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Mogull v. CB Commercial Real Estate Group Inc.

March 09, 1999

MARTHA MOGULL, PLAINTIFF-RESPONDENT/CROSS-APPELLANT,
v.
CB COMMERCIAL REAL ESTATE GROUP, INC., DEFENDANT-APPELLANT/CROSS-RESPONDENT, AND GARY BEBAN, FRED SCHMIDT, JOHN FOSTER, JAMES J. DIDION, BOYD VAN NESS, AND STEVEN FLEMING, DEFENDANTS/CROSS- RESPONDENTS, AND HAROLD APPEL, DEFENDANT.



Before Judges Conley, A. A. Rodr¡guez and Kimmelman.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 18, 1999

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

The opinion of the court was delivered by

Following a lengthy trial in this sex discrimination case, and in response to special interrogatories, a jury concluded that defendant CB Commercial Real Estate Group, Inc. (CB) had denied plaintiff certain employment benefits and had discharged her and had not presented legitimate nondiscriminatory reasons therefor. It awarded her compensatory and punitive damages totaling $6,500,000. Additionally, the trial Judge awarded plaintiff $211,460.13 in prejudgment interest, $14,249.10 taxed costs and $624,150.20 counsel fees against CB. *fn1 Because we are convinced the jury charge contained fundamental errors which may well have affected the jury's proper application of plaintiff's burden of proof and CB's burden of going forward in a Law Against Discrimination (LAD) suit brought pursuant to N.J.S.A. 10:5-1 to -49, we reverse and remand. Since we cannot be sure that the errors did not taint both the discriminatory denial of employment benefits verdict and the discriminatory discharge verdict, we reverse the entire verdict and remand for a new trial against CB.

Both parties raise a number of other issues, some relating to evidence, some relating to damages and some relating to counsel fees. Since the matter must be retried, these issues are moot. We observe only that on retrial, we assume the punitive damage jury charge will reflect our decision in Maiorino v. Schering-Plough Corp., 302 N.J. Super. 323, 355 (App. Div.), certif. denied, 152 N.J. 189 (1997). We also observe that CB may now be able to amend its answer to include plaintiff's alleged breach of her duty of loyalty as a defense, as opposed to a separate counterclaim. And see McKennon v. Nashville Banner Publ'g Co., 513 U.S. 352, 115 S. Ct. 879, 130 L. Ed. 2d 852 (1995). Finally, as to plaintiff's cross-appeal from the dismissal of the complaint against all individual defendants except Appel, we are convinced that aspect of the cross-appeal is without merit and requires no further opinion. R. 2:11-3(e)(1)(E). The retrial on remand, then, will be against CB only.

I.

Given our Disposition of this appeal, we need not discuss at length the extensive evidence produced by both sides over the course of the thirty-four day trial. Suffice it to say that this litigation seems to have had its genesis when plaintiff, who had obtained her real estate license and began working in the real estate field in 1974, was hired in 1976 by Appel, who was at that time managing partner of Sutton & Towne, a real estate company in Paramus. Appel had been in the real estate field since 1957. Appel trained plaintiff and, for a year and a half, between 1977 and 1978, they had more than a working relationship which, ostensibly at that time, ended without adverse effects upon their ability to continue working together. They did so on a number of transactions, sharing the salesperson's commissions. They also worked on other transactions independently.

In 1980, Sutton & Towne was acquired by CB. Appel was brought in as a vice-president; plaintiff was employed as a broker-salesperson. Plaintiff ultimately was promoted to an associate vice-president; at the time of the trial, Appel was the managing officer of CB's Hackensack office. During the trial, plaintiff alleged that over the course of her years at CB from 1980 to her termination in 1992, she had been subjected to a course of long-term discrimination reflected by being excluded from various office activities and real estate transactions, undermining her relationship with long-term clients, denying her a fair share of commissions, failing to fairly investigate her complaints and, finally, terminating her.

Plaintiff's actionable claim of denial of employment benefits centers upon three real estate transactions, in which Appel received benefits that she did not. *fn2 She asserted this was so because of her sex and produced evidence from which a jury could have drawn such a Conclusion. On the other hand, CB presented evidence of legitimate nondiscriminatory reasons for why it handled each of these transactions in the way it did, as well as for plaintiff's termination, which a jury as well could have accepted.

