November 20, 2007
JERSEY'S LEGENDARY STEAKHOUSE, INC., ROBYN HENGBER, AND STUART HENGBER, PLAINTIFFS-APPELLANTS,
CHRIS KONTOS, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, General Equity, Middlesex County, Docket No. C-224-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 29, 2007
Before Judges Gilroy and Baxter.
Plaintiffs, Jersey's Legendary Steakhouse, Inc. (JLS), Robyn Hengber and Stuart Hengber, appeal from the January 22, 2007, order of the Chancery Division, General Equity Part, that dismissed their complaint against defendant Chris Kontos for failure to state a claim upon which relief can be granted. R. 4:6-2(e). Plaintiffs also appeal from the order of February 21, 2007, that denied their motion for reconsideration. We affirm.
Robyn Hengber is the owner and president of JLS, the corporate entity that previously owned and operated Poor Billy's Restaurant at 40 Oakwood Avenue, Woodbridge. The property on which the restaurant is located was previously owned by 40 Oakwood, LLC, also owned by Robyn Hengber. In July 2005, Robyn and defendant engaged in preliminary discussions concerning the sale of the restaurant and the real property to defendant. On September 24, 2005, Stuart and defendant executed an agreement whereby defendant agreed to pay Stuart $250,000 as a finder's fee for his efforts in bringing the buyer and sellers together.
On September 29, 2005, 40 Oakwood, LLC, entered into a written contract for the sale of the real property to defendant for $2,500,000. On the same date, JLS entered into a written contract for the sale of business assets to defendant for $350,000. The contract for the sale of the business assets was subsequently amended, reducing the price by $150,000, provided that closing of title occurred on or before November 30, 2005. Each contract contained a provision whereby each party represented to the other "that no real estate commission, brokerage fee or any other type of commission is due anyone on the transaction." Each agreement also contained a provision providing that the "[a]greement constitutes the entire understanding of the parties. There are no other agreements, expressed or implied. Any oral representations, undertakings or agreements are expressly merged herein." Notwithstanding defendant's failure to pay any portion of the finder's fee to Stuart, the two corporate sellers and defendant closed title to the real property and business assets with defendant paying $2,700,000.
On or about September 20, 2006, ten months post-closing of title, plaintiffs filed their complaint against defendant for failing to pay the $250,000 finder's fee. Plaintiffs alleged in the complaint that prior to executing the two contracts of sale, Robyn and defendant verbally agreed that defendant would "pay $250,000 of the purchase price for the business known as Poor Billy's in cash." Plaintiffs assert that their verbal agreement led to Robyn and Stuart preparing the finder's fee agreement. Plaintiffs further alleged in the complaint that although they mistakenly believed that the finder's fee agreement was enforceable, defendant knew that it was not.
The complaint contained four counts. The first count sounds in breach of contract, and plaintiffs demanded judgment in the amount of $250,000 together with injunctive relief, directing defendant to vacate the premises and assign an existing lease back to plaintiffs. Count Two (incorrectly designated as Count One) sounds in fraud in the inducement. Plaintiffs again demanded damages, together with injunctive relief against the Township of Woodbridge (not a named party), prohibiting it from authorizing the transfer of the liquor license from JLS to defendant. Count Three sounds in reformation, whereby plaintiffs demanded the same remedies as in Count Two. Under Count Four, plaintiffs alleged an implied contract and demanded judgment in the amount of $250,000.
Prior to filing his answer, defendant moved to dismiss the complaint for failure to state a claim upon which relief can be granted, asserting that plaintiffs were bound by the terms of the formal, written contracts of sale. On January 22, 2007, Judge Amy Piro Chambers rendered an oral decision granting defendant's motion, determining that plaintiffs were barred from introducing parol evidence concerning the finder's fee agreement, because the evidence would have altered or varied the terms of the fully integrated agreements of sale that had been entered into by the parties after the finder's fee agreement was executed by Stuart and defendant. A confirming order was entered the same day. On February 13, 2007, plaintiffs filed a motion for reconsideration. On March 2, 2007, the trial judge rendered an oral decision and entered a confirming order denying the motion.
On appeal plaintiffs argue:
WHETHER THE COURT ERRED IN HOLDING THAT THE FRAUD EXCEPTION TO THE [PAROL] EVIDENCE RULE DID NOT APPLY IN THIS MATTER AND THEREFORE ANY EVIDENCE OF FRAUD IN THE INDUCEMENT OR MISTAKE, INCLUDING THE WRITTEN FINDER[']S FEE AGREEMENT, WAS INADMISSIBLE AS EVIDENCE TO PROVE FRAUD OR MISTAKE AND THEREFORE ERRED IN DISMISSING PLAINTIFF[S'] COMPLAINT WITH PREJUDICE FOR FAILURE TO STATE A CLAIM.
We have considered the argument presented in light of the record, the applicable law, and the briefs. We are satisfied that the argument is without sufficient merit to warrant discussion in a written opinion. We affirm substantially for the reasons expressed by Judge Piro Chambers in her thoughtful, oral decisions of January 22, 2007, and March 2, 2007. R. 2:11-3(e)(1)(A) and (E).
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