Opinion
DOCKET NO. A-5712-10T2
02-11-2013
R.J. BRUNELLI & CO., INC., Plaintiff-Appellant, v. BRIAD DEVELOPMENT EAST, L.L.C., and BRIAD CLIFTON, L.L.C., Defendants-Respondents.
Fred M. Klatsky argued the cause for appellant (Klatsky Sciarrabone & DeFillipo, attorneys; Mr. Klatsky and Thomas C. Sciarrabone, on the briefs). Philip Rosenbach argued the cause for respondent (Berman Rosenbach, P.C., attorneys; Mr. Rosenbach, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Ashrafi and Hayden.
On appeal from Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-4982-08.
Fred M. Klatsky argued the cause for appellant (Klatsky Sciarrabone & DeFillipo, attorneys; Mr. Klatsky and Thomas C. Sciarrabone, on the briefs).
Philip Rosenbach argued the cause for respondent (Berman Rosenbach, P.C., attorneys; Mr. Rosenbach, on the brief). PER CURIAM
Plaintiff, a commercial real estate broker, appeals from final judgment denying its claims for commissions. We reverse and direct that judgment be entered awarding plaintiff $600,000 in damages. We also remand to the trial court to determine whether contractual pre-judgment interest and attorney's fees should be added to the judgment.
On an appeal from judgment after a trial without a jury, we defer to the trial court's findings of fact. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). We will not disturb the trial court's decisions on factual disputes so long as "there is sufficient credible evidence in the record to support the findings." Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 397 (2009); accord State v. Adams, 194 N.J. 186, 203 (2008). We "may not 'engage in an independent assessment of the evidence as if [we] were the court of first instance.'" In re Taylor, 158 N.J. 644, 656 (1999) (quoting State v. Locurto, 157 N.J. 463, 471 (1999)).
Our deferential standard of review, however, does not apply to questions of law upon which the judgment stands. "A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
In this case, our disagreement with the trial court does not arise from its findings of fact but from its interpretation and application of the parties' contract for real estate commissions. That function of the trial court is a matter of law subject to plenary review on appeal. Selective Ins. Co. of Am. v. Hudson East Pain Mgmt. Osteopathic Med. & Physical Therapy, 210 N.J. 597, 605 (2012); Kaur v. Assured Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009).
The contract terms and the relevant facts leading to our conclusions were essentially undisputed at the trial.
I.
As a real estate broker, plaintiff R.J. Brunelli & Co., Inc., specializes in the leasing of retail space in shopping centers. The principal of the firm, Richard Brunelli, acted personally on behalf of plaintiff in the events and transactions relevant to our conclusions, and therefore, we will refer to both the plaintiff firm and Richard Brunelli interchangeably as Brunelli. Brunelli's daughter, Danielle Brunelli-Albrecht, a vice-president of the firm, also performed realtor services in this matter, but her role does not materially affect the dispute between the parties.
Defendants Briad Development East, L.L.C., and Briad Clifton, L.L.C., (jointly "Briad"), are among a group of corporate entities that own and operate T.G.I. Friday's and Wendy's restaurants in several states. Brad Honigfeld is the owner of Briad. Other corporate personnel who participated in the relevant events and transactions on behalf of Briad are James Ardizzone, its director of development, and Marlene Laveman, its vice-president and general counsel.
Additional persons and entities involved in the events are: Terry McEwen, a partner of a firm named Poag & McEwen ("Poag"), headquartered in Memphis, Tennessee, that developed and operated shopping centers; and Clifton Lifestyle Center, L.L.C., a joint venture company established by Briad and Poag to own and develop the property that is the subject of this lawsuit.
In 2005, Briad purchased land on Route 3 in Clifton, New Jersey, to build a T.G.I. Friday's restaurant. The land exceeded by about eight-and-a-half acres the space Briad needed for the restaurant. In February 2006, Honigfeld and Ardizzone met with Brunelli to discuss development and marketing options for the extra land Briad had purchased. Briad did not wish to sell the land, but it had no experience in developing and leasing retail commercial space. Brunelli suggested alternatives for developing the land as a traditional shopping center or one of a more modern design, which he called an open "lifestyle center." Brunelli then prepared and presented to Briad several concepts and drawings showing development plans, including "lifestyle center" designs that contained both retail commercial space and residential condominium units or only retail commercial space. The parties believed that the design for combining both commercial and residential uses provided the most profitable potential for Briad.
