Chuck Bednarik has been acknowledged to be the last great two-way player in the NFL, playing both center on offense and linebacker on defense for the Philadelphia Eagles. They called him “Concrete Charlie.” Other football legends who were two-way players include Gino Capelletti, Jim Thorpe, Sammy Baugh, Red Grange, George Blanda, even Deion Sanders, a renowned corner back and kick returner, now a college football head coach. The brokerage section of a lease and in a purchase and sale agreement is a prime example of where brokers can play: (1) offense getting named in the lease or contract to confirm both procuring cause and their entitlement to a fee; (2) defense disclosing agency and getting the parties’ acknowledgement of agency and perhaps consent to dual agency; and (3) defense again (obtaining indemnity from the parties against claims for commission from other brokers.

The current case pending in New York, SL 4000 Connecticut LLC and BL 4000 CT LLC v. CBRE Inc. is a case that has already received a great deal of press. In this case, an unhappy sublessor sought a finding that no commission was due as a result of CBRE’s alleged dual agency, and also sought return of the first half of the fee which has already been paid. Another large step was taken recently when Plaintiff Sublessor’s Second Amended Complaint was dismissed by the court. I have written in my column about this case before, and the latest court order is reason to discuss the case again, this time in a slightly different light.

To refresh your recollection, CBRE served as the sub-tenant’s broker in a large office sublease transaction, and another firm, Cushman & Wakefield, represented the sublessor/plaintiff. That was clearly documented in CBRE’s lease commission agreement with the sublessor, a fact on which the court placed great importance. CBRE earned a commission in excess of $22 million for this 30-year sublease, received the first half, and claims the second half is due. Sublessor, after seeing its sublease fail, and its subtenant unable to perform and pay rent, resists paying the balance of the fee. The sublessor/plaintiff has claimed in a seven-count second amended complaint that CBRE was a dual agent in violation of the DC agency statute, and in other ways, breached various fiduciary and other duties to sublessor, while CBRE served as sublessor’s property manager and construction manager overseeing the buildout of the space for this full building sublease. It appears, having prevailed thus far, that CBRE has played both good offense with its commission agreement, and good defense in the same document, getting sublessor’s agreement that CBRE was not a dual agent in the sublease, notwithstanding its simultaneous roles as property manager and construction manager with sublessor. The court pointed to the detailed description of CBRE’s duties under each of the three separate agreements with Plaintiff. Whether this case drags on remains to be seen, as it appears from the transcript of the most recent hearing that plaintiff may be permitted to file a third amended complaint, despite dismissal of all counts thus far.

Back to being a two-way star in your own brokerage practice. That lease or PSA is likely your last clear chance, and possibly your best chance, to confirm which broker represented which party or parties, whether anyone consented to a disclosed and confirmed dual agency, whether the fee is due, who is paying the fee, and when it is due. There are a few cases which have held that being named in a lease signed by a landlord is equivalent to the landlord admitting the broker was procuring cause, so always get your firm named in that lease or PSA. There are other cases (I have won a couple of these), where the language in the lease discussing commission served as the broker’s only enforceable commission agreement, landing two large commissions in these cases for two different brokers where there was no other commission agreement. In each of these cases, the broker was named and deemed to be an intended third-party beneficiary of the lease, supporting a broker lien in one case, and in each case serving as the basis for successful commission claims. My advice is to get a detailed statement in the lease or PSA that the landlord/seller (usually) agrees to pay your commission computed as __% of the rents or sale price.

The broker provision often contains indemnity language, usually calling for each of the parties to the lease or PSA to indemnify the other against commission claims brought by any other broker not named in the lease or PSA, based on the indemnifying party’s acts or promises. Why not ask, I suggest, that the indemnity apply, not only to the other party, but to the other party’s broker? That way, if a different broker parachutes into the deal where you are named and protected in the lease or contract, you might even have the benefit of indemnity against the parachuting broker’s claim.

There is one other lesson to be learned from CBRE’s successful defense in this case thus far. Be mindful of misunderstandings that could arise when different divisions of your firm render services to the same client-especially when your firm represents the other party in the underlying transaction. The Plaintiff’s attorneys tried to bootstrap their dual agency claim in defending against the lease commission, pointing to CBRE’s duties as a property manager and construction manager as agent of the Sublessor. The court indicated that she had read each of the different service agreements, meaning the property management agreement, the construction management agreement, and the lease commission agreement, commenting that the management agreements did not create a dual agency when it was the Plaintiff/Sublessor’s decision to be represented by a different broker in the sublease. To CBRE’s credit, that too was clarified in its sublease commission agreement.

Yes, large transactions deserve great care when you are documenting your role and your right to a fee; but so do the smaller deals, because the specter of defending a claimed dual agency (and/or license law violation), even the cost of pursuit of the fee, could be an expensive proposition. Involve your lawyer, get your lawyer into the game early, and maybe your lawyer can coach you to be a successful two-way player.