Court Opinion

ID: 9693758
Source: CourtListenerOpinion
Date Created: 2023-08-25 16:59:08.022621+00
Date Added: 2024-06-11T18:19:50.089547
License: Public Domain

Dooley, J.,
dissenting. If the trial court had accepted the theory adopted by the majority, I would be tempted to affirm and join the majority opinion. The trial court did not accept this theory for good reasons, and the majority opinion is not consistent with the standard for reviewing the trial court’s findings and decision. As a result of the majority’s decision, the sellers, whose manipulations were the sole cause of their losing a sale on terms they set, escape the legal consequences of their actions. I dissent.
The majority characterizes the trial court decision as concluding that the brokers breached their fiduciary duty by “failing to immediately communicate the seller’s change of heart regarding the buyers’ latest offer.” The decision is then restated as “QLRC failed to communicate material information from its principal to the buyers and acted in a manner antagonistic to the interests of its principal.”
In fact, the trial court found a breach of fiduciary duty, that would deprive the brokers of their commission, only in their failure to disclose the “side deal” for the furniture. The court found that the failure to inform the purchasers of the sellers’ changed position was “negligence” with no “disloyalty, fraud or bad faith.” It also found that Stephen Boggess was the architect of his undoing, that the buyers were “exasperated and mistrustful” of him and that independent of any actions of the broker, “they decided to have no further dealings” with the sellers.
The majority recognizes that its decision rests on conclusions not drawn by the trial court. It states, however, that it does “no violence to the trial court’s findings of fact.” I strongly dis*266agree. A central part of the majority’s analysis is that if the broker had immediately communicated the sellers’ change of heart “the sale might have gone through and this lawsuit avoided.” This is directly contrary to the trial court’s finding that “Q.L.R.C. and its agents ... were not the cause of Boggess’ failure to sell [the condominium] . .. [independently of any actions of Q.L.R.C., [the buyers] . . . decided to have no further dealings with the defendant.” As the majority states, the trial court’s findings, including this one, are supported by the evidence. It is improper for this Court to ignore the trial court’s finding.
I agree with the majority that the applicable law is found in § 469 of the Restatement (Second) of Agency. It provides that “[a]n agent is entitled to no compensation for conduct which is disobedient or which is a breach of his duty of loyalty ....” As the comment quoted by the majority points out, the duty of loyalty is breached if the agent “acts for his own benefit or for the benefit of another in antagonism to ... the principal.” Id., Comment a. There is nothing in the section or the comment to suggest that negligence alone, without improper motive, creates a breach of duty of loyalty. The trial court found as fact that the broker did not act for its own benefit, and that factfinding must be upheld if not clearly erroneous. See, e.g., Musselman v. Southwinds Realty, Inc., 146 Ariz. 173, 175, 704 P.2d 814, 816 (1985) (whether breach of fiduciary duty occurred is a question of fact).
What the majority has really concluded is that the broker was self-dealing in order to earn a higher commission on a sale of another condominium to the buyers. This is directly contrary to the trial court’s finding that the broker did not switch the buyers to another condominium to earn a higher commission. There was evidence that the buyers were so angry with the sellers because of the sellers’ actions that they would not even drive by the condominium on which they had made an offer. The broker could fairly surmise that fueling that anger was pointless and might further injure the principal. It was not clearly erroneous for the trial court to conclude that the broker’s delay in notifying the buyers, and the method of notification, was negligence but was not induced by improper motives and was not disloyal.
*267There is a second reason why this creation of a new theory on appeal to deny the commission is improper. The broker discharged its obligation under the listing agreement when it produced a buyer “ready, willing and able” to purchase on the terms specified by the seller. See Arjay Properties, Inc. v. Hicks, 143 Vt. 335, 338, 465 A.2d 777, 778-79 (1983). If a sale doesn’t occur because of the sellers’ “fault or inability to complete it,” the broker is still entitled to a commission. Pond v. Carter, 126 Vt. 299, 305, 229 A.2d 248, 252 (1967). Under the majority’s theory, the breach of fiduciary duty occurred after the seller had rejected the full-price offer of the buyers and after the buyers had irrevocably decided to have no further dealings with the seller.
Although even a breach of fiduciary duty that does not result in harm may prevent recovery of the commission, there must first be a “duty” that was breached. At best, the presence of a duty here is arguable and depends on a finding, not made by the trial court, of an agency relationship that continued beyond the rejection of the full-price offer. On this point, neither the Colorado nor the Florida case cited by the majority is helpful. The Colorado opinion addresses the obligation of the broker when a contract of sale specifically provides that the broker is to sell the property. Moore & Co. v. T-A-L-L, Inc., 792 P.2d 794, 799 (Colo. 1990). The Florida case involves a listing agreement that “requires the broker not only to find a purchaser but actually to effect the sale or procure a binding contract of purchase.” Wallace v. Odham, 579 So. 2d 171, 174 (Fla. Dist. Ct. App. 1991). The listing agreement in this case did not give the broker the power to sell, nor did it require an actual sale for the broker to earn a commission. I do not believe we should create a duty that goes beyond the point where the broker earned the commission.
The sale of real estate through brokers has been a fertile area for litigation in this state and elsewhere. See Zeigler, Brokers and Their Commissions, 14 Real Est. L.J. 122, 122 (1985) (real estate brokers’ commission disputes “have given rise to more litigation in the history of American law than just about any other type of conflict”). In fact, the relationship between brokers and buyers and sellers of real estate is fraught with potential conflict. A thoughtful analysis of the role of the real estate broker points out:
*268The broker attempting to fulfill his duties to both buyers and sellers confronts a seemingly unresolvable dilemma. The obligation to hold the interest of his principal above all others conflicts with his public responsibility to deal fairly with nonprincipals in real estate transactions. Although most transactions are concluded without complaint from either party, the thoughtful broker should realize that only the rare conveyance does not involve at least a technical violation of law or regulation.
Currier, Finding the Broker’s Place in the Typical Residential Real Estate Transaction, 38 U. Fla. L. Rev. 655, 674 (1981). The broker made an attempt to deal fairly with the potential buyer despite roadblocks put up by the seller. The majority holds that a technical violation of law, made negligently and without improper motive resulting in no harm to the seller, deprives the broker of a commission. The rule the majority creates encourages a seller to search for some harmless, innocent violation of a broker’s duty as a justification for denying a commission to a broker who has produced exactly the sale that the seller seeks. The result is neither just in this case nor wise as a matter of general policy. Accordingly, I dissent.
I am authorized to state that Chief Justice Allen joins in this dissent.