Licari v. Blackwelder


            Six siblings, the plaintiffs, inherited their family home in Westport from their parents. Being relatively unsophisticated regarding real estate transactions, the plaintiffs contacted a Norwalk real estate agent, Robert Schwartz, to sell the home. Schwartz then contacted the defendant, Blackwelder, a Westport real estate agent to assist him sell the home and split the commission equally if any of the defendant’s clients bought the home. Schwartz advertised the home for $125,000 to one of the defendant’s prospective clients, but Blackwelder soon after posited his own bid to purchase the home for $115,000 without previously disclosing his valuation to the plaintiffs or negotiating with the other prospective buyer. Accordingly, the plaintiffs accepted the defendant’s bid and sold him the home under the impression that it represented the fair market value. Blackwelder proceeded to sell the home immediately afterwards for $160,000 without ever occupying or making improvements on the residence. The plaintiffs accordingly sued Blackwelder for breaching his fiduciary duty to them as a real estate broker by failing to advise them of other prospective buyers and misleading them as to the fair market value of the home.


            Trial court awarded the plaintiffs $45,000 plus interest in damages for breach of the defendant’s duty as real estate brokers to find a buyer for the plaintiff’s property at the best possible price and for acting improperly in dealing for themselves to the plaintiffs’ financial loss. Defendants now appeal.


            The issue is whether a real estate broker owes a fiduciary duty to act in the best interest of his/her principal (client) and must inform them of all information that might be material to their advantage.


            A real estate broker, as a fiduciary, is required to exercise fidelity and good faith, and cannot act adversely to his principal’s interest or fail to communicate information he may possess or acquire which is or may be material to his principal’s advantage.


            First off, the defendants argue that the court erred in its findings as to the manner in which they breached their fiduciary duty to the plaintiffs because the findings go beyond the scope of the plaintiffs’ allegations. The court disagrees. They initially point to Kurtz v. Farrington and Ritch v. Robertson, in which the court holds that a real estate broker, as a fiduciary [Kurtz] is required to exercise fidelity, good faith, and cannot put himself in a position antagonistic to his client/principal’s interest [Ritch]. Furthermore, a real estate broker would be engaging in fraudulent conduct if he/she failed to communicate information that might be material to his/her principal’s best interest and/or works adversely to his/her principal’s best interest, as it seems to be the case here. The aforementioned rule puts the real estate broker under a legal obligation to act with the utmost good faith towards his/her principals and to provide them with a full, fair and prompt disclosure of all facts within his knowledge, regardless if they may or may not be material to the principal’s advantage. Additionally, the broker is under a duty to communicate any facts concerning a more advantageous sale to his principal. If the broker fails to act accordingly, he/she is liable to the principal for any losses the principal may suffer as a consequence. Furthermore, the state of Connecticut codified all of the aforementioned principals of real estate law in an array of statutes, thereby further supporting the plaintiffs’ allegations of the defendants’ liability. The defendants specifically violated section 20-320 of the General Statutes, i.e. making any material misrepresentation; false promise likely to influence or persuade; acting for more than one party without the knowledge of all parties; and any act which constitutes dishonest, fraudulent or improper dealings. Accordingly, the defendants both violated the statutory provisions of the state and breached the fiduciary duty owed to the plaintiffs by engaging in fraudulent activity in the dealings. The trial court therefore did not err in their determination of the defendants’ liability for breach of duty and intentional misrepresentation to the plaintiffs.  


            The Appellate Court of Connecticut affirmed the trial court’s judgment in favor of the plaintiffs for damages due to the defendant’s breach of duty as a real estate broker.

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