Court Opinion

ID: 5158689
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:29:43.919277+00
Date Added: 2024-06-11T08:25:31.214561
License: Public Domain

Justice COATS,
dissenting.
37 Because I not only consider summary judgment against the sellers unjustified in the circumstances of this case, but also reject the majority's holding concerning professional malpractice claims against transactional real estate brokers generally, I respectfully dissent. I disagree with the majority's categorical pronouncement about the proof of broker malpractice claims both because I find it too broad for the majority's own rationale and because I believe the majority fails to recognize (or at least declines to acknowledge) what I consider to be a meaningful distinction between lost profits from a negligently brokered transaction and the actual loss or diminution of a seller's property rights caused by the broker's negligence. In addition, even if I could agree that lost profits can be the only form of injury possible from malpractice by real estate brokers, I would still find the majority's measure of damages unrealistic and would, instead, consider a beneficial appraisal sufficient to evidence a genuine dispute of material fact as to both injury and damages.
138 Initially, I believe the majority simply misreads the allegations of the sellers' complaint. Rather than seeking $1.6M in lost profits from a negligently handled real estate transaction, the sellers seek damages for having to part with an asset, against their will, due to the negligence of the broker. As the court of appeals emphasized, the complaint alleged that as a result of the brokers' agreement to altered conditions of the transaction without the sellers consent, the sellers lost the opportunity "to avoid the contracts and corresponding losses," and "the ability to retain the subject property." By the same token, rather than alleging injury from "the foregone opportunity to sell their property for the additional 1.6 million that they anticipated they were going to receive in the Actis transaction," maj. op. 246, the sellers alleged that they were injured by being contractually forced to part with "an asset for $1.6 million less than its fair market value." I consider the difference significant both because the wrongful loss of a valuable property right amounts to an injury in and of itself and because damages for a lost asset are less speculative than for lost profits.
1 39 It is generally held that "[when one is entitled to a judgment for ... the destruction or impairment of any legally protected interest in land or other thing, he may recover ... the value of the subject matter or of his interest in it at the time and place of the conversion, destruction, or impairment." Restatement (Second) of Torts § 927(1)(a) (1977). Although "value" can include both "market value and value to the owner," id. § 927 emt. d, as the court of appeals noted, with detailed support, in cases involving dam*250age to property (including real property), the ordinary measure of damages is the diminution of the market value of the property. For obvious reasons, the mechanism typically used by courts to determine the market value of real property is the construction of a hypothetical market, based on sales of more or less comparable properties. See generally 1 Dan B. Dobbs, Law of Remedies § 8.5 (2d Ed. 1998). At least where a real estate broker's malpractice is alleged to have caused the wrongful deprivation of real property, I would therefore find an appraisal of that property to be a perfectly adequate method of evidencing a loss of value, and consequently, damages.
140 Under these circumstances, whether or not the majority's "better deal"/"no deal" dichotomy could fairly be said to present a false choice, it is at least clear that the majority's understanding of the second alternative as permitting recovery only upon a demonstration of a lost future, "better," sale is too narrow to account for the kind of injury allegedly caused by the broker malpractice claimed here. Even the foreign, split, intermediate appellate court decision from which the majority borrows its "better deal"/"no deal" analysis describes the latter option as merely requiring that the seller obtain a more favorable result by walking away from the deal. See Viner v. Sweet, 117 Cal.App.4th 1218, 12 Cal.Rptr.3d 533, 538 (2004) (splitting 2-1 over question whether seller was entitled to new trial to demonstrate that retaining stock would have had value as more than mere "corporate opportunity"). Because real property can have measurable value for a host of reasons other than merely resale at a profit, demonstrating a more favorable result by walking away cannot reasonably be limited to proof of an alternate profitable sale.
T41 To the extent the majority misconstrues the allegations of the complaint in this case, the sellers are unjustly deprived of presenting their case for damages to a jury. Whether the majority misconstrues the allegations in this particular case or not, however, it is not difficult to envision real estate broker malpractice resulting in the loss of property a seller would have put to another beneficial use or simply enjoyed, rather than parting with it for the amount of the sale. To the extent the majority's sweeping pronouncement about the required showing for transactional real estate broker malpractice implies that a property owner can never show he would be better off by walking away from a sale except by producing evidence of lost profits from another, now foregone, sale, such a broad holding would clearly be both unnecessary for the resolution of this case, as it is understood by the majority, and unsupported by the majority's rationale.
11 42 Finally, even if lost profits really were the only kind of injury possible from real estate broker malpractice, to make survival of a motion for summary judgment contingent on the production of evidence of lost profits from another prospective sale equaling the claimed damages is not only unrealistic but an unjustified departure from existing law. Unlike the examples of speculative, remote, or imaginary evidence of future profits relied on by the majority, a hypothetical market for real property based on sales of more or less comparable properties constitutes a sufficient measure of damages for a multitude of legal purposes. E.g., Lo Plato Elec. Ass'n v. Cummins, 728 P.2d 696 (Colo. 1986) (using property appraisal to determine damages of easement condemnation); Bd. of Cnty. Comm'rs v. Slovek, 723 P.2d 1309, 1320 (Colo.1986) (appraisal constituted evidence of "diminution of the market value" for purposes of determining damages caused by a flood). Furthermore, while it may be necessary to demonstrate a genuine dispute about the cause of injury, surviving a motion for summary judgment has never been contingent upon producing evidence of the precise amount of claimed damages. See, eg., Julius Hyman & Co. v. Velsicol Corp., 123 Colo. 563, 623, 233 P.2d 977, 1008 (1951) ("[Where it has been definitely established that damages are traceable to and the direct result of a wrong, the uncertainty as to the amount thereof is a question for determination by the trier of the facts."). Barring some unique cireumstance, sales of real property based on appraisals of the kind offered by the sellers in this case are regular and expected occurrences. Even if real property were considered to have value only in the amount for *251which it could be sold, I would find a valid appraisal based on comparable sales sufficient to establish a genuine dispute concerning the value of wrongfully divested property rights.
T43 Because I not only believe that the sellers offered evidence sufficient to overcome the broker's motion for summary judgment in this particular case, but also that the majority's holding concerning the proof of malpractice claims against real estate brokers is far too broad for the circumstances and rationale from which it derives, I respectfully dissent.
I am authorized to state Justice HOBBS and Justice BOATRIGHT join in this dissent.