Moorestown, NJ (Business Wire) 11 October 2010

Last month, an appeals court in New Jersey (Realty v. Caton, No. A-1171-09T2 (NJ Super. Ct. App. Div. 31 August 2010)) to make sure of a negotiated one dispute between members of the Commission of a realtor ® association to be submitted to arbitration, even if punitive damages sought study. As a member of NAR (National Association of Realtors) Posternock Barron and wish to provide an update of the Court of Appeal of New Jersey, if a process is considered a dispute between members of the board of a broker ® Association must be sent to arbitration , even if punitive damages sought study.

The dispute relates to an Ocean County Agency (“Brokerage”) and its agents (“Seller”), which was previously connected to the exchange. During the conciliation, the seller an offer on one of their ads. After his departure, the buyer and the seller an agreement signed this property purchase. The transaction was finally closed and the company has half of the commission received by the seller claimed.

the seller had signed a “Termination (” Agreement “) with the mediation. The agreement provided that the seller does not receive a portion of the commission if the sale was carried out while the seller was a partner in the firm but closed after the seller has left the company. The agreement is not the situation in the purchase contract executed after the seller has left the company, was.

brokerage has a dispute over half the research submitted by the Commission. The brokerage said the seller had taken the wrong display when he moved for a new brokerage. The brokerage also brought new allegations against broker for the seller. These allegations have also claimed a contractual claim to the Commission, the winding circuit with a contract by both the seller and broker of new and punitive damages.

the seller filed for arbitration is to require and to suspend the prosecution. The seller and the broker are members of the Ocean County Board of REALTORS ® (“Association”). Through its membership in the union, both parties agreed to comply with Article 17 of the Code of Ethics NAR and settle all disputes “of their relationship as REALTORS ®.” The trial court denied the request for arbitration, arguing that arbitration REALTOR ® is not for the settlement of claims for punitive damages and permit if the allegations were outside the duty to arbitrate. The brokerage to appeal this decision.

New Jersey Superior Court, Appellate Division annulled the trial court and remanded the case to the Association for arbitration. First, the Court analyzed a REALTOR the obligation to arbitrate disputes ®. The brokerage argued that it contained settle the obligation, contractual disputes and / or a specific type of non-contractual dispute had, and so should not this conflict is decided by the Association for the wrongful acts.

The court rejected the argument that the obligation of REALTORS ® to include to resolve disputes, which arise from their relationship as REALTORS ® and is thus much broader than simple contract disputes. New Jersey courts have permitted arbitration of non-contractual claims, as a result of disputes under the contract, and the courts of the State, the “presumption of arbitrability” if the parties have a contractual agreement to arbitrate all disputes.

the court found that the dressing should resolve the dispute, because each of the allegations against the seller and broker of new, arising from the contractual relationship between the broker and seller. All allegations turn around to see if the broker is contractually entitled to a portion of the commission has received, or if the new agency had violated the right of the mediation of the Commission shall receive. The court itself noted that the arbitration court of the association a brokerage question punitive damages because the NAR Code of Ethics and Arbitration Manual does not limit includes the amount of the damage type of interest, it can be used for disputes between members to grant “because their relationship REALTORS ® (Price Commission not more than the actual commission). Therefore, the court ruled that was simple, the association of the dispute and therefore reverse the trial court, the case to the Arbitration Association and the suspension of prosecution.

This notification is provided by the NAR. It is not published in an official stenographer and therefore should not be cited as authority. Please consult a lawyer before you on this opinion.

Dan Posternock, Barron & Posternock, attorneys

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