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Harper-Lawrence Inc. v. United Merchants and Manufacturers Inc.

Decided: January 22, 1993.


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

Gaulkin, Havey and Brochin. The opinion of the court was delivered by Brochin, J.A.D.


Plaintiffs Harper-Lawrence, Inc. and Jaime Weiss are realtors who claim they were entitled to a real estate commission because they procured defendant United Merchants and Manufacturers, Inc. as a tenant for a building which defendant Anne Gibbons, trading as Elberon Development Company, purchased from defendant Vantage Properties, Inc. or an affiliated company. To recover their commission, plaintiffs sued United Merchants, Ms. Gibbons, and Vantage Properties for breach of contract, tortious interference with contract, and tortious interference with prospective economic advantage.

Before trial, the court entered summary judgment dismissing plaintiff Weiss's claims. The court held that he was not legally entitled to maintain the suit because he had not been a licensed broker when he performed his services; he had been licensed as a broker-salesperson and had acted on behalf of his employer, Cushman & Wakefield of New Jersey, Inc., a licensed broker, which had a co-brokerage agreement with Harper-Lawrence.*fn1

After the presentation of all of the evidence, the court ruled that a prima facie case had not been established against Vantage Properties and dismissed all claims against it with prejudice.

The parties stipulated that the cross-claims for indemnification between Ms. Gibbons and United Merchants would not be submitted to the jury and would be decided by the court. Following the trial, the court ruled that neither was entitled to indemnification from the other.

The jury returned its verdict by answers to special interrogatories. It found that Harper-Lawrence was the efficient procuring cause of a lease from Ms. Gibbons to United Merchants; that United Merchants had breached its contract with Harper-Lawrence, but Harper-Lawrence had suffered no damages from the breach; that Ms. Gibbons had not breached any contract with Harper-Lawrence; and that neither United Merchants nor Ms. Gibbons had interfered with any contractual relationship of Harper-Lawrence, but that both United Merchants and Ms. Gibbons had tortiously interfered with Harper-Lawrence's prospective economic advantage. The jury also determined that United Merchants was eighty percent and Ms. Gibbons twenty percent culpable for that tortious interference, and it awarded Harper-Lawrence $330,000 compensatory damages.

The trial court modified the verdict. Harper-Lawrence and Cushman & Wakefield had agreed that they would share equally in any commission received for leasing property to United Merchants. Cushman & Wakefield was not a party to the suit and did not seek a commission. The court ruled that Harper-Lawrence was therefore entitled to only $165,000 in damages, and it entered judgment for that principal amount against United Merchants and Ms. Gibbons, jointly and severally,*fn2 together

with prejudgment interest.*fn3 To reflect the jury's apportionment of fault, the judgment also awarded Ms. Gibbons $132,000 plus eighty percent of the prejudgment interest on her crossclaim for contribution against United Merchants.

Ms. Gibbons has appealed both from the judgment against her and also from the judgment in her favor on her crossclaim because it did not award her full indemnification. Mr. Weiss has appealed from the order for summary judgment which dismissed his claim. Harper-Lawrence has cross-appealed from the judgment in its favor because it was entered for the principal amount of $165,000 rather than for $330,000, the amount of the jury's verdict. United Merchants has not cross-appealed.*fn4

For purposes of our review, we are required to accept as true all evidence supporting the jury's verdict and to draw all reasonable inferences in its favor wherever reasonable minds could differ. Dolson v. Anastasia, 55 N.J. 2, 5, 258 A.2d 706 (1969). The following are the facts of the case viewed in that light.

In August 1986, Howard Ruderman, the "president" of a division of United Merchants consulted with Arthur Draznin, a senior vice-president of Harper-Lawrence, to obtain Mr. Draznin's assistance in finding suitable premises for the relocation of the division's warehouse and distribution facilities to a site

outside of New York City. Mr. Draznin was a New York real estate broker who was not licensed in New Jersey. He enlisted Jaime Weiss, whom he considered to be "the number one top industrial warehouse distribution broker in the State of New Jersey" to help locate an appropriate site. Through Mr. Draznin and Mr. Weiss, Harper-Lawrence and Cushman & Wakefield orally agreed to co-operate in the search and to share equally in any resulting brokerage commission.

In accordance with instructions from Mr. Ruderman, Mr. Draznin and Mr. Weiss met with Bruce Trattler, the general manager of Mr. Ruderman's division, and John Geniton, its controller, in order to learn their needs. Mr. Weiss then prepared a list of potentially suitable New Jersey locations, and Mr. Draznin sent it to Mr. Trattler and Mr. Geniton. On two occasions in August, Mr. Draznin and Mr. Weiss took them on a tour of several properties in New Jersey, including the property at 47 Brunswick Avenue, Edison, New Jersey, which was then owned by Vantage Properties or by one of its affiliates and which the parties refer to as the Vantage building. On September 18, 1986, Mr. Draznin and Mr. Weiss took Mr. Ruderman, Mr. Trattler, Mr. Geniton and one of their associates to see the Vantage building. They spent more than an hour at the site and met with four representatives of the owner of the property, including its president or partner-in-charge, who personally showed Mr. Ruderman through the building.

