by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
It's been a while since we ran a brokers case. There are many brokers and brokers' lawyers out there. What are your thoughts on this? (Yes, I know, this is just another argument for having buyer's brokers.)
VENDOR/PURCHASER; SELLER'S REMEDIES'; EARNEST MONEY: Seller is entitled to earnest money in escrow account where purchaser is unable to perform because procuring broker has absconded with purchase funds. Ivanov v. Sobel, 654 So.2d 991 (Fla.App. 3 Dist. 1995).
The case does not mention the issue of agency. Normally, of course, both the listing broker and procuring broker are agents of the seller. If that were the case here, there at least should be some consideration of the fact that the seller's agent had received the purchase money in trust and failed to apply it as instructed, thereby rendering the sale impossible, and therefore excusing the buyers from performance.
This was a $300,000 deal, involving Russian nationals as purchasers and a broker's salesperson who took advantage of her fluency in Russion to influence and cheat the buyers. The earnest money forfeited was $30,000. Presumably the procuring broker's insurance paid off on the amounts that were stolen, and perhaps the insurer was also the real party in interest with respect to this $30,000 as well.
DIRT readers: Let's assume, for the drill, that the selling broker indeed was the agent of the seller. Is the case correct? Are there other arguments that might have excused buyer's performance?
Do we have Florida readers who know more about the case?
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