Title: Green Mountain Investment Corp. v. Flaim

State: vermont

Issuer: Vermont Supreme Court

Document:

Green Mountain Investment Corp. v. Flaim (2001-238); 174 Vt. 495;
807 A.2d 461

[Filed 15-Aug-2002]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2001-238

                               JUNE TERM, 2002


  Green Mountain Investment Corp.      }	APPEALED FROM: 
  d/b/a	Palmiter Realty Group	       }
                                       }
       v.	                       }	Windham Superior Court
                                       }	
  Edward A. Flaim	               }
                                       }	DOCKET NO. 195-5-00 Wmcv
       v.	                       }
                                       }
  Paul James and Brian Palmiter	       }

                                                Trial Judge: John P. Wesley

             In the above-entitled cause, the Clerk will enter:


       Defendant Edward Flaim appeals a superior court judgment in favor of
  Palmiter Realty Group, Paul James and Brian Palmiter on his counterclaims
  and third-party claims for breach of fiduciary duty and promissory
  estoppel.  Flaim contends that: (1) the trial court erroneously declined to
  instruct the jury on his claims for breach of fiduciary duty; (2) he is
  entitled to damages in the amount of $10,000 on those claims as a matter of
  law; and (3) the trial court improperly reserved, and then decided as a
  matter of law against him, the issue of whether equity required the
  enforcement of the promise forming the basis of his claim for promissory
  estoppel.  We affirm. 

       In December 1999, Flaim entered into two separate open listing
  agreements with Palmiter Realty Group and Deerfield Valley Realty.  The
  terms of the listing agreements were identical and provided that the
  realtor would earn a 5% commission upon the presentation of a full price,
  no contingency offer that would close in a reasonable time, whether or not
  a sale was made.  Flaim received an offer through Deerfield that satisfied
  the open listing agreement on March 29, 2000.  Paul James, a broker at
  Palmiter Realty, called Flaim the next day and informed him that he was
  developing a higher offer.  Flaim told James that it was too late for
  another offer and that James's proposed offer was not high enough to make a
  difference.  That night, Flaim composed a letter stating his intention to
  accept the Deerfield offer and thereby terminate his listing with Palmiter
  Realty.  (FN1)  

 

       On March 31, Flaim met with James and expressed his intention to
  terminate the listing by accepting the Deerfield offer.  James encouraged
  Flaim to reject the Deerfield offer and list exclusively with Palmiter to
  avoid paying a double commission.  According to James, a clause in the open
  listing agreement shielded Flaim from a double commission by terminating
  all other outstanding open listings when he upgraded to an exclusive
  listing agreement with one broker.  Skeptical of the clause, Flaim insisted
  on a hold harmless agreement under which Palmiter Realty would assume
  liability for the Deerfield commission.  James assured Flaim that Palmiter
  Realty would hold him harmless and would sign an agreement to that effect. 
  Later that day, Palmiter Realty submitted a higher offer that satisfied the
  requirements of the open listing agreement.  The hold harmless agreement
  had not been signed at that point.  Both Deerfield and Palmiter sought
  their commissions from Flaim.  Flaim did not accept either offer, nor did
  he accept the higher than asking price follow-up offers through both
  Deerfield and Palmiter. 

       Palmiter Realty then commenced this action against Flaim for breach of
  contract.  Flaim responded by asserting breach of fiduciary duty as an
  affirmative defense and counterclaim.  He also brought a third-party breach
  of fiduciary duty claim against James and Brian Palmiter individually for
  exposing him to a dual commission.  During the jury trial, Flaim, without
  objection, amended his response to include promissory estoppel claims
  against Palmiter Realty.  Later, the court ruled on its own motion that
  there was no evidentiary basis for the breach of fiduciary duty
  counter-claims and third-party claims. 

       The jury returned a special verdict, finding that James had knowledge
  of the Deerfield offer before submitting a competing offer and that James
  took insufficient precautions to obtain Flaim's informed consent before
  subjecting him to multiple commissions.  Accordingly, the jury denied
  Palmiter Realty recovery of its commission.  The jury also determined that
  James had promised to hold Flaim harmless if Flaim accepted the Palmiter
  offer and Deerfield subsequently sued for its commission.  The jury found
  that James's hold harmless promise induced Flaim to reject the Deerfield
  offer.  The superior court declined to award Flaim compensation for the
  payment of the Deerfield commission, however, reasoning that justice did
  not require the performance of the promise to hold harmless.  In reaching
  this conclusion, the court noted that Flaim could have accepted either
  offer and paid only one commission by either (1) enforcing the hold
  harmless agreement by taking the Palmiter offer, or (2) accepting the
  Deerfield offer and raising the same defenses against Palmiter that the
  jury accepted in its special verdict. 

       On appeal, Flaim argues that the court erroneously failed to charge
  the jury with his breach of fiduciary duty counter- and third-party claims,
  noting that they rest on the same evidentiary basis as his successful
  breach of fiduciary duty affirmative defense.
      
       The court must charge the jury with all legal theories raised in the
  pleadings and by the introduction of evidence.  Arnold v. Cantini, 154 Vt.
  142, 145, 573 A.2d 1193, 1195 (1990).  However, those pleadings and
  evidence must support a prime facie case.  Seewaldt v. Mount Snow, Ltd.,150
  Vt. 238, 240,