On April 13, 2006, Brunelli and Briad executed an exclusive listing agreement for the proposed development of the Route 3 property. Both parties participated in the preparation of the listing contract. Its primary objective was to establish terms for the payment of commissions that Brunelli would earn through its specialty services of procuring commercial retailers to lease space in the proposed shopping center. Brunelli expected it could earn more than a million dollars in leasing commissions by marketing the proposed shopping center to high-end retailers and negotiating future leases.
The term of the listing agreement was from March 3, 2006, through at least March 31, 2008; the agreement would remain in effect beyond the two-year term unless Briad cancelled it by written notice. Brunelli was concerned that his firm might provide leasing services during the term of the listing agreement but that Briad might elect to pursue a different option for its land. At Brunelli's request, the listing agreement provided for alternative forms of commission in the event that the property was conveyed during the term of the listing agreement.
A section of the listing agreement labeled "SALE" states that Brunelli would not market the property for sale unless directed by Honigfeld to do so, but that, if Briad sold the property during the term of the listing agreement, Briad would pay Brunelli three percent of the sale price as a commission. The commission would be payable whether or not the buyer was procured by Brunelli.
Additional provisions in the same section address the eventuality that Briad might choose to "contribute" the land to a joint venture entity for purposes of development rather than selling it outright. The "contribution" provisions also fix at three percent the commission payable to Brunelli based on the "'land value,' which may be 'contributed' to the Joint Venture entity." The dispute in this case requires interpretation and application of these alternative provisions for payment of a commission to Brunelli. The core of the dispute can be found in a clause in the "contribution" provisions stating that the three-percent commission was to "be paid when the closings on residential spaces commence."
Briad emphasizes that clause and also testimony that the parties discussed a joint venture in the context of a mixed commercial and residential development. Significant to the issues in dispute, the listing agreement does not fix a time for payment of a commission in the event that Briad contributed the land to a joint venture entity but there were no "closings on residential spaces," in other words, contribution of the land to a joint venture to develop exclusively commercial uses. As events progressed, Briad's plans for the property evolved toward a joint venture with Poag to develop the land for exclusively commercial leases. The trial court agreed with Briad that a commission for contribution of the land to a joint venture was payable to Brunelli only if the property was developed for residential as well as commercial uses.
In the spring and summer of 2006, before the joint venture plans took shape, Brunelli undertook to create marketing materials for the anticipated development. Brunelli and his daughter traveled to meet with potential commercial tenants, and they presented their marketing materials at an industry show in 2006 to attract high-end retailers. Brunelli also participated in advising Briad and its architects about design concepts for the shopping center. Over time, Brunelli was able to procure four potential retailers for the anticipated commercial spaces — Jos. A. Bank Clothiers, Coldwater Creek, Massage Envy, and Chico's. It also engaged in discussions with other similar retailers.
In the summer of 2006, Honigfeld and Ardizzone became acquainted with the Poag partnership as an entity that developed and operated shopping centers, including innovative lifestyle centers similar in design to the proposals made by Brunelli. During the next several months, Poag partner McEwen met with Honigfeld, Ardizzone, and Brunelli to discuss a joint venture to develop the property in Clifton.
In September 2006, Brunelli and Briad learned that municipal authorities in Clifton were unlikely to grant zoning and development approvals for a mixed commercial and residential use of the Route 3 property. Briad's discussions with Poag continued, but now focused on exclusively commercial development of the property.
In October 2006, Brunelli received approval from Briad to market the property for sale or a joint venture for commercial development. It sent correspondence and marketing materials to seven potential buyers or joint venture partners, including Poag. After McEwen visited the Clifton property in October 2006, Brunelli immediately wrote to him stating that his firm had an exclusive listing agreement with Briad that entitled it to a three-percent commission on the land value in the event that the property was conveyed to a joint venture. Although Brunelli's letter indicated that copies were sent to Honigfeld and Ardizzone, both claimed later that they had not seen a copy of that letter until litigation had commenced.
