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American Dream Home Realty Corp. v. Tapia

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 24, 2007

AMERICAN DREAM HOME REALTY CORP. T/A UNICASA AMERICAN DREAM HOME CORP., PLAINTIFF-APPELLANT,
v.
SERGIO AND CELSO TAPIA, DEFENDANTS-RESPONDENTS, AND ANA M. ARRECHEA, ESQ., AND NESTOR F. GUZMAN, ESQ., DEFENDANTS.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Passaic County, Docket No. DC-14650-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted June 19, 2007

Before Judges Stern and Coburn.

Plaintiff appeals from an "order for judgment" entered on June 9, 2006, dismissing all claims against defendant Sergio Tapia a/k/a/ Celso Tapia ("defendant" or "Tapia") following a bench trial.*fn1

Plaintiff, a licensed real estate broker, and defendant entered into a real estate listing commission agreement, on April 14, 2004, to run through the "expiration date" of October 30, 2004. As the property was not sold in that period, and defendant wanted to increase the sales price, on November 2, 2004, the parties entered into another such agreement. That agreement contained an "expiration date" of November 30, 2005.

However, on May 18, 2005, the parties executed a "Garden State MLS Property Change Form" which "permanently" withdrew the property from the multiple listing service. The form stated that "Temporarily or Permanently removing a property from the ML Service does not release the property owner of contractual obligations created by a listing contract."

Thereafter, defendant listed the property with another broker, Bella Homes, and entered a "real estate contract" to sell the property to a third party before the "expiration date" of defendant's listing agreement with plaintiff. After closing, plaintiff received a portion of the commission due as the agent for the buyer,*fn2 with the balance distributed to the new broker, and this action was commenced.

Plaintiff's broker, Auriello Arias, testified that the second listing agreement was for a year because he wanted "to sell" the property "at full price," that defendant agreed to the year listing, and that defendant signed the agreement so providing before Arias did. According to plaintiff's owner, Laura Bettschneider, defendant subsequently came to her office and "specifically said in English" he wanted an "unconditional withdrawal, so [she] automatically knew he was speaking to another [broker]." She testified defendant said he was looking to buy a one-family home, and asked to see the listings for same, before listing his house for sale. She learned of Bella Homes listing thereafter because one of plaintiff's agents represented the buyer when defendant sold the house through that broker.

Defendant testified that Arias "pressure[d]" him to sign an extension and thought he signed a three month extension.*fn3 He did not realize it was a year extension until he went to a new broker months later. According to defendant after visiting the new broker, he requested the "unconditional withdrawal." The following colloquy was developed during defendant's direct testimony:

Q: Okay. Now would you have signed that five percent listing with Bella Homes if you still understood that you were owing UNIcase [plaintiff] six percent?

A: Not at all.

Q: Now at the time of the closing, which I believe was August of '05, had anybody from UNIcase informed you with a written notification, oral, that you were still owing UNIcase six percent?

A: No, I never knew that.

Q: I'm gong to go back to your visit to UNIcase on May 18th, '05. Did anybody at that office explain to you the provision which indicated that temporary or permanent removal from the MLS service did not release you of contractual obligations created by a listing contract?

A: No, nobody told me that.

Q: Did anybody ask you to initial the provision in the document marked P-3 which indicated that permanently removing the property from MLS would not release you from the contractual obligations of a listing contract?

A: No.

Q: As I was asking you, did you ever tell Ms. Arrechea [his attorney] that you were owing a commission to another listing agency other than Bella Homes?

A: No, because I didn't know it.

Q: You know that from your testimony. When did you first find out that you owed this additional six percent to UNIcase after having paid five percent to Bella Homes?

A: I got an envelop in the mail.

Q: That's the lawsuit that brings you her today, right?

A: Yes.

After the bench trial, Judge Thomas J. LaConte found a novation, holding that the contract of sale superseded the listing agreement, and that because plaintiff obtained a commission therein it was bound to accept that commission.

The judge found that the listing agreement had different color ink indicating that different provisions were inserted onto the form at different times, and that:

The fact of the matter is that this is a document that was not fully filled out with -- with all the -- all of the terms prior to the time that Mr. Tapia [the seller] signed it. And for that reason alone, this Court can find that there was not a meeting of the minds with respect to the commissioned agreement, which is entirely improper to have someone sign an agreement, and then have one of the parties go back and -- and -- and revise the agreement, and not send the agreement back to Mr. Tapia to at least initial the changes.

