Stoll v. Cruz

A-2435-96T3 (N.J. Super. App. Div. 1997) (Unpublished)
  • Opinion Date: September 25, 1997

BROKERS; COMMISSIONS; BANKRUPTCY—Even though a broker would have received a commission from a purchaser had the deal gone through before the seller’s bankruptcy, the broker doesn’t get a commission when a purchaser buys the property at a subsequent public auction.

A real estate broker had an agreement with a purchaser for a 6% commission, payable at the time of closing. The deal never closed and the seller of the property filed for bankruptcy. The property was put up for sale at a public auction where the purchaser’s company bought it. The broker then sought his commission. The Law Division granted purchaser’s motion for summary judgment, ruling that broker was not the “efficient procuring cause” in bringing about the sale, and therefore was not entitled to a commission. The broker appealed.

The Appellate Division upheld dismissal of the broker’s claims, citing decisions holding that in order to be the “efficient procuring cause”, a broker must demonstrate that he “caused the seller to negotiate with a customer produced by the broker who was ready, able and willing to perform, and that the transaction was later consummated without a substantial break in the ensuing negotiations.” In re Roth, 120 N.J. 665 (1990) (quoting DeBenedictis v. Gerechoff, 134 N.J. Super. 238, 242 (App. Div. 1975)). The Court found that the broker was not even entitled to be heard by a jury since he failed to produce evidence sufficient from which to draw even an inference that the property was purchased with his assistance.