Kopp, Inc. v. United Technologies, Inc.

• Court: New Jersey Superior Court – Appellate Division
• Writing for the Court: Plaintiffs instituted this action to recover both compensatory and punitive damages as a result of defendants' failure to execute the contract for the sale of the Mahwah property. Plaintiff grounded its claim on breach of contract as well as various
• Citation: 223 N.J.Super. 548,539 A.2d 309
• Parties: KOPP, INC., Plaintiff-Appellant, v. UNITED TECHNOLOGIES, INC., Otis Elevator Company and Thomas Heden, Defendants- Respondents.
• Decision Date: 03 March 1988

Page 548

223 N.J.Super. 548 539 A.2d 309 KOPP, INC., Plaintiff-Appellant,
v.
UNITED TECHNOLOGIES, INC., Otis Elevator Company and Thomas
Heden, Defendants- Respondents. Superior Court of New Jersey,
Appellate Division. Argued Jan. 12, 1988.
Decided March 3, 1988.

[539 A.2d 310]

Page 551

William C. Rindone, Jr., Englewood, for plaintiff-appellant (Liebowitz & Liebowitz, attorneys; William C. Rindone, of counsel and on the letter brief).

Harold I. Braff, Livingston, for defendants-respondents (Braff, Ertag, Wortmann, [539 A.2d 311] Harris & Sukoneck, attorneys; Harold I. Braff, of counsel and on the brief).

Before Judges MICHELS, SHEBELL and ARNOLD M. STEIN.

The opinion of the court was delivered by

MICHELS, P.J.A.D.

Plaintiff Kopp, Inc. appeals from a summary judgment of the Law Division entered in favor of defendants United Technologies, Inc. (United), Otis Elevator Company (Otis) and Thomas Heden (Heden). Plaintiff instituted this action against United, its wholly-owned subsidiary, Otis and its group real estate manager, Heden, after Otis refused to execute a contract of sale containing an assignment of a lease with purchase options for real property located in Mahwah, New Jersey.

The facts necessary to a resolution of the issues raised on this appeal can be summarized generally as follows. On or about August 21, 1973, Otis entered into a 20-year lease of certain lands and improvements located in Mahwah, New Jersey. In addition to this leasehold estate, Otis also owned a fee interest in an adjacent parcel of unimproved property. In the summer of 1983, United authorized Otis to sell its interest in these properties and negotiations commenced with two prospective purchasers; plaintiff, through its president Martin Kopp (Kopp), a real estate entrepreneur now deceased, and representatives from a New York firm known as Meringoff & Shidler (a predecessor of "440 Franklin Associates", the ultimate purchaser of these property interests, hereinafter referred to as the "440 Group").

Page 552

Negotiations on behalf of Otis were handled exclusively by Heden, a United group real estate manager responsible for "conduct[ing] negotiations for the acquisition and disposition of real estate for selected groups within United Technologies as well as of the parent." Initially, negotiations with plaintiff and the 440 Group occurred simultaneously and Heden advised both parties that there were other bidders involved. Additionally, it became apparent to Otis at this time that the 440 Group was willing to pay a considerable amount more for the property than plaintiff was willing to pay. However, although Otis and the 440 Group reached a preliminary agreement at an early stage of discussions, further dealings between these parties did not resume until mid-September 1983, approximately two months later.

Despite the fact that plaintiff would not meet the 440 Group's offer, Otis and plaintiff arrived at an agreement on price and the method of payment sometime in May or June, 1983. Although dealings between plaintiff and Otis were somewhat sporadic at first, negotiations proceeded steadily from mid-September through November 1983. During this time, negotiations primarily focused upon plaintiff's ability to exercise purchase options under the proposed contract and the quality of title which plaintiff would receive thereunder.

The critical juncture in the Otis-Kopp negotiations occurred sometime around the beginning of October, 1983. Prior to that date, Kopp had retained two New Jersey attorneys, Michael Feltman, Esq. (Feltman) and Myron Rosner, Esq. (Rosner), to work out the contractual terms with Otis and to simultaneously negotiate a sublease agreement with a prospective tenant, Pezrow. Feltman, who was responsible for negotiating the Pezrow lease, had been advised by Kopp early on not to prepare a lease until "[he] (Kopp) [was] absolutely certain that [he] [was] going to make this deal with Otis." When the parties met on October 4, 1983, and Kopp expressed concern "that there would be something that would intervene to prohibit them from going forward", Heden advised him "that [he] was not

Page 553

having any negotiations with anyone at that date, at that time" but reiterated, on several occasions, "that [he] couldn't guarantee them anything and the best way to resolve and make sure there were no open questions was to have documentation completed and signed." Sometime thereafter, Kopp advised Feltman to begin preparing the Pezrow lease.

Negotiations culminated on November 28, 1983, in a meeting between Heden and Kopp at an Otis factory in Yonkers, New [539 A.2d 312] York. At this meeting the parties reviewed the document drafts which had been approved by Kopp and his attorney. After additional modifications were made to the contract, Kopp expressed an intention to accept this document as the final form of contract and agreed to initial the modifications and sign on behalf of plaintiff. However, since Heden was not authorized to sign the contract on behalf of Otis, he merely affixed his name as a witness to Kopp's signature.

Pursuant to United's policy, the only persons having the authority to bind Otis to real estate contracts were the president and vice-presidents of Otis North American. As such, the parties originally agreed that Heden would take the partially executed contract to the United/Otis main offices in Farmington, Connecticut in order to have Vice President Richard M. Whiston (Whiston) review the contract and sign on behalf of Otis. However, in order to ensure a prompt response, Kopp decided to personally take the documents and meet Heden at the Farmington offices the following morning.

On the morning of November 29, 1983, Kopp arrived at the Farmington offices with the documents and a check. After Kopp and Heden conducted additional discussions regarding the timing of the purchase option, a memorandum of understanding was drawn up and typed upon Whiston's personalized stationery bearing the United/Otis letterhead. However, since Whiston was engaged in conferences that morning, Heden notified Whiston's secretary that Kopp was there and that these documents were now available for his [Whiston's] review.

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Before a final review of the Otis-Kopp contract could take place, however, Heden received a phone call from representatives of the 440 Group who indicated that they were now willing to purchase the property for $300,000 to $400,000 more than plaintiff. Heden apprised Kopp of these new circumstances and asked him whether he would be willing to match this offer. Kopp declined and negotiations between plaintiff and Otis immediately terminated. Defendants subsequently sold the property to the 440 Group.

Plaintiffs instituted this action to recover both compensatory and punitive damages as a result of defendants' failure to execute the contract for the sale of the Mahwah property. Plaintiff grounded its claim on breach of contract as well as various tort theories, alleging fraudulent misrepresentation and interference with its contractual rights and prospective economic advantage. After extensive pre-trial discovery proceedings concluded, Judge Follender in the Law Division granted summary judgment in favor of all defendants on all counts of the complaint. The trial court held essentially that since the agreement had never been signed by an authorized officer of Otis, plaintiff's claims grounded in contract were barred by the Statute of Frauds. Accordingly, the trial court reasoned that plaintiff's claims based...