During the fall of 2006 and into the early months of 2007, Briad and Poag negotiated on the terms of a joint venture, Brunelli being kept informed and participating at times in the discussions and planning. In November 2006, Brunelli and his daughter traveled to Memphis to update Poag on the progress of the development plans.
In January 2007, about fifteen months before the earliest termination date of Brunelli's exclusive listing agreement, Briad informally notified Brunelli that it should suspend its services in seeking lessees for the anticipated commercial development. By email dated February 11, 2007, Honigfeld told Brunelli that Poag would "finish out the leasing" of the shopping center. By letter dated March 27, 2007, Briad's general counsel, Laveman, instructed Brunelli to cease and discontinue all contact with potential lessees and to provide to Briad the information it had collected about potential tenants. Laveman's letter also disputed Brunelli's claim that it was entitled to a three-percent commission upon conveyance of the property to a joint venture. Brunelli immediately wrote back to Laveman disputing Briad's right to terminate the exclusive listing agreement a full year before the earliest termination date fixed by the agreement.
By responding letter dated April 4, 2007, Laveman denied having terminated the listing agreement, but her letter did not alter the prior instructions that Brunelli should cease its services toward leasing commercial space to retailers. In fact, Laveman's letter stated that Poag had its own "leasing department and agents to work on the project." Neglecting that the listing agreement designated Brunelli as the "sole and Exclusive agent to sell or lease the subject property," Laveman's letter asserted that Brunelli would not be "the sole agent" and it should await further instructions if its services were needed. Briad, however, did not request any additional services from Brunelli.
On April 23, 2007, Briad and Poag executed a joint venture agreement. The agreement required the formation of a new entity, to be called Clifton Lifestyle Center, L.L.C., for the purpose of "acquiring, owning, and constructing improvements upon, and marketing and leasing" the Route 3 property. It stated that title to the property would be conveyed to Clifton Lifestyle Center for a "purchase price" of $20,000,000, which Briad and Poag expected to finance by means of an acquisition and construction loan from a bank.
Nine months later, on February 1, 2008, Briad executed a deed conveying the property to Clifton Lifestyle Center. The deed and a number of other documents used to complete the conveyance indicated a purchase price of $20,000,000, which was financed by a loan of $61,000,000 from M & T Bank.
Also on February 1, 2008, Clifton Lifestyle Center entered into a Management and Leasing agreement appointing an entity named PM Lifestyle Shopping Centers, LLC, as the "exclusive leasing agent." The agreement authorized the new leasing agent "to perform those services necessary for the leasing of the Center," and it established a manner and formula for calculating commissions to be paid for its leasing services. Subsequently, by letter dated March 24, 2008, attorney Laveman wrote to Brunelli stating in one sentence that Briad was terminating the Brunelli exclusive listing agreement effective April 4, 2008.
Eventually, the property was developed as a shopping center, now called "The Promenade at Clifton." Brunelli did not receive any commissions for its services related to the Clifton property. In September 2008, Brunelli made a written demand upon Briad for payment of $600,000, representing a commission of three percent of the $20,000,000 sale price of the property as conveyed from Briad to Clifton Lifestyle Center.
During the events relevant to this litigation, the parties and documents referred to the proposed shopping center as "The Village at Clifton."
In November 2008, Brunelli commenced this lawsuit. By a subsequent amended complaint, Brunelli alleged the following five counts against Briad: (1) breach of the exclusive listing agreement in that Briad failed to pay $600,000 in commission for the sale of the property to Clifton Lifestyle Center in February 2008; (2) quantum meruit recovery of the same amount based on the same conveyance of the property to Clifton Lifestyle Center; (3) breach of the exclusive listing agreement in that Briad failed to pay commissions due to Brunelli for procuring retail leases of four retailers: Jos. A. Bank Clothiers, Coldwater Creek, Massage Envy, and Chico's; (4) quantum meruit recovery for procuring the same four leases; and (5) breach of the listing agreement with respect to Brunelli's opportunity to earn additional leasing commissions by procuring other potential retailers as tenants of the shopping center. Briad filed an answer and a counterclaim alleging that faulty advice from Brunelli caused it certain losses.
