Opinion
DOCKET NO. A-5162-10T4
06-21-2012
SITE SEARCH OF NEW JERSEY, INC., Plaintiff-Appellant, v. CAMCO MANAGEMENT, LLC a/k/a CANUSO COMMUNITIES, MADISON RIDGEWOOD, LLC, RICHWOOD INVESTMENT GROUP, LLC, MADISON CANUSO RICHWOOD VILLAGE, LLC, CANGLO AT RICHWOOD, LLC, CANETIC LAND, LLC, and HARRISON VENTURE, LLC, Defendants-Respondents.
Robert P. Avolio argued the cause for appellant (Avolio & Hanlon, P.C., attorneys; Mr. Avolio and Catherine B. Rinaldi, on the briefs). Teresa M. Lentini argued the cause for respondents Camco Management, LLC, a/k/a Canuso Communities, Madison Ridgewood, LLC, Richwood Investment Group, LLC, Madison Canuso Richwood Village, LLC, Canglo at Richwood, LLC and Canetic Land, LLC (The D'Elia Law Firm, LLC, attorneys; Ms. Lentini, on the brief). Gene R. Mariano argued the cause for respondent Harrison Venture, LLC (Parker McCay, P.A., attorneys; Mr. Mariano, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Sapp-Peterson and Ostrer.
On appeal from the Superior Court of New
Jersey, Law Division, Mercer County, Docket
No. L-2143-08.
Robert P. Avolio argued the cause for
appellant (Avolio & Hanlon, P.C., attorneys;
Mr. Avolio and Catherine B. Rinaldi, on the
briefs).
Teresa M. Lentini argued the cause for
respondents Camco Management, LLC, a/k/a
Canuso Communities, Madison Ridgewood, LLC,
Richwood Investment Group, LLC, Madison
Canuso Richwood Village, LLC, Canglo at
Richwood, LLC and Canetic Land, LLC (The
D'Elia Law Firm, LLC, attorneys; Ms.
Lentini, on the brief).
Gene R. Mariano argued the cause for
respondent Harrison Venture, LLC (Parker
McCay, P.A., attorneys; Mr. Mariano, of
counsel and on the brief).
PER CURIAM
Plaintiff Site Search of New Jersey, Inc. (Site Search), a licensed New Jersey real estate broker, appeals from the trial court's grant of summary judgment to defendants, dismissing Site Search's complaint seeking a real estate commission. The trial court determined that Site Search's claim was barred by the Statute of Frauds. N.J.S.A. 25:1-16(b). The court rejected Site Search's argument that there was no "transfer of an interest in real estate" that triggered the Statute. We agree and affirm.
I.
Mark Olinsky had been a real estate professional since the early 1970s. He founded Site Search in 1992 or 1993. In order to learn about potential real estate projects, in late 2005 or early 2006, Olinsky contacted Michael Canuso (Canuso), who along with John Canuso, Sr., were engaged in real estate development through various business entities. Olinsky considered the Canusos a prestigious residential developer.
Canuso told Olinsky they were working on a project with residential and commercial components. Olinsky requested, and Canuso provided, information on the development. Olinsky initially showed it to a potential client who was uninterested, but Olinsky kept the information on file.
A. Site Search Brings Madison Marquette and Canuso Together.
In early 2006, Olinsky was contacted by a long-time business acquaintance, Jay Vigdor, who had taken a position with a firm known as Madison Marquette. Vigdor told Olinsky that Madison Marquette was interested in significant real estate transactions involving retail development. Olinsky forwarded the information he had received from Canuso. Vigdor presented the project to his superiors at Madison Marquette, who expressed interest in meeting with the Canusos.
Site Search named Madison Marquette Property Investments, LLC (Madison Marquette) as a defendant in its original complaint, but omitted it as a party in subsequent amended complaints.
