Licari v. Blackwelder

Connecticut Appellate Court · Property

PropertyReal estate brokersAgencyFiduciary dutiesreal estate brokersubagentfiduciary dutyagency

Facts

The plaintiffs, unsophisticated heirs to family property in Westport, contacted broker Robert Schwartz for help selling the property. Schwartz had a co-broke arrangement with the defendants, experienced local brokers, under which they would share listings and commissions, and after Schwartz obtained a twenty-four hour exclusive listing at $125,000, the property was shown to one of the defendants' prospective buyers. Before allowing a reasonable time for negotiations with that buyer, the defendants offered $115,000 for the property themselves, did not disclose their understanding of the property's potential value to other buyers, and led the plaintiffs to believe the defendants would occupy and use it. In fact, one defendant immediately contracted to resell the property for $160,000, and the defendants conveyed title six days after acquiring it, making a $45,000 profit.

Issue

Whether the defendants, through their relationship with the listing broker, owed fiduciary obligations to the plaintiffs as subagents, and if so whether their undisclosed self-dealing and failure to disclose material facts supported liability and damages. The appeal also raised whether the trial court's factual findings and conclusions were supported by the evidence and within the pleadings.

Rule

Whether an agency relationship exists is a question of fact and may be established by the parties' words, conduct, and circumstances rather than by express appointment alone. A real estate broker is a fiduciary and may not place himself in a position antagonistic to the principal's interest; a broker, including a subagent acting with the listing broker's express permission, must exercise utmost good faith and make full, fair, and prompt disclosure of all known facts that are or may be material to the principal's interests before making a sale or dealing for the broker's own benefit. Failure to disclose such material facts renders the broker liable for the principal's resulting loss.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Portland, Maine, Elena Ortiz asked broker Martin Keene of Harbor Stone Realty to list her warehouse. Martin then entered a co-broke arrangement with Dana Voss of Pine Row Properties to share commissions if Dana's clients bought Martin's listings, and Dana requested access to show Elena's property to one of Dana's prospects. Before any further discussions with that prospect, Dana personally offered to buy the warehouse.

If Elena later sues Dana for breaching fiduciary duties, what is the strongest basis for finding Dana owed Elena those duties?

Explanation. The majority treated agency as a factual question that need not arise from express appointment alone. It may be inferred from words, conduct, and circumstances. A cooperating broker acting with the listing broker's permission may be found to be a subagent of the seller and thus owe fiduciary duties. The other choices incorrectly require an express writing, treat every buyer as a fiduciary, or deny the possibility of subagency.