SETH POLLACK VS. QUICK QUALITY RESTAURANTS, INC.(L-1000-14, BERGEN COUNTY AND STATEWIDE)
172 A.3d 568
| N.J. Super. Ct. App. Div. | 2017Background
- Quick Quality Restaurants (tenant) held a 1994 lease with a right of first refusal for Butler Plaza; lease required the landlord to provide any bona fide purchase contract and gave tenant 10 days to accept the terms in writing.
- Seth Pollack (broker) and SP Realty procured Levin Properties as a purchaser; Levin and the sellers executed a purchase contract naming Pollack as broker and stating purchaser would pay a commission pursuant to a separate agreement.
- The separate commission agreement between Pollack and Levin was drafted but never signed by Levin; the purchase contract provided to tenant was redacted and did not include the separate commission agreement or identify the broker.
- Tenant timely exercised its right of first refusal and accepted the terms of the Levin contract; the sale ultimately closed between landlord and tenant and no commission was paid to Pollack.
- Pollack sued tenant for the commission (breach of contract, third‑party beneficiary, quantum meruit, implied covenant of good faith), and tenant counterclaimed under the Consumer Fraud Act; trial court granted tenant summary judgment and dismissed the counterclaim; both parties appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether broker was a third‑party beneficiary of the seller–purchaser contract | Pollack: contract naming broker and stating purchaser would pay commission shows intent to benefit broker | Quick: contract did not bind tenant to a separate commission agreement; tenant never received unredacted commission terms | Broker was not a third‑party beneficiary; no intent the tenant would be bound to pay commission |
| Whether tenant who exercises ROFR must pay broker commission tied to third‑party sale | Pollack: tenant adopted all terms of Levin contract including commission obligation | Quick: commission was in a separate, unsigned agreement and not incorporated into contract provided to tenant | Tenant not obligated; commission agreement was separate, unsigned, and not part of the adopted contract |
| Whether statute of frauds bars broker’s commission claim | Pollack: oral/email confirmation and contract language suffice | Quick: statute requires a signed writing or timely written notice identifying broker and commission | Statute of frauds bars recovery; no signed writing or compliant notice to tenant |
| Whether quantum meruit or implied covenant supports recovery | Pollack: performed services, conferred benefit, expected payment | Quick: services were for seller/purchaser; tenant received no benefit conferred by broker | Recovery denied—no unjust enrichment and no bad‑faith conduct by tenant |
Key Cases Cited
- Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528 (N.J. 1967) (broker who procures purchaser on owner’s terms is ordinarily entitled to commission)
- St. George's Dragons, LP v. Newport Real Estate Grp., LLC, 407 N.J. Super. 464 (App. Div. 2009) (construction of right of first refusal and reliance on contract language)
- Broadway Maint. Corp. v. Rutgers, 90 N.J. 253 (N.J. 1982) (third‑party beneficiary test focuses on contracting parties’ intent)
- Stein v. Chalet Susse Int’l, Inc., 492 N.E.2d 369 (Mass. App. Ct. 1986) (holder of ROFR not liable for broker commission promised by third‑party purchaser when commission agreement not enforceable)
- Fallenius v. Walker, 787 P.2d 203 (Colo. App. 1989) (contrast case where commission was included in contracting price and ROFR designee was required to accept all terms)