R.A. Intile Realty Co., Inc. v. Raho

• Citation: 259 N.J.Super. 438,614 A.2d 167
• Parties: R.A. INTILE REALTY CO., INC., Plaintiff, v. Michael F.P. RAHO, et al., Defendants.
• Decision Date: 02 July 1992
• Court: Superior Court of New Jersey

Page 438

259 N.J.Super. 438

614 A.2d 167

R.A. INTILE REALTY CO., INC., Plaintiff, v. Michael F.P. RAHO, et al., Defendants.

Superior Court of New Jersey, Law Division Essex County.

Decided July 2, 1992.

C. Robert Sarcone, Bloomfield, for plaintiff (C. Robert Sarcone, on the letter brief).

Jerald D. Baranoff, Newark, for defendants, Michael and Deborah Raho (Sills, Cummis, Zuckerman, Radin, Tischman, Epstein & Gross, Jerald D. Baranoff, of counsel; and Richard S. Schkolnick, on the brief).

SCHWARTZ, J.S.C.

On August 21, 1989 plaintiff, R.A. Intile Realty Co., Inc. a licensed real estate broker, filed a three count complaint against defendants, Michael F.P. Raho and Debra Raho (jointly referred to either as "the Raho defendants," or "Raho"). Also joined as defendants were John Kimble ("Kimble") and O. Realty Corp., which is either a fictitious name or a company solely owned and controlled by Kimble, but those defendants have never been served. It appears from the certification of plaintiff's counsel that Kimble cannot be located and that O. Realty Corp. is neither a New Jersey corporation nor a foreign corporation licensed to do business in New Jersey and, accordingly, if not a fictitious name, that entity has not been located for service of process.

The first count of the complaint charges the Raho defendants with breach of a real estate brokerage agreement arising out of the sale of a four acre tract of land on which a home is situated located on Glen Avenue in Llewellyn Park, West Orange, New Jersey (hereinafter the "Glen Avenue home"). Title to the Glen Avenue home was transferred by deed dated May 13, 1988, from Raho to O. Realty Corp. Plaintiff alleges that on or about November 26, 1987 it and Raho entered into an oral agreement pursuant to which plaintiff was authorized to find a buyer for the Glen Avenue home at $1,200,000 and that if successful, plaintiff was to be paid a six percent commission. Plaintiff alleges in the first count that the oral agreement was confirmed by letter dated November 27, 1987. Plaintiff further alleges that it complied with N.J.S.A. 25:1-9 by mailing that letter on November 27, 1987 by ordinary mail to Raho. Plaintiff further contends that it procured Kimble as a purchaser; that Raho sold the property to Kimble's company, O. Realty Corp., for $957,000; that plaintiff thereby became entitled to receive a commission of $57,420; and that Raho breached the contract with plaintiff by refusing to pay said commission.

The second count alleges that all the defendants named in the complaint entered into a conspiracy to fraudulently conceal the sale of the Glen Avenue home from plaintiff, thereby fraudulently depriving it of said commission. Plaintiff seeks compensatory and punitive damages on the second account.

In the third count, plaintiff seeks compensatory and punitive damages for alleged tortious interference with plaintiff's contractual rights and with plaintiff's prospective business advantage by all the defendants.

The Raho defendants now move for summary judgment, alleging that plaintiff's claim for a brokerage commission is barred by the statute of frauds, N.J.S.A. 25:1-9. Plaintiff has filed a cross motion seeking leave to amend the complaint by alleging in paragraph 3 of the first count that the written notice (the letter of November 27, 1987) was personally served, as well as served by ordinary mail, upon Raho.

The summary judgment motion requires resolution of the following legal issues:

(1) What proofs will suffice to establish a fact question under N.J.S.A. 25:1-9 as to whether the broker's written notice was "personally" served on the seller within five days?

(2) Will a broker's written notice which makes no express reference to an oral agreement between broker and seller, is signed by the broker and requests the sellers' signatures be sufficient under the statute of frauds to impliedly inform the seller of an oral agreement to pay commissions on which the broker relies solely because the notice refers to a "negotiated commission rate"?

(3) Does a broker who has failed to send a proper written notice of an oral brokerage agreement to the seller within five days have a right to maintain a contract action for commissions where the parties subsequently orally reconfirm or modify the earlier agreement and the broker sends a written notice to the sellers within five days of such oral reconfirmation or modification incorporating by reference the alleged prior commission agreement?

(4) Must the broker's written notice make reference to the seller's asking price or the duration of the oral agreement to satisfy the statute of frauds?