According to Mr. Weiss, during the September 18 visit, Geoffrey Schubert, a principal of Vantage Properties, told him, Mr. Draznin and the representatives of United Merchants that the building was about to be sold to "Elberon," the name under which Ms. Gibbons conducted her real estate business. Mr. Schubert assured them that United Merchants would still be able to lease the vacant space in the building and that, even after the sale, he would negotiate the lease on behalf of the new owner.

Following Mr. Ruderman's September 18, 1986 visit to the building, he instructed Mr. Draznin and Mr. Weiss to obtain a statement of the terms on which Vantage Properties would be willing to lease the vacant 152,000 square foot portion of the building to United Merchants. Mr. Ruderman told Mr. Weiss, "Let's go for it. Let's get a leasing proposal from Vantage." Mr. Draznin or Mr. Weiss obtained a written proposal for a lease and sent it to Mr. Trattler on September 23. On September 24, 1986, Vantage Properties or its affiliate executed the agreement to sell its property to Ms. Gibbons. Title closed December 4, 1986.

A few days after sending the proposed lease terms to Mr. Trattler on September 23, 1986, Mr. Draznin asked him what he thought about the proposal. Mr. Trattler replied that the offer "looked good" and that he had sent it to Mr. Ruderman. From then until the middle of November 1986, Mr. Draznin called Mr. Ruderman "a half-dozen times." Mr. Ruderman told him that he and his associates "loved the building, [but] that things were on a holding pattern, that they were not moving ahead as rapidly as he anticipated, but they loved the building."

On November 13, 1986, Ms. Gibbons' property manager sent the following letter to Mr. Weiss:

Dear Jaime:

As you probably know, we are the Contract Purchasers for the property located at 47 Brunswick Ave., Edison, N.J. As per Geoff Schubert at Vantage Company, I understand that you have a client that showed some interest in leasing the available space at the above referenced building. Please be advised that we are anxious to make a deal on the vacant space. I think it would be in our best interest to arrange a meeting with your client, yourself and me to discuss the possible tenancy. I would ask that you arrange a meeting as soon as possible. . . . In closing, I would be pleased to sit down at any time to discuss anything you need to know regarding the building. I think you will find that our Company is a pleasure to do business with.

Mr. Weiss forwarded this letter to Mr. Trattler and then telephoned him, suggesting that his division's representatives meet with someone representing the new owner. The suggestion was not accepted. Although United Merchants offered a plausible alternative explanation for its failure to pursue the transaction

at that time, the jury could reasonably have inferred that the real reason was that the company was stalling in order to avoid paying a broker's commission when it consummated its plan to lease the building.

On November 20, 1986, Mr. Draznin wrote Mr. Ruderman, "Jaime and I look forward to pursuing this transaction with you and your team as soon as you are ready to proceed." The letter continues:

In the meantime, I would like you to consider appointing Cushman & Wakefield and ourselves to act as your exclusive representatives in the proposed relocation.

A proposed form of contract was enclosed with the letter. It read in part:

You [Harper-Lawrence and Cushman & Wakefield] agree to negotiate the terms of the lease and/or purchase on our behalf, however, all such negotiations shall be subject to our review and final approval.

Unless otherwise agreed, you agree to look only to the landlord or seller, as the situation may be, for your commission and we agree to recognize you as our broker in connection with any prospective locations submitted to us by you.

Mr. Ruderman declined to execute the proposed contract, but assured Mr. Draznin that United Merchants would "protect him as a broker." According to Mr. Draznin, that meant that "any of those properties that you show a customer they will respect your ability to negotiate on their behalf to secure that property. They will insure the fact that if you show it to them you will earn a commission." Harper-Lawrence and Mr. Weiss point to this exchange between Mr. Draznin and Mr. Ruderman as establishing the only express contract between their two companies.

Thereafter, Mr. Ruderman consistently failed to answer or return Mr. Draznin's calls. Before May 1, 1987, Ms. Gibbons appointed an exclusive broker to represent her in the leasing of space in her building. In the period before that date, while she was in the process of selecting her broker, Ms. Gibbons' property manager asked Mr. Weiss if United Merchants was still interested in the property. Mr. Weiss told him that the corporation's relocation project was still "on hold" as far as he knew,

but that a standard five percent commission would be expected if United Merchants leased the property from Ms. Gibbons. No response was testified to. As the result of that conversation or of a subsequent advertisement that Mr. Weiss received from Ms. Gibbons' brokers, Mr. Weiss sent Mr. Trattler a letter dated May 14, 1987, telling him that the Vantage building was still available and that the new owner was "anxious to work with you in connection with satisfying your requirement."

In the meanwhile, United Merchants met with a firm of consultants in February and March 1987, and hired them to advise it in connection with the proposed relocation of its warehouse and distribution facilities. The original scope of the services to be performed by the consultants included selecting the site for the new facilities. However, the jury could reasonably have concluded that the consultants did not make any significant contribution to selection of the site; they were informed of the division representatives' preference for the Vantage property in Edison, New Jersey, shown them by Mr. ...

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