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FGH Realty, LLC v. Centex Homes

November 20, 2008


On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-3985-06.

Per curiam.


Argued August 26, 2008

Before Judges Messano and Chambers.

Plaintiff, FGH Realty, LLC, d/b/a/ Remax Commercial Real Estate appeals from two orders entered by the motion judge on August 7, 2007. The first denied plaintiff's motion for summary judgment against defendant, Centex Homes LLC, a Delaware Limited Liability Company; the second granted defendant summary judgment and dismissed plaintiff's complaint. Since both applications were brought before any discovery took place, we rely upon the allegations contained in the respective pleadings, and the supplementary certifications that were filed in support of the motions.


Plaintiff filed its complaint on November 14, 2006 alleging it was a licensed real estate broker that had entered into a commission agreement (the commission agreement) with NYA Associates LLC (NYA), the owner of certain real estate located at 1301 New York Avenue in Trenton. Pursuant to the commission agreement dated October 11, 2004, plaintiff was to earn a real estate commission "in the event of the consummation of the . . . sale" from NYA to defendant "based on a portion of the sales price . . . $2,905,000, and at a commission rate of six and one-half [] percent," for a total of $188,825, though the commission agreement did not identify the property to be sold. It was executed by plaintiff's representative, Richard B. Falkan, and NYA's representatives, Steven Grau and Larry Gerber, all of whom represented they had the actual authority to enter into the contract.*fn1

On October 12, 2004, defendant executed an agreement (the purchase agreement) with NYA and 650 Strawberry Associates LLC (Strawberry), to purchase Block 221B, Lot 1014 in Trenton, owned by NYA, and Block 221 Lot 1015, a smaller, apparently contiguous lot for which Strawberry was the contract purchaser from a third-party. The purchase price for the properties was dependent upon the number of lots defendant could ultimately develop, but was to be not less that $2,800,000, or $2,625,000 if the Strawberry piece was not acquired. In its complaint, plaintiff alleged that based upon price adjustments, the total purchase price was ultimately $2,880,000, thus, its commission was $187,500.

We quote at length two relevant portions of the purchase agreement. Paragraph 13, entitled "Broker," provided

The parties certify to each other that [plaintiff] brought about this Agreement and that the real estate commission shall be payable to [plaintiff] entirely by the Seller if closing of title occurs pursuant to a separate agreement between Seller and [plaintiff]. Seller does hereby agree to indemnify and hold [defendant] harmless from and against any and all claims for commissions . . . brought by [plaintiff] . . . . The provisions of this Paragraph 13 shall survive the closing and the delivery of the deed to the Premises . . . .

Paragraph 14, entitled "Buyer's Default," provided,

If [defendant] shall default in the performance of this Agreement, then Seller shall be entitled to retain the Deposit as liquidated damages and Seller's sole and exclusive remedy, it being understood that Seller's actual damages would be difficult, if not impossible to determine in the event of [defendant's] default, and Seller hereby waives its right to seek monetary damages or specific performance, whereupon this Agreement shall be null and void and of no further effect and there shall be no further liability between the parties with respect hereto . . . .

The purchase agreement was signed by defendant's senior vice-president, Robert C. Fecso, and Grau and Garber on behalf of NYA and Strawberry.

In its complaint, plaintiff alleged that all conditions under the purchase agreement were met, but that defendant refused to close the transaction. Alleging "breach of implied contract," "tortious interference with contract rights," and "tortious interference with economic expectation," plaintiff sued defendant. On January 26, 2007, defendant filed its answer and third-party complaint against NYA and Strawberry. While denying any obligation for plaintiff's commission payment, defendant claimed that NYA and Strawberry were obligated to indemnify and hold it harmless if any commission was due to plaintiff, and further alleged that on April 15, 2005, NYA had conveyed its portion of the property to S&G Operating, LLC (S&G) for $1,750,000, thus "defeat[ing] any entitlement that plaintiff may have had to a commission under the [c]ommission [a]greement."

On April 13, 2007, before any discovery occurred, plaintiff moved for summary judgment relying upon a certification filed by Falkin. Along with the commission agreement and the purchase agreement, Falkin's certification included the March 8, 2005, agreement in which NYA assigned its rights under the purchase agreement to S&G which specifically recognized plaintiff's entitlement to a sales commission of $186,000 "as a result of the sale" of the property to defendant.*fn2 Although defendant was not a party to the assignment agreement, the document reflected S&G's consent to NYA's grant of an extension of time for defendant to "file for governmental approvals until April 15, 2005."

Falkin's certification alleged that "all approvals were obtained . . . and all conditions precedent" in the purchase agreement "were satisfied." He claimed that "[w]hen [defendant] failed to agree to a closing date, S&G sent [defendant] a 'Time of the Essence' letter setting a closing date." Falkin alleged that "[a]pparently for business reasons . . . [defendant] made a business decision to refrain from going forward with the purchase." He noted that defendant failed to close on the ...

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