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Cushman & Wakefield of New Jersey, Inc. v. Alexander Summer Co.

November 18, 1996

CUSHMAN & WAKEFIELD OF NEW JERSEY, INC., PLAINTIFF-APPELLANT/CROSS-RESPONDENT,
v.
ALEXANDER SUMMER CO. AND UNITED JERSEY BANK, DEFENDANTS-RESPONDENTS/CROSS-APPELLANTS.



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

Approved for Publication November 18, 1996.

Before Judges Baime, P.g. Levy, and Braithwaite. The opinion of the court was delivered by Baime, J.A.D.

The opinion of the court was delivered by: Baime

The opinion of the court was delivered by

BAIME, J.A.D.

Cushman & Wakefield (C&W) brought this action against Alexander Summer Co. (Summer Company) and United Jersey Bank (UJB) to recover brokerage commissions and punitive damages, alleging tortious interference with contract and tortious interference with prospective economic advantage. The complaint alleged that UJB utilized C&W's brokerage services to obtain leases for its new operations center and for two branch banks. C&W claimed that it introduced UJB to Hartz Mountain, the developer, negotiated the terms of the transactions and caused the procurement of the resulting leases. C&W contended that Summer Company was inserted into the transaction when the leases were imminent because Alexander Summer was a member of the board of directors of UJB and a major shareholder.

Following a protracted non-jury trial, the Law Division found that UJB and Summer Company had wrongfully interfered with C&W's reasonable expectation of economic gain. The court also found that defendants' wrongful conduct resulted in the loss of C&W's commission earned on the lease for UJB's branch banks. C&W was awarded $131,250 in compensatory damages and $400,000 in punitive damages respecting that transaction. However, the court determined that C&W was not entitled to a commission on the lease for UJB's operations center because the property C&W had introduced to UJB was rejected due to toxic contamination, and another site adjacent to it was ultimately selected.

C&W appeals, contending (1) there was a reasonable probability it would have introduced UJB to the adjacent property had there been no wrongful interference and, therefore, it was entitled to a commission on that transaction, and (2) the Law Division erred by refusing to consider its litigation expenses in the award of punitive damages. UJB and Summer Company cross-appeal, claiming (1) the Law Division committed error in finding that C&W was the efficient procuring cause of the branch banks lease, (2) punitive damages should not have been granted, and (3) prejudgment interest was improperly awarded from the filing date of the original complaint. Our examination of the voluminous record discloses clear and convincing evidence that defendants wrongfully deprived C&W of commissions due on both the operations center and branch bank leases. We also conclude that the Law Division erred by refusing to consider C&W's reasonable litigation expenses in the punitive damage award. The remaining arguments lack merit.

I.

C&W is a commercial real estate brokerage firm. In 1983, C&W acquired Baker Merin Associates, a competitor that long served as UJB's principal broker. Andrew Merin and John McCormick, two principals in Baker Merin Associates, joined C&W and continued to assist UJB in its leasing needs following the acquisition.

In March 1984, Leonard Speakman, UJB's head of real estate, requested Merin and McCormick to search for space for an operations center to accommodate the bank's check processing, computer, and accounting functions. Initially, Speakman specified that UJB was seeking 50,000 to 65,000 square feet of space in close proximity to the bank's existing operations center in Hackensack. As time passed, however, UJB repeatedly increased its estimate of the amount of space needed. While Merin originally confined his search to existing facilities, he later expanded his survey to include undeveloped land on which a building could be constructed to suit UJB's specific needs.

Thus, at a relatively early stage, Merin suggested that UJB consider an undeveloped tract in Ridgefield known as the Overpeck Office Park. Merin considered this property attractive for several reasons. It was located in close proximity to UJB's existing facility in Hackensack, and it was owned by Hartz Mountain, one of New Jersey's largest developers of commercial property. Moreover, Agfa Gavaert, a major customer of UJB, had committed to locating its offices at Overpeck. Merin reasoned that Hartz Mountain could construct a building suitable to UJB's needs as fast as an existing building could be retrofitted.

Although other properties were included in C&W's survey of potential sites, Alan Posencheg, UJB's senior vice-president in charge of operations, centered his attention on the Overpeck property. At a series of meetings in March and April 1985, C&W and UJB representatives examined aerial photographs and proposed plans for constructing a building. Posencheg also toured the site on at least two occasions. Posencheg testified at trial that he "liked the location when [he] first saw it," and became more enthused about the property after eliminating other sites because of traffic and other related problems.

Posencheg raised questions concerning the contemplated road access to the Overpeck area. There were "considerable . . . Discussions" about road access from Route 46 and the New Jersey Turnpike. In its marketing brochure, Hartz Mountain represented that the site was "directly accessible from Route 46 to the south." C&W presented evidence indicating that the Hartz Mountain plan envisioned incorporation of an adjacent site known as the Iganamort property consisting of approximately fourteen acres. The plan called for access roads through the Iganamort ...


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