(5) Where the broker complies with the statute of frauds, is the broker's claim limited to one for breach of contract or may the broker also seek damages against the seller for common law fraud or tortious interference with the broker's contractual rights and prospective business advantage?

Although numerous factual disputes are raised by the certifications of the parties, certain background facts appear undisputed. These may be summarized as follows.

The Rahos, both in 1987 and at present, reside on Edgehill Court in Llewellyn Park, West Orange, New Jersey (the "Edgehill home"). On April 1, 1987 Raho contracted to purchase a six acre tract of real estate on Glen Avenue, in Llewellyn Park (the "Glen Avenue property") from Alvin Mancusi-Ungaro ("Mancusi-Ungaro"). Prior to the purchase of the Glen Avenue property, Mancusi-Ungaro informed Raho that Kimble had been interested in purchasing that six acre tract and the selling broker had shown them several written offers made by Kimble to Mancusi-Ungaro.

Before Raho closed title on the Glen Avenue property on October 1, 1987, the property was subdivided into two parcels, one of which was an unimproved two acre parcel and the other was a four acre parcel on which was situated a large home, heretofore referred to as the Glen Avenue home, and out of which this litigation arises.

Following the subdivision and closing on the Glen Avenue property, Raho listed the Edgehill home and the two acre unimproved parcel located on Glen Avenue for sale with plaintiff. Raho executed two written multiple listing contracts, agreeing to pay plaintiff a five percent commission upon the sale of each property. The multiple listing contracts stated a selling price for each property and contained a provision for sharing of commissions with any cooperating broker who may have effected a sale. Both agreements were to remain in effect during specified dates between July 1987 and January 1988, and provided that the commission stipulated in the agreement was to be paid if the property was sold to a person to whom the property was shown by plaintiff within three (3) months after the listing contract expired.

The Raho defendants have certified that they intended to move into the Glen Avenue home after they sold the Edgehill home, but upon advice of plaintiff's realtor associate, Linda Grabowski ("Grabowski"), continued to reside in the Edgehill home because it was more marketable if it was shown while it was being lived in and furnished. According to Grabowski, Raho informed her sometime prior to November 1987 that they would be interested in selling the Glen Avenue home if it could be done directly and without advertising it for sale. Grabowski makes no mention in her certification of when or where this alleged conversation with Raho took place or whether at that time a selling price or brokerage agreement with plaintiff concerning the Glen Avenue home was discussed.

Grabowski asserts that on November 24, 1987 she received a phone call from one Shirley Naso who expressed an interest in inspecting a house in Llewellyn Park which plaintiff had advertised in the preceding Sunday Star Ledger (the "Horvat house"); that she met Ms. Naso with her boyfriend Kimble at the Horvat house on November 25, 1987; that Grabowski knew Kimble because she previously worked for him; and that Kimble was not interested in the Horvat house. They then discussed the Glen Avenue home and Kimble, stating he did not know Raho, requested that Grabowski set up an appointment for him to meet with Raho.

Grabowski claims she had a telephone conversation with both Rahos on November 25, 1987 during the course of which she informed them that she had a prospective purchaser for the Glen Avenue home; that they were both extremely interested and that they were asking $1,200,000, but would not list the Glen Avenue home as an exclusive or multiple listing because of alleged concerns by Raho over the possible adverse reaction of other residents of Llewellyn Park if it became known that the Rahos had purchased the Glen Avenue home for investment or speculation. Grabowski further asserts that Raho agreed during this conversation to pay plaintiff a commission if a sale was consummated and that they would permit Kimble, the prospective purchaser, to inspect the Glen Avenue home the next day. Grabowski further asserts that on November 26, 1987 she again called defendants to confirm a 2:00 p.m. appointment with Kimble the next day at the Glen Avenue home. Grabowski certifies that during that conversation, the defendants agreed to pay plaintiff a six percent commission if a sale was consummated with Kimble.

The Raho defendants deny having had any conversations in or prior to November 1987 concerning the sale of the Glen Avenue home. In their certifications both assert that during that time period they had no desire to sell the Glen Avenue home because they intended to move into it as soon as their Edgehill home was sold. Mrs. Raho asserts that she received one short phone call from Grabowski sometime during the Thanksgiving 1987 weekend; that Grabowski told her Kimble wanted to tour the Glen Avenue home; and that she asked her husband to walk through the home with Kimble. Mrs. Raho denies she ever discussed selling the Glen Avenue home with...