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Rangel v. Denny - 47381 ( La. App. 2 Cir 08/08/12), 104 So. 3d 68

Rule:

A real estate broker is a professional who holds himself out as trained and experienced to render a specialized service in real estate transactions. The broker stands in a fiduciary relationship to his client and is bound to exercise reasonable care, skill, and diligence in the performance of his duties. The duties of a real estate licensee representing clients are set forth in La. R.S. 9:3893, which specifies in pertinent part that a licensee representing a client shall: (1) Perform the terms of the brokerage agreement between a broker and the client. (2) Promote the best interests of the client by: (a) Seeking a transaction at the price and terms stated in the brokerage agreement or at a price and upon terms otherwise acceptable to the client. (b) Timely presenting all offers to and from the client, unless the client has waived this duty. (c) Timely accounting for all money and property received in which the client has, may have, or should have had an interest.

Facts:

Property sellers entered into a contract with their broker Dowling to sell their house situated on 40 acres of land in DeSoto Parish. The sale was to include mineral rights to 20 acres, the sellers were to retain the mineral rights to 20 acres, and the contract provided that the sellers were to inform Dowling if a prospective buyer contacted them directly. They were contacted by Marlon and Cynthia Curtis about buying the house, and that they notified Dowling and requested that it provide a prospective buyer's contract. Dowling refused to do so because its brokerage company did not represent the Curtises. The sellers then personally drafted an agreement for the Curtises to buy the house, land and 20 acres of mineral rights, for approximately $396,000. The sellers filed a cause of action for damages against their real estate broker for negligence and for breach of contract. They claimed that the broker breached its duty to professionally represent them, failed to negotiate a particular sale of their property, failed to produce a contract that was approved by the Louisiana Real Estate Commission, failed to review all purchase offers, failed to follow up on remaining details of the sale, failed to discuss financing alternatives appropriate for the property, and failed to work to successfully close the sale. Dowling filed an exception of no cause of action. Dowling argued that under its "Exclusive Right to Sell Listing Agreement," it only had the duty to advertise the property and if an offer was made, to present it to the sellers. Dowling asserted that it fulfilled its duty. The trial court sustained the exception of no cause of action filed by Dowling. On appeal, the sellers argued that the trial court erred in sustaining the exception of no cause of action in favor of Dowling and dismissing the plaintiffs' claims against the company. 

Issue:

Did the trial court err in sustaining the exception of no cause of action in favor of Dowling and dismissing the plaintiffs' claims against the company?

Answer:

Yes

Conclusion:

The Court of Appeal of Louisiana, Second Circuit, reversed the trial court decision sustaining the exception of no cause of action filed by the defendant. It held that the exception of no cause of action was overrruled and the matter was remanded to the trial court for further proceedings. The court noted that under Louisiana law, a real estate licensee representing either the buyer or the seller of residential property shall complete the purchase agreement form prescribed by the Louisiana Real Estate Commission in making an offer to purchase or sell residential real property. The court held that the plaintiffs did state a cause of action against Dowling and the trial court erred in sustaining the exception of no cause of action.

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