Before trial, the parties settled the issue of commissions due for leases of the four named retailers, Briad paying $265,000 in commissions to Brunelli. Consequently, counts three and four of Brunelli's amended complaint were dismissed.
Trial of counts one, two, and five proceeded on seven non-consecutive days before a judge sitting without a jury. During the trial, the court granted Briad's motion to dismiss count five on the ground that Brunelli had not proven by reliable evidence the damages it allegedly suffered when it was prevented from procuring leases with other potential retailers.
In its final decision at the conclusion of the trial, the court reasoned as to count one that a "sale" had not occurred when the property was conveyed to Clifton Lifestyle Center in February 2008. The court also concluded that the contractual provision fixing a commission for "contribution" of the property to a joint venture did not include a conveyance for exclusively commercial development. Therefore, the listing agreement did not require Briad to pay a three-percent commission to Brunelli for the conveyance of the property to Clifton Lifestyle Center.
As to count two, the court concluded that Brunelli could not recover compensation pursuant to quantum meruit. The court reasoned that the terms of the listing agreement controlled all of Brunelli's rights to compensation and that the common law doctrine of quantum meruit was not available if a contract pertaining to the same subject exists.
Having denied Brunelli any commission or other form of compensation, the court dismissed with prejudice counts one and two of Brunelli's amended complaint. By judgment entered on July 6, 2011, the court also dismissed with prejudice Briad's counterclaim.
II.
The trial court's decision was based on its interpretation and construction of the terms of the exclusive listing agreement. As we have stated, we conduct plenary review of the trial court's interpretation of the contract and its understanding and application of the relevant law to established facts. "Accordingly, we pay no special deference to the trial court's interpretation and look at the contract with fresh eyes." Kieffer v. Best Buy, 205 N.J. 213, 223 (2011).
The trial court erred in its decision on count one because the listing agreement provided for a three-percent commission to be paid to Brunelli in the event the property was sold, or, in the event it was contributed to a joint venture in circumstances such as those that occurred. After the property was conveyed to Clifton Lifestyle Center, Brunelli lost the opportunity to earn commissions for its leasing services. Whether the conveyance is viewed as a sale or a contribution to a joint venture, the contract entitled Brunelli to a $600,000 commission.
"Contribution" of property rather than its "sale" may affect tax consequences to a partnership or a limited liability company. See 26 U.S.C.A. § 721(a) ("No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership."); Mark IV Pictures v. Comm'r, 969 F.2d 669, 672 (8th Cir. 1992) ("[N]o income is recognized when a taxpayer exchanges property for a partnership interest."). For our purposes on this appeal, the federal tax consequences of the conveyance do not affect the meaning of the terms "sale" and "contribution" as used in the exclusive listing agreement. Briad has not argued that the conveyance was a "contribution" rather than a "sale" because of its federal tax consequences.
Alternatively, with respect to count five, the trial court erroneously failed to award damages to Brunelli for Briad's breach of the exclusive listing agreement. There can be no question that Briad breached the listing agreement when it directed Brunelli to cease its services before the termination date of the agreement. We accept the trial court's conclusion that Brunelli's evidence on unearned leasing commissions of more than a million dollars was speculative and not sufficiently reliable as a measure of its losses. However, the evidence permitted a rational basis to award damages to Brunelli in conformity with the parties' contract.
Either as an unpaid commission for conveyance of the property or as a fair substituted measure of its losses arising from early termination of the listing agreement, Brunelli is entitled to recover $600,000 as its damages.
A.
The relevant provision of the listing agreement upon which Brunelli relies for the first count of its amended complaint states: "[I]f the property is sold during the term of this Agreement, the Owner agrees to pay R.J. Brunelli & Co., Inc. a sales commission based on three (3%) percent of the sales price of the property whether or not the Broker was the procuring cause of the sale." The agreement does not define or further explain the words "sold" or "sale."
