On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-599-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 5, 2011 -
Before Judges Fuentes, Graves and Koblitz.
This case concerns a dispute between two commercial real estate brokerage firms over a commission payment due under a commercial lease. Plaintiffs AJR Commercial Realty, Inc. (AJR), Arthur J. Reinitz and James A. Skoglund brought suit against defendants Bussel Realty Corp., Steve Bussel, and RAR2-11 Port Jersey NJ QRS, Inc. (RREEF) claiming they were entitled to $424,785 in commission for a commercial lease entered into between RREEF and Continental Terminals (Continental). Plaintiffs appeal from the order of the Law Division granting defendants' motion for summary judgment and denying plaintiffs' cross-motion for summary judgment. We affirm.
On January 11, 2005, James Skoglund, a licensed real estate agent, entered into an employment contract with New Jersey Equity Corporation (NJEC), a real estate brokerage firm. Under paragraph 5 of the employment contract, the initial term of employment was for one year. However, unless notice of cancellation was given, the contract was "deemed to be automatically renewed from year to year[.]" In the event of termination, paragraph 5 further provided:
Upon termination, the right of the Salesperson and Broker to any commission which accrued prior to said notice shall not be divested by termination of this Contract. Salesperson shall, upon termination of this Agreement, furnish Broker with a list of all prospects, leads, and probable transactions developed by Salesperson or in which said Salesperson has been engaged. The Salesperson shall not be compensated for any transaction completed following the termination of this Agreement, unless agreed to, in writing, by the Broker. [(Emphasis added).]
Arthur Reinitz, a licensed real estate agent and broker, signed a nearly identical employment contract with NJEC on July 11, 2007. The only relevant difference between the two contracts was that Reinitz agreed to be bound by the restrictive covenant found in paragraph 6:
It is understood and agreed that if for any reason whatsoever there is a termination of this Agreement, the Salesperson co[v]enants and agrees with the Broker that for a period of twelve (12) months after the termination, said Salesperson will not engage in the industrial, commercial and or investment real estate business in the Counties of Middlesex and Somerset, and in any other County of the State in which said Salesperson has operated or conducted activities on behalf of NEW JERSEY EQUITY CORP., during the twelve (12) month period prior to termination. In the event of any violation of this restrictive covenant, the Salesperson does herewith agree that the consequential damages as a result thereof will consist of a waiver of all commissions due the Salesperson following the date of termination, and in addition, shall entitle the Broker to any equitable and injunctive relief appropriate to further enforce this restrictive covenant. [(Emphasis added).]
During the time they were employed by NJEC, Reinitz and Skoglund engaged in numerous discussions with Doug Martocci, Sr., of Continental. As a commodities importer, Continental was looking to lease warehouse space in New Jersey. According to Martocci, in "early 2008" Reinitz and Skoglund showed him "a half of a dozen or a dozen" properties in Elizabeth, Jersey City, and Linden. On April 9, 2008, Skoglund emailed information to Martocci regarding two buildings in Jersey City that were exclusive NJEC listings. Reinitz showed Martocci one of those sites in June 2008. Martocci did not make any lease offers at that time. on June 26, 2008, the owner of NJEC, Steve Nozza, entered into a "Purchase and Sale Agreement of New Jersey Equity Corp. Assets" with Bussel Realty. The agreement had an effective date of July 1, 2008. According to Reinitz and Skoglund, on or about July 1, Nozza informed them that: "[E]ffective July 1st, I'm out of business. Your deals and your customers are your own. Good luck."
Neither Reinitz nor Skoglund executed a termination agreement with NJEC. Nozza did, however, sign Reinitz's and Skoglund's real estate sales licenses as the "terminating broker" that same day. Reinitz and Skoglund considered this action by Nozza to mean that their employment with NJEC was terminated as of July 1, 2008. The question of who had the rights over "the deals" or customers remained unanswered. Although Nozza acknowledged signing plaintiffs' real estate licenses as the "terminating broker," he denied saying to them "[y]our deals and your customers are your own."
On July 7, 2008, Reinitz and Skoglund met with Nozza and Steve Bussel to crystallize their separation from NJEC. It is undisputed that Reinitz and Skoglund made it clear at this meeting that they did not want to be employed by Bussel Realty. Plaintiffs both signed identical "Termination of Employment" letters, prepared on Bussel Realty letterhead, that read as follows:
As you are aware Bussel Realty Corp. has acquired all the assets of New Jersey Equity Corp. As a consequence of that acquisition, all of New Jersey Equity Corp.'s Contractual [sic] Employment Agreements have been assumed by Bussel Realty Corp. Be advised that we ...