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Striker Investment Realty v. Martin


June 7, 2007


On appeal from Superior Court of New Jersey, Law Division, Essex County, No. L-1705-05.

Per curiam.


Argued April 25, 2007

Before Judges Wefing and Yannotti.

Plaintiff appeals from a trial court order granting judgment in favor of defendant. After reviewing the record in light of the contentions advanced on appeal, we affirm.

Plaintiff filed a one-count complaint alleging that defendant owed it a real estate commission of $72,000. Defendant, by its answer, denied it had any obligation to plaintiff. The lower court heard the matter in a bench trial, at the end of which it gave an oral opinion finding for plaintiff.

Plaintiff is a licensed real estate broker, dealing primarily in commercial real estate. Its principal is Michelle Streicher. Defendant is a real estate developer who owned property located at 533 Adams Street in Hoboken, for which he had received approval to build four condominium units with parking.

Sarah Abrahams, a real estate agent associated with plaintiff, approached defendant in connection with the Adams Street property. Defendant indicated he would be willing to sell the property if the transaction could close quickly on an all-cash basis.

The parties executed a listing agreement dated December 1, 2004. The agreement reflected a purchase price of $1,200,000. Next to the entry "Cash Req'd on Contract" was written $200,000. The listing agreement contained the following language:

Upon the procuring of a purchaser of the Property during the Term of this Listing, Owner agrees to pay to Broker a commission of 6% of the selling price. Broker's Commission shall be considered earned if the sale of the Property is effected by Broker, by Owner or by any third party during the Term of the Listing or after its Termination if sold to a party who was introduced to the Property during the term by Broker . . . .

Owner agrees to enter into a contract of sale which conditions the buyer's obligations on satisfaction of physical inspection and due diligence inquiries as to income expense and governmental inspection status. Owner agrees to enter into a contract which contains a contingency period of up to [60] days for the obtaining by purchaser of a mortgage commitment which is not in excess of 75% of the selling price of the Property.

The listing agreement named four prospective purchasers to whom plaintiff would be marketing the property, one of whom was Abraham Wercberger. The listing agreement specified that it would expire on December 7, 2004.

On December 6, the parties executed a new listing agreement for this property. This agreement called for an all-cash deal, with a purchase price of $1,175,000. This agreement deleted the language referring to the purchaser obtaining a mortgage. It also deleted the following clause, which had been present in the initial agreement:

The term of this Listing shall be extended by the period of time commenced by the date that Owner accepts any offer presented by Broker for the Property and extended for an additional 3 months unless the negotiations with respect to such offer terminate at a later date which will then end the term of this Listing by the date that negotiations are ended.

As with the first listing agreement, this second agreement called for a commission of 6%. Next to the entry "Cash Req'd on Contract" was again written $200,000. It also listed Abraham Wercberger as a potential buyer. Finally, the listing agreement was extended from December 7 to December 9, 2004.

On December 6, 2004, Wercberger, through Striker, submitted an offer to purchase the property for $1,075,000. This was unsatisfactory to defendant. Abrahams met with defendant to solicit a counter-offer and to avoid confusion, prepared another listing agreement dated December 8, 2004, incorporating the terms that would be satisfactory to defendant. This reflected an all-cash transaction for a purchase price of $1,175,000. It provided for a time-of-the-essence clause and stated that closing must occur by January 24, 2005. It also stated that if buyer wanted to extend the closing date until February 8, 2005, the price would increase to $1,200,000. The listing agreement continued to provide for a 6% commission but reduced to $150,000 the cash required upon execution of the contract. It specified, however, that the deposit had to be by way of certified check. This listing agreement again deleted the language set forth earlier extending the listing during the period of negotiations and also deleted the contingencies relating to physical inspection and due diligence. Finally, it specified that it would expire the following day, December 9, 2004.

On December 9, 2004, defendant sent to plaintiff an e-mail agreeing to extend the closing date until February 18, 2004, but increasing the purchase price to $1,225,000, requiring a certified deposit check for $150,000 to be forfeited if the closing did not take place for any reason by that date, and reducing plaintiff's commission to $55,000.

Also on December 9, plaintiff submitted to defendant Wercberger's offer to purchase the property for the $1,200,000 purchase price set in the December 8 listing agreement. The offer also agreed to close by February 8 on a time-of-the-essence basis. The offer sheet specified that a deposit of $150,000 would be paid by certified check on signing of a contract for sale.

Finally, again on December 9, defendant sent another e-mail to plaintiff rejecting Wercberger's offer of December 9. This e-mail started in the following manner:

I will not accept the offer you have presented to me since no money has been transacted, [sic] and you have ignored my new purchase price and specific terms for the property as I have instructed you to make the last and final offer to your client. The terms have not been met as per my fax on Thursday morning sent to your office.

Wercberger elected not to sue for specific performance and pursued other investment opportunities instead. Defendant did not sell the property to another purchaser but proceeded with the development himself. The project had not been completed by the time of trial, in June 2006, as defendant testified that the foundation was being "reconfigured." Plaintiff, however, contending it had produced a ready, willing and able buyer in accordance with the listing agreement, sought its commission of 6% of the final price.

Despite the complaints defendant set forth in his final e-mail of December 9, he admitted at trial that the only term of the listing agreement he considered not to have been satisfied was that the deposit check did not accompany the offer sheet. Defendant construed that omission to mean that plaintiff had not produced an offer matching all the terms of the listing agreement from a ready, willing and able buyer. In our judgment, the trial court correctly rejected that proposition.

Our analysis is informed by Van Winkle & Ligget v. G.B.R. Fabrics, Inc., 103 N.J. 335 (1986), in which the Court dealt with the issue of a broker's entitlement to a commission in the face of an aborted real estate transaction. There, the Court stated: liability [for a broker's commission] should not be imposed on the seller when he acts in good faith and his inability to perform is not related to any wrongful act or misconduct on his part. In contrast, where a seller's default is attributable to wrongful conduct, he has been held liable for the broker's commission. [103 N.J. at 345.]

Having carefully reviewed the record in this matter, we are satisfied that the record amply supports the conclusion of the trial court that when defendant executed the listing agreement, he did not intend that a certified check had to accompany the offer sheet. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974). His subsequent refusal to proceed with the transaction because purchaser did not submit the deposit with his offer wrongfully deprived the broker of his commission.

The judgment under review is affirmed substantially for the reasons stated by Judge Dennis F. Carey in his oral opinion of June 22, 2006.



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