The relevant provisions pertaining to a commission payable upon "contribution" of the property to a joint venture are as follows:
The Broker and the Owner have discussed the possibility of the Owner seeking a Joint Venture versus a sale and in the event the Owner decides to pursue this alternative, the Owner hereby agrees to have the Broker exclusively procure Joint Venture prospects as an alternative to outright purchasers except [that no commissions shall be payable with respect to three named potential joint venture partners].
The commission rate in the event of a Joint Venture with any other party th[a]n the three listed above shall be three (3%) percent of the agreed development's "land value," which may be "contributed" to the Joint Venture entity. In the event of a Joint Venture, the three (3%) percent commission shall be paid when the closings on residential spaces commence.
These "contribution" provisions do not expressly refer to either a joint venture limited to a mixed commercial and residential development or to a solely commercial development. The last-quoted sentence, however, inserts the notion of residential development of the property into the contingency of a contribution of the land to a joint venture rather than "outright" sale and purchase.
The trial court concluded that the conveyance of the property to Clifton Lifestyle Center was not a "sale despite [its] outward appearances." The court stated that classifying the transaction "as a sale would exalt form over substance," but it did not analyze the evidence in detail to explain why it reached that conclusion. The court interpreted the sale provision as applicable only to an "outright sale" and it apparently viewed a transaction by which Briad maintained an interest in the joint venture entity that would own the property as something other than such an "outright sale." The court concluded that the February 2008 transaction was a contribution of the land to the joint venture but not a contribution that was covered by the listing agreement. It read the provisions we have quoted as applicable only to a joint venture that intended to develop the property for at least some residential use.
As we have stated, what happened is not in dispute. Nor is there a dispute about the documents in evidence that were generated during the relevant events and transactions. The issue in dispute is whether the February 2008 conveyance to Clifton Lifestyle Center was a sale or a contribution of the land and, if the latter, whether the contract nevertheless requires that Briad pay a three-percent commission on the value of the land.
When interpreting a contract, "we first examine the plain language of the [contract] and, if the terms are clear, they 'are to be given their plain, ordinary meaning.'" Pizzullo v. N.J. Mfrs. Ins. Co., 196 N.J. 251, 270 (2008) (quoting Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001)). We do not supply terms to contracts that are plain and unambiguous, and we will not make "a better or more sensible contract than the one" the parties made for themselves. Kotkin v. Aronson, 175 N.J. 453, 455 (2003); accord Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960); Graziano v. Grant, 326 N.J. Super. 328, 342 (App. Div. 1999). "If the terms of the contract are susceptible to at least two reasonable alternative interpretations, an ambiguity exists. In that case, a court may look to extrinsic evidence as an aid to interpretation." Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (citation omitted). "Whether a term is clear or ambiguous is . . . a question of law." Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (internal quotation marks omitted).
In applying these general principles to the facts of this case, we do not defer to the trial court's determination as to whether or not an ambiguity exists in the contract terms, or how such an ambiguity should be resolved. These disputed issues are questions of law subject to our plenary review. See Celanese Ltd. v. Essex Cnty. Improvement Auth., 404 N.J. Super. 514, 528 (App. Div. 2009) ("[U]nless the meaning is both unclear and dependent on conflicting testimony," the court interprets the terms of a contract as a matter of law.).
In our view, some of the provisions of the listing agreement we quoted earlier are ambiguous. The agreement is susceptible to two reasonable interpretations on the question of whether a contribution of the land for exclusively commercial development requires payment of a commission. Whether the February 2008 conveyance was a sale or a contribution, we construe the contract as requiring Briad to pay a three-percent commission to Brunelli, in particular, because Brunelli's opportunity to earn leasing commissions was thus prematurely terminated.
i.
For a commission to be payable if Briad sold the property, the contract does not explicitly require a sale to an independent third party. Rather, it merely references a sale, which numerous documents evidencing the February 1, 2008 transaction also reference. Documents that used the terms "sale" or "purchase" in reference to the conveyance of the property include: the joint venture agreement of Briad and Poag dated April 23, 2007, referencing the "purchase price" of $20,000,000; the deed from Briad to Clifton Lifestyle Center, which states that the "transfer and conveyance is made for the sum of . . . $20,000,000 . . . The Grantor acknowledg[ing] receipt of this money"; the affidavit of consideration Briad filed with the county clerk, reciting the same consideration and a realty transfer tax of $239,475, which Briad paid; a corresponding affidavit of consideration executed by Clifton Lifestyle Center, again designating the same price for the property; and the settlement statement generated at the closing, indicating the same purchase price and other indicia of a sale.
