A New York appellate court recently ruled on a case involving the Long Island Board of Realtors (LIBOR) and a former member, James An. The court's decision affects real estate brokers in the region, particularly those who may face disciplinary actions from trade associations. The ruling addresses allegations of fraud and other claims against LIBOR and its officials.
The case, An v. Long Island Board of Realtors, was decided on October 7, 2026, by the Appellate Division of the Supreme Court of the State of New York. The docket number for this case is 2023-09783. The plaintiffs, James An and his real estate agency, Re/Max Frontier, claimed that LIBOR and several of its officials engaged in fraudulent practices that harmed their business.
LIBOR is a nonprofit trade association serving approximately 30,000 real estate brokers and agents in Nassau, Suffolk, and Queens Counties. In 2019, LIBOR found An in violation of its Code of Ethics and required him to complete a training course by December 20 of that year. An claimed he was registered for a different course and requested extensions due to personal circumstances, including his wife's cancer treatment. However, LIBOR denied these requests, leading to An's suspension from the organization and the loss of access to vital business resources.
In February 2022, An and Re/Max Frontier filed a lawsuit against LIBOR and its officials, including Judy Gehlich, Frank Dell Accio, and Matthew Arnold. They sought damages for fraud, conspiracy to commit fraud, aiding and abetting fraud, injurious falsehood, negligence, breach of fiduciary duty, and unjust enrichment. The defendants responded by filing a motion to dismiss the claims against them.
The Supreme Court of Queens County issued an order on September 19, 2023, partially granting the defendants' motion to dismiss. The court dismissed the first four causes of action but allowed the fifth through seventh causes of action to proceed. Both parties appealed parts of this order.
The Appellate Division ultimately reversed the lower court's decision regarding the fifth through seventh causes of action, granting the defendants' motion to dismiss these claims. The court ruled that the plaintiffs failed to adequately allege justifiable reliance for their fraud claims. The opinion stated, "The plaintiffs had the means available to them of knowing, by the exercise of ordinary intelligence, that the 'Ethics Notification' course on January 1, 2020, would not satisfy the requirement in LIBOR's determination."
Furthermore, the court found that the plaintiffs did not demonstrate consumer-oriented conduct required under General Business Law § 349, which pertains to deceptive acts in business. The court noted that the plaintiffs did not adequately allege that the defendants' actions had a broader impact on consumers at large.
The ruling also addressed the statute of limitations for the injurious falsehood claim, stating that the plaintiffs filed their action after the one-year limit had expired. The court noted that the defendants successfully demonstrated that the plaintiffs did not raise a question of fact regarding the applicability of the statute of limitations.
In addition, the court concluded that the plaintiffs' claims of negligence, breach of fiduciary duty, and unjust enrichment were improperly asserted. The court stated that the allegations sounded more like breaches of contract rather than tort claims, leading to the dismissal of these causes of action as well.
The judges on the panel included Francesca E. Connolly, Barry E. Warhit, Helen Voutsinas, and Susan Quirk. Their decision emphasized the importance of adequately pleading claims in a manner that meets legal standards.
This ruling has significant implications for real estate professionals in New York. It clarifies the standards for proving fraud and related claims against trade associations and their officials. Brokers and agents may need to exercise caution when dealing with disciplinary actions and ensure they understand the requirements set forth by their organizations.
The court's decision also highlights the necessity for plaintiffs to provide sufficient evidence and legal grounding for their claims. Moving forward, this case may serve as a reference point for similar disputes involving trade associations and their members.
As for what’s next, it is unclear if the plaintiffs will seek to appeal this ruling to a higher court. There are no related cases mentioned in the court filing, but the outcome of this case may influence future litigation involving trade associations in the real estate industry.