Case Name: ALL AMERICAN REALTY, INC., an Idaho Corporation, Plaintiff-Appellant, v. Michael B. SWEET, an individual, and Harold L. Ryan, an individual, and Ryan and Sweet, a partnership, Defendants-Third Party Plaintiffs-Respondents
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1984-07-24
Citations: 107 Idaho 229
Docket Number: No. 13135, 13323
Parties: ALL AMERICAN REALTY, INC., an Idaho Corporation, Plaintiff-Appellant, v. Michael B. SWEET, an individual, and Harold L. Ryan, an individual, and Ryan and Sweet, a partnership, Defendants-Third Party Plaintiffs-Respondents.
Judges: DONALDSON, C.J., concurs.
Reporter: Idaho Reports
Volume: 107
Pages: 229–240

Head Matter:
687 P.2d 1356
ALL AMERICAN REALTY, INC., an Idaho Corporation, Plaintiff-Appellant, v. Michael B. SWEET, an individual, and Harold L. Ryan, an individual, and Ryan and Sweet, a partnership, Defendants-Third Party Plaintiffs-Respondents.
No. 13135, 13323.
Supreme Court of Idaho.
July 24, 1984.
Rehearing Denied Oct. 10, 1984.
Jon N. Wyman, Michael Brady and Terry R. McDaniel, of Brady, McDaniel & Matthews, Boise, for plaintiff-appellant.
Jeremiah A. Quane and John Potter Howard, of Quane, Smith, Howard & Hull, Boise, for defendants-third party plaintiffs-respondents.

Opinion:
HUNTLEY, Justice.
By this appeal we consider the duty of an attorney, acting as closing agent pursuant to Farm Home Administration (FmHA) regulations in a real estate transaction, to the real estate broker, for failure of the attorney to pay the broker its commission as required by the escrow instructions.
All American Realty, Inc. was employed by David Smith to find a buyer for his ranch. All American found a purchaser in Alden Wilson, who with his wife entered into an earnest money agreement for the purchase of the ranch. The agreement provided, inter alia, that Smith pay AH American a broker's commission of $13,000 from the proceeds of the sale.
The land was encumbered by a FmHA loan, which Wilson was to assume under the terms of the contract of sale. Controlling FmHA regulations require that an attorney or title insurance company act as closing agent in transactions involving FmHA loans. 7 C.F.R. 1807.1 (1976). Michael Sweet was the attorney designated to act as the closing agent, and as such received from FmHA a set of instructions to be followed in executing the closing together with a copy of the earnest money agreement. One of the instructions directed the payment of the real estate broker's commission in accordance with the earnest money agreement.
In the weeks following the execution of the earnest money agreement, both Smith and Wilson became dissatisfied with A11 American, believing that All American was not making a great enough effort to wind up the transaction. The closing was conducted by Sweet without All American's agent present. Viewing the evidence in the light most favorable to All American, as we are required to do in cases of summary judgment, we must accept All American's statement (disputed by defendants) that it never received notification of the closing date. At the closing, Sweet first made a check out with All American and Smith as joint payees, but both Smith and Wilson insisted that the check be made out only to Smith. Smith told Sweet that he had no agreement with All American and that if the closing was not completed that day, that he would withdraw from the transaction. Sweet then made the check out to Smith only, and informed Smith and Wilson that they would have to settle up with All American. Smith subsequently refused to pay the commission to All American and All American filed this ' action against Sweet and his law partnership. The trial court granted summary judgment in favor of Sweet, as well as awarding him costs and $7,000 in attorney fees, for one hundred forty hours work, defending the case through summary judgment.
As the designated closing agent under FmHA regulations, Sweet was acting in the capacity of an escrow holder. In Am.Jur.2d Escrow § 16, the rule is stated:
Where a person assumes to and does act as the depositary in escrow, he is absolutely bound by the terms and conditions of the deposit and charged with a strict execution of the duties voluntarily assumed. He is held to strict compliance with the terms of the escrow agreement; and he may not perform any acts with reference to handling the deposit, or its disposal, which are not authorized by the contract of deposit.
By failing to pay the broker's commission in accordance with the earnest money agreement, Sweet violated one of FmHA's express instructions and breached his duty as the depositary. He is therefore liable to All American for the losses it suffered due to his breach:
Since the depositary is bound by the terms of the deposit and charged with the duties voluntarily assumed by him, the rule is that liability attaches to him if he improperly parts with his deposit. His breach of duty in this respect has been held to constitute conversion. If he violates instructions or acts negligently he is ordinarily liable for any loss occasioned by his breach of duty. 28 Am. Jur.2d Escrow § 18.
Accordingly, it was error for the trial court to grant summary judgment in favor of Sweet.
The fact that the trial court awarded Sweet $7,000 attorney fees for an alleged one hundred forty hours of work in processing discovery and summary judgment appears to be unjustified. One hundred forty hours at an average 6.5 hours per day would compute to 21.53 days, or virtually an entire working month. Assuming the average lawyer works eleven months per year, that would equate to one-eleventh of an attorney's entire annual performance to process a relatively simple summary judgment. The trial court made no determination of the appropriateness of the fees under the standards of either I.R. C.P. 54(e) and the trial court erred in refusing to grant All American's request that the attorney be made to itemize his time spent.
The judgment of the trial court is reversed and remanded for further proceeding consistent herewith.
Costs to Appellant. No attorney fees.
. Lest there be any doubt that Sweet was an escrow agent for the purposes of this transaction, we note that the FmHA Agreement to Provide Loan Closing Services, executed by Sweet, specifically terms the designated attorney (Sweet) as "escrow agent."