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Mogull v. CB Commerical Real Estate Group

February 16, 2000

MARTHA MOGULL, PLAINTIFF-APPELLANT,
V.
CB COMMERCIAL REAL ESTATE GROUP, INC., GARY BEBAN, FRED SCHMIDT, JOHN FOSTER, JAMES J. DIDION, BOYD VAN NESS AND STEVEN FLEMING, DEFENDANTS-RESPONDENTS,
AND
HAROLD APPEL, EDWARD HIGHERS AND JOHN DOES 1-5, (SAID NAMES BEING FICTITIOUS AND UNKNOWN), DEFENDANTS



The opinion of the court was delivered by: Garibaldi, J.

Argued November 30, 1999

On certification to the Superior Court, Appellate Division, whose opinion is reported at 319 N.J. Super. 53 (1999).

This appeal presents the issue whether jury instructions, jury interrogatories, and a verdict sheet regarding a defendant employer's burden of production in a sex discrimination case under the New Jersey Law Against Discrimination ("LAD"), N.J.S.A. 10:5-1 to -42, so confused the jury that a reversal of plaintiff's verdict was required. Plaintiff Martha Mogull worked in the Hackensack office of defendant CB Commercial Real Estate Group, Inc. ("CB") for more than a decade. After a number of disputes about commissions owing to her, CB discharged her. In her suit, Mogull alleged that CB and a number of its employees*fn1 had discriminated against her in her employment and in the termination of her employment, in violation of the LAD. After a seven-week trial, the jury awarded Mogull $1.5 million in compensatory damages and $5 million in punitive damages. The Appellate Division reversed the verdict and remanded for a new trial. 319 N.J. Super. 53 (1999).

I.

Martha Mogull was the first woman ever to be named an associate vice president in the commercial division of CB. Mogull's career in commercial real estate began in the firm of Brunell Kramer. At the recommendation of a client, she left that firm and took a job at Sutton & Towne in Paramus under the managing partner, Harold Appel.

Appel trained Mogull. She worked on some of his transactions, doing leg work and asking him for help when she needed it. On those transactions, they shared the salesperson's portion of the commission equally. Each worked independently on other transactions as well. Appel and Mogull had a brief affair in 1977 and 1978, but they were able to continue working together after it ended amicably.

When CB purchased Sutton & Towne in 1980, both Mogull and Appel worked in CB's Hackensack office. Appel became a vice president for CB, and Mogull worked under a "Broker-Salesman Contract" that provided that "Broker agrees to provide to Salesman all current listings in the office except such as Broker may find expedient to handle itself or to place solely with another salesman or salesmen." Mogull was named associate vice president in 1986, in recognition of having had sales of more than $100,000 for five of the previous six years. She was one of the top ten salespeople in CB's Hackensack office from 1981 to 1990, and was five times in the top five. Nevertheless, in her twelve years at CB, Mogull received only two leads from CB's management, one in exchange for agreeing not to pursue a complaint.

A. Transactions

Mogull's claim of denial of employment benefits centers on real estate transactions with three clients: a) Edwards & Kelcey; b) CBS; and c) Allstate.

1. Edwards & Kelcey

In 1978 when Edwards & Kelcey ("E&K") entered into a long-term lease, both Appel and plaintiff shared equally in that commission. E&K had been looking unsuccessfully for new space for several years, until Mogull arranged for a developer (a neighbor of hers) to build E&K a building in Livingston. Appel, who had an exclusive representation agreement with E&K, decided to split the commission equally with Mogull because she was energetic and bright and he "wanted to help her along and . . . promote the company." E&K occupied half of the building and gave Mogull an exclusive to lease the rest of the space, which she and Appel did, sharing those commissions. When Mogull later found E&K a warehouse, she also split the commission with Appel. In 1983 or 1984, Appel, without Mogull, did some out-of-state deals with E&K. At about the same time, E&K expanded its office space in Livingston, and Mogull, who should have split her commission on that transaction with Appel, did not.

