Court Opinion

ID: 9715514
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:07:21.796217+00
Date Added: 2024-06-11T18:23:35.414161
License: Public Domain

BAKER, Judge,
dissenting.
Because I disagree with the majority's determination that Tri-Professional was not acting on behalf of a principal at the time it represented the identity of the property to be sold and, as a result, that Tri-Professional owed Hillenburg, as the buyer of real estate, a duty of care, I respectfully dissent.
The majority opinion fails to recognize the application of the well-settled law of agency to the instant case. Here, Tri-Professional undertook to sell property for Yeryar. TriProfessional, therefore, was acting as an agent for Yeryar, the principal. See Sutton v. Sanders, 556 N.E.2d 1362 (Ind.Ct.App.1990) (agency relationship consists of agreement of agent to act for or on behalf of principal). The seope of the authority given to Tri-Professional was to sell Yeryar's property, which Yeryar identified as the Front *1071Lot. Thus, Tri-Professional was acting within the seope of its authority when it sold the Front Lot to Hillenburg. Tri-Professional, therefore, cannot be held individually liable for selling the Front Lot on the basis of Yeryar's misrepresentations. See Clark v. Millikin Mortgage Co., 495 N.E.2d 544, 547 (Ind.Ct.App.1986) (principal is liable for acts of agent committed within scope of agent's actual or apparent authority).
Further, I reject the majority's use of the Restatement (Second) of Agency § 829 to find Tri-Professional individually liable in this ease. This section applies to situations in which an agent warrants that he has the authority to bind the principal but, in fact, does not have such authority. In those situations, the agent can be held personally Hable to the third party for his actions. See e.g. Barnes v. Southwestern Bell Telephone, Co., 596 F.Supp. 1046, 1050 (W.D.Ark.1984) (agent of telephone company who contracted with third party for service and equipment at certain price could be personally Hable if she contracted without authority); Pete's Satire, Inc. v. Commercial Union Ins. Co., 698 P.2d 1388, 1390 (Colo.App.1985), aff'd 789 P.2d 239 (Colo.1987) (ins. agent who sold ins. coverage beyond his authority could be held personally liable for his actions). Here, Tri-Professional had the authority to procure a buyer for Yeryar. I do not believe this authority was altered by the fact that Yeryar misrepresented to Tri-Professional the location of the property she intended to sell.
My disagreement with the majority's determination that Tri-Professional was not acting on behalf of a principal compels me to also disagree with their finding that TriProfessional owed a duty to Hillenburg to properly represent the property to be sold. Rather, I find persuasive the line of Indiana cases which holds that a real estate broker owes no duty to a buyer. See McAdams v. Dorothy Edwards Realtors, Inc., 604 N.E.2d 607, 611 (Ind.1992). Such a duty is also not imposed, contrary to the majority's assertions, by the Realtors Code of Ethics and Standards, which provides that realtors may not offer property for sale without authority. By manipulating the law of agency and the Realtor's Code to place a duty on the agent here, the majority has effectively placed a requirement on real estate brokers that they insure the title of all real estate which they contract to sell. This added burden only serves to increase the expense associated with the purchase of real estate and is unsupported by Indiana law.
Additionally, I note that by holding TriProfessional liable because it did not verify that Yeryar was the true owner of the Front Lot, the majority places a requirement on Tri-Professional without the benefit of warning or notice. If the majority intends to place such a requirement on real estate brokers, the requirement should not be applied retroactively, as is being done here.6
Contrary to the position of the majority, I believe that a mutual mistake of fact existed between the principal, agent and purchaser of the real estate. Specifically, both the buyer and the seller mistakenly believed that the sales transaction concerned lot 8, first addition, rather than lot 8, second addition. See Showalter, Inc. v. Smith, 629 N.E.2d 272 (Ind.Ct.App.1994), trans. denied, (where both parties share common assumption about vital fact upon which bargain is based, and assumption is false, transaction may be avoided if because of the mutual mistake a quite different exchange of values occurs from exchange contemplated by parties). As a result, I would find the appropriate remedy to be recision of the sales contract and I would remand to the trial court for a determination of any consequential damages suffered by Hillenburg.

. I agree with the majority's determination that IND. CODE §§ 25-34.1-10-10(c) and (d), which define the duties and obligations of a broker, are inapplicable to this case because of the date the cause of action accrued. However, I disagree that, had they been applicable, the sections would not have granted Tri-Professional relief in the instant case. On the contrary, the legislature has specifically determined that a broker owes no duty or obligation to a buyer except the duty to treat the buyer honestly and the duty not to knowingly give the buyer false information. I.C. § 25-34.1-10-10(c). I find nothing in this section indicating that the legislature additionally intended to require brokers to insure the title to the real estate they are selling.