JEFFREY REALTY, INC. v. KEVIN VENTICE

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0506-05T10506-05T1

JEFFREY REALTY, INC.

Plaintiff-Appellant,

v.

KEVIN VENTICE, individually and

d/b/a BRANCH BROOK COMPANY, INC. or

BRANCH BROOK POOLS, INC., or

BRANCH BROOK POOL CONSTRUCTION CORP.,

Defendants,

and

PETER VIGLIONE, individually and

d/b/a WHEELS IN MOTION, INC.,

Defendants-Respondents.

________________________________________________________________

 

Submitted October 31, 2006 - Decided December 6, 2006

Before Judges Lisa and Holston, Jr.

On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-30-04.

Brian F. Curley, attorneys for appellant (Mr. Curley, of counsel and on the brief; Jennifer Loheac, on the brief).

William Goldberg, attorney for respondents.

PER CURIAM

Plaintiff, Jeffrey Realty, Inc., appeals the Law Division's August 18, 2005 judgment memorializing Judge Kumpf's nineteen-page written opinion denying plaintiff the right to a real estate broker's commission from defendant, Peter Viglione. The court concluded that plaintiff's failure to comply with the strict requirements of the statute of frauds, N.J.S.A. 25:1-16, precluded plaintiff's recovery for breach of contract. Additionally, the judge determined that plaintiff's failure to comply with the statute of frauds prevented recovery on a quantum meruit or unjust enrichment theory. We affirm.

Defendant was the owner of commercial property on Route 15 South in Wharton, from which he operated a roller skating rink known as Wheels in Motion. Plaintiff is a licensed real estate broker, specializing in the sale and leasing of commercial properties. Vincent Castagno is a licensed real estate agent employed by plaintiff.

On April 3, 2003, Castagno was contacted by Steven Goss, the manager of Branchbrook Pools (BP), an entity owned by Kevin Ventrice. Goss told Castagno that BP was looking for retail space to purchase in the Rockaway area. Castagno investigated the Rockaway area for suitable retail locations and eventually identified defendant's property as a possible site. The property was not advertised or listed as available for sale.

Castagno contacted defendant by telephone on April 15, 2003. Castagno told defendant that he was a real estate broker, and may have some people interested in the purchase of his property. He inquired as to whether he was interested in selling. Defendant responded that the property was for sale. Castagno contends that he informed defendant that he expected to be paid a real estate commission of 6% in this telephone call. Defendant denies any such disclosure and contends that the conversation lasted five minutes.

Castagno did not initially disclose the name of the purchaser to defendant because, as an experienced broker, Castagno would not give this information out until he knew the owner would agree to pay him a real estate commission. In a telephone call on April 24, 2003, Castagno asked defendant for permission to show the property. Defendant agreed to permit the inspection. On April 28, 2003, Castagno met with Ventrice at the property for a walk-through inspection. Ventrice expressed interest.

On May 5, 2003, Castagno contacted defendant for a copy of the property survey and scheduled a meeting for May 7, 2003. In that conversation, Castagno maintains defendant orally agreed to pay a 6% commission if Castagno found him a buyer, while defendant asserts that the payment of a commission was never agreed to.

Castagno met with defendant on May 7, 2003 at the roller rink. At the meeting, Castagno stated that he told defendant of the interested purchaser, but that he wanted a definite commitment defendant would pay a real estate commission. Castagno maintained that defendant orally agreed to pay a 6% broker's commission. Castagno testified that he gave defendant a written commission agreement which contained the name of Ventrice as the potential buyer and the terms of the commission were as they had previously discussed.

Defendant claimed that he and Castagno never came to an agreement. He testified that he "kind of chuckled, because here's a guy off the street, that's you know, on a mission from somebody else . . . . [T]his guy walks in and in 10 minutes he's telling me that he wants six percent of several million dollars for putting me in touch with somebody who he is representing and on a commission for, it just struck me as being crazy." Defendant contended that they left the question of the commission open at the end of the meeting. In his deposition, defendant asserted that he definitively did not give Castagno a copy of the survey at this time. However, Castagno maintained that defendant never expressed the slightest objection, in any way to the Commission Agreement. Castagno conceded that defendant did indicate that he needed time to read it over but that defendant stated he would sign the agreement and return it to Castagno.

The purported Sales Commission Agreement dated May 7, 2003, contained in plaintiff's appendix, is unsigned. It requires the payment of a commission by defendant to plaintiff of 6% of the gross aggregate sale price upon closing of title. The agreement identifies the purchaser as BP but the agreement makes no reference to a prior oral agreement.

Another meeting took place on May 9, 2003 at the roller skating rink. Castagno contended he arranged the meeting because he believed there was an oral agreement to the terms set forth in the commission agreement. Ventrice, defendant and Castagno were all present. Price was negotiated but neither buyer nor seller would budge. They decided to meet again later. Castagno testified that at this meeting defendant did not express any rejection of the terms of the agreement that Castagno had given him on May 7, 2003.

On May 12, 2003, plaintiff sent to defendant a Sale Commission Agreement dated May 7, 2003 for the property. Defendant claimed that this is the only agreement he received. Castagno explained that this agreement must have been sent by his secretary. Defendant stated he never signed the agreement.

On May 14, 2003, Castagno prepared a comparables report for BP. On May 20, 2003 Castagno contacted defendant to set up a meeting, which occurred on May 23, 2003, in which the parties exchanged their offers and counter-offers. There was no discussion about a broker's commission at this meeting, nor was there any discussion between the buyer and seller regarding the payment of a commission.

On May 28, 2003, Castagno contended defendant contacted him for permission to contact Ventrice directly to ask if he would agree to split the real estate commission. Defendant never indicated that there was a problem with the 6% commission.

On June 16, 2003, defendant contacted Castagno and asked him to convey a proposal to Ventrice of $3,200,000 with a $500,000 mortgage at 7%. Ventrice countered with $3,200,000 with a $500,000 second mortgage at 6%. Castagno relayed the counter-offer to defendant.

Defendant than contacted his attorney who informed him that he did not owe a commission based on the status of negotiations. On June 20, 2003, Castagno contacted defendant and was told that he would be called back, but this was the last communication Castagno had with defendant. A contract of sale was executed by defendant and Ventrice on July 30, 2003, without Castagno's knowledge, in which each party asserted that it had not promised to pay a real estate commission. Each agreed to hold the other harmless with respect to any breach of that representation.

On August 21, 2003, Castagno wrote to defendant reminding him of his work with the property and of his right to a commission. However, his letter did not mention a prior verbal agreement to pay a commission. Defendant did not respond to the letter. On September 25, 2003, Castagno again wrote to defendant claiming his right to a commission. The closing took place four days later. No commission was paid to plaintiff.

In January 2004, plaintiff sued defendant and Ventrice alleging breach of contract, unjust enrichment and quantum meruit. After a three day bench trial in May 2005, Judge Kumpf considered the parties' respective versions of their oral discussions and made credibility determinations. In a comprehensive written opinion, the judge concluded that because the commission agreement was not signed, because no oral agreement was reached on all material terms, and because the requirements of N.J.S.A. 25:1-16(d) were not satisfied, defendant was not entitled to a real estate commission from defendant on breach of contract grounds. The judge further determined that failure to comply with the statute of frauds precluded a quantum meruit or unjust enrichment theory recovery.

The judge found that "plaintiff has established that an oral agreement existed between it and defendant to pay a real estate commission," however, the amount of the commission was not agreed to. Thus, the parties never came to agreement on an essential element of the contract, the amount of the real estate commission. The judge wrote:

There was never a meeting of the minds concerning the amount of the commission to be paid by [defendant] in the event of the sale of the property. There is nothing in this record to indicate that [defendant] agreed to the 6% commission, and it is unlikely that he would have done so. There is support in Plaintiff's own conduct for the conclusion that the parties had not reached an oral agreement as to the amount of the commission. In the two letters sent by Mr. Castagno, on [plaintiff's] stationery . . . Castagno indicated that he had put the deal together and was entitled to a commission. He never suggested in those letters that he had an oral agreement with [defendant] about this brokerage commission which he intended to enforce.

After having made those factual findings, the judge concluded:

N.J.S.A. 25:1-16(d)(1) requires a writing setting forth the terms of the prior oral agreement, including the commission rate. Here, in addition to the failure to agree on a commission rate, the writing, which was the Commission Agreement, does not indicate that there was a prior oral agreement. The Seller cannot be expected to reject an oral agreement when the writing does not make it clear that the broker is asserting that the parties had arrived at an oral agreement. The Commission Agreement provided simultane-ously with the oral agreement cannot satisfy the requirements of N.J.S.A. 25:1-16(d)(1). "Strict compliance with the statute of frauds is essential for a broker to recover a commission for the sale of real estate." C & J Colonial Realty, Inc. [v. Poughkeepsie Sav. Bank, 355 N.J. Super. 444, 473, (App. Div. 2002)]. Since satisfying the requirements of N.J.S.A. 25:1-16(d) is the only way Plaintiff Jeffrey Realty could satisfy the Statute of Frauds, I conclude that Plaintiff Jeffrey Realty has failed to meet its burden of proof that it is entitled to a real estate broker's commission on the sale of the property from
Defendant Wheels in Motion to Defendant Branch Brook through Waltann Greenbrook 1, L.L.C. on September 29, 2003.

