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Peterson v. Estate of Pursell

April 10, 2001

ERIK C. PETERSON, PLAINTIFF-APPELLANT,
v.
ESTATE OF ELMA M. PURSELL, COLDWELL BANKER, INC., RESIDENTIAL BROKERAGE, AND ELIZABETH FRANK, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Chancery Division, Hunterdon County, C-14047-99.

Before Judges Baime, Wallace, Jr., and Lintner.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 21, 2001

In New Jersey State Bar Ass'n v. New Jersey Ass'n of Realtor Bds., 93 N.J. 470 (1983), our Supreme Court approved a statewide settlement of differences between lawyers and real estate brokers. One requirement of that settlement was that all contracts prepared by real estate brokers must contain an attorney review clause providing each party with a three-work day escape period during which his or her lawyer may disapprove of the agreement. This appeal requires us to determine when the attorney review period begins to run.

Plaintiff buyer delivered a fully executed agreement to the listing broker who forwarded it to defendant seller's lawyer the next day. The signed contract was never delivered to defendant seller. The attorney notified plaintiff of his rejection of the agreement within three business days of receiving it. Within the review period, but before the attorney's cancellation of the contract, defendant seller entered into an agreement to sell the property to another at a higher price. Plaintiff brought this action for specific performance and for tortious interference, claiming that the attorney's disapproval of the agreement was untimely because the three-day review period commenced to run when the signed contract was delivered to the listing broker. The Chancery Division entered summary judgment dismissing plaintiff's complaint. Plaintiff appeals. We affirm.

I.

The salient facts are not in dispute. The Estate of Elma Pursell owned residential property located in Milford. Evelyn Wysocki was the executrix of the Estate. The Estate entered into a listing agreement with Coldwell Banker. Lisa Ellis was the listing agent for the property.

In August 1999, plaintiff contacted Darryl Martoccio, the attorney for the Estate, and advised him that he wished to make an offer on the Milford property. Martoccio referred plaintiff to Ellis. Plaintiff thereafter negotiated with Ellis. On Tuesday, September 21, 1999, Ellis told plaintiff that it would be in his interest to sign a contract that day so that the attorney review period would end on Friday, September 24, 1999. Ellis explained that offers were often received over weekends, and that by executing a contract that day, plaintiff could reduce the possibility the Estate would receive a higher offer.

Ellis prepared a contract for the sale of the residence and faxed it to Wysocki on Tuesday, September 21, 1999. Wysocki signed the agreement and returned it to Ellis the same day. Ellis then faxed the contract to plaintiff. Ellis informed plaintiff that the executrix had instructed her not to send her a signed contract, but instead to fax a fully executed agreement to the Estate's real estate attorney, George Walton. Ellis told plaintiff to sign the agreement and fax it to her, and she would forward it to Walton.

Pursuant to these instructions, plaintiff signed the contract and faxed it to Ellis. The fax was received in Ellis's office at 5:37 p.m., but she had left for the day. On Wednesday, September 22, 1999, Ellis faxed the signed contract to Walton for his review. Over the weekend, Elizabeth Frank, another Coldwell Banker agent, showed the property to other people who submitted a bid that was substantially higher than that of the plaintiff. On Monday, September 27, 1999, Walton wrote to plaintiff and canceled the agreement.

Plaintiff instituted this action against the Estate seeking specific performance. Also named as defendants were Coldwell Banker and Frank who, it was alleged, were liable for tortious interference. Plaintiff contended that Ellis, as the listing broker, served as the Estate's agent. The principal thrust of plaintiff's contention was that his delivery of the signed contract to Ellis started the running of the attorney review clock.

The Chancery Division rejected that argument. The judge determined that the attorney review period begins to run when a fully executed contract is delivered to a party. He further concluded that the attorney review period did not commence because the signed contract had never been delivered to the Estate. The judge decided, alternatively, that Walton's rejection of the contract was timely. In reaching that conclusion, the judge observed that in calculating the three-day period for attorney review, the date of delivery is not counted. Because Walton received the contract on Wednesday, the review period was said to have begun that Thursday. Excluding the non- business weekend days, the review period was held to conclude on ...


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