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Flagstaff Realty Inc. v. Ned

Decided: October 28, 1987.

FLAGSTAFF REALTY, INC., PLAINTIFF-RESPONDENT,
v.
CORA NED, MAYRA BROWN, DEFENDANTS-APPELLANTS, AND MYRON NED AND MARTY NED, DEFENDANTS



On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Hudson County.

Baime and Ashbey. The opinion of the court was delivered by Baime, J.A.D.

Baime

[226 NJSuper Page 294] Plaintiff Flagstaff Realty, Inc. instituted this action in the Superior Court, Law Division, Special Civil Part, to recover a

real estate brokerage commission. Named as defendants were Cora Ned, her two sons, Myron Ned and Marty Ned, and her daughter, Mayra Brown. The gist of plaintiff's complaint was that, acting as a licensed real estate broker, it had produced a buyer ready, willing and able to purchase property owned by defendants as tenants in common, that defendants and the buyer had entered into a binding contract and that defendants had wrongfully repudiated the agreement. Following a trial, the judge issued a written opinion in which he concluded that defendants had wrongfully refused to consummate the transaction and were thereby responsible for plaintiff's loss of its commission. Judgment was entered accordingly.*fn1 We are constrained to reverse.

The salient facts can be briefly stated. Cora Ned, a 55 year-old widow, purchased her Jersey City home some 25 years ago. Following the death of her husband, Cora at some point decided to place the names of her three children on the deed to the property. While the property was thereafter held as tenants in common, Cora retained both the decision-making authority concerning the house and the responsibility for payment of all of the bills.

Cora has a long history of mental illness. She has been diagnosed as a paranoid schizophrenic who suffers from delusions of persecution, hallucinations and suicidal thoughts. Because of the severity of her condition, Cora has been hospitalized for extensive periods on numerous occasions. When not hospitalized, Cora undergoes monitoring and treatment by the Mount Carmel Guild. The treatment consists generally of

psychotherapy and the administration of large quantities of psychotropic drugs. While the outward manifestations of the disease can be controlled and ameliorated to some extent, the underlying thought disorder is essentially incurable.

In the fall of 1985, Cora suddenly decided to sell her house, apparently because of the anxiety she felt about paying her bills, especially her mortgage. Cora placed the house on the market under a non-exclusive listing agreement with another broker. The record reflects that she gave only one day of thought before deciding to list the house, that she did not discuss the sale of the property with her children and that she never considered where she would reside thereafter.

In any event, a representative of plaintiff subsequently produced a buyer who entered into a contract of sale with Cora and her three children. The contract provided that plaintiff was to earn a 3.75% commission "due and payable upon closing of the title." Both parties had attorneys review the contract and none of the sellers expressed any reservations concerning the sale.

On the day before she signed the contract, Cora visited her psychiatrist, Dr. Julio Arla, at the Mount Carmel Guild. At trial, Dr. Arla testified that Cora did not apprise him of the fact that she intended to sell her house. He noted that during the visit Cora was extremely unstable and was suffering from hallucinations and the effect of chronic insomnia. According to Dr. Arla, "[s]he was afraid of the voices [she was hearing] and had suicidal thoughts."

After signing the contract, Cora's condition deteriorated substantially. The record reflects that she was unable to eat or bathe and was virtually bed-ridden during this period. Accompanied by her daughter, Cora visited Dr. Arla at his office on January 16, 1986. Dr. Arla testified that Cora appeared "greatly agitated," that "she couldn't stand still in [his] office" and that she was "psychotic and incoherent." He attributed her deteriorating condition to the proposed ...


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