ILNews

Judges affirm judgment for real estate agent on negligence claim

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Court of Appeals affirmed that a real estate agent representing buyers did not breach the duty he had to the sellers when he communicated with them personally about accepting his clients’ offer.

Jack Stump represented Zachary and Holli Gredy, who wanted to buy Terry and Marti Likens’ home. The Likenses had their own real estate agent, who advised the couple to accept another offer instead of the Gredys’. Stump contacted the Likenses directly by phone and e-mail encouraging them to accept the Gredys’ offer.

They executed a purchase agreement, in which the Gredys were to close before Sept. 30, 2008, and have $10,000 held in escrow. Closing didn’t happen on time, and the bank letter guaranteeing the funds was fraudulent. The Likenses sued the Gredys, Stump and his employer, Prickett’s Properties. At issue in the instant case is the grant of summary judgment in favor of Stump and his employer on the Likenses’ negligence/breach of agency duty claim.

The Likenses argued Prickett’s Properties was liable under the doctrine of respondeat superior. They also claimed that Stump owed them a common law duty because he went beyond acting as an agent for the Gredys and undertook to advise and coerce the Likenses into a course of action.

But statutory law supersedes any common law to the contrary, the Court of Appeals concluded in Terry Likens, et al. v. Prickett's Properties, Inc., et al., No. 43A03-1008-PL-455. The judges cited Indiana Code Chapter 25-34.1-10, which governs real estate agency relationships, to define the duty Stump owed the Likenses. Section 11 of the chapter says a licensee representing a buyer owes no duties or obligations to the seller, except that a licensee shall treat all prospective sellers honestly and not knowingly give them false information, wrote Judge Nancy Vaidik. The section also says that the licensee owes no duty to conduct an independent investigation of the buyer’s financial ability to purchase or verify the accuracy of any statement made by the buyer or a third party.

“Indeed, Stump had a duty to treat the Likenses honestly and not knowingly give them false information. But the negligence count against Stump does not allege any violation of this clearly-articulated statutory duty,” she wrote, noting the Likenses didn’t appeal the summary judgment ruling pertaining to their fraud claim against Stump. “Finally, while Stump’s actions in directly contacting the Likenses to encourage them to accept the Gredys’ offer may seem inappropriate, Stump, as the buyers’ agent, is allowed to provide the Likenses services in the ordinary course of a real estate transaction and any similar services that do not violate the terms of his agency relationship with the Gredys.”

Judge Vaidik also referenced section 15, which says the “duties and obligations of a licensee set forth in this chapter supersede any fiduciary duties of a license to a party based on common law principles of agency to the extent that those common law fiduciary duties are inconsistent with the duties and obligations set forth in this chapter.”

Also, there’s no evidence of a writing that the Gredys and the Likenses consented to Stump acting as a limited agent for both of them.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

  2. Been there 4 months with 1 paycheck what can i do

  3. our hoa has not communicated any thing that takes place in their "executive meetings" not executive session. They make decisions in these meetings, do not have an agenda, do not notify association memebers and do not keep general meetings minutes. They do not communicate info of any kind to the member, except annual meeting, nobody attends or votes because they think the board is self serving. They keep a deposit fee from club house rental for inspection after someone uses it, there is no inspection I know becausee I rented it, they did not disclose to members that board memebers would be keeping this money, I know it is only 10 dollars but still it is not their money, they hire from within the board for paid positions, no advertising and no request for bids from anyone else, I atteended last annual meeting, went into executive session to elect officers in that session the president brought up the motion to give the secretary a raise of course they all agreed they hired her in, then the minutes stated that a diffeerent board member motioned to give this raise. This board is very clickish and has done things anyway they pleased for over 5 years, what recourse to members have to make changes in the boards conduct

  4. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

ADVERTISEMENT