December 18, 2008
PRIME PROPERTIES, INC., A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT,
ESTATE OF RAYMOND H. CURRY, PATRICIA JACOBS, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF RAYMOND H. CURRY, RONALD JACOBS, ALAN H. ETTENSON, ESQ., TAENZER, ETTENSON, STOCKTON & ABERANT, P.C., A NEW JERSEY PROFESSIONAL CORPORATION, AND ALLIANCE REALTY OF NEW JERSEY, LLC, D/B/A CENTURY 21 ALLIANCE, DEFENDANTS-RESPONDENTS, AND WILLIAM S. CAPPUCCIO, ESQ., MATTHEW POWERS, ADRIENNE POWERS, MICHELLE ARNOLD, AND DOLORES R. SHIELDS, DEFENDANTS.
On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3192-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 15, 2008
Before Judges Parker, Yannotti and LeWinn.
Plaintiff Prime Properties, Inc., appeals from an order entered on November 28, 2007 granting summary judgment in favor of all defendants dismissing the complaint with prejudice. We affirm.
Plaintiff is a real estate brokerage company. Alan Moore, a licensed real estate broker, is plaintiff's president.
Raymond Curry, decedent, whose estate is the principal defendant, owned property in Lindenwold, Camden County. His daughter, defendant Patricia Jacobs, is executrix of Curry's estate, and defendant Ronald Jacobs is Patricia's husband. Defendants Matthew and Adrienne Powers (the Powers) purchased the Lindenwold property from the Curry estate on June 30, 2005. Defendant Alan Ettenson was the attorney who represented the Powers in the purchase of the property, and defendant William Cappuccio represented the Curry estate in the sale.
Curry owned and operated a boarding kennel on the Lindenwold property. Plaintiff alleges that on November 2, 2004, Moore received a phone call from Ronald Jacobs indicating that Curry was interested in selling the business because he was in poor health. Moore met with Jacobs on the property and discussed finding a buyer for it. Plaintiff further alleges that on November 10, 2004, Moore forwarded a proposed brokerage agreement to Jacobs. Curry, however, required certain modifications to the agreement and, on November 24, 2004, Moore sent a modified agreement in accordance with Jacobs' request.
The agreement provided for a brokerage commission of seven percent "based on the total gross sales price of the combined business and property, at closing, whether pursuant to one or more separate contracts of sale," if plaintiff "brings a person(s) to your attention, or introduces [the] business and property to someone, or otherwise serves as the procuring cause to bring together a buyer and seller, on whatever final terms that you as seller, and they, as buyer, might contractually agree." There was no provision binding the seller's heirs or estate to the agreement. Curry signed and dated the agreement on November 29, 2004 and returned it to Moore. Curry died on January 15, 2005.
Thereafter, defendant Michelle Arnold, a real estate salesperson employed by defendant Century 21 Alliance (Century 21), advised Moore that she was representing the Powers with respect to their potential purchase of the property. Moore claimed that he was already in discussions with the Powers and would not agree to recognize Arnold or Century 21 as the procuring broker. Moore maintains that the Powers assured him that they did not authorize Century 21 or Arnold to broker an agreement for them. Defendants, on the other hand, contend that Moore never showed the property to the Powers or introduced them to Curry. The Powers acknowledged that they initially attempted to make an appointment with Moore to see the property but never set a date and ultimately told Moore in an e-mail that their "plans had changed." Century 21 received the entire commission at the June 30, 2005 closing.
Moore claims he was unaware that the Powers signed an exclusive agreement with Arnold and Century 21. Indeed, plaintiff claims that it was unaware that the Powers were negotiating to purchase the property until after the sales agreement was signed on February 15, 2005. At that point, on March 18, 2005, Moore sent letters to all parties and attorneys involved setting forth an equitable lien claim on the property. On July 7, 2005, after closing had occurred, Moore sent a commission statement, demanding the commission from the Powers' attorney. On July 14, he forwarded the same commission statement to the Curry estate's attorney. The Powers' attorney released the entire commission to Century 21. Plaintiff filed the complaint demanding the commission on November 14, 2005.
Defendants moved for summary judgment, arguing that any agency relationship ended when Curry died. After hearing arguments, the trial court agreed in essence with defendants' position and, in its written statement of reasons, concluded:
The threshold issue presented is whether the agency relationship survives the death of the principal. An agency can only survive the death of the principal, even after the agent receives notice thereof, if it is coupled with an interest. Smith v. Cynfax Corp., 261 N.J. Super. 378 ([Law] Div. 1992). This requires that the agent have some interest, such as a security interest, in the subject matter of the agency independent of the power conferred upon him by the principal. Sarokhan v. Fair Lawn Mem'l Hosp., Inc., 83 N.J. Super. 127, 136 (App. Div.), [certif. denied, 42 N.J. 501 (1964)]. An interest merely in "the proceeds which will arise from the exercise of the power" of the agency is not sufficient for this purpose. Ibid. (quoting 3 Am.Jur.2d Agency §62.) The test of an agency coupled with an interest is defined in 2 Williston on Contracts §280 (3d ed.) at pp. 301-302: "Does the agent have an interest or estate in the subject matter of the agency independent of the power conferred, or does the estate or interest accrue by or after the exercise of the power conferred? If the former, it is an agency coupled with an interest, or as has been suggested, a proprietary power; if the latter, it is not." Id. at 135. In the case at bar, the listing agreement created an interest only in the proceeds of the sale of the subject property. Curry died on January 15, .
At that time, the agency relationship created under the listing agreement terminated. The listing agreement between Curry and Plaintiff was not in effect at the time of sale due to Curry's death prior to that sale. Accordingly, Plaintiff is not entitled to a commission under this agreement.
In this appeal, plaintiff argues that the trial court erred in granting summary judgment because plaintiff introduced the Powers to the business and property before Curry died. We have carefully considered the record in light of plaintiff's argument and the applicable law and we are satisfied that the judgment of the trial court was based on findings of fact that are more than adequately supported by the undisputed evidence. R. 2:11-3(e)(1)(A). Plaintiff's argument lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Nevertheless, we add the following comments.
Under well-established principles of agency law, "the death of the principal terminates the authority of the agent without notice to him." Restatement (Second) of Agency § 120 (1958). New Jersey has applied this common-law rule to real estate listing agreements:
"If either the broker or the principal dies, or is adjudged insane or goes through bankruptcy the listing is automatically terminated." Frank W. Kovats, Principles and Practices of New Jersey Real Estate (17th ed. 2003). "A listing agreement, which creates an agency relationship, may be terminated for any of the following reasons: . . . [b]ankruptcy, death or insanity of either party." Edith Lank & Joan M. Sobek, Essentials of New Jersey Real Estate (7th ed. 2004). "It is an established rule of the common law that the death of the principal puts an end to the agency when the authority is not coupled with an interest, and no act of agency subsequent thereto is binding on the estate of the principal." Durbrow v. Eppens, 65 N.J.L. 10, 16 (Sup. Ct. 1900). In order for the agency to survive, the coupled interest on the part of the agent must be directly in the subject matter of the agency, and not just an interest in the proceeds which would have arisen if the agency power had been exercised. Sarokhan v. Fair Lawn Mem'l Hosp., Inc., 83 N.J. Super. 127, 136 (App. Div.), certif. denied, 42 N.J. 501 (1964); Smith v. Cynfax Corp., 261 N.J. Super. 378, 383-84 (Law Div. 1992).
We affirm substantially for the well-stated reasons in Judge Michael Paul Wright's written statement appended to the order entered on November 28, 2007.
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