Judges reverse summary judgment for agent, partner

Back to TopCommentsE-mailPrintBookmark and Share

A case involving a Bloomington real estate transaction required the Indiana Court of Appeals to decipher the statutes in question without the aid of previous interpretations because of a lack of previous caselaw interpreting them.

Sheree Demming sued real estate agent Cheryl Underwood and her business partner Kenneth Kinney for breach of fiduciary duty, constructive fraud, and vicarious liability, and she requested the imposition of a constructive trust ordering Underwood and Kinney to convey title of the properties at issue to Demming.

Demming renovated and leased or sold properties in Bloomington and had her eye on two properties near Indiana University’s campus. She had Underwood contact the property owners’ real estate agent many times over the course of several years to see if the owners would be interested in selling, and the two discussed strategies in order for Demming to get the properties. Underwood was to be paid when Demming purchased the properties. When Underwood learned the owner would entertain offers after the death of her husband, instead of informing Demming, Underwood and Kinney submitted an offer and purchased the properties.

The trial court granted summary judgment to Underwood and Kinney on all of the claims, concluding that there were no genuine issues of material fact and no agency relationship existed between Demming and Underwood.

But in Sheree Demming v. Cheryl Underwood and Kenneth Kinney, No. 53A01-1005-PL-252, the Court of Appeals judges found several genuine issues of material fact regarding whether Demming exercised sufficient control over Underwood’s activities to support the existence of an agency relationship and whether Underwood breached a common law fiduciary duty owed to Demming.

On the matter of whether Underwood breached a fiduciary duty owed to Demming under Indiana’s real estate agency statutes, Judge Paul Mathias pointed out that the applicable statutes in Indiana Code Chapter 25-34.1-10 (referred to as the agency chapter) are nearly opaque and there is a dearth of caselaw interpreting them.

The definitions of “customer” and “client” highlight “the perplexities inherent in the Agency Chapter. Section 25-34.1-10-9.5(a)(2) provides that a real estate licensee has an agency relationship with and is representing the person with whom the licensee is working unless the licensee is assisting that person as a customer without compensation. But a customer is someone who is not a client, and client is defined as someone who has entered into an agency relationship with a licensee. Thus, under section 25-34.1-10-9.5(a)(2), a person with whom a licensee is working is a client unless he or she is not a client and is not paying for the licensee’s services,” he wrote.

The trial court concluded Demming was merely a customer, relying on the definition of real estate transaction under Section 25-34.1-10-8, to rule that a “cold call” to find out if a property not on the market could be purchased was not “the sale or lease of any legal or equitable interest in real estate” and was not a “real estate transaction.”

The judges held the fact