Opinion ID: 1183420
Heading Depth: 2
Heading Rank: 9

Heading: counterclaim and cross-claim

Text: The Mannhalters prevailed on their counterclaim for the purchase price against the Winns. Because we reverse the trial court's dismissal of the Winns' complaint, the judgment for the Mannhalters on the counterclaim is also reversed. The Mannhalters cross-claimed against Area and the Agents, alleging breach of contract, negligent handling of the sale of the business, and failure to disclose the Agents' minimal experience in handling sales of ongoing businesses. The trial court entered judgment for the Mannhalters and ordered Area to disgorge its $45,000 commission. Area and the Agents contend that disgorgement is an appropriate remedy only when bad faith is proven. Disgorgement is an appropriate remedy to deter intentional misconduct by a broker; in the absence of bad faith, damages resulting from the broker's failings may be rectified in a negligence action. Veach v. Meyeres Real Estate, 599 P.2d 746, 749 (Alaska 1979). Because the Mannhalters may proceed with their negligence claims against Area and the Agents, disgorgement is not the correct measure of damages. The Mannhalters may recover damages proximately caused by Area and the Agents' negligence in an amount to be determined on remand. The judgment of the superior court is AFFIRMED in part, REVERSED in part and REMANDED for further proceedings consistent with this opinion. MOORE, J., not participating.