On appeal from the Superior Court of New Jersey, Law Division, Camden County.
J.h. Coleman, Shebell and Conley. The opinion of the court was delivered by Conley, J.A.D.
[261 NJSuper Page 449] Following a nonjury trial, final judgment was entered in favor of defendant GKN Realty Corp. and Heather Croft Associates (hereinafter collectively referred to as GKN) dismissing plaintiff VRG Corporation's (VRG) claim for an equitable lien upon certain rental income generated by a shopping center, presently owned by GKN, in payment for a brokerage commission owed VRG by bankrupt defendants Golden Reef and Perlman Enterprises.*fn1 We reverse.
The pertinent facts are not in dispute. VRG Corporation is a commercial real estate brokerage firm incorporated in New Jersey. Beginning in 1984, VRG assisted Golden Reef, a New Jersey corporation, and Perlman Enterprises, a Florida corporation authorized to do business in New Jersey, with the development of Heather Croft Square, a shopping center. In addition to assisting with the design, financing and necessary zoning approvals for the shopping center, VRG procured tenants for Golden Reef and Perlman pursuant to an Exclusive Agency to Lease Agreement. Entered into in October 1985, the agreement granted VRG an exclusive agency to procure tenants for Heather Croft Square "in consideration of services to be rendered by [VRG]." Paragraph four of the agreement concerning compensation for procuring tenants, provided that VRG:
shall be entitled to a commission for each tenant who enters into a lease for space in the Center during the term of this Agreement equal to six (6%) percent of each monthly gross base rental payment under the initial term of such lease. Each such monthly commission payment shall be paid by [Golden Reef] to [VRG] within ten (10) days after receipt by [Golden Reef] of the subject monthly rental payment. . . .
Provision was made in the agreement for the advance payment of $250,000 of the commission owed:
[Golden Reef] shall pay to [VRG], as advance commissions hereunder, the sum of One Hundred Thousand and No/100 ($100,000.00) Dollars on or before November 1, 1985 and the further sum of One Hundred Fifty Thousand and No/100 ($150,000.00) Dollars on or before the date that the first tenant takes possession of leased space in the Center and commences to pay monthly base rental. Such payments of Two Hundred Fifty Thousand and No/100 ($250,000.00) Dollars shall be credited against the commissions due [VRG] pursuant to paragraph 4 above and [Golden Reef] shall not be obligated to make any payments to [VRG] pursuant to paragraph 4 above until such time as said credit of Two Hundred Fifty Thousand and No/100 ($250,000.00) Dollars has been exhausted.
The agreement, further, bound the successors and assigns of the parties.
Catherine Backos, a licensed New Jersey real estate broker and the Vice President of VRG, negotiated the agency agreement. Originally, she had attempted to negotiate payment on a
discounted basis of all commissions due at the time the shopping center opened. However:
what took place was that the then developer-owner of the center, Stuart Perlman, who's deceased, agreed to pay us at the time when the center opened $250,000 on account, which $250,000 would be charged off against each month's rental income stream at six percent.
It was -- there had been a draft of this contract in Mr. Perlman's hands, okay, which stated that we wanted to be paid off on a discounted basis. That is six percent of the first year, five percent of the second year, and four percent of every year thereafter --
Of all of the leases out over 20 years. He said, I want to pay you $250,000 now and I want you to continue to have a six percent income stream from this property. Will you accept this? And I said, yes, ...