The transactions have been referred to as the 1989 Allstate transaction, the 1990 CBS transaction and the 1991 Edwards and Kelcey transaction. We set forth the evidence relating to them and to plaintiff's discharge. But, because the verdict here arose from the jury's determination that CB had not presented legitimate nondiscriminatory reasons for its challenged actions and we must, thus, consider this appeal in that context, we do no more than set forth CB's reasons as if they were true. See St. Mary's Honor Center v. Hicks, 509 U.S. 502, 509, 113 S. Ct. 2742, 2748, 125 L. Ed. 2d 407, 417 (1993). Allstate

In 1989, Allstate was contemplating a major relocation in New Jersey which would involve the sale of its 150,000 square foot building in Murray Hill and relocation of 70,000 to 80,000 square feet of its office space. Plaintiff had previously done some work for Allstate, including the leasing of four offices of 20,000 square feet to 40,000 square feet. In the course of that work, plaintiff had developed a good relationship with Allstate's local manager of the property. Because it was ordinarily CB's policy to assign a salesperson who had a prior relationship with a potential client to that client's projects in the salesperson's area, plaintiff expected to be involved in the 1989 transaction. The transaction was to be handled by two teams, one to handle the sale, the other to handle the lease. Allstate did retain CB for the job, but with Appel as one of the members of the leasing team. Plaintiff was not selected to work on either team.

CB articulated the following legitimate, nondiscriminatory reasons for its decision concerning the Allstate transaction. CB and Allstate had been sister companies when both were owned by Sears. As of 1989, Allstate had been one of CB's national accounts for many years, providing on an average 125 transactions and approximately $3,000,000 in commissions per year. As a result, CB's national accounts group, comprised of salaried officers, regularly provided nationwide services to Allstate. Jack Weber, a member of CB's national accounts group, had been responsible for the Allstate account on a national basis since 1986 or 1987. One of his responsibilities was to assist Allstate with relocation of regional headquarters throughout the country. Based in Chicago, near Allstate's corporate headquarters in Northbrook, Illinois, Weber dealt directly with Chuck Roth, an Allstate employee who oversaw the Disposition of surplus properties, and Bill Mosten, the head of Allstate's facilities group. Plaintiff did not know Roth or Mosten.

The 1989 transaction was very large and despite CB's past relationship with Allstate, Allstate was considering other real estate companies for the project. It was essential, therefore, in submitting its proposal to Allstate, that CB present their "strongest players on the team." Weber, Gary Beban, CB's president, and Boyd Van Ness, its Eastern Divisional Manager, determined that the brokers in CB's Piscataway office -- CB's closest location to the Murray Hill location -- were the most familiar with the Murray Hill area and therefore best able to provide the services Allstate needed. Plaintiff was in CB's Hackensack office.

CB assembled a sales team comprised of three brokers from the Piscataway office. For the leasing team, CB included two of those brokers but wanted to add a third member who would have a stronger leasing resume. Finding no broker with a suitable resume in the Piscataway office, CB ultimately selected Appel from the Hackensack office.

Appel had specialized in office leasing for almost forty years. He was also one of the top performers in all of CB. Each year, CB identifies the salespersons who have earned a place in the "Colbert Coldwell Circle," a group limited to three percent of the sales force. As of 1991, Appel had achieved a position in the Circle nine consecutive years. Boyd Van Ness, CB's Eastern Divisional Manager, testified that Appel's performance was "better than anybody in the east or the west"; Appel was the "most consistent performer in terms of getting in the Circle." Plaintiff's experience in office leasing, on the other hand, was limited. Between 1983 and 1988, she had handled only twelve office leases, only four of which were more than 5,000 square feet. Weber testified that he was "[l]ooking for exceptional people -- not just competent people. . . . There's no doubt that [Appel] was the perfect choice." CBS

Plaintiff claimed that she discovered in 1990 that in 1987 Appel had excluded her from a leasing of space for CBS. CBS had become a client of hers in 1979, when she was instrumental in the leasing of office space for CBS from Hartz Mountain. She had received a commission of $75,000 for that transaction. Hartz Mountain, as a landlord, had agreed that if CBS took more space at that location, plaintiff would be entitled to a commission. Plaintiff thought such a transaction had occurred in 1987 and that she should have gotten a portion of Appel's commission. In April 1990, she complained to her resident manager and sought such a commission. Her request was denied in a June 1, 1990 memorandum from Joe Renizo, the then sales manager of the Hackensack office. According to CB's evidence, the 1987 lease was executed a number of ...


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