In 1991, Mogull learned that Appel was working with E&K and immediately complained to Arleigh Williams, her regional manager, that she was entitled to work on any E&K deal. Appel, in turn, sought his share of the 1984 expansion commission. Nearly a year later, Williams responded in a memorandum, explaining that, in 1991, E&K had been "out in the marketplace with other brokers," and that Appel, by making a presentation with CB's resident manager, had "regained control" and won E&K back. Appel explained that the person in charge of real estate matters at E&K was retiring, and after meeting with the new vice president he had secured a new exclusive. Appel did not tell Mogull, because it was a new deal and they were no longer working together. Fred Schmidt, then resident manager of CB's Hackensack office, corroborated Appel's account.

Williams resolved the dispute by telling Mogull that she had the option to choose either (a) thirty percent of the commission if the client renewed its lease, but none of the commission if the client relocated, or (b) twenty percent of the commission, regardless of whether the client renegotiated or relocated. Mogull responded that both options were unacceptable, that E&K was her account, and that she was "a fifty percent partner whether they renegotiate or relocate." On further review, Williams decided that Mogull and Appel would split the commission equally if E&K renewed, but that she would receive only twenty percent of the total commission if they relocated. Williams also reversed a previous decision and awarded Appel a commission of $2429 on the 1984 expansion. When E&K eventually relocated, Mogull received a commission of $67,000, twenty percent of the total commission of $334,800. She claimed that CB therefore owed her $100,000.

2. CBS

In 1990, Mogull learned that in 1987 Appel had improperly excluded her from a deal with CBS, on which she should have received a $75,000 commission. Several years earlier, she had leased space to CBS in Secaucus. The landlord, Hartz Mountain, had agreed that Mogull would get a commission if CBS took more space at that location. In April 1990, Mogull discovered that there was a second deal between CBS and Hartz Mountain, and in a memo to John Anderson, her resident manager, she asked for her share of that commission. Anderson's replacement wrote to Mogull advising her that no commission was due her because the two transactions were distant in time, and that Hartz Mountain was not the landlord in the second lease.

Appel stressed that CBS had been his client before plaintiff joined the firm. He explained that the landlord in the second transaction was Meadowlands Parkway Association, not Hartz Mountain, but admitted that correspondence to the new landlord was addressed care of Hartz Mountain, and that the lease involved space in the same development.

2. Allstate

During the 1980s, Allstate was a substantial client for Mogull, who procured four offices of approximately 20,000 square feet, and a 40,000 square foot office for Allstate. The Allstate manager appreciated Mogull's work and regularly employed her services as she was willing to meet his smaller requirements. Mogull even did one emergency deal for Allstate without a fee, in order to build her relationship with the company. When Allstate was planning a major relocation in New Jersey, Mogull prepared a summary of her deals for another CB salesman to submit in connection with the relocation. A meeting with Allstate's management, plaintiff, and other CB agents was arranged.

CB's policy was to assign a salesperson with a previous relationship with a national client to that client's projects in the salesperson's area so long as the assignment met the client's needs. Mogull expected that she would choose the team to work on the major relocation project but, one or two days before the meeting, she received a message telling her not to come to the first meeting with Allstate on that project. Mogull later learned that Appel, who had not worked with Allstate previously, had been selected for the team.