The settlement statement references a loan that Clifton Lifestyle Center obtained from M & T Bank to finance the transaction. It also lists the payoff of existing mortgages of Briad on the property. Briad apparently needed the settlement statement to establish an official record of the transaction for M & T Bank and for the parties themselves. Such a settlement statement is generally necessitated when the property is sold, especially when a financial institution provides the funds for the purchase.
Briad argues that a true sale did not occur because it continued to be part-owner of the land through its fifty-percent ownership interest in Clifton Lifestyle Center, and because Honigfeld and his wife were required to sign a guarantee for the loan from M & T Bank. Briad claims it did not benefit from the transaction as it would have if a sale had been made to a third party. It argues it did not receive the "purchase price" of $20,000,000 but only a net gain of $2,340,396.41 upon completion of the transaction.
The fact that Honigfeld and his wife were required to guarantee the M & T Bank loan does not mean that Briad, the prior owner of the property, did not benefit from the conveyance in the same way it would have from a sale. The $20,000,000 designated in the settlement statement as the proceeds of the sale were used to pay the expenses of the transaction and to discharge prior encumbrances on the portions of the original property that Briad continued to own, including the land on which the T.G.I. Friday's restaurant would be situated. More than $17,000,000 in existing mortgages were discharged, and Briad admittedly received the net amount of the purchase price, more than $2,340,000. As far as Briad is concerned, the financial results of the transaction were indistinguishable from a sale to a third party.
The trial court erred as a matter of law in concluding that a sale could not occur from Briad to a separate joint venture entity that Briad also owned in part. Separate business entities can convey property to one another with consideration exchanged. See, e.g., 54 C.J.S. Limited Liability Cos. § 54 (2010). As Briad itself indicated by the documents it prepared for the transaction, such a transaction is the equivalent of a sale, at least for some purposes.
Attorney Laveman testified that the $20,000,000 consideration was noted in the deed and other documents so that Clifton Lifestyle Center could obtain title insurance in the full amount of the bank loan devoted to the acquisition of the land and also so as not to defraud the county clerk with respect to a realty transfer tax for the transaction. When it suited Briad's purposes, it described the transaction as an exchange of property for consideration of $20,000,000, in other words, a sale. It could not at the same time claim that the transaction was not truly a sale to avoid payment of a commission to Brunelli. For the same reasons that the transaction was a sale for purposes of the lender, the title company, and the county clerk, it was a sale for purposes of Brunelli's right to a commission.
We conclude that the February 2008 conveyance of the property from Briad to Clifton Lifestyle Center was a sale that required payment of a three-percent commission to Brunelli.
ii.
Alternatively, if the conveyance was a sale only in form and not in substance, then it was a contribution of the property to the new joint venture entity, but a commission was yet payable.
The trial court was persuaded that the "contribution" provisions we previously quoted must be limited to a joint venture intended to develop the property with at least some residential uses. The parties' testimony, however, was that the listing agreement was intended to address a conveyance of the property to a joint venture if the conveyance interfered with Brunelli's opportunity to earn commissions from leasing commercial space. The primary objective of the listing agreement was to state the terms of Brunelli's right to earn commissions by procuring commercial lessees. Brunelli sought to protect its financial interest if Briad decided to convey the property and the new owner did not intend to continue Brunelli's services as the exclusive listing broker for commercial leases. Since the contract did not expressly address the contingency that the land might be contributed to a joint venture for exclusively commercial development, the court could look to the intention of the parties to discern whether the contract as a whole should be interpreted to cover such a contingency. See Hall v. Bd. of Educ., 125 N.J. 299, 305 (1991) ("If contract terms are unspecific or vague, extrinsic evidence may be used to shed light on the mutual understanding of the parties.").