Olinsky initially represented that he was working on behalf of Madison Marquette. Olinsky wrote to Canuso on April 21, 2006 to request the meeting, stating, "Michael, we spoke a month or so ago relating to the retail opportunity in Harrison . . . . My client, a high end retail developer is interested in pursuing an opportunity in Harrison if it is available." (emphasis added). The meeting occurred on May 5, after which Olinsky wrote to John Canuso, Sr. to thank him for "taking time with us this morning." (emphasis added). Canuso also sent an e-mail to Olinsky stating "[i]t was nice mtg. with you and your client last week." (emphasis added). At that point, Olinsky had not discussed his entitlement to a commission with representatives of Madison Marquette, or the Canusos.
In mid-May, Olinsky conveyed to Canuso that Madison Marquette representatives wished to meet with Canuso again while they attended an industry convention in Las Vegas. Olinsky had no further involvement with planning the meeting, and had no direct involvement in any subsequent meetings or negotiations between Madison Marquette representatives and the Canusos.
B. Olinsky's Efforts to Obtain a Commission Agreement.
At the end of May, 2006, Jay Vigdor e-mailed Olinsky offering to split whatever commission he received from Madison Marquette. On June 16, Olinsky contacted Canuso via e-mail and stated, "I believe it[']s time to reach an understanding relating to the potential real estate commission due for the transaction." He offered to draft an agreement for Canuso's review. Canuso responded, "As far as the commission agreement, go ahead and put something together for our review."
On June 22, Olinsky e-mailed Canuso a proposed commission agreement that identified the property as "Intersection of Routes 55 & 322, Harrison Township, Gloucester County, N.J.," the owner as Camco Management LLC and Canuso Communities, the purchaser as Madison Marquette of Washington, D.C., and proposed a commission of $2.50 per square foot of commercial approved GLA (gross leasing area) for all phases of the project. On July 8, Olinsky sent a follow-up e-mail stating that he had not heard anything from the Canusos regarding the proposal. Various e-mails were exchanged between Olinsky and Canuso, and Olinsky and Vigdor, regarding the status of the deal and the progress with Township approvals for the next several months.
On November 13, 2007, Olinsky sent an e-mail to Canuso referring to another meeting with Canuso. "As we discussed, the $25,000 'Referral Fee' offered by MM [Madison Marquette] is totally unacceptable." Olinsky reminded Canuso of his June 22, 2006 proposal and conceded Canuso had never accepted it. "I would like to note at this time that you at no time accepted the terms of the 6/22/06 Commission Agreement." Olinsky proposed, "[i]n order to gain closure to this issue[,] Site Search will agree to accept a one-time fee amounting to $250,000 as its total compensation relating to the transaction[,]" which would be due upon execution of a formal agreement between "Canuso Properties and Madison Marquette." His e-mail did not expressly indicate who would be liable for the $250,000 payment.
On November 29, 2007, Olinsky wrote to Canuso, indicating that Site Search was seeking a commission from Madison Marquette. He stated, "I hear that MM is announcing their deal . . . next week at the NY Shopping Center Convention. How can we resolve our fee deal with them? Have they responded?" On December 11, Olinsky wrote to Canuso offering to take a one-time fee of $150,000 as a "last ditch effort to settle with Madison." Olinsky also stated that he was fairly certain that Jay Vigdor would accept $25,000. On January 7, 2008, Olinsky wrote an e-mail stating that he would agree to receive $50,000 in February 2008, $50,000 in February 2009, and $100,000 in February 2011. He indicated he would need both Canuso and Madison to sign off on the agreement.
On January 17, 2008, Olinsky wrote another e-mail stating that he understood that the deal had been signed, and indicating that he would like to resolve the commission question in an amiable fashion. In response to another inquiry from Olinsky, Canuso responded that he and his father wanted to meet "to resolve this issue." The record provided does not indicate that the meeting took place or what was discussed. In March 2008 the e-mails begin referring to "feedback" from Madison Marquette regarding the commission. On March 24, 2008, Olinsky wrote that it appeared that Madison Marquette "need[s] to see I'm serious before they will move on this issue." Michael Canuso responded that "Canuso" had agreed to hold Madison Marquette harmless regarding Site Search's commission, and that commission issues needed to be addressed by Canuso. Olinsky indicated that Site Search had a claim for commission from Madison Marquette, writing, "Relating to the fact that u are solely responsible for me . . . they cannot sign my rights away unilaterally." Site Search ultimately did not enter into a signed, written commission with either Madison Marquette, or any entity affiliated with the Canusos.
