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Fraser v. Bovino

317 N.J. Super. 23, 717 A.2d 20 (App. Div. 1998)

CONTRACTS; BROKERS; INTENTIONAL INTERFERENCE—A neighboring landowner has the right to oppose a development application and to appeal its grant. Therefore, absent sham litigation, such opposition can not be the basis for a broker’s claim of intentional interference with its right to collect a commission.

In one of three related cases, a landowner contracted to sell its property contingent upon the buyer’s obtaining all necessary approvals to construct a certain number of condominium units. In a separate agreement, the seller agreed to pay a real estate commission. When an owner of adjacent property (who had earlier attempted unsuccessfully to buy the land for itself) objected to the proposed development, it allegedly induced the buyer’s engineer to withdraw from the project and then offered the buyer a sum of money to drop the project. While a zoning board application was pending, the broker sued the adjacent landowner, the original engineering company, and others opposed to the proposed condominium project. In that suit, the broker alleged that the actions taken by certain parties in opposing the development project tortiously interfered with its expected real estate commissions. The zoning board approved the project, but a corporation controlled by the adjacent landowner commenced a court action which, though unsuccessful, expended three years through three courts. These court challenges delayed the project. The buyers were unable to raise additional funds and abandoned the project. After some procedural difficulties, the original suit was dismissed and a second similar suit was instituted. This time, it was in the name of the real estate agency by whom the original broker was employed. It included a number of additional defendants, but was still based on the original claims, although, by this time, the substance of the allegations was that the actions of the neighboring landowner were “baseless and bogus.” Shortly thereafter, the selling landowner filed a substantially similar complaint. By reason of various statutes of limitation, most of the seventeen counts in the broker’s complaint were dismissed. This left only those counts against the landowner and his company relating to their actions in opposing the application for the condominium development project.

A neighboring landowner possesses a statutory right to receive notice of a zoning application and to appear in opposition to the requested variances. Consequently, according to the Court, an exercise of that statutory right, without more, does not give rise to a cause of action for damages. Likewise, the exercise of a further right to appeal a determination by a zoning board cannot give rise to a cause of action for loss of real estate commissions. The one exception to this immunity is if the conduct at issue is “a mere sham to cover ... an attempt to interfere directly with the business relationships of the competitor.” The Court found that the question of whether particular conduct constitutes a mere sham which subjects the actor to potential tort liability, “is answered objectively, without consideration of the actor’s underlying motivation, no matter how improper it may be.” Following a decision of the United States Supreme Court, the Court found that to constitute sham litigation, and thus expose a litigant to loss of its immunity, “the lawsuit must be objectively baseless in the sense that no reasonable litigants ... would conclude that the suit is reasonably calculated to elicit a favorable outcome.” Here, the broker could not persuade the Court that this very high threshold had been breached. With respect to action taken by the neighboring property owner to persuade the original project engineer to withdraw, the Court found that because the zoning approval was granted, no damage was incurred by the broker by reason of such interference. Similarly, the monetary offer made to the buyer to not pursue its purchase, having been rejected, also did not result in any loss of commissions.


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