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Stephen N. Frankel Real Estate, Inc v. John G. Merrett

March 25, 2011

STEPHEN N. FRANKEL REAL ESTATE, INC., PLAINTIFF,
v.
JOHN G. MERRETT, DEFENDANT,
AND C-BREEZE, LLC, CHARLES J. KUSKI, MARK E. KUSKI, MAHER SEDRA,
SOHAIR SEDRA, DAVID J. KINDER, ALEJANDRO MELLI AND ROSANA MELLI, DEFENDANTS-RESPONDENTS,
AND EAST BENNETT HOLDING CO., LLC, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-44-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 26, 2010

Before Judges Graves, Messano and Waugh.

The Law Division granted summary judgment to defendants, C-Breeze LLC (C-Breeze), Charles J. and Mark E. Kuski (Kuski), Maher and Sohair Sedra (Sedra), David J. Kinder, and Alejandro and Rosana Melli (Melli) (collectively, the sellers), dismissing the cross-claims of defendant East Bennett Holding Co., L.L.C. (East Bennett). Thereafter, plaintiff, Stephen N. Frankel Real Estate, Inc. and East Bennett settled their claims. East Bennett now appeals from the grants of summary judgment to the sellers. We have considered the arguments raised in light of the record and applicable legal standards. We affirm.

I.

East Bennett intended to build a multi-story, residential condominium in Wildwood on a series of lots owned by the sellers. Defendant John G. Merrett was East Bennett's managing member.*fn1 Merrett signed a commission agreement with plaintiff on April 27, 2005, that listed various parcels of land and committed "the [s]elling [e]ntity" to pay plaintiff "5% of the [g]ross amount of sale" "if the Wildwood project . . . [wa]s sold" by plaintiff. A second similar agreement was signed on May 9.

On July 14, plaintiff and East Bennett entered into a third commission agreement whereby East Bennett agreed to pay plaintiff $25,000 upon execution of real estate contracts with the sellers, and an additional $75,000 when certain approvals were issued by the City of Wildwood. The sellers did not enter into any commission agreements with plaintiff.

In July, August and September 2005, East Bennett executed contracts of sale with the sellers for their respective properties. Apparently, the parties were prepared to close in February 2006. However, on February 10, plaintiff commenced a chancery action alleging it was entitled to a commission from East Bennett apparently based upon its introduction of an investor, Eli Weinstein, to the project. Plaintiff also alleged that Merrett had misrepresented the amount of investment that Weinstein had made to the project. As a result, plaintiff claimed it was entitled to a commission based upon the April 2005 agreement, i.e., an amount that was greater than the $100,000 contained in the July 2005 agreement.

Although plaintiff made no specific allegations against the sellers, they were named as defendants in the suit, and plaintiff requested that an equitable lien be placed upon the proceeds of the sales of their properties. On February 28, 2006, plaintiff filed a lis pendens against the sellers' properties.

On May 12, 2006, a case management conference was held before the chancery judge who entered an order setting a time of the essence closing date of May 31.*fn2 The order further provided that "counsel for plaintiff and . . . East Bennett . . . have agreed that at the . . . closing . . . an escrow shall be established with funds to be provided by East Bennett, and that the lis pendens shall then be discharged on that basis." The order further provided for the immediate release of "[a]ny . . . deposits which have not yet been released . . . to sellers." On the record, the judge told plaintiff's and East Bennett's counsel the following:

[T]he worst thing that happens is that [counsel for plaintiff] and [counsel for East Bennett], if they can't agree, will have to ask me to establish an amount that goes into escrow, and the dispute would be a fairly limited one . . . that I could deal with fairly easily.

On May 25, 2006, based upon financial information East Bennett supplied plaintiff regarding the amount of Weinstein's investment, plaintiff's attorney sent a letter to East Bennett's counsel demanding a commission of $425,000. The letter stated in part:

In our conference call with [the judge] I indicated that we have no desire to stand in the way of a closing. We all agreed that if we could not agree on a commission then we would attempt to agree on an escrow. If we could not agree on an escrow then we agreed to submit to [the judge] for his decision the amount of the escrow. I am prepared to ...


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