C. The Real Estate Development.
On December 18, 2007, various business entities affiliated with the Canusos and Madison Marquette, along with defendant Harrison Venture, LLC (Harrison Venture), entered into a series of agreements providing for the assembly and development of numerous parcels of land owned or under contract to Canuso-related entities or Harrison Venture. The project was intended to develop roughly 382 acres in Harrison and Mantua Townships. The transaction was outlined in a "Master Agreement" among several Canuso entities, Camco Management, LLC (Camco), Canglo at Richwood, LLC (Canglo), Canetic Land, LLC (Canetic), Ridge Road at Harrison, LLC (Ridge Road), Richwood Road Corp., and Richwood Investment Group, LLC (Richwood Investment); a Madison Marquette entity, Madison Richwood, LLC (Madison Richwood); and Harrison Venture. The authority to develop the assemblage was assigned to a new limited liability company that would be formed at closing, Madison Canuso Richwood Village, LLC (MCR Village),whose members would be Madison Richwood, a fifty-percent owner, and Richwood Investment and Harrison Venture, which were each twenty-five percent owners. The Master Agreement provided that Harrison Venture, and Canglo, would transfer certain parcels of identified parcels of land they owned to Madison Richwood, which in turn agreed to transfer the properties to then-nascent MCR Village.
In some documents, including the First and Second Amendment Complaints, the company is referred to as Madison Ridgewood LLC.
In some documents, the company is referred to as Madison/Canuso Richwood Village LLC.
Pursuant to a second agreement between Canetic and Madison Richwood, called the "Other Agreement," Canetic agreed to assign to Madison Richwood its rights as a contract purchaser of various other parcels of land; and Madison Richwood in turn agreed to contribute those contracts to MCR Village. The contracts contemplated a purchase price of almost $8.5 million. The parties to the Master Agreement also contemplated acquisition of parcels neither owned nor under contract, which were called "missing land."
Canetic was owned by the Joan E. Canuso Trust, ninety-nine percent, and Sherry DiMedio, one percent.
The closing occurred on January 4, 2008. The motion record includes two deeds between Harrison Venture and MCR Village, transferring Block 25, lot 10 and Block 3, Lot 1 in Harrison Township for the sums of $2,635,406 and $1,154,075. A closing statement reflected the Harrison Venture transfers as well as the sale to MCR Village and Madison Richwood of Block 3, Lots 2 and 3, and Block 22, Lot 13, owned by Canglo. The closing statement reflected a purchase price of $3,885,934.
The Master Agreement, the Other Agreement, the Limited Liability Company Agreement forming MCR Village, and the closing statement all referred to potential commissions to Site Search and to Jay Vigdor. The Master Agreement obliged Madison Richwood to pay Olinsky up to $50,000:
Canuso and Madison each warrant to the other that it has not incurred any obligation for a real estate broker's commission, other than Jay Victor [sic] ("Madison's Broker") and Site Search of New Jersey (Mark Olinsky)("Canuso's Broker" together, the "Broker"). Each party agrees to indemnify and hold harmless the other party for any loss, cost or expense, including reasonable attorneys' fees, which the non-defaulting party may suffer as a result of a breach of this warranty. Madison shall pay, on behalf of the Company, the commissions due Madison's Broker, and with respect to Canuso's Broker, not more than $50,000 ($25,000 at Closing and $25,000The Other Agreement included the same provision, except Canetic was substituted for Canuso, and instead of naming the brokers, [x] and [y] were used.
on the first anniversary of Closing) of the commissions due Canuso's Broker. Canusoshall pay the balance of any additional commission, fee or other compensation due or payable to Canuso's broker, and shall indemnify and hold harmless Madison and the Company from any claims of liability to Canuso's Broker. This provision shall survive the Closing or the earlier termination of this Agreement.
[(emphasis added).]
"Canuso" is not a defined term in the Master Agreement, which only defines "Canuso Entities" to include Ridge Road, Canglo, Canetic, Richwood Road, and Camco Management.
