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Daily Development for Thursday, June 5,
2003
by: Patrick A. Randolph,
Jr.
Elmer F. Pierson Professor of
Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper
Martin
Kansas City, Missouri
dirt@umkc.edu
BROKERS; NEGLIGENCE; STANDARD OF CARE;
EVIDENCE;
EXPERT TESTIMONY: Where
statutory standard is that broker shall
exercise "ordinary care" and to perform their contract obligations
under
listing agreements, court need not
hear expert testimony to determine
whether broker was negligent in procuring client seller's signature
on a
contract that was ambiguous as to
the amount of land to be sold.
Polyzos v. Cotrupi, 563 S.E. 2d 775 (Va.
2002)
Sellers acquired waterfront property adjacent to their
own in order to add
a portion of that
property to their own home and then to resell the
downsized property. When they incorporated the
additional property into
their own lot,
they demarcated the new boundary with fencing and
landscaping, but did not record an amended plat
because their lawyer
advised them this
might trigger a due on sale clause in the mortgage on
the adjacent parcel.
Sellers then listed the downsized adjacent parcel with
Broker, fully
disclosing their intention
and explaining that there was no new recorded
plat. The listing agreement described the property by street
address.
Broker procured an offer
contract from Buyers, prepared by their broker.
The agreement described the property by street address and
contained a
space to designate the lot
number of the property in the subdivision.
Broker left this space blank, because he was not sure how the
County
recorder would designate the
revised lot once the revised plat was
recorded. He testified that he believed that Buyers knew that
the lot's
size had been reduced and that
they were buying it reduced, and of
course he knew that the proportions of the lot were indicated by
the
landscaping and fencing installed by
Sellers. Sellers and Buyers signed
the contract.
Prior to closing, a title agent discussed with Buyers
the revision in the
size of the lot, and
they claimed that they learned about it at this moment
for the first time. They brought suit for
specific performance of the
contract in
the original lot size, claiming that the description of the
property by street address necessarily indicated that
the recorded plat lot
was being
sold.
Sellers brought a third party
complaint against Broker for negligence and
breach of the listing agreement for his failure to prepare the
contract in a
way that made crystal clear
what property was being sold. The trial court
dismissed the complaint against broker on the grounds
that no Sellers
brought forth no expert
testimony as to the standard of care to be applied
to Broker.
On appeal: Held: Reversed: In a split decision, with
three dissenters, the
Virginia Supreme
Court ruled that expert witness evidence is not
necessary in every case of professional malpractice and would not
be
required here, where "the alleged
negligent acts or omissions of certain
professionals clearly lie within the range of the common knowledge
and
experience of the trier of
fact."
The court acknowledged that that there may be
instances in which the
acts of a realtor,
as with other professionals, involve transactions or
matters beyond the capacity of persons of ordinary
intelligence to
comprehend and, thus, to
form an intelligent opinion about them without
the assistance of expert testimony. But it opined that this
need not be the
case every time a
realtor's conduct is called into question. For reasons
that the court does not make clear, it holds that the
existence of the
statutory standard of
"ordinary care" is relevant to its conclusion that
expert assistance is not always relevant in
evaluating the conduct of
professional
real estate agents. [The court used the term "licensed
realtors." But the editor would never tread
upon the copyright of the
National
Association of Realtors as the court might.].
Here, the court concluded the trial court erred in
dismissing the case for
want of expert
testimony. Although it noted that there was not
necessarily a "bright line" separating cases in which
such testimony was
vital from those in
which it was not, the court claimed it "knew 'em what
it saw 'em."
"In the present case, it is
manifest that any person of ordinary
intelligence would grasp that a realtor
should take care not to
offer for sale property which he has not
been contractually
authorized to sell, nor should a realtor
present to his client a
contract which clearly fails to
sufficiently reflect the accurate
legal description of the property to be
conveyed. The failure of a
realtor in either regard is
negligence. Similarly, it is not beyond
the realm of common knowledge and
understanding that when a
contract gives authority to an agent to
sell a specific portion of
property, and the agent then offers for
sale and procures a buyer
for more than that portion of the property
within his authority to
sell, he has breached his contract with
his principals."
Three dissenters pointed
out that since the agent believed that the Buyers
fully understood the meaning of the agreement, and
since there was no
way to know what the
exact legal description might be, the question of
negligence here is one that is not manifest and
certainly would require an
expert to
explain.
Comment: Don't the dissenters have something
here? Frankly, the editor
is not
certain what a Virginia court might do with the fact that a
street
address no longer coincides with
the original plat that it designates. The
editor would advise the court to seek expert advice as to the
standard in
the local area. Is this
a common issue? Do parties generally sell on the
basis of street addresses, knowing that there often
are changes in the
original legal
descriptions? Do professional real estate agents
(remember
the buyers had an agent)
typically advise their clients that a contract
containing a street address will convey only the property
apparently
associated with that address?
If so, is that accurate? If not, should a
professional real estate agent know that it's not? The
questions go on
and on in the editor's
mind.
The Sellers got lucky here. Otherwise, their
next lawsuit likely would
have been
against the lawyer who failed to produce an expert.
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