Jack Weber, CB's national account manager for Allstate, explained that two senior Allstate real estate people had called him regarding the New Jersey relocation. Weber understood that they were interviewing three different firms for the relocation and they told him that they wanted a high-profile broker for the deal. Local managers decided that Steve Fleming, then manager at CB's Piscataway office, would pick the sales team. Weber made no investigation into other transactions in the area involving Allstate, but Fleming discovered that Mogull had worked with Allstate in the past. Fleming asked Weber to ask Allstate whether they wanted Mogull on the team, but no one at Allstate's national office knew who she was. Fleming then concerned himself with putting the "strongest players on the team." His brokers who had relationships with Allstate had done small deals with them, so he looked to Hackensack for salespeople with stronger resumes. Appel was the top salesperson in CB's Hackensack office for every year but one from 1983 to 1992, and was among the top three percent of CB salespeople nationwide for nine straight years. Fleming could recall no other situation in which a salesperson with a local relationship had been left off the team. Mogull complained to Fleming about being left off the team, and Fleming reported that it was Weber's decision. Mogull asked whether Van Ness, then CB's Eastern Division Manager, was Weber's boss, and Fleming responded that Gary Beban, CB's President, was as well. Mogull complained of discrimination to Anderson and Williams, and Williams told her that Allstate had asked for Appel, which he later admitted was incorrect. Mogull called Williams again and said "if I weren't a woman, this wouldn't happen to me," and Williams answered, "if that's the way you feel then we have nothing to talk about."

B. Termination

In 1990, Mogull met with Williams in an effort to resolve her difficulties with the firm. Williams described a December 1990 meeting as a "litany . . . of wrongs," in which Mogull displayed an "almost obsessive" animus towards Appel. Williams arranged a meeting between Mogull and Van Ness the following February. During that meeting, which lasted more than two hours, Van Ness denied knowing that Allstate was Mogull's account. Van Ness described the meeting as "about the most unpleasant experience that I've ever had," and Mogull admitted that she had insulted and degraded him. Eventually, Beban was assigned to carry out an investigation of Mogull's discrimination claims and determined them to be unfounded. Beban, however, only reviewed Mogull's claim regarding the Allstate transaction, and concluded that her dislike of Appel was at the core of all of her complaints. Beban later sent Mogull a memorandum informing her that her "personal disposition toward [Appel] is at the heart of this problem [and] this disruption must end." Mogull denied Beban's allegations, but acknowledged that her commissions fell from $98,000 in 1989 to $31,000 in 1990 and $54,000 in 1991. Those totals were among the lowest in the Hackensack office, as were her earnings of $46,000 in 1988 and $26,000 in 1992.

In early 1992, Mogull also met with Schmidt, her resident manager from 1990 through mid-1992, and Williams. Schmidt advised her to stop thinking about lost clients and relationships and to canvass or cold-call for clients, as those procedures provided the bulk of the office's business. Schmidt also advised Mogull that she was disrupting the office. John Foster succeeded Schmidt as resident manager in July 1992, with the mission of shaking up the struggling Hackensack office. Foster sought to meet with Mogull, and after she canceled a number of appointments with him, they met on October 9, 1992. After the meeting, Foster wrote a memo to Mogull's file stating that Mogull was "out of touch with reality" and had said that she was burned out and would not canvass.

On October 15, 1992, Foster fired Mogull. In a memorandum to plaintiff's file dated October 26, 1992, Foster stated that her firing resulted from her mental attitude, her statement that she was burned out, her statements that CB took business away from her, her dependence on leads and her refusal to canvass. Van Ness denied taking part in the firing.

II.

Mogull filed suit in the Law Division, Bergen County, on August 20, 1993, alleging that she had been discriminated against on the basis of sex in violation of the LAD. She complained that CB removed her from transactions in favor of male salespeople after she had developed business relationships with clients, deprived her of leads that were given instead to junior male salespeople, and violated agreements to split fees with her, causing damage to her income and reputation. Mogull also alleged that she was wrongfully discharged on October 15, 1992. Additionally, Mogull accused Appel of participating in the discriminatory actions and, separately, of breaching an agreement to allow Mogull to work with a specific client. She demanded compensatory and punitive damages, attorneys' fees, and costs. Other claims were dismissed on summary judgment, as were complaints against defendants Edward Highers and James J. Didion. CB denied the material allegations of the complaint and alleged in its answer that Mogull was terminated for legitimate business reasons. CB also counter-claimed, alleging breach of the duty of loyalty, breach of contract, and interference with prospective ...


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