Opinion ID: 2569319
Heading Depth: 1
Heading Rank: 6

Heading: Claims against Kornkven

Text: Sundown contends that Kornkven misrepresented his agency relationship by telling the seller that he was working for it and telling the buyer that he was working for it; failed to disclose the title exceptions; drafted contracts waiving title exceptions without disclosing them to Nogle; accepted Nogle's request to review the title documents and disclose defects and then failed to disclose the effect of the Arch Agreements. Sundown contends these false representations were intended to and did induce it to sign the purchase contract and close the transaction, and its reliance reasonably caused it to decide to range lamb the sheep and thereby incur damages. Although Kornkven contends that the executed contract discloses that he was the seller's subagent, Nogle testified that Kornkven orally represented that he was acting as Sundown's agent and then assumed responsibilities to review the title exceptions for Sundown. We note that Kornkven's failure to provide a brokerage disclosure statement to the seller supports Sundown's claim. This Court has not addressed the issue of the duty owed by a broker who misrepresents his ability to represent purchaser's interest because he also represents seller. See Messler v. Phillips, 867 P.2d 128, 132 (Colo.App.1993) (broker's negligent misrepresentation violated broker's duty of honesty and fair dealing). Sundown contends that if the jury found that Kornkven was acting as Sundown's agent, Kornkven owed it a fiduciary duty of good faith and undivided loyalty. Hagar, 638 P.2d at 137. Sundown contends that Kornkven breached this duty by failing to disclose the existence and effect of the Arch agreements. Kornkven contends that this issue is being raised for the first time on appeal. W.R.C.P. 9(b) provides that fraud must be pled with particularity. Our review of Sundown's complaint indicates that it identified Kornkven as the subagent of Pearson Real Estate Company, identified the duty owed as the duty a broker owes to a nonclient buyer and did not state any facts alleging that Kornkven acted as buyer's agent and acted fraudulently in that capacity. The record does not indicate that the complaint was amended to plead the fraud claim against Kornkven in any capacity other than as seller's subagent. We agree with Kornkven that at the time that the directed verdict was entered the issue before the trial court was Kornkven's breach of the duty owed by a broker to a nonclient. This claim that Kornkven was acting as Sundown's agent is raised improperly for the first time on appeal. Limited to finding that Kornkven was acting as seller's agent and not acting as Sundown's agent, the applicable duty is the same as Pearson's, and we again find that Sundown has not properly established a negligent nondisclosure cause of action and cannot assert a claim for negligent misrepresentation because of the disclaimer provision. We do find, however, that the jury may consider whether Kornkven's failure to provide the title commitment listing and the Addendum B-1 to Nogle before execution of the contract concealed material facts. Such conduct, if intentional, would constitute fraudulent concealment, and the party would be liable for pecuniary loss. Restatement (Second) of Torts § 550 (1977); see Richey, 904 P.2d at 802. Whether the element of damages has been satisfied is next considered.