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Kislak Co. v. Hirschfeld

Decided: February 16, 1988.


On appeal from the Superior Court of New Jersey, Law Division, Essex County.

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


[222 NJSuper Page 554] Defendant, Abraham Hirschfeld, individually and trading as West Park Washington Corp., appeals from a judgment of $200,000, plus approximately $63,000 in prejudgment interest, awarded to plaintiff The Kislak Company, Inc., a real estate broker. The judgment was based upon a commission which the trial judge found to be due and payable to plaintiff as a result of the sale by defendant through another broker of an apartment complex in Union City during a time that the real estate was subject to an exclusive listing with plaintiff. The selling broker was not a party to these proceedings. At trial, defendant's

sole defense was that plaintiff was not entitled to a commission because it failed to use its best efforts to sell the subject property. After a five-day bench trial the trial judge determined that defendant, not plaintiff, had breached the exclusive listing agreement.

Defendant signed a series of exclusive listing agreements with plaintiff. The first covered the period of March 9, 1982 through May 31, 1982 and provided for a $200,000 commission to be paid upon sale of the property. The agreement specifically provided that defendant would refer to plaintiff all inquiries received regarding the purchase of the property whether from real estate brokers, prospective purchasers or others, and that the commission was considered earned if the property was sold or exchanged or contracted to be sold or exchanged by anyone during the term of the agreement. A few days after the signing of this initial agreement defendant received a letter from the eventual selling broker informing defendant of the details of an offer to buy the property. The trial judge determined that defendant never informed plaintiff of this inquiry.

On May 5, 1982, prior to the expiration of the initial agreement, plaintiff and defendant executed a second agreement containing substantially identical terms, except that the period of exclusive authorization was extended to June 15, 1982. On June 9, 1982 the parties executed a third exclusive agreement upon similar terms, except that the payment terms for the $200,000 commission were amended to provide that the commission was to be paid $100,000 at the closing of title, $50,000 six months later and $50,000 18 months after closing, to coordinate with the deferred payments permitted for a potential purchaser under the listing agreement. This third agreement did not extend the termination date of the second exclusive listing, June 15, 1982, but merely amended its terms.

Four months after the expiration of the exclusive listing agreement, defendant sold the property to the purchaser originally presented in March 1982. Defendant and the purchaser had been involved in extensive negotiations that had commenced

during the listing agreement. Plaintiff did not discover this until after the closing, and this suit ensued for plaintiff's commission. Although the sale was reflected by the closing statement dated October 20, 1983, the sales contract between Washington Park Urban Renewal Corp. and the purchaser is dated June 23, 1982 which is handwritten over the scratched out, typed date "29th day of April 1982." A cover letter of April 29, 1982 from the purchaser's attorney enclosing the deposit checks was also admitted into evidence. Defendant paid a full $200,000 commission to the selling broker.

The sole issues presented for adjudication here*fn1 are whether plaintiff's commission should be reduced by any referral commission it would have been required to pay had defendant made a proper reference of the inquiry to plaintiff, and the amount of prejudgment interest to be assessed.


Defendant first contends that the trial judge should have entered a damage judgment for no more than the net loss that would have been suffered by plaintiff, i.e., the $200,000 commission, less the referral or selling broker's commission which would have been paid by plaintiff had defendant referred the inquiry as required by the listing agreement. Inexplicably, defendant's trial attorney, who is not counsel on this appeal, stated at oral argument following the conclusion of the trial that if the judge found bad faith on particular facts, the proper measure of damages would be the ...

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