There is no evidence in the record that the sellers had consented to defendant acting in a dual agency relationship. Therefore, plaintiffs cannot enforce a claim against the broker for breach of duty as their agent. Consequently, we hold that the alleged contract between plaintiffs and the broker is unenforceable. Thus, we reject plaintiffs' claim that the trial court should have instructed the jury on defendant's duties regarding the realtor-client relationship and defendant's fiduciary relationship with plaintiffs. The basis for plaintiffs' fraud claim was defendant's failure to discover and disclose that the property was in a flood fringe zone.
Defendant maintains that it made no false representations with intent to deceive.
The court of appeals concluded that defendant possessed superior knowledge and had a duty to disclose facts which would be unfavorable to plaintiffs. It further concluded that the requirements of scienter and intent to deceive were met by defendant's failure to disclose the flood zone information. Scienter and intent to deceive may be shown when the speaker has actual knowledge of the falsity of his representations or speaks in reckless disregard of whether those representations are true or false. In this case, there is no showing that defendant's agent had actual knowledge of the flood fringe zone or that she made any representations concerning the zoning of the property. Thus, the question becomes whether defendant's conduct was sufficiently reckless to permit implication of the elements of scienter and intent.