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Law School Case Brief

Licari v. Blackwelder - 14 Conn. App. 46, 539 A.2d 609 (1988)

Rule:

A real estate broker is a fiduciary. As such, he is required to exercise fidelity and good faith, and cannot put himself in a position antagonistic to his principal's interest by fraudulent conduct, acting adversely to his client's interests, or by failing to communicate information he may possess or acquire which is or may be material to his principal's advantage. A real estate broker acting as a subagent with the express permission of another broker who has the listing of the property to be sold is under the same duty as the primary broker to act in the utmost good faith. This rule requiring a broker, or his subagent, to act with the utmost good faith towards his principal places him under a legal obligation to make a full, fair and prompt disclosure to his employer of all facts within his knowledge which are, or may be material to the matter in connection with which he is employed, which might affect his principal's rights and interests, or his action in relation to the subject matter of the employment, or which in any way pertains to the discharge of the agency which the broker has undertaken. 

Facts:

Plaintiff sellers decided to sell their property but had no real knowledge as to the actual or potential value of the property. The sellers contacted a real estate agent who consulted with defendant brokers. The real estate agent obtained an exclusive 24-hour right to sell the property and the brokers made an offer, which the sellers accepted. The brokers did not negotiate on behalf of or for the sellers with another prospective buyer, nor did they disclose to the sellers their understanding of the potential value of the property. The brokers then sold the property for a large profit. The sellers filed an action to recover damages for the alleged breach of fiduciary duty and intentional misrepresentation in the sale of the real property. The trial court granted judgment in favor of the sellers, and the brokers appealed.

Issue:

Were plaintiff sellers, who had no real knowledge of the value of their property, entitled to recover damages in their action against defendant brokers, who acted as fiduciaries, for the alleged breach of fiduciary duty and intentional misrepresentation in the sale of real property and intentional misrepresentation in the sale?

Answer:

Yes

Conclusion:

The Appellate Court of Connecticut affirmed the trial court's decision granting judgment for the sellers in their action to recover damages for the alleged breach of fiduciary duty and intentional misrepresentation in the sale of real property. The Court determined that there was sufficient evidence to support the trial court's conclusions. The Court could not retry the facts of the case or pass upon the credibility of the witnesses. Whether the brokers were agents of the sellers was a question of fact. The relationship did not have to arise from an express appointment and an acceptance. Lastly, the Court noted that the brokers were fiduciaries and were required to exercise fidelity and good faith and could not put themselves in a position antagonistic to the sellers' interests.

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