The agreement provided for an alternative form of commission to compensate Brunelli at the rate of three percent of the purchase price or land value. Because the contribution provision did not expressly indicate it was restricted to a joint venture developing the land for mixed commercial and residential use, the agreement could be read to provide for a three-percent commission under the circumstances that actually occurred, contribution of the land for another purpose that terminated Brunelli's leasing services. Such a reading would require supplying a missing term in the agreement to provide for the time that payment of the commission would be due, generally a reasonable time after the transaction conveying the land to a joint venture. See Restatement (Second) of Contracts § 33 cmt. d (1981) ("Where the contract calls for a single performance such as the rendering of a service or the delivery of goods, the time for performance is a 'reasonable time.'"). Otherwise, interpreting the agreement to include a commission if the land was contributed to any joint venture that did not continue Brunelli's leasing services is generally consistent with the contract terms as a whole and with the parties' intentions.
In that regard, we note that the agreement specifically listed the names of potential joint venture partners that would not generate a commission payment to Brunelli. By explicitly excluding certain contingencies from Briad's obligation to pay a commission, the parties implied that other contingencies were covered by the agreement they had reached.
We conclude that the listing agreement should be construed to entitle Brunelli to a commission even if the land was conveyed for only commercial development, in particular, because Brunelli was prevented from earning leasing commissions as a result of the conveyance.
There is no dispute on this record that the value of the land was $20,000,000. Therefore, Brunelli is entitled to a commission of $600,000 even if the transaction of February 1, 2008, was a contribution rather than a sale of the land.
Because we conclude the listing agreement was a sufficient basis for Brunelli's recovery of the compensation it was due, we need not address its quantum meruit claim and the trial court's restrictive reading of that common law doctrine. See Moser v. Milner Hotels, Inc., 6 N.J. 278, 280 (1951) ("An implied contract cannot exist when there is an existing express contract about the identical subject."); Kas Oriental Rugs, Inc. v. Ellman, 394 N.J. Super. 278, 286 (App. Div.) ("It has long been recognized that the existence of an express contract excludes the awarding of relief regarding the same subject matter based on quantum meruit."), certif. denied, 192 N.J. 74 (2007). We reach no conclusion on whether the trial court correctly determined the limitations of the quantum meruit doctrine in the circumstances of this case.
B.
There is yet another alternative ground upon which Brunelli is entitled to recover damages on this record. With respect to count five of Brunelli's amended complaint, Brunelli proved that Briad breached the exclusive listing agreement by directing it to cease and discontinue its leasing efforts more than a year before the termination date of the contract. Attorney Laveman's letter of April 4, 2007, disclaiming that Briad had terminated the contract prematurely, and her letter of March 24, 2008, officially terminating the listing agreement, are of no effect on that score. In the early months of 2007, Briad decided to turn the leasing services over to Poag to "finish out the leasing" of the shopping center. Its decision to do so did not alter its obligations to Brunelli under the exclusive listing agreement that was to run through at least March 31, 2008.
Briad's brief disingenuously describes the events of early 2007 as "Poag [taking over] the retail leasing functions for the site from the plaintiff[,]" and "a disagreement" between Brunelli and Briad "over the plaintiff's leasing role." The correspondence and other communications we have recounted in our factual narrative are unrefuted proof that, in a word, Briad breached its exclusive listing agreement with Brunelli.
Although breach of the contract cannot be disputed, Brunelli had the burden of proving its damages resulting from that breach. Caldwell v. Haynes, 136 N.J. 422, 436 (1994). In a contract case, "[c]ompensatory damages are designed 'to put the injured party in as good a position as he would have had if performance had been rendered as promised.'" 525 Main Street Corp. v. Eagle Roofing Co., 34 N.J. 251, 254 (1961) (quoting 5 Corbin, Contracts § 992, p.5 (1951); 1 Restatement, Contracts § 329, comment a (1932)).
