On appeal from Superior Court of New Jersey, Chancery Division, Atlantic County, Docket No. C-54-07 and F-11428-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 4, 2009
Before Judges Stern, Lyons and Waugh.
Defendants, Dr. Ira Trocki and Jack Trocki Development Co., appeal from portions of an order dated December 6, 2007, and from an order dated January 18, 2008. The central issue is whether a broker in a commercial real estate transaction was properly awarded its full commission under the terms of a written Commission Fee agreement and the facts presented.
The judgment at issue was rendered after a trial of two consolidated cases involving a myriad of claims among four main entities. The first case was filed in General Equity by the broker, plaintiff, Vanguard Property Group, Inc. (the Broker), against the owner of the property, defendants, Dr. Ira Trocki and Jack Trocki Development Co. (Trocki); Joseph and Chastity Tucker; Tucker Land Co., Inc.; Tuckers Steak and Seafood House, Inc. (Tucker); and 800 Bay Avenue, LLC, A.R. Fanucci Real Estate, Inc. and Anthony R. Fanucci (Fanucci), seeking damages and injunctive relief arising out of a commercial real estate brokerage agreement. The second case was a foreclosure action commenced by Trocki and later pursued by Fanucci. The following factual and procedural history is relevant to our consideration of the issues advanced on appeal.
In 2004, Trocki was the owner of a bay-front restaurant and marina in Somers Point. Trocki became interested in selling the property, and on January 28, 2004, signed a listing agreement with the Broker. The listing agreement contemplated sale of the property for $4,500,000 or a lease of the restaurant portion of the property for approximately $80,000 to $100,000 per year, and a commission of five percent to be paid at time of settlement. Under the listing agreement, Trocki was not bound to sell the property unless it was "completely satisfied with the terms and conditions that are submitted to" it.
On or before May 4, 2004, Tucker signed an agreement to purchase the property. The purchase price was $3,500,000; $3,375,000 of which was to be paid pursuant to a five-year note and mortgage to be held by Trocki. The agreement required Tucker to lease the marina portion of the property to Trocki for ninety-nine years for one dollar. Tucker was granted a five-year option to purchase or extinguish the lease for $1,000,000.
On the eve of closing, Trocki requested that the Broker reduce its commission from five percent to three percent, stating this was its regular practice. The Broker agreed to reduce its commission. On May 7, 2004, the parties signed a Commission Fee agreement reducing the commission as agreed and specifying:
Vanguard Property Group, Inc. shall be paid by Seller a three (3%) percent commission of the $3,500,000.00 sale of the Restaurant, Liquor License, FFE and Real Estate for a total of $105,000.00 based upon the following structure: $25,000.00 at the initial Closing $1,000.00 per month due on the 1st of each month commencing June 1, 2004 until the PMM is paid off, (up to 60 months) $_______ the balance will be paid immediately upon PMM being paid off by Buyer.
At anytime, for whatever reason the Buyer defaults and does not fulfill his obligations, Vanguard Property Group, Inc. is to be paid a 3% Commission on the sums the Seller has received. In the event the monies received by Vanguard are greater that [sic] a value equal to 3%, than [sic] Vanguard shall reimburse Seller the amount greater than 3%.
Seller acknowledges that Vanguard Property Group, Inc. shall be paid by Seller three (3%) percent at the closing of the Sale of the Marina for $1,000,000.00 for a Commission Fee of $30,000.00.
Tucker purchased the property and operated it until the summer of 2006, when it signed a listing agreement with the Broker to sell the property. The decision to sell was apparently due in part to Tucker's difficulties making mortgage payments to Trocki. Tucker's last payment on the mortgage to Trocki was in September 2006. In February 2007, Tucker obtained a concession from Trocki by which Trocki would accept ...