Case Law Summaries

Almeida Real Estate Associates v. Baijnath

• Opinion Date: August 4, 2000
• Real Property Law
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BROKERS; COMMISSIONS—A broker that does not comply with the statute of frauds is not entitled to an award for quantum meruit damages.

A real estate broker sued both the seller and buyer of a commercial building for failure to pay the broker’s commission. The seller had sent a fax to a number of local brokers indicating that the property was for sale and that a commission would be paid to the office “who makes the sale.” The fax described the offer as an open listing. The suing broker spoke with the seller who reportedly offered to pay a 6% commission. The broker subsequently showed the property to the buyer. Six months later, the buyer bought the building and represented that no broker was involved in the transaction. Thereafter, the broker sued the both the seller and buyer for breach of contract, quantum meruit, and fraud. The seller and buyer moved for summary judgment, claiming that the broker failed to comply with the statute of frauds. On that basis, the lower court dismissed the breach of contract claim. However, the counts for quantum meruit and fraud came before a different court that concluded that the broker was entitled to approximately $10,000 in quantum meruit. The seller and buyer appealed claiming that it was an error to award quantum meruit when the statute of frauds had been violated. The statute of frauds law in effect at the time the sale took place required a writing when the building’s “owner” or seller was to pay the commission. The Appellate Division relied on New Jersey Supreme Court cases which concluded that the statute of frauds “represents a strong statement of public policy by the Legislature which cannot be ignored.” The Supreme Court also concluded that “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 by a claim against the seller for wrongful interference with the broker’s reasonable expectancy of an economic benefit.” The Supreme Court then stated that “such a claim actually seeks to enforce the oral agreement, amounts to an effort to evade the statute, and like a claim in quantum meruit, would substantially undercut the law and its spirit.” In this light, the Appellate Division concluded that “quantum meruit cannot be applied to frustrate these important public policies represented by the statute of frauds.” To this end, the judgment for the award of quantum meruit was reversed, but the case was remanded for further inquiry as to the broker’s fraud claim.

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