Court Opinion

ID: 9481836
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:33:21.83952+00
Date Added: 2024-06-11T17:48:36.648467
License: Public Domain

SCIRICA, Circuit Judge,
dissenting.
I agree with the majority that the district court’s proffered distinction between a broker and a mere finder is invalid; and also agree with the majority’s discussion of prejudgment interest (although I would extend the award, and therefore would address prejudgment interest on. amounts corresponding to the sale of real property), and its discussion of Ritter’s further contentions at Section II.B. of the opinion. However, I find this case governed by our reasoning in Gruber v. Owens-Illinois, Inc., 899 F.2d 1366 (3d Cir.1990), and therefore disagree with the majority’s conclusion that part of the sale of Ritter Transportation constituted a sale of real estate within the purview of the New Jersey Real Estate Brokers’ Act, N.J.S.A. 45:15-3 (“New Jersey Act”). Therefore I respectfully dissent.
In Gruber, we interpreted Pennsylvania’s Real Estate Licensing and Registration Act, 63 Pa.Stat.Ann. § 455.101 et seq. (Purdon 1988) (“Pennsylvania Act”). Like the New Jersey Act, the Pennsylvania Act bars receipt of a commission for the sale of real estate by anyone other than a licensed real estate broker. We held that the Pennsylvania Act did not bar receipt of a commission for a sale of all the stock in a corporation, even though the assets of the corporation included real estate. We reached this result because Pennsylvania law clearly distinguishes between ownership of a corporation’s stock and ownership of a corporation’s property. 899 F.2d at 1370. We found our conclusion supported by the fact that the Pennsylvania Real Estate Act was clearly intended to protect consumers of residential real estate, not sophisticated commercial purchasers. Id. at 1373-74.
*91I see no reason why Gruber should not guide our result today. I have been unable to discern any material difference between either the language or the purpose of the New Jersey Act and that of the Pennsylvania Act. Furthermore, I believe that the New Jersey Supreme Court, no less than the Pennsylvania Supreme Court, would recognize the distinction between ownership of a corporation’s stock and ownership of a corporations’s property. See Craig v. Lake Asbestos of Quebec, Ltd,., 843 F.2d 145, 149 (3d Cir.1988) (“the fundamental proposition[ ] that a corporation is a separate entity from its shareholders”); Lyon v. Barrett, 89 N.J. 294, 297, 445 A.2d 1153, 1156 (1982); Department of Environmental Protection v. Ventron Corp., 94 N.J. 473, 500, 468 A.2d 150, 164 (1983). The New Jersey Supreme Court has recognized that the New Jersey Act, like the Pennsylvania Act, is designed to protect purchasers of residential real estate. “Neither the words nor the history of the real estate brokers’ act indicates that the act was intended to protect businessmen from business brokers.” Kazmer-Standish Consultants, Inc. v. Schoeffel Instrument Corp., 89 N.J. 286, 288, 445 A.2d 1149, 1151 (1982).
I do not believe that Kazmer-Standish suggests a different result in New Jersey. That case held that a business broker could not recover a commission on portions of the sale attributable to the sale of real estate. However, the transactions in that case took the form of sales of the corporations’ assets, not sales of their stock. See Kazmer-Standish Consultants, Inc. v. Schoeffel Instrument Corp., 177 N.J.Super. 412, 414, 426 A.2d 1061, 1061 (1981), aff'd., 89 N.J. 286, 445 A.2d 1149 (1982), Kazmer-Standish, 89 N.J. at 287, 445 A.2d at 1150. Nothing in that opinion indicates that the New Jersey Supreme Court would extend the Act’s prohibitions to sales of stock to a sophisticated purchaser. The majority relies upon the New Jersey Supreme Court’s observation that “[t]he transfer of a business can assume many forms, e.g., a sale of assets, including real estate, or the transfer of stock.” 89 N.J. at 288, 445 A.2d at 1151. That statement, however, appears as a description of transactions that are not within the Act’s central purpose, id., not as an explanation of the types of transactions that bar receipt of a broker’s commission. Therefore, I do not find it convincing on this issue.
Rather, I believe Kazmer-Standish lends support to the conclusion that Cooney’s and Wetherill’s receipt of a commission for the entire price is not barred by the Act. As we have noted, in Kazmer-Standish the New Jersey Supreme Court held that a business broker is entitled “to recover a commission on the portion of the sale of an ongoing business attributable to personal property even if the sale includes an interest in real estate.” 89 N.J. at 289, 445 A.2d at 1152. Under New Jersey law, stock is personal property. See Martindell v. Fiduciary Counsel, 133 N.J.Eq. 408, 414, 30 A.2d 281, 285 (1943). Because this transaction took the form of a purchase of stock, the entire purchase price was “attributable to” a sale of personal property. Since I rely on our reasoning in Gruber, I do not rest my decision on this ground; but it does indicate that Kazmer-Standish does not require a contrary result.