Weichert Co. Realtors v. Ryan

• Decision Date: 02 July 1992
• Citation: 128 N.J. 427,608 A.2d 280
• Parties: WEICHERT CO. REALTORS, Plaintiff-Respondent, v. Thomas W. RYAN and Jay Saunders, Defendants-Appellants.
• Court: New Jersey Supreme Court

Page 427

128 N.J. 427

608 A.2d 280

WEICHERT CO. REALTORS, Plaintiff-Respondent, v. Thomas W. RYAN and Jay Saunders, Defendants-Appellants.

Supreme Court of New Jersey.

Argued Feb. 19, 1992.

Decided July 2, 1992.

H. John Schank, II, Newark, for defendants-appellants (Crummy, Del Deo, Dolan, Griffinger & Vecchione, attorneys; H. John Schank and Robert W. Delventhal, on the brief).

Martin Newmark, Morristown, for plaintiff-respondent (Broderick, Newmark & Grather, attorneys).

The opinion of the Court was delivered by

STEIN, J.

Plaintiff, Weichert Co. Realtors (Weichert), sought damages from defendants, Thomas Ryan and Jay Saunders, based on defendants' failure to pay Weichert for brokerage services rendered by William Tackaberry, a Weichert employee. Weichert based its claim on defendants' alleged breach of contract, or, in the alternative, on a theory of quantum meruit. The Appellate Division upheld the trial court's determination that Weichert was entitled to recover damages for breach of contract. We granted defendants' petition for certification, 127 N.J. 546, 606 A.2d 360 (1991), and now modify the judgment of the Appellate Division, remanding for a new trial limited to the issue of damages.

I

In late March 1987, Socrates Kyritsis, a property owner, met with Robert Olpp, the manager of Weichert's Chatham office, and Tackaberry, a real estate agent in that office, and told them he wished to sell the "William Pitt property" for $3,000,000, with the sales commission to be paid by the buyer. Shortly after that meeting, Tackaberry telephoned Ryan, a local developer, and informed him that he knew of a property that Ryan and Saunders, his partner, might be interested in purchasing. Tackaberry also stated that the purchaser would have to pay Weichert a ten percent commission. Ryan indicated that he was interested in knowing more about the property, and Tackaberry disclosed the property's identity and the seller's proposed price. Ryan ended the conversation by agreeing to meet with Tackaberry to obtain more information.

As a result of his telephone conversation with Ryan, Tackaberry met with Kyritsis to acquire information concerning the property's current leases, income, expenses, and concerning plans for its eventual development. Tackaberry also collected tax and zoning documents relevant to the property. In a face-to-face meeting held on April 4th, Tackaberry gave Ryan the data and information he had procured. Tackaberry began that meeting by presenting Ryan with a letter dated April 3, 1987, that stated in part, "As compensation for this information * * * there will be a ten percent finders fee to be paid by your group upon successfully completing and closing of title." Ryan testified that he had refused Tackaberry's request that he sign the letter, and had explained to Tackaberry that he needed more information about the property before he could commit to the broker's fee, and therefore they would discuss that fee later. Tackaberry, however, testified that he had not asked Ryan to sign the letter, although on cross-examination he admitted that he had been intent on memorializing the agreement in writing. According to Tackaberry, after Ryan had read the letter, he had indicated only that he was concerned about the method and timing of the commission payment. Tackaberry did not pursue that point, apparently assuming that the parties would resolve that issue at a later date. Ryan ended the meeting by instructing Tackaberry to arrange a meeting between Ryan and Kyritsis. Ryan took the letter and the information with him, and later used the information to evaluate the project.

On April 7th, Ryan and his attorney met with Kyritsis to discuss the sale of the property. Although Ryan initially refused to allow Tackaberry to attend that meeting, he relented when Tackaberry insisted. Before the meeting began, Tackaberry offered unsolicited advice concerning how to negotiate effectively with Kyritsis. The meeting was successful, and afterwards Ryan instructed his attorney to prepare a draft contract for the purchase of the William Pitt property for $3,000,000. At that time Ryan informed Tackaberry that he had discussed the commission issue with Saunders, and they both agreed that ten percent was too much to pay for Tackaberry's services. Tackaberry insisted that Ryan had already agreed to pay ten percent. After some discussion the two parted without resolving the issue.

