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Island Realty v. Van Dyk Group

April 7, 2008

ISLAND REALTY, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
VAN DYK GROUP, INC., A CORPORATION OF THE STATE OF NEW JERSEY, AND JEFF GAMBLE, DEFENDANTS-APPELLANTS.



On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3289-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 19, 2007

Before Judges Lisa and Simonelli.

Defendants Van Dyk Group, Inc. and Jeff Gamble (collectively Van Dyk) appeal from the September 26, 2006 order vacating an arbitration award and denying their motion to confirm the award and for reasonable attorney's fees. We reverse and remand for entry of an order consistent with this opinion.

I.

The facts are straightforward. Plaintiff Island Realty and Van Dyk are members of the Ocean County Board of REALTORS(r) (the Board) and the National Association of REALTORS(r) (NAR). Greg Gaske contacted Van Dyk and Island Realty about purchasing a home in the Long Beach Island area.*fn1 On March 5, 2005, Van Dyk's agent, Janet Frank, showed Gaske property located at 140 Catherine Lane, Manahawkin (the Property), which was listed through the sellers' realtor, G. Anderson Agency (Anderson), at a price of $629,999. Gaske instructed Frank to make an offer of $550,000. Frank presented a verbal offer in that amount to Anderson on March 7, 2005, and a written offer on March 8, 2005.

After further negotiations, the sellers reduced the price to $615,000. However, Gaske would not offer more than $585,000. As a result, negotiations ended on March 10, 2005, and Frank made an appointment with Gaske for March 12, 2005, to show Gaske other properties.

Gaske did not meet with Frank on March 12, 2005. Instead, he met with Island Realty's agent, John Hubert, who took Gaske to see the Property. Hubert admitted that before showing Gaske the Property, Gaske said he had already seen it. Hubert was "taken aback," "a little bit hurt," and it was "a little bit disappointing for [him] to hear" that Gaske had contacted another realtor. However, instead of referring Gaske back to the other realtor, Hubert showed Gaske the Property and told Gaske it was up to Gaske as to how he wanted to proceed. Gaske asked Hubert what he thought the Property was worth, and Hubert responded, "at least $600,000." Gaske then made a cash offer in that amount, which the sellers rejected. Gaske then offered $615,000, which the sellers accepted. This was the same price Frank had negotiated.

Gaske entered into a contract of sale, which provided for payment of a two-percent commission to Island Realty and two percent to Anderson. On or about March 21, 2005, Van Dyk discovered that Gaske had signed the contract for $615,000, and Island Realty, not Van Dyk, was listed as Gaske's agent, entitling Island Realty to the two-percent commission. Van Dyk filed a complaint with the Board asserting entitlement to Island Realty's commission.

As members of the Board and NAR, Island Realty and Van Dyk agreed to resolve real estate related disputes through binding arbitration, utilizing the Board's Bylaws and the NAR's Code of Ethics and Standards of Practice and Arbitration Manual of the NAR (Code of Ethics). On July 15, 2005, Van Dyk and Island Realty executed a Response and Agreement to Arbitrate, consenting to arbitration through the Board in accordance with the Code of Ethics. The parties also agreed to "abide by the arbitration award and to comply with it promptly." The parties further agreed as follows:

In the event I do not comply with the arbitration award and it is necessary for any party to this arbitration to obtain judicial confirmation and enforcement of the arbitration award against me, I agree to pay the party obtaining such confirmation the costs and reasonable attorney's fees incurred in obtaining such confirmation and enforcement.

The Board appointed three disinterested arbitrators to conduct the arbitration and determine which realtor was the "procuring cause" of the sale, utilizing the procedures and provisions set forth in the Bylaws and Code of Ethics.

According to the Code of Ethics, the arbitrators' decision "as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation ...


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