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Deforest Investment Co., LLC v. Cushman & Wakefield of New Jersey

January 12, 2012

DEFOREST INVESTMENT CO., LLC, PLAINTIFF-APPELLANT,
v.
CUSHMAN & WAKEFIELD OF NEW JERSEY, INC., DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-722-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 16, 2011

Before Judges Fuentes, Ashrafi and Nugent.

This dispute involves the timing of payment of a real estate commission owed by the seller, plaintiff DeForest Investment Co., LLC (DeForest), to its commercial real estate broker, defendant Cushman & Wakefield of New Jersey, Inc., (Cushman). DeForest appeals from three Law Division orders.

The first and second orders, entered on March 26, 2010, denied DeForest's summary judgment motion for a declaration that it was obligated only to pay the commission in installments, and granted Cushman's summary judgment motion on its counterclaim seeking payment of its commission in a lump sum. The third order, entered on May 24, 2010, awarded Cushman contractual attorneys' fees and costs. We affirm.

I.

In November 2007, DeForest and Cushman entered into an "Exclusive Sales Agency Contract" (the Agency Contract) in which DeForest appointed Cushman its sole agent and granted to Cushman the exclusive right to sell property DeForest owned in East Hanover, New Jersey (the Property). Before signing the Agency Contract, the parties exchanged drafts. The parties agreed that Cushman's commission would be three and one-half percent of the total sales price, but did not agree immediately about how the sales price would be computed or when the commission would be paid. Cushman submitted to DeForest a proposal which included the following "Time of Payment" and "Computation of Sales Price" clauses:

TIME OF PAYMENT

The commission shall be earned, due and payable in full at the time of the closing or transfer of title to the property and not otherwise except, in the case of an installment purchase contract, in which case, the commission shall be earned, due and payable in full at the time of the execution and delivery of the installment purchase contract by and between the seller and the purchaser. []COMPUTATION OF SALES PRICE

The commission shall be computed in accordance with the above rates based upon the total sales price, which shall include any mortgages, loans or other obligations of the seller which may be assumed by the purchaser or which the purchaser takes title "subject to", any purchase money loans or mortgages taken back by the seller, the sales price of any fixtures or other personal property sold by separate agreement between the seller and purchaser as part of the overall sale of the real property, and the current market value of any other real or personal property transferred from the purchaser to the seller as part of the sale. DeForest responded with a counter-proposal that included the following changes:

TIME OF PAYMENT

The commission shall be earned, due and payable in full at the time DeForest . . . receives payment from the Seller[*fn1 ] for the Property. at the time of the closing or transfer of title to the property and not otherwise, except, In the case of an installment purchase contract, [Cushman] will earn a portion of its commission with each payment received by the Seller. For example, in the event of an installment sale which calls for ten equal payments, [Cushman] will earn one tenth[] of its total commission simultaneous with DeForest['s] . . . receipt of each equal payment. in which case, the commission shall be earned, due and payable in full at the time of the execution and delivery of the installment purchase contract by and between the seller and the purchaser.

DeForest's counter-proposal also included a change in the manner in which the sales price would be computed. DeForest proposed, among other things, to decrease the total sales price by the "cost . . . of any insurance policy or environmental remediation that is a condition to, or a necessary prerequisite to the sale of the Property"; and to delete from Cushman's "Computation of Sales Price" clause the inclusion of "any mortgages, loans or other obligations of the seller which may be assumed by the purchaser or which the purchaser takes title 'subject to', [and] any purchase money loans or mortgages taken back by the seller."

The relevant clauses in the Agency Contract executed by the ...


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