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Howard Wein, William Farkas, and Jeffery Realty, Inc., A Corporation v. Lacey Town Square

June 6, 2012

HOWARD WEIN, WILLIAM FARKAS, AND JEFFERY REALTY, INC., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFFS-APPELLANTS,
v.
LACEY TOWN SQUARE, L.L.C., A LIMITED LIABILITY COMPANY OF THE STATE OF NEW JERSEY, DEFENDANT, AND LAUREL BOULEVARD ASSOCIATES, L.L.C., DEFENDANTS-RESPONDENTS, AND BRIAN TREMATORE, DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT,
v.
JACK MORRIS, INDIVIDUALLY AND AS OWNER OF EDGEWOOD PROPERTIES, INC., THIRD-PARTY DEFENDANTS.



On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-2504-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 24, 2012

Before Judges Messano, Yannotti and Espinosa.

Plaintiffs Howard Wein (Wein), William Farkas (Farkas) and Jeffrey Realty, Inc. (JR) appeal from orders entered by the Law Division granting summary judgment in favor of defendants Brian Trematore (Trematore) and Laurel Boulevard Associates, L.L.C. (LBA). For the reasons that follow, we affirm in part, reverse in part, and remand for further proceedings.

I.

Trematore was the owner of a piece of commercial real property in Lacey Township, New Jersey, upon which he planned to develop a shopping center. On May 30, 2000, Trematore entered into an exclusive listing agreement with JR to find tenants for the proposed development. The listing agreement required Trematore to pay JR "a commission equal [to] five . . . percent of the gross aggregate lease rental value (less [real estate] [t]axes, [i]nsurance, and [common area maintenance charges]) for the initial term of [any] lease, and any and all options and renewals[,] if during the term of the agreement[:] a. All or any portion of the [property] [wa]s leased."

The listing agreement included the following provisions:

3. DURATION: This agreement will become effective upon acceptance by [Trematore] and will continue in full force and effect for a period of six (6) months from the date provided herein. After the initial six (6) month term, this agreement will automatically renew and continue on a month to month basis indefinitely thereafter, unless and until either party terminates same by written notice to the other not less than thirty (30) days prior to the intended termination date.

7. UPON TERMINATION: In the event this agreement is terminated by either party consistent with the requirement of paragraph [three] hereunder, the terms of this [listing] agreement shall continue to apply for one year from the effective date of termination to any and all prospective tenants/purchasers which [JR] introduced to the property during the terms of the agreement and/or any person or entity with whom the owner negotiated during the agreement.

The listing agreement also stated that any commissions due must be paid "in three . . . equal installments, commencing upon receipt of [the] first month[']s rent," with the remaining payments due six and twelve months thereafter.

On June 12, 2000, Trematore incorporated Lacey Town Square, L.L.C. (LTS), and on July 11, 2001, that entity entered into a lease agreement with CVS Laurel River, L.L.C. (CVS Laurel River). CVS Laurel River agreed to lease a building that LTS intended to construct on the property.

The initial term of the lease was for twenty-two years, which would commence upon delivery of the premises. The annual fixed rent for the initial term was $179,520. The lease indicates that the business address for CVS Laurel River was One CVS Drive, Woonsocket, Rhode Island. Moreover, CVS Caremark Corporation, Inc. (CVS Caremark) is identified as guarantor under the lease. Peter F. Pecoraio signed the lease on behalf of CVS Laurel River.

In addition, Section 40 of Part II of the lease agreement stated that the parties represented that they had no dealings or conversations with any real estate broker in connection with the negotiation and execution of this Lease, other than the Broker(s) named in Section 23 of Part I. Landlord and Tenant each agree to defend, indemnify and hold harmless the other against all liabilities arising from any claim of any other real estate brokers, including cost of counsel fees, resulting from their respective acts. Landlord warrants and agrees that it shall be solely responsible for any and all brokerage commissions owing to said Broker(s), as a result of the negotiation and execution of this lease.

Wein of JR was identified as the broker in Section 23 of Part I of the lease.

The lease additionally provided that CVS Laurel River could terminate the agreement if the owner did not deliver the premises by April 1, 2003. LTS did not deliver the premises by that date. On April 29, 2004, CVS Laurel River agreed to extend the delivery date to November 1, 2004. LTS did not deliver the premises by that date, but CVS Laurel River did not exercise its right to terminate.

On December 22, 2004, LTS entered into a joint venture agreement with Edgewood Properties, Inc. (Edgewood) "for the purpose of owning, developing, improving, selling, leasing and managing the [p]roperty as a mixed use development in accordance with applicable zoning and land use regulations . . . ." The joint venture agreement stated that Trematore owned the property and acknowledged that portions of the property had been leased to certain commercial tenants. Trematore signed the agreement as managing member of LTS, and Jack Morris (Morris) signed the agreement as President of Edgewood.

Among other things, the joint venture agreement provided that Edgewood would "have a seventy-five percent . . . membership interest in the joint venture entity, and Trematore [would] have a twenty-five percent . . . membership interest." The joint venture agreement further provided that, upon its execution, Trematore would prepare and record a deed transferring ownership of the property to the joint venture entity.

The joint venture agreement additionally provided that Edgewood would pay Trematore $4,425,000. in consideration for "entering . . . and becoming a member of the joint venture[.]" About $1,000,000. of that amount would be paid to Trematore "as partial reimbursement for [the] capital contributions [he] made in connection with the acquisition and development of the [p]roperty." Edgewood agreed to pay Trematore the balance of the consideration "upon issuance of a [c]ertificate of [o]ccupancy . . . for the CVS Pharmacy to be constructed" on the premises.

In addition, Section 8(b) of the joint venture agreement stated that Edgewood would "be responsible for overseeing the development of the [p]roperty . . . ." Moreover, Section 8(b) stated in part that, "[t]he joint venture shall be responsible to pay the costs and expenses associated with trailers, wages for supervisors, realtor's commissions, and other costs of on site development and construction of the [p]roperty." (Emphasis added).

By letter dated December 27, 2004, LTS advised Farkas that it was terminating the listing agreement. The joint venture entity, Laurel Boulevard Associates (LBA), was incorporated on January 3, 2005. Although the record is unclear as to whether LTS had any interest in LBA, on June 29, 2005, Trematore and LTS assigned their twenty-five percent membership interest in the joint venture to an entity called JSM at Laurel Blvd., L.L.C. (JSM).

On May 11, 2007, LBA signed a declaration stating that the lease between LTS and CVS Laurel River was terminated and a new lease for the space had been executed by LBA and New Jersey CVS Pharmacy, L.L.C. (NJCVS). The declaration stated that NJCVS was the "successor by merger" to CVS Laurel River.

The lease between LBA and NJCVS is dated June 26, 2007. Peter F. Pecoraio signed the lease for NJCVS. NJCVS is identified in the lease as the tenant, with a business address at One CVS Drive, Woonsocket, Rhode Island. CVS Caremark is identified as the guarantor. The initial term of the lease is twenty-five years, with an option to renew for five ...


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