Court Opinion

ID: 9790337
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:51:53.429516+00
Date Added: 2024-06-11T07:37:28.875908
License: Public Domain

*514CONCURRING AND DISSENTING OPINION OF
LEVINSON, CIRCUIT JUDGE
I agree, for the reasons staled by the majority, that the evidence adduced by Azer on his negligence and offset claims against Gromet was insufficient to withstand a motion for a directed verdict; I therefore join in the reversal of the ICA’s vacation of the trial court’s order granting the motion.
I believe, however, that the majority’s focus on the “niceties of pleading” with respect to the listing agreement between Brokers and the “Owner” (i.e., Azer, for purposes of this appeal) ignores “the underlying realities” of that contract. See Higa v. Mirikitani, 55 Haw. 167, 171-72, 517 P.2d 1, 4 (1973). I would affirm the ICA’s reversal of the trial court’s denial of Azer’s request for attorney’s fees from Brokers and would remand for a determination, not only of costs, but also of attorney’s fees recoverable from Brokers by Azer. Accordingly, I respectfully dissent from that part of the opinion of the court reversing the ICA.
I. GIVEN THEIR CONTRACTUAL DUTY OF DILIGENCE, BROKERS, THROUGH MYERS, BREACHED THEIR FIDUCIARY DUTY TO AZER IN MISALLOCATING AVAILABLE PARKING SPACE AS A PART OF THEIR NEGOTIATION OF THE PROFIT LEASE, RESULTING IN DAMAGE TO AZER.
By virtue of the judgment entered in Azer’s favor and against Brokers based on the jury’s findings of the latters’ breach of fiduci- . ary duty, Azer proved, inter alia, the following facts at trial:
*515(1) SGM Partners (which, for present purposes, will be referred to as Azer) and Brokers executed an Exclusive Authorization of Lease (listing agreement), pursuant to which Azer granted to Brokers the exclusive right to negotiate a lease or leases for space in the property not already listed;
(2) The listing agreement, by its express terms, obligated Brokers “diligently to pursue the procurement of a tenant” in consideration for a commission. (Emphasis added). The listing agreement also provided that “if either [Azer] or Broker[s] commences any litigation to enforce the terms of this [agreement], the prevailing party shall be entitled to receive a reasonable attorney’s fee from the other party[;]”
(3). Myers was a real estate agent employed by Brokers;
(4) Myers, as an agent of Brokers, was bound by the terms of the listing agreement;
(5) Myers, as an agent of Brokers and on behalf of Azer, negotiated a lease of space (Profit lease) in the property with Profit;
(6) The terms of the Profit lease were prepared by Myers, who had substantial control over the lease transaction;
(7) The Profit lease guaranteed to Profit a specified minimum amount of parking space incident to Profit’s authorized use of the property;
(8) Azer paid Brokers a substantial commission for procuring the Profit lease pursuant to the listing agreement;
(9) Brokers, through Myers, owed Azer a fiduciary duty in obtaining a lessee and negotiating the Profit lease;
(10) Brokers, through Myers, breached their fiduciary duty to Azer, in the course of negotiating the Profit lease, by misallocating the property’s available parking space; and
(11) As a result of Brokers’ breach of fiduciary duly, Azer sustained damage, for which he was entitled to, and the jury awarded, compensatory damages.
*516II. AZER IS ENTITLED TO AN AWARD OF A REASONABLE ATTORNEY’S FEE FROM BROKERS PURSUANT TO HRS § 607-17, INASMUCH AS BROKERS’ BREACH OF FIDUCIARY DUTY DERIVED FROM A BREACH OF THEIR CONTRACTUAL DUTY OF DILIGENCE IMPOSED IN THE LISTING AGREEMENT.
