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Prudential Stewart Realty v. Sonnenfeldt

November 3, 1995

THE PRUDENTIAL STEWART REALTY, PLAINTIFF-APPELLANT,
v.
MICHAEL SONNENFELDT, DEFENDANT-RESPONDENT.



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

Approved for Publication November 3, 1995. As Corrected January 2, 1996.

Before Judges Stern, Keefe and Humphreys. The opinion of the court was delivered by Stern, J.A.D.

The opinion of the court was delivered by: Stern

The opinion of the court was delivered by STERN, J.A.D.

Plaintiff appeals from the grant of summary judgment dismissing its complaint.

Plaintiff broker filed this action against defendant with whom it had entered into an exclusive listing agreement for the sale of defendant's home. Plaintiff sought a commission based on breach of contract and damages for the breach of good faith and fair dealing implicit in the agreement.

The agreement, entered on June 16, 1992, granted plaintiff an exclusive "right to sell" the single family home with the listing price of $2,395,000. it provided for a 7% commission. It further provided that "in the event that the property ... is sold within 90 after the expiration of this Agreement to anyone to whom the Broker or the Broker's salesperson ... had introduced the property during the term of this Exclusive Listing, the commission as indicated above shall be earned by the Broker ... unless the Seller executes a new Exclusive Right to Sell Listing Agreement to take effect on expiration of this Agreement."

The Agreement was made "subject to [a] letter of 6/11/92," which modified the commission rates at different selling prices, established an advertising budget and strategies, and provided a "term of listing" of "one year with 6 month cancellation by either party." According to plaintiff's brief, the parties "understood this to mean that either party could cancel the agreement after six months from its inception." Defendant terminated the agreement by a letter of May 10, 1993 (confirming a prior oral notification), which was "agreed and accepted" by plaintiff's manager.

According to defendant, he started discussing a sale to the buyers on May 7, 1993, although the purchasers had previously been shown the house by defendant's personal assistant in April or May 1992, in March and April 1993, and again on May 5, 1993. Defendant entered into an agreement with them on May 13, 1992, selling the house for $2,075,000.

The motion Judge granted summary judgment for defendant because the broker was not the "efficient producing cause" of the sale, and the contract did not require defendant to refer a prospective buyer to the broker during the contract term. The motion Judge's entire opinion was as follows:

THE COURT: I'm satisfied that the case law requires that in order for the broker to be paid a commission, especially against the will of the buyer or seller, the broker must be the efficient producing cause of the sale in this case. I'm satisfied that there's no evidence here from which a fact finder could so conclude.

Dr. Somberg (phonetic) was introduced to the house before the listing existed by entities entirely different from the broker. The broker concedes this. Dr. Somberg's negotiations with the Sonnenfeldts did not commence until after the listing was terminated.

The termination of the listing was done pursuant to the authority vested in Sonnenberg -- Sonnenfeldt in the listing agreement and that was accepted by the Plaintiff.

Moreover, this is no obligation in this contract to refer. There may be some common law obligation to refer, but there's no obligation to refer in this contract. The contract was written by Prudential. The Court is going to construe any ambiguity or the absence ...


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