Brunelli attempted to prove that it would have earned more than $1,200,000 in additional commissions had it been permitted to continue marketing the commercial leasing spaces and to negotiate leases besides the four it actually procured. The trial court found this evidence too speculative and unreliable. Although a plaintiff is not required to prove its losses with precision or certainty, Totaro, Duffy, Cannova & Co. v. Lane, Middleton & Co., 191 N.J. 1, 14 (2007); Cox v. Sears Roebuck & Co., 138 N.J. 2, 22 (1994), we defer to the trial court's finding that Brunelli's proofs of its losses were not reliable.
However, the absence of evidence as to one measure of damages should not preclude an award based on an alternative and reliable measure of damages. Cf. St. Louis, LLC v. Final Touch Glass & Mirror, Inc., 386 N.J. Super. 177, 188 (App. Div. 2006) (considering alternative forms of calculating damages in construction case). "[M]ere uncertainty as to the quantum of damages is an insufficient basis on which to deny the non-breaching party relief." Totaro, Duffy, supra, 191 N.J. at 14. "[C]ourts will fashion a remedy even though the proof on damages is inexact." Kozlowski v. Kozlowski, 80 N.J. 378, 388 (1979). "It is . . . sufficient that the plaintiff prove damages with such certainty as the nature of the case may permit, laying a foundation which will enable the trier of the facts to make a fair and reasonable estimate." Lane v. Oil Delivery, Inc., 216 N.J. Super. 413, 420 (App. Div. 1987).
Here, the parties' contract addresses the possibility that Brunelli might be prevented from earning leasing commissions by disposition of the property to a purchaser or joint venture entity that would not continue Brunelli's leasing services. Presumably, if Brunelli had been permitted to continue its marketing efforts and leasing services after Clifton Lifestyle Center acquired the property, it could not complain that Briad had breached the exclusive listing agreement by ending its opportunity to earn commissions on additional leases. But in fact, Briad viewed the conveyance of the property as ending Brunelli's role as the listing broker.
The parties' agreement set a three-percent commission rate based on the sale price or the value of the land if such an eventuality occurred through a sale or a contribution of the land to a joint venture. In the absence of other sufficient proofs, the same measure of fair compensation to Brunelli is an appropriate substitute for the damages it incurred as a result of Briad's premature termination of its services. The $600,000 alternative form of commission payable to Brunelli is a reasonable measure of its damages for Briad's breach of the leasing agreement as alleged in count five.
To be clear, we do not mean that Brunelli is entitled to both a $600,000 commission for conveyance of the land and the same amount again as compensation for loss of leasing opportunities. That amount is a measure of its losses based on alternative legal grounds under the contract that Briad breached.
Count five should not have been dismissed for lack of adequate proof of damages.
C.
Having concluded that Brunelli was entitled to recover $600,000, we next consider Brunelli's claim for pre-judgment interest and expenses of litigation. The listing agreement contains provisions for the payment of interest to Brunelli at the rate of 1.5% per month and also for "collection costs, attorney's fees and court costs" if Briad fails to pay commissions within thirty days of their due date.
Briad contends that before Brunelli filed suit, Poag offered to "buy-out" for $600,000 Brunelli's interest in continuing as the leasing broker. If true, the joint venture may have been willing to pay to Brunelli the amount it was entitled to receive under its listing agreement. We have no information on this record, however, concerning what the terms were of Poag's alleged offer.
We note that settlement offers are generally not admissible evidence to prove liability or the amount in dispute. N.J.R.E. 408. However, a settlement offer may be relevant and admissible for other purposes. Ibid.
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The parties have not addressed factual issues that may be relevant to the right of Brunelli to charge interest at the 1.5% per month contract rate, or to be reimbursed for its costs in being required to litigate to "collect" the commissions it was entitled to receive. We leave it to the trial court in the first instance to determine whether Brunelli is an aggrieved party to a contract entitling it to recover pre-judgment interest at either the contract rate or some other rate, see Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 478 (1988); DialAmerica Mktg., Inc. v. KeySpan Energy Corp., 374 N.J. Super. 502, 512 (App. Div.), certif. denied, 184 N.J. 212 (2005), and also, whether attorney's fees and collection costs should be added to the judgment, see N. Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158 N.J. 561, 572 (1999). We remand to the trial court to entertain any further claims and defenses regarding additional amounts that may be awarded to Brunelli.
Reversed and remanded. We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION