DKNJ Real Estate & Appraisal, LLC v. Reussi Capital Ltd.
| Decision Date | 10 February 2021 |
| Docket Number | DOCKET NO. A-2316-19 |
| Parties | DKNJ REAL ESTATE AND APPRAISAL, LLC, and DIANE TRUGMAN, Plaintiffs-Appellants, v. REUSSI CAPITAL LIMITED LIABILITY COMPANY, d/b/a REUSSI CAPITAL, LLC, 501 LAKE TERRACE, LLC, and PETER SIEGEL, Defendants-Respondents. |
| Court | New Jersey Superior Court — Appellate Division |
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
Before Judges Rose and Firko.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1986-19.
Stephen A. Gravatt, attorney for appellants.
Fox Rothschild, LLP, attorneys for respondents (Andrew J. Karas, on the brief).
Plaintiffs DKNJ Real Estate and Appraisal, LLC (DKNJ) and Diane Trugman1 appeal from the February 3, 2020 order entered by the Law Division judge granting summary judgment to defendants Reussi Capital Limited Liability Company d/b/a Reussi Capital, LLC, 501 Lake Terr, LLC, and Peter Siegel. The judge denied plaintiffs the right to a real estate broker's commission from defendants because plaintiffs failed to comply with the strict requirements of the statute of frauds, N.J.S.A. 25:1-16. Additionally, the judge determined that plaintiffs' failure to comply with the statute of frauds prevented recovery on breach of contract, quantum meruit, and tortious interference with contractual relations and that plaintiffs were not the efficient procuring cause of the sale. We affirm.
We derive the following facts from the motion record viewed in the light most favorable to plaintiffs. Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016). In April of 2018, Trugman, a licensed New Jersey real estate broker, acting on behalf of DKNJ, contactedSiegel to inquire whether his company was interested in purchasing 501-511 Lake Terrace (Lake Terrace property), a residential apartment complex in Bradley Beach. Siegel is a managing member of Reussi Capital, LLC. The Lake Terrace property "was not listed [for sale] . . . on the Multiple Listing Service . . . nor with any other real estate broker." On May 4, 2018, defendants submitted a written offer to Trugman to purchase the Lake Terrace property. In May 2018, Siegel sent Trugman a text message stating, "and if I can make it work, I will pay you [sic] fee directly?"
On July 12, 2018, Trugman sent defendants a proposed broker commission agreement setting forth a proposed commission of two percent of the purchase price. Defendants never signed the July 12, 2018 agreement. The next day, July 13, 2018, defendant sent Trugman a counter commission agreement proposing a flat commission fee of $100,000 in the event the total purchase price did not exceed five million dollars. This agreement was signed by defendants but not by Trugman or anyone on behalf of DKNJ.
On July 14, 2018, Trugman sent a text message to Siegel stating she "would appreciate [the commission agreement] stating [two] percent of [the] price and not a dollar amount." Two days later on July 16, 2018, Trugman sent Siegel an email asserting that she could not agree to the July 13, 2018 countercommission agreement. In response, on July 18, 2018, Siegel sent Trugman an email stating:
You brought the buyer and seller together. Thank you. The rest of the negotiations and the work are to be done by me unless I need something more from you . . . . The seller doesn't want to engage with you, nor do I want you engaging with the seller . . . Yes you brought me this opportunity . . . so that is valuable . . . .
On July 20, 2018, Trugman sent Siegel an email asking him to send her a commission agreement that was not contingent on the purchase price in which she has no input. On July 30, 2018, Trugman sent defendant an email stating, "I will not contact [seller] again, but I do need you to produce a reasonable commission agreement." On August 3, 2018, Trugman sent Siegel an email stating, "I will need to be notified when the transaction closes and obtain closing documents from you . . . so that I can assess the amount of commission due pursuant to our agreement for you to pay my commission on the above-referenced properties."
On August 30, 2018, plaintiffs' attorney sent Siegel a letter asking him to confirm whether he intends to pay Trugman a commission. On November 30, 2018, defendants' attorney sent a letter to plaintiffs' attorney stating that no commission agreement existed between the parties that would warrant payment. On February 8, 2019, plaintiffs' attorney sent a letter inquiring about thecommission payment. In response, on February 14, 2019, defendants' attorney sent a letter stating Trugman "has no claim for commission in connection with a transaction between the parties." In February 2019, Siegel closed title on the purchase of the Lake Terrace property.
On June 5, 2019, plaintiffs filed a complaint against defendants and an amended complaint on July 19, 2019, alleging breach of contract, quantum meruit, and tortious interference with prospective economic advantage. On October 15, 2019, in lieu of filing an answer, defendants moved to dismiss for failure to state a claim under Rule 4:6-2(e).
Trugman submitted a certification in opposition to defendants' motion to dismiss. On December 6, 2019, the judge denied defendants' motion to dismiss and converted the motion to one for summary judgment since plaintiffs relied on facts outside of their pleadings in their opposing papers. R. 4:6-2. The judge issued a schedule for supplemental briefing.
On January 24, 2020, the judge conducted oral argument on defendants' motion. Defendants' counsel argued the undisputed facts demonstrated there was no enforceable agreement between the parties, and Trugman's rejection of the July 13, 2018 counteroffer evidenced a lack of a meeting of the minds regarding the commission rate in contravention of the statute of frauds.Plaintiffs' attorney, in turn, argued the statute of frauds was satisfied here because defendants were aware of their obligation to pay a commission to plaintiffs. Because defendants drafted their own commission agreement, plaintiffs' attorney contended "this is not a situation in which a principal is being treated unfairly by a broker who's trying to get a commission where there's no written agreement."
Plaintiffs' attorney maintained there was an agreement as to the commission rate because two percent of the purchase price sought by plaintiffs equates to $100,000, the flat rate offered in defendants' counter agreement. Further, plaintiffs' attorney argued that plaintiffs only rejected defendants' counter agreement insofar as it included a "term that the properties sell for five million or less." By virtue of Trugman's conduct, plaintiffs' attorney claimed the counter agreement was ratified because she performed all of her duties thereunder.
Following oral argument, the judge rendered a decision on the record. The judge concluded that since there was no signed commission agreement because no agreement was reached on all material terms, and the requirements of N.J.S.A. 25:1-16(d) were not satisfied, plaintiffs were not entitled to a real estate commission from defendants on breach of contract grounds. The judge furtherdetermined that failure to comply with the statute of frauds precluded a quantum meruit or tortious interference with contract claim. In making her factual findings, the judge highlighted, "[t]here were ample opportunities in the communications between the parties in this case for . . . plaintiff to comply with the statute[] at a very minimum to send a confirming letter . . . ."
The judge concluded the emails between the parties violated the statute of frauds as "there was no meeting of the minds." Citing C & J Colonial Realty v. Poughkeepsie Savings Bank, 355 N.J. Super. 444, 473 (App. Div. 2002) (), the judge granted defendants' motion to dismiss the amended complaint with prejudice. Further, the judge found "there was no 'duly executed' real estate broker commission agreement."
In addressing plaintiffs' quantum meruit and tortious interference with contract claims, the judge found that a broker who fails to comply with the statute of frauds cannot obtain relief under these causes of action, citing Coldwell Banker v. Blancke P.W. L.L.C., 368 N.J. Super. 382 (App. Div. 2004) and McCann v. Biss, 65 N.J. 301 (1974). A memorializing order was entered on February 3, 2020.
Plaintiffs filed a notice of appeal. Thereafter, on March 11, 2020, the judge filed a written amplification of her decision pursuant to Rule 2:5-1(b). In her amplification letter, the judge focused on the "reasons why [she] found that plaintiff[s] failed to provide compelling facts that would warrant an award on quantum meruit grounds." Citing our Supreme Court's decisions in Weichert Co. Realtors, Ltd. v. Ryan, 128 N.J. 427 (1992), McCann, 65 N.J. at 301, and Coldwell Banker, 368 N.J. Super. at 382, the judge found "upon a review of the facts, including the exchange of communications between the parties, . . . that plaintiff was not the efficient and procuring cause of the sale." Although the judge acknowledged that Trugman brought defendants and the seller together, the judge noted, "that is all that [Trugman] appears to have done." In contrast, the judge emphasized the matter under review is distinguishable from Weichert and Coldwell Banker where there was "substantial evidence that the plaintiffs procured the sales."
On appeal, plaintiffs only challenge dismissal of their quantum meruit count and raise the following arguments: (1) plaintiffs satisfied the elements required to obtain quantum meruit relief as an...
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