When they entered into the listing agreement, Brokers agreed that if either party to the contract commenced “any litigation to enforce the terms” of the agreement, “the prevailing party shall be entitled to receive a reasonable attorney’s fee from the other party ....” As the majority recognizes, HRS § 607-17 authorizes the awarding of a reasonable attorney’s fee when provided for in a written contract. Moreover, this court has recognized for almost seventeen years that “in reality, a claim of injury resulting from ... professional incompetence ... is actionable under theories which are an amalgam of both tort and contract.” Higa v. Mirikitani, 55 Haw. at 172, 517 P.2d at 5. Accordingly, the answer to the question whether the damage award to Azer, based on his breach of fiduciary duty claim against Brokers,:arises out of “any litigation to enforce the terms” of the listing agreement determines whether Azeris entitled to recover a reasonable attorney’s fee from Brokers in this case.
In my view, the majority’s conclusion that “[t]he enforcement of the listing agreement was not at issue in this case,” SGM Partners v. The Profit Co., 71 Haw. 506, 512, _P.2d_,_ (1990), is unduly facile. Specifically, it ignores the inescapable fact that, in finding in favor of Azer on his breach of fiduciary duty claim against Brokers, the jury must of necessity have found as a fact that Brokers breached their express, written, contractual duty “diligently to pursue the procurement of a tenant” by misrepresenting, in their negotiations with Profit, the amount of allocable parking space available on the property.
*517None of the parties to this case disputes that the listing agreement created a fiduciary relationship between Brokers and Azer. Transcript of 7/13/87, at 38-39. It should therefore go without saying that actions for breach of fiduciary duty sound in contract. Bibo v. Jeffrey’s Restaurant, 770 P.2d 290, 296 (Alaska 1989); Restatement (Second) of Agency §§ 400, and 401 comment a, introductory note to ch. 13; see also Higa v. Mirikitani, supra.
Moreover, the parties do not dispute that, as a fiduciary, Brokers owed Azer an “obligation of the utmost faith, integrity honesty, and loyalty in connection with” Brokers’ performance of their duties pursuant to the listing agreement. (Emphasis added). Transcript of 7/13/87, at 34. Indeed, the duty of diligence that Brokers’ voluntarily undertook is the quintessential expression of that obligation. Such “utmost” or “extraordinary” diligence has been defined as “[t]hat extreme measure of care and caution which persons of unusual prudence and circumspection use for securing and preserving their own property or rights.” Black’s Law Dictionary 411 (5th ed. 1979).
It therefore ineluctably follows that when a duty, fiduciary or otherwise, arises out of a contract, a breach of that duty is a breach of the contract. See generally Schulz v. Honsador, Inc., 67 Haw. 433, 437, 690 P.2d 279, 282 (1984); Au v. Au, 63 Haw. 210, 219, 626 P.2d 173, 180 (1981); Higa v. Mirikitani, supra; see also Restatement (Second) of Agency §§ 400 and 401 comment a, introductory note to ch. 13, supra.
Brokers’ suggestion that although “Azer’s breach of fiduciary claim may be based on the listing agreement,... he [is nevertheless] not seeking] enforcement of the agreement,” Brokers’ Supplemental Brief of 5/10/90 at 3, is nothing short of disingenuous. In effect, Brokers are arguing that as long as they in fact produced a tenant for Azer pursuant to the listing agreement, they could not possibly have breached their fiduciary obligation of diligent pursuit. It is inconceivable to me that if, in the manner of Don Vito *518Corleone, Brokers had procured Profit as a tenant by assuring its representatives that Brokers would have their brains or their signatures on the Profit lease, or if Brokers had intentionally misrepresented the true amount of allocable parking space available, anyone would deny that Brokers had breached their fiduciary duty of diligent pursuit. Brokers’ breach under the circumstances of this case compels no different conclusion. By agreeing diligently to pursue a tenant for Azer, Brokers contractually bound themselves to a standard of care. Brokers’ failure to perform according to that standard caused Azer’s damages. If that is not a breach of contract, then nothing is.
Azer is entitled by HRS § 607-17 to an award of a reasonable attorney’s fee from Brokers.