No Mr. Tapia, his understanding with [plaintiff] UNIcase was that in April of '04, this is his testimony, he had a contract with UNIcase for six months, which comports with P-1, which goes from April of '04 to October of '04. He indicates that when Mr. Arias showed up, he --he was at his carpentry shop, and (indiscernible) came to list the property again. Arias, according to Mr. Tapia, told him verbally that it was a three-month extension, and he indicated that he signed it under pressure at the door of his shop. According to him, he signed a blank document. Of course, three months would have been 1/30/05. But this document in blue ink says 11/30/05, and there is a question at least in this Court's mind as to what was on this commission agreement when he signed it, and what wasn't on there when he signed it.

As already noted, defendant testified he was unhappy with plaintiff's performance, and asked for the unconditional withdrawal when he learned from his new broker that the listing agreement with plaintiff was still in effect. Defendant testified through an interpreter as he does not speak English well, and stated that he signed the extension in blank.*fn4 He further testified he would not have listed the property with the second broker if he knew he still owed plaintiff a commission.

The judge expressed his view that brokers, knowing of other listings for the same property, should communicate and found that plaintiff never asserted its claim of entitlement to the commission to the new broker. He then found:

No one knows why they [plaintiff] weren't at the closing, but they were fully aware that the closing took place. They were fully aware that a HUD-1 -- a HUD-1 was going to be prepared. They prepared the contract of sale. UNIcase prepared the contract of sale for this very transaction showing that UNIcase was, as the buyer's broker, was entitled to 2.5 percent of the commission minus $200, and nowhere at that time was there any effort by UNIcase to make Mr. Tapia know, Ms. Arrechea [seller's attorney] know, or Mr. Guzman [buyer's attorney] know that there was another $7,000 in brokerage commissions which was being claimed here.

I find that the contract of sale was at the very least a novation between Mr. Tapia and UNIcase. That this contract super[s]edes what I have found to be an invalid listing agreement in the first place, but I wanted full -- I want my analysis to be fully on the record. I don't want to just stop by saying this -- this consumer signed a document that was not fully -- fully filled out before he went back. Certainly you cannot have a circumstance where the customer signs a document and then Lillian goes back and starts changing provisions.*fn5

But even if that were not the case, I find that -- two things. One is that the agreement that was signed by UNIcase, which represented itself purely as the buyer's broker, as the buyer's broker, super[s]edes whatever existed by way of the listing agreement, with or without an unconditional withdrawal.

I find that the parties relied upon P-6, which was the contract. They closed on the basis of P-6 that clearly UNIcase if --if it was laying claim to a commission over and above what the contract of sale indicated was under an obligation to speak, and that their silence equitably estops them from later allowing these people to close, letting the buyer[']s and the seller's attorney to close, and then only at 5:30 that night sending a bill out saying, oh, by the way, you owe me another $7,000.

I find that the -- the position that UNIcase was asserting in this matter is --is absolutely unconscionable, and there is no way that this Court in -- in conformance with its concept of justice can say to Mr. Tapia under all of these circumstances you owe another $7,000 to UNIcase. UNIcase received $4,925 out of this transaction. Bella received $6,350, and based upon all the facts of this case, I'm going to rule in favor of Mr. Tapia, dismissing the complaint for additional commissions.

[Emphasis added.]

Plaintiff now asserts "the trial court erred in concluding that alternations to the listing agreement rendered it unenforceable against defendant" because the items in the blue ink before defendant signed it contained its "essential terms" and constituted a binding agreement irrespective of any later insertions. Hence, plaintiff asserts its entitlement to its full 6% commission as provided in the listing agreement which was preserved by the withdrawal. Plaintiff also claims the "trial court further erred in concluding that a novation relieves defendant of his obligation to pay plaintiff the commission due under the listing agreement."

We have reservations about several of the comments of the trial judge concerning the duties of a broker and the concept of novation.*fn6 In any event, this case is extraordinary because it turned out that plaintiff, as the buyer's broker, knew of the agreement, prepared the contract of sale and provided therein for its commission, albeit as buyer's agent, so that we agree with Judge LaConte that:

Fortunately, in this case it makes it easier because UNIcase was also the buyer's broker. They actually drafted the contract that was entered into. They list themselves as -- as being entitled to 2.5 percent of the purchase price, and I'm able to conclude without hesitation that this document super[s]edes that ever validity existed as to the listing agreement, of which I find there was none because it was modified afterwards. And concepts of equity and estoppel which preclude -- preclude UNIcase complaining more from Mr. Tapia than the $4,925 that he was paid.

Because the record sufficiently supports the trial judge's findings and conclusions on the ultimate issue in contest concerning the enforcement of the listing agreement, based on the totality of the facts concerning the transaction, we affirm the judgment. See Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 484 (1974).

Affirmed.

No costs.


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