Western Electric Company, Incorporated's (Western) New York City office sent a form letter, dated March 4, 1980, to 28 real estate brokers. In this letter Western advised these brokers that it was seeking a buyer for a portion of its Kearny, New Jersey, facility. The letter, in pertinent part, read:
The attached brokerage agreement form contained the following pertinent paragraphs:
Two lines are set forth at the foot of this brokerage agreement for the signatures of the broker and Western.
Twenty-five of the brokers solicited were located in the State of New Jersey and the remaining three were located in the State of New York.
One of the New Jersey brokers that received the subject letter was:
When Leonard Gero (Gero) received this letter he was the president, director and stockholder of Andover Realty of New Jersey, Inc. (Andover-New Jersey); and, Gero also held the same titles in a New York corporation known as Andover Realty, Inc. (Andover-New York). Both Andover-New Jersey and Andover-New York were engaged in the real estate brokerage business, and were respectively licensed in New Jersey and New York. Frequently, Andover-New Jersey and Andover-New York worked together to obtain a purchaser.
According to Gero he deliberately did not sign the brokerage agreement because "[t]he agreement did not meet the criteria that we usually use to sign agreements". Despite not complying with Western's condition of executing a brokerage agreement, Gero undertook to find a buyer for this property. Thus, Gero sent a copy of Western's letter to Andover-New York.
By a letter, dated April 8, 1980, which appears on the stationery of Andover-New Jersey and which is signed by Gero as president of Andover-New Jersey, Gero informed Remo Grimaldi (Grimaldi), who was then department chief of corporate realty of Western, that he was submitting a proposal from Ray Greenwald (Greenwald) and Mayer Reiss (Reiss) to purchase the property. It is undisputed that Gero hand delivered this letter to Grimaldi at Western's New York City office, located at 222 Broadway.
Examination of the Greenwald and Reiss proposal reveals that it was in substance a counteroffer to Western, since it contained terms significantly different than the ones set forth by Western in the March 4 letter, and the brokerage agreement, cited supra. For example, the proposal offered $3,250,000 in cash for the property; sought a 6% commission for the broker; and made certain demands about heating the property. Western rejected this proposal.
Subsequently, Gero sent another letter, dated April 30, 1980, to Grimaldi and this letter contained a revised proposal from Greenwald and Reiss as nominees of the Realex
Thereafter, on May 9, 1980, a meeting took place in Western's New York City offices between the attorneys for Realex and Western for the purpose of discussing the terms of a possible sales contract. No agreement was ever reached between the parties concerning this property, and, several weeks later, Western withdrew the property from the market.
In September, 1980, plaintiffs Andover-New York and Andover-New Jersey commenced the instant action to recover a brokerage commission from defendant Western concerning the Kearny, New Jersey, property. In substance, plaintiffs alleged in their complaint that they are entitled to a 5% commission, which amounts to $187,500 of the $3,750,000 offer Realex submitted for this property because defendant allegedly accepted that offer, subject only to inconsequential terms to be negotiated. Defendant interposed an answer, which, inter alia, denied that defendant had ever accepted the offer and raised the affirmative defense of the New Jersey Statute of Frauds, as it pertains to real estate brokers. This statute is found in title 25 of New Jersey Statutes Annotated and, in pertinent part, it reads: "25:1-9. Commissions of real estate broker or agent; writing required * * * 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, signed by the owner or his authorized agent, or unless such authority is recognized in a writing or memorandum, signed by the owner or his authorized agent, either before or after such sale or exchange has been effected, and, in either case, the rate of commission on the dollar or the amount of the commission shall have been stated therein."
In New York, unlike New Jersey, a real estate broker is specifically exempt from the reach of the Statute of Frauds in respect to earning commissions. (New York General Obligations Law, § 5-701, subd 10.)
Defendant moved for summary judgment, based upon the New Jersey Statute of Frauds. As Special Term noted:
Our review of this record leads us to conclude that New Jersey "has the paramount interest in the application of its law when the contacts which New Jersey and this State have with the instant controversy are examined in relation to the policies and purpose to be vindicated by the conflicting laws" (Intercontinental Planning v Daystrom, Inc., 24 N.Y.2d 372, 382).
Herein the subject premises are located in New Jersey. As a general rule "contracts referring to the transfer of title to land are governed by the law of the place where the land is situated" (Stumpf v Hallahan, 101 App Div 383, 386, affd 185 N.Y. 550).
Defendant clearly intended that the laws of New Jersey apply in the instant case, since it deliberately sought New Jersey brokers to deal with, as discussed, supra. Plaintiffs apparently evidenced their awareness that they were selected by defendant because they were licensed as New Jersey real estate brokers, by presenting the two proposals, to defendant, on Andover-New Jersey stationery, even though Greenwald, Reiss and Realex were located in New York. Significantly, plaintiffs do not offer any evidence to support the conclusion that defendant had any knowledge of the participation of Andover-New York in this matter, and defendant specifically denies having such knowledge. "In formulating rules to govern contractual rights in situations involving conflicts of laws, the courts have often sought to carry out the presumed intention of the parties" (19 NY Jur 2d, Conflict of Laws, § 33, p 608).
In Ellsworth Dobbs, Inc. v Johnson (50 N.J. 528, 552-553) a unanimous New Jersey Supreme Court set forth the reason for the application, in New Jersey, of the Statute of Frauds to real estate brokers' commissions: "[T]he lawmakers long ago amended the statute of frauds so as to deny
We hold that, based upon the record herein, none of the following three facts, either singly or in combination, supports a finding that New York's interest outweighs New Jersey's in this matter: (1) that the May 6 and May 9 meetings, mentioned supra, were held in New York City; (2) that defendant received inquiries about the property at its New York City office; and, (3) that potential purchasers Greenwald, Reiss and Realex were located in New York.
"It is clear that the instant dispute has sufficient contacts with [New Jersey] to give [New Jersey] a substantial interest in applying its [Statute of Frauds] policy" (Intercontinental Planning v Daystrom, Inc., supra, at p 384).
It has long been the law in New York, that the State having the greatest interest in the matter should have its law applied (Auten v Auten, 308 N.Y. 155).
Here, the solicitation was made to New Jersey real estate brokers, the property is located in New Jersey, and most of the communications took place in New Jersey. The minimum fortuitous contacts that New York has with this litigation are grossly insufficient to overcome New Jersey's paramount interest herein.
Accordingly, the order of the Supreme Court, New York County (STANLEY PARNESS, J.), entered April 15, 1983 which, inter alia, struck the defendant's affirmative defense of the Statute of Frauds and denied defendant's motion and the plaintiffs' cross motion for summary judgment, should be reversed, to the extent appealed from on the law, with costs, the defendant's Statute of Frauds defense reinstated and defendant's motion for summary judgment granted.
Order, Supreme Court, New York County, entered on April 15, 1983, unanimously reversed, on the law, the defendant's Statute of Frauds defense reinstated and defendant's motion for summary judgment granted. Appellant shall recover of respondents $75 costs and disbursements of this appeal.