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Leora Dubrovsky Realty Group, LLC v. Ron Tedesco

April 17, 2012

LEORA DUBROVSKY REALTY GROUP, LLC, PLAINTIFF/THIRD-PARTY DEFENDANT-APPELLANT,
v.
RON TEDESCO, A/K/A RONALD TEDESCO, AND RANDS, LLC, DEFENDANTS/THIRD-PARTY PLAINTIFFS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-5313-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 26, 2012 --

Before Judges A. A. Rodriguez, Sabatino, and Ashrafi.

This case involves a real estate broker's claims for commissions. After a bench trial, the judge dismissed the complaint of plaintiff, Leora Dubrovsky Realty Group, LLC, and entered judgment in favor of defendants Ron Tedesco ("Tedesco") and RandS, LLC ("the LLC"). We affirm.

I.

The pertinent facts are as follows. Leora Dubrovsky and her husband Richard Dubrovsky operate plaintiff, a real estate agency in Manalapan. Mr. Dubrovsky is the company's broker of record, and Mrs. Dubrovsky is the company's owner. Tedesco is a businessman. He and another businessman, Steve Young,*fn1 founded the LLC at some point before the events that gave rise to this litigation. According to Tedesco's testimony, Young eventually withdrew from the LLC, and Tedesco became its sole operating officer.

The parties' dispute concerns a residential property in Manalapan, which was owned by the LLC and which defendants wished to sell. On April 2, 2008, plaintiff entered into a listing agreement to serve as the seller's agent for the property. The agreement was signed by Tedesco and by Mrs. Dubrovsky. Paragraph 1 of the listing agreement specified that it would expire on October 31, 2008. Paragraphs 4, 5, and 6 of the agreement contain the following additional relevant terms:

[Paragraph 4]: If, before the expiration date [October 31, 2008] the real estate and/or business is sold or exchanged, regardless of who effects such sale or exchange (including the owner), the [o]wner shall pay a commission of 6% of the sale price, due and payable at the time the sale or exchange takes place. In the event of an exchange, the listing price shall be considered the sale price. [Paragraph 5]: If, before the expiration date [October 31, 2008] the real estate and/or business is leased/rented, regardless of who effects such lease/rental (including the owner), the owner agrees to pay a commission of -*fn2 on each installment of rent or one month[']s rent for each year of the lease/rental. If the tenancy continues beyond the term of the original lease/rental the owner agrees to pay a commission on all such renewals or extensions as set forth above. If, during the terms of tenancy, the tenant purchases the real estate and/or business, a commission of - of the sale price shall be paid by the owner. [Paragraph 6]: If the real estate and/or business is sold, leased or exchanged within a period of 180 days from the expiration of this listing or any extension thereof to a buyer introduced to the property during the term of this listing agreement, the [o]wner shall pay to the listing broker the commission set forth above. However, the [o]wner shall not be obligated to pay such commission if a valid listing agreement is entered into during the term of this protection period with another licensed real estate broker, and the sale, lease, or exchange of the property is made during the term of this protection period. [Emphasis added.]

About a month after the listing period commenced, Tedesco and a potential buyer, Laura Mercandetti, entered into a contract on May 3, 2008, in which Mercandetti agreed to purchase the property for $715,000. Plaintiff is designated in the contract as the "listing broker." The buyer and seller agreed that the closing was to occur on or before June 13, 2008.

As it turned out, defendants were unable to obtain a certificate of occupancy ("CO") for the property before the June 13, 2008 closing deadline. Apparently, the LLC had to reapply to the municipality for a CO, as well as certain variances and permits, because the developer's agreement for the property had expired. Those municipal approvals were contingent upon, among other things, defendants addressing certain environmental concerns.

More specifically, on June 5, 2008 -- while the Mercandetti purchase was still pending -- the municipality's zoning board of adjustment granted defendants' requests, on the condition that defendants obtain a "no further action" letter from the New Jersey Department of Environmental Protection ("NJDEP") relating to soil remediation. Although a local construction code official testified at trial that he could have issued a CO for the premises in the absence of a "no further action" letter from NJDEP if defendants had executed a "hold harmless" agreement, the official conceded that no such agreement had been drafted at that time.

Tedesco testified that on June 18, 2008 he signed a contract with Brinkerhoff Environmental Services for the completion of soil testing in order to obtain the required NJDEP "no further action" letter. Tedesco further testified that he received a notice of deficiency from the NJDEP on September 2, 2008, stating that the soil on one of the lots was tainted, apparently due to circumstances beyond defendants' control. In light of these developments, on September 25, 2008, the municipal planning board issued a resolution waiving the requirement that a "no further action" letter be obtained as a condition of issuing a CO for the property. Defendants ultimately obtained the CO on October 31, 2008, which also happened to be the last day of the listing agreement.

Because no CO had been issued for the property before the June 13, 2008 deadline in the purchase contract, counsel for Mercandetti and defendants mutually agreed on June 16, 2008 to terminate the contract. At that point, there were still about four-and-a-half months left on the listing agreement. The hoped-for sale to ...


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