itkowitz and Harwood, which represented Westchester Building Company and Cohen Brothers Realty in the suit (Cohen Brothers was ultimately dismissed from the suit as the jury determined Westchester Building Company held responsibility, since they were the owner of the building).

“We have moved to vacate the jury’s verdict,” Itkowitz told The Real Deal after it left a message for Cohen. “We intend to fully proceed with the owner’s claim that the case was wrongly decided and wrongly adjudicated.”

The appeal will mean more time before Golberg will receive his commission.

“This could go on for nine to 12 more months,” Goldberg said, “so four years overall. If the courts would allow it, they could just drag this on forever, but, as I said to the judge, ‘I believe in the system and I believe I’m going to get what’s rightfully mine in the end,'” he told The Real Deal.

Schlamm added: “The jury heard it and it was a fair decision. I just sincerely hope it doesn’t drag on and that [Goldberg] gets the money he deserves.”