The Limited Liability Company Agreement for MCR Village provided:
12.17 Brokers
. . . .
12.17.2 The brokerage fees referenced in the Master Agreement are intended to cover and compensate the brokers referred to therein, for the transactions contemplated by this Agreement, and the Company shall have rights, as a third-party beneficiary, to enforce the indemnification provisions contained in the Master Agreement.
Site Search obtained an expert report from John H. Illengwarth, who opined Site Search was entitled to a commission of $820,636, based on a sliding scale of percentages of the total investment he projected to exceed $32 million.
II.
In August 2008, Site Search filed its first complaint against Camco, Madison Marquette, and MCR Village, alleging breach of contract for failure to pay a commission and unjust enrichment. In the first amended complaint, filed almost a year later, Site Search dropped Madison Marquette as a party, and added Harrison Venture, Madison Ridgewood, LLC and Richwood Investment Group, and added a claim for tortious interference with a contract relationship between Site Search and Camco Management, LLC. Site Search's second amended complaint, filed on May 17, 2010, added Canglo and Canetic as defendants. Site Search alleged that Camco "agreed to recognize [Site Search] as a procuring broker in a deal between Canuso [defined in the complaint as Camco] and Madison Marquette Investments, LLC[.]" The complaint alleged the agreement was embodied in a writing Site Search prepared. Apparently referring to the draft agreement Olinsky forwarded to Michael Canuso on June 22, 2006, the complaint alleged:
12. Specifically, the Agreement, which plaintiff memorialized in a writing, stated that plaintiff would be entitled to a commission from defendant Canuso upon procuring a ready, willing and able buyer. The Agreement further provided that said
commission "shall be payable in full at closing or the transfer of title."
13. On or about May 2006, plaintiff introduced defendant Canuso to Madison as a ready, willing and able buyer or joint venturor of the Property.
14. In or about June 2006, plaintiff forwarded to defendant Canuso the Agreement.
At the close of discovery, defendants Camco, Madison Richwood, Richwood Investment Group, MCR Village, Canglo, and Canetic moved for summary judgment in April 2011. Harrison Venture then joined. At oral argument on June 10, Site Search argued the transactions did not constitute transfers of land because the "Canuso family entities" "never left the deal," but instead formed a joint venture with the other participants. Judge Hurd rejected the argument, finding there was no genuine issue that transfers of land occurred, whether or not a joint venture was formed. Consequently, the Statute of Frauds barred Site Search's claim, and the motions were granted.
Site Search raises the following points on appeal:
I. GENUINE ISSUES OF MATERIAL FACT EXIST THAT REQUIRE SUBMISSION TO THE TRIER OF FACT.
A. Standard of Review.
B. Genuine Issues of Material Fact Exist Regarding Whether There Was A Sale or Transfer of Interest in Real Estate.
C. Genuine Issues of Material Fact Exist Regarding Whether Plaintiff Was an Efficient Procuring Cause of the Transaction.
III.
We review the trial court's grant of summary judgment de novo. Lapidoth v. Telcordia Tech., Inc., 42 0 N.J. Super. 411, 417 (App. Div. 2011). We apply the same standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167, (App. Div.), certif. denied, 154 N.J. 608 (1998). Pursuant to Rule 4:46, we "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational fact finder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Issues of law are also subject to our plenary de novo review. Regarding "the review of legal conclusions reached on summary judgment . . . '[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference[.]'" Estate of Hanges v. Metropolitan Prop. & Cas. Ins. Co., 202 N.J. 369, 382-83 (2010) (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
We turn first to consider whether Site Search's contractual claim for a commission is barred by the Statute of Frauds. We begin by reviewing the statute. A real estate broker generally may obtain a commission only if the broker can produce a writing or writings (1) granting or recognizing the broker's authority to act, signed by the broker's principal or principal's agent; and (2) stating the amount or rate of commission agreed to by the principal and broker. The statute states:
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. For the purposes of this subsection, the interest of a mortgagee or lienor is not an interest in real estate.
[N.J.S.A. 25:1-16.]