The judge then addressed whether plaintiff's failure to comply with the statute of frauds permitted plaintiff to recover on alternative theories of quantum meruit and unjust enrichment. The judge determined:

To permit recovery on a theory of quantum meruit here would require a further extension of that remedy to brokers who were not in strict compliance with the Statute of Frauds than expressed by the court in Coldwell Banker [v. Blanche P.W., L.L.C., 368 N.J. Super. 382 (App. Div. 2004)]., While the facts of this case are compelling, the court concludes that they are not compelling enough to warrant a further erosion of the Statute of Frauds requirement that brokers, in order to recover commissions, must have their agreements in writing.

The judge noted that the overriding rule established by the Supreme Court in McCann v. Bill, 65 N.J. 301, 310 (1974) is that a "broker who fails to comply with the statute of frauds may not circumvent the statute by seeking recovery against the seller on a . . . quantum meruit theory." See Coldwell Banker, supra, 368 N.J. Super. At 398.

When reviewing findings of fact, our standard of review is limited. Rova Farms Resort, Inc. v. Investors Ins. Co. of America, 65 N.J. 474, 483-84 (1974). "The general rule is that findings by the trial court are binding on appeal when supported by adequate substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). "[W] e do not disturb the factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Rova Farms, supra, 65 N.J. at 484 (quoting Fagliarone v. Twp. Of No. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)).

The relevant sections of the statute of frauds, N.J.S.A. 25:1-16, are as follows:

b. Except as provided in subsection d. of this section, a real estate broker who acts as agent or broker on behalf of a principal for the transfer of an interest in real estate . . . is entitled to a commission only if before or after the transfer the authority of the broker is given or recognized in a writing signed by the principal or the principal's authorized agent, and the writing states either the amount or the rate of commission.

d. A broker who acts pursuant to an oral agreement is entitled to a commission only if: (1) within five days after making the oral agreement and before the transfer or sale, the broker serves the principal with a written notice which states that its terms are those of the prior oral agreement including the rate or amount of commission to be paid.

[N.J.S.A. 24:1-16.]

The statute of frauds must be strictly complied with. McCann, supra, 65 N.J. at 309-10. See also Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 552-53 (1967) (stating that "lawmakers long ago amended the statute of frauds so as to deny brokers the right to commission on a sale of real property unless their authority from the owner to find a purchaser is given in writing"); The Real Estate Broker's Commission-Oral Agreements and the Statute of Frauds 55 Rutgers Law Rev.ew 410, 419 (1955). Accordingly, under section b of N.J.S.A. 24:1-16, the real estate broker (plaintiff) must have the "writing signed by the principal" (defendant). Because the writing was not signed by defendant, section b is not satisfied.

Consequently, section d of N.J.S.A. 24:1-16 is applicable in this case. Based upon the parties' testimony, the trial court determined that an agreement between the parties was established. However, an essential element of that agreement was not. The judge quoting Restatement, Contracts (1932) 32, stated that, "an offer must be so definite in its terms . . . that the promises and performance to be rendered by each party are reasonably certain." The judge found that, "[h]ere, one of the key elements in this agreement, that is, the amount of the commission, this Court concludes was never agreed to by the parties."

"The amount of compensation . . . is an essential term of any contract." MDC. Inv. Property, L.L.C. V. Marando, 44 F. Supp 2d 693 (D.N.J. 1999). See also Weichert Co. Realtors v. Ryan, 128 N.J. 427, 441 (1992), (where the Supreme Court held that the defendant's "implied promise to pay a commission is unenforceable because of the parties' failure to agree on the amount of the commission"). Because a determination of whether the price was agreed to between the parties is a factual determination, great deference must be given to the trial court's finding. Rova Farms Resorts, Inc. supra, 65 N.J. at 501.

After a thorough review of the record, we are satisfied that there was sufficient credible evidence to support the trial judge's determination that the commission price was never agreed to, leaving an essential term open. We are equally satisfied that plaintiff's failure to comply with the strict requirements of the statute of frauds precludes recovery on a quantum meruit or unjust enrichment theory. McCann, supra, 65 N.J. at 310. We affirm the Law Division's order of August 18, 2005 substantially for the reasons expressed in Judge Kumpf's thorough and well-reasoned written opinion.

Affirmed.

 

In February 2005, a stipulation of dismissal with prejudice was filed as to Ventrice.

In Coldwell Banker, this court permitted a limited exception to the requirement of strict compliance with the statute of frauds because the plaintiff's only non-compliance was that the agreement was faxed rather than served personally or by certified mail, and the faxed letter agreement was acknowledged as being received by the defendant. Id. At 400.

(continued)

(continued)

13

A-0506-05T1

December 6, 2006