At trial, the parties did not dispute that from the April 7th meeting until the closing, Ryan consistently had told Tackaberry that he would not agree to pay a ten percent commission. Ryan testified:

We had several discussions about the amount of the fee, the method of payment of the fee, but we were not able to be in agreement as to the amount of the fee. Mr. Tackaberry was insistent on the $300,000 amount. I indicated to him on several occasions, verbally that I would not sign his $300,000 letter, * * * the April 3rd letter, [ ] and that it was just too much money[. T]o pay out as the property was developed was discussed and was, I felt, agreeable to Mr. Tackaberry. But we were not and have not been able to agree on the amount of a finder's fee.

Tackaberry's subsequent involvement in the transaction was unsolicited by Ryan and Saunders. At trial he acknowledged that "there were no phone calls coming in my direction." Nevertheless, he continued to participate in the sale by carrying draft contracts back and forth between the parties, and offering negotiating advice. When Kyritsis eventually decided to raise the price of the property by $250,000, he informed Tackaberry, who broke the news to Ryan and Saunders. After Kyritsis signed the final contract, Tackaberry delivered it to Ryan and Saunders for their signature. The final contract, signed by Ryan and Sauders on April 27th, stated:

Both parties represent to each other that they have not dealt with any broker or other person entitled to a commission in connection with this transaction except Weichert Realtors ("Weichert"). Buyer agrees to pay any broker's commission due Weichert as per separate agreement between Buyer and Weichert. Buyer agrees and covenants to protect and indemnify Sellers against and/or with regard to such commissions.

On May 4th, Tackaberry wrote to Ryan and Saunders, bringing to their attention some errors in the contract. He again requested that they sign his April 3rd letter indicating that they would pay a ten percent broker's fee, and informed them that the fee would be due and payable by certified or attorney's check at the closing. The letter had two spaces for Ryan's and Saunders' signatures underneath the caption "Acknowledgement of Commission Agreement." Tackaberry personally delivered the letter to Ryan, who said he would have to talk to Saunders. Neither Ryan or Saunders signed or otherwise responded to that letter.

Throughout May, Tackaberry continued his efforts to obtain a written agreement. During that time, Ryan and Saunders offered to pay him a $75,000 commission on an installment basis as they developed the property. Tackaberry refused to consider anything less than ten percent. Tackaberry testified that he had met with Ryan again on May 15th, but they were still unable to agree on the commission amount. Thereafter, Tackaberry testified, Ryan had ceased to return his phone calls, and he had cancelled a meeting scheduled for May 29th. On that date, Tackaberry drafted another letter, stating in part:

I have forestalled processing my paperwork on this transaction for almost a month in hopes that when I did process it the commission issue would be resolved.

* * * * * *

This complicates the issue in that I may not have as much flexibility in the manner of payment of the commission as I would have, had we resolved this issue prior to the file being processed.

On June 5th, Ryan and Tackaberry met once more to discuss the commission. Ryan offered Tackaberry $150,000, and Tackaberry again refused to consider less than $300,000. On June 26th, Ryan made Tackaberry a final offer of $150,000, which Tackaberry again refused. Tackaberry subsequently delivered to Ryan a bill for $325,000, ten percent of the final purchase price. On September 29, 1987, Ryan and Saunders closed on the property but did not pay Tackaberry for his services.

Weichert brought this action to enforce an alleged oral agreement between Tackaberry and Ryan for the payment of a ten percent brokerage fee, or, in the alternative, for damages based on quantum meruit. At trial, Kyritsis surprised counsel on both sides by testifying that he had agreed to sell the property to Saunders for $3,000,000 before Tackaberry had first contacted Ryan. Saunders testified and corroborated Kyritsis' testimony. Subsequent to that revelation, defendants argued that Tackaberry deserved no commission because he had not been the procuring cause of the sale.

The trial court found that Ryan and Saunders had contracted to pay Tackaberry a $300,000 broker's fee. The court first found that Tackaberry was the efficient and procuring cause of the sale, and expressly rejected Kyritsis' testimony that he had independently agreed to sell the property to Saunders:

It is not logical or credible that [Ryan and Saunders] would have their attorney * * * prepare a contract and later sign a revised contract * * * referring to Weichert as the only broker "entitled to commission," providing that "buyer agrees to pay any broker's commission due Weichert as per separate agreement between buyer and Weichert," (emphasis added) and further arranging to indemnify the sellers as to any commissions claims, unless Ryan and Saunders believed Weichert Realtors was the efficient cause of the sale.

The court also found that Ryan had orally contracted to pay Tackaberry a broker's fee totaling ten percent of $3,000,000 (the original price for the property), and that the statute of frauds did not apply to that oral contract. Finally, the...