An oral agreement is enforceable only if memorialized in writing within five days of the oral agreement and the principal does not reject the writing until after the broker has effected the transfer, or in good faith enters negotiations with a party who ultimately effects the transfer:
d. A broker who acts pursuant to an oral agreement is entitled to a commission only if:A "transfer or sale" is defined as "the transfer of an interest in real estate or the purchase or sale of a business." N.J.S.A. 25:1-16(a).
(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; and
(2) before the principal serves the broker with a written rejection of the oral agreement, the broker either effects the transfer or sale, or, in good faith, enters negotiations with a prospective party who later effects the transfer or sale.
[N.J.S.A. 25:1-16(d).]
Site Search argues no transfer of interest in real estate occurred because defendants entered into a joint venture; therefore, the Statute of Frauds does not apply. We disagree. First, the record does not indicate the formation of a joint venture. Second, the indisputable evidence reflects that an interest was transferred.
A joint venture is simply a single-purpose partnership. Fliegel v. Sheeran, 272 N.J. Super. 519, 524 (App. Div.), certif. denied, 137 N.J. 312 (1994). See Wittner v. Metzger, 72 N.J. Super 438, 444 (App. Div. 1962) (setting forth factors a court must consider in determining whether a joint venture exists). In this case, the parties formed not a partnership, but a limited liability company, MCR Village, to own and develop the properties (other than the properties transferred to Pulte Homes). A limited liability company is not a partnership, although it may be taxed as one. See Kuhn v. Tumminelli, 366 N.J. Super. 431, 439 (App. Div.) (distinguishing between partnerships and limited liability companies), certif. denied, 180 N.J. 354 (2004); N.J.S.A. 42:2B-69 (taxation of limited liability companies).
Site Search argues, "[T]he Canuso Defendants never left the transaction; rather he [sic] maintained his interest in the Property and became a co-venturer in the joint venture agreement." Not so. MCR Village is an entity distinct and separate from its members, Harrison Venture, Richwood Investment, and Madison Richwood. See Shotmeyer v. N.J. Realty Title Ins. Co., 195 N.J. 72, 85 (2008) (individual insureds are separate from limited liability company they owned). Although one Canuso-related entity, Richwood Investment, became a member of the newly formed limited liability company, it retained no ownership interest in the limited liability company's property. N.J.S.A. 42:2B-43 ("A member has no interest in specific limited liability company property."); see also Budtel Assoc., L.P. v. Cont'l Cas. Co., 915 A.2d 640, 646 (Pa. Super. Ct. 2006) (construing New Jersey Limited Liability Company Act). MCR Village is also distinct and separate from the entities that directly, or indirectly, transferred properties to it. Cf. Shotmeyer, supra, 195 N.J. at 85 (limited partnership distinct and separate from general partnership that transferred property to it).
The record also indisputably reflects that the relevant properties, or contracts to purchase — both interests in property — were each the subject of a "transfer" as contemplated by the Statute of Frauds. The rights under the contracts to purchase were transferred by Canetic to Madison Richwood, which in turn contributed them to MCR Village. The fee simple ownership of properties by Harrison Venture and Canglo were transferred to Madison Richwood, which in turn contributed them to MCR Village. With respect to properties owned by Harrison Venture, the record contains deeds evidencing the transfers.
As the Statute of Frauds applies, Site Search is entitled to a commission only if it can produce a writing that (1) evidences its authority and (2) confirms its rate of compensation; or it can prove that it entered an oral agreement that it memorialized in writing within five days, after which the principal failed to object timely. N.J.S.A. 25:1-16(b), (d). Although Site Search alleged in its complaint that it reached a commission agreement with Camco Management — an entity that apparently held no direct ownership interest in any relevant property — the record is devoid of any evidence of a bilateral agreement, oral or written, establishing Site Search's compensation as a broker. Under the Master Agreement, Madison Richmond assumed responsibility for paying Site Search "not more than $50,000," and Canuso was responsible for paying anything due above that. Under the Other Agreement, Canetic was responsible for any excess amounts due. But, those agreements do not establish the amount of commission due, and appear on their face merely to assign potential liability. In any event, Site Search does not claim that these provisions satisfy the Statute of Frauds and constitute the enforceable commission agreement governing its claim.
Notwithstanding the Statue of Frauds, Site Search argues alternatively, it is entitled to compensation because it acted as a finder, not a broker, and it was the efficient procuring cause of the transaction. We are unpersuaded.
Under New Jersey law, a broker must establish that he or she was the efficient procuring cause in order to earn a commission.
Ordinarily, for a broker to earn a commission from a seller or buyer he must establish that he was the "efficient producing cause" in bringing about the sale — at least in the sense of causing the seller to negotiate with a customer,See also Vanguard Telecomm. Inc. v. S. New England Tel. Co., 900 F.2d 645, 652 (3d Cir. 1990).
produced by the broker, who is ready, able and willing to perform, and where the transaction is later consummated without a substantial break in the ensuing negotiations.
[De Benedictis v. Gerechoff, 134 N.J. Super. 238, 242 (App. Div. 1975).]
However, even granting Site Search the favorable inference that it was responsible for bringing Madison Marquette and Camco Management together, which ultimately led to the multiple land transfers, we are unaware of any authority that proof that a broker was the efficient procuring cause of a transaction overcomes either the failure to satisfy the Statute of Frauds, or the lack of proof of a meeting of the minds on the issue of commission between the broker and the principal. Geo. H. Beckmann, Inc. v. Charles H. Reid & Sons, Inc., 44 N.J. Super. 159 (App. Div. 1957), cited by Site Search, is not to the contrary, as there existed in that case a written agreement between the owner-seller and broker.
Site Search argues, however, that its role as the efficient procuring cause entitles it to quantum meruit compensation. However, quantum meruit is unavailable, because its award would undermine the Statute of Frauds. "[A]s a general proposition, a broker, who may not recover commissions from a seller directly by reason of the statute of frauds, may not accomplish the same result indirectly . . . ." McCann v. Biss, 65 N.J. 301, 310 (1974). Casting a claim for a broker's commission as a claim in quantum meruit is an "attempt to evade the statute which [will] not be countenanced." Id. at 309. Similarly, a broker cannot recover under the theory of tortious interference with prospective economic advantage if such recovery would circumvent the statue of frauds. Ibid.; Mina L. Smith, Inc. v. Cyprus Indus. Minerals Co., 178 N.J. Super. 7, 12 (App. Div. 1981).
Although plaintiff alleged in its complaint tortious interference with contract, it has not pursued that claim on appeal.
We have required strict compliance with the Statute of Frauds. C&J Colonial Realty v. Poughkeepsie Sav. Bank, 355 N.J. Super. 444, 473 (App. Div. 2002). The statute evidences "a strong statement of public policy by the Legislature which cannot be ignored." Schettino v. Roizman Dev., Inc., 310 N.J. Super. 159, 166 (App. Div. 1998) (citing McCann, supra, 65 N.J. at 309). The Statute of Frauds was enacted to "protect the public from fraud, incompetence, misinterpretation, sharp or unconscionable practices by real estate brokers." C&J Colonial Realty, supra, 355 N.J. Super. at 470 (internal quotations and citation omitted).
Weichert Co. Realtors v. Ryan, 128 N.J. 427 (1992), cited by Site Search, is distinguishable. The Court held a buyer liable to pay quantum meruit compensation to a broker, where the two did not form an enforceable agreement; but, the version of the Statute of Frauds at the time required a writing only when the seller was responsible for the commission, and did not bar oral agreements between a buyer and a broker. Id. at 441.Thus, award of quantum meruit in that case did not violate the policy of the Statute of Frauds then in effect. See Coldwell Banker v. Blanke, 368 N.J. Super. 382, 400-01 (App. Div. 2004) (discussing Weichert Co. Realtors, supra). The 1996 revision of the Statute of Frauds requires a signed writing when a broker seeks a commission from a "principal" as distinct from only a seller, expanding the reach of the statute to commissions sought from buyers, sellers, or owners. L. 1995, c. 360, § 7.
The old version of the law stated, in relevant part, "Except as herein otherwise provided, no broker or real estate agent selling or exchanging real estate for or on account of the owner shall be entitled to any commission for such sale or exchange, unless his authority therefor is in writing . . . ." Rev. 1877, p. 446, § 10, as amended by L. 1911, c. 331, § 1, L. 1918, c. 273, § 1, previously codified at N.J.S.A. 25:1-9, repealed by L. 1995, c. 360, § 9.
Nor does Site Search present the kind of compelling facts that have led us to approve the award of quantum meruit, despite non-compliance with the statute. For example, in Coldwell Banker, supra, we remanded for a determination of compensation on a quantum meruit basis, where Coldwell Banker had served as a broker in procuring a tenant for a commercial lease; a draft of the lease prepared by the landlord and tenant explicitly stated that Coldwell Banker had negotiated the transaction and that the landlord would be responsible for broker's fees; there was substantial evidence that Coldwell Banker had provided valuable services that had enriched the defendant; it was undisputed that the defendant accepted those services; and there was evidence that the parties all expected that Coldwell Banker would be compensated in some amount for its services. However, unlike in this case, Coldwell Banker attempted to comply with N.J.S.A. 25:1-16(d) by forwarding a written confirmation of an oral agreement, though it failed to comply with the requirements of subsection (e) mandating service in person or via registered or certified mail. Id. at 391. In this case, there was no such attempt at compliance with the statute.
Finally, we reject Site Search's newly minted claim for a "finder's fee" in an effort to avoid the Statute of Frauds. First, the claim was not presented to the trial court and is not properly before us. See R. 2:5-4(a) (limiting appellate review to the record before the trial court); Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (holding that appellate courts generally will decline to consider questions or issues not properly presented to the trial court).
Second, New Jersey's Statute of Frauds governs Site Search's claim, even if Site Search is deemed a "finder." The statute applies to commission claims by a "real estate broker," who is defined as "a licensed real estate broker or other person performing the services of a real estate agent or broker." N.J.S.A. 25:1-16(b), (a). Our Supreme Court long ago held that even the limited activity of introducing or marrying together a potential buyer and seller of real estate, without participating in the parties' negotiation of price and terms — in other words, the work of a "finder" — is the activity of a real estate broker. Corson v. Keane, 4 N.J. 221, 227-8 (1950) (denying claim for finder's fee by unlicensed real estate broker).
The Statute of Frauds also proscribes commission claims by business brokers assisting in the sale of businesses, unless "before or after the sale of the business, the authority of the broker is expressed or recognized in a writing signed by the seller or buyer or authorized agent, and the writing states either the amount or the rate of commission." N.J.S.A. 25:1-16(c). As with real estate broker commission agreements, the statute also permits business broker oral agreements later memorialized in a writing. N.J.S.A. 25:1-16(c), (d). A business broker is defined as a person who "negotiates" the sale of a business, whereas "negotiates" is defined to include merely providing information or introducing parties. N.J.S.A. 25:1-16(a). Thus, even if Site Search's activities were characterized as those of a business broker, his claim would be barred by the statute. Cf. Kasmir-Standish Consultants, Inc. v. Schoeffel Instruments Corp., 89 N.J. 286, 292-3 (1982) (distinguishing between real estate broker and business broker).
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The result we reach may be perceived as a harsh one. Granting Site Search all favorable inferences, it assisted in joining together parties, which ultimately led, albeit without any further involvement from Site Search, to the Master Agreement and related agreements, the transfer and assembly of multiple properties, and the formation of a limited liability company to steer the development. However, the law required Site Search, operated by an experienced real estate professional, to obtain a signed writing as a predicate to its entitlement to a commission. As we noted in Coldwell Banker, supra,
Our Supreme Court has long disapproved of business methods which rest on a broker's "hopes" that a commission "will voluntarily be paid even though there is no legal obligation to do so," and their wish "to avoid the possibility of the refusal of an owner to sign at the outset a document of authority the full import of which the latter may not be sure."
[368 N.J. Super. at 392 (citing McCann, supra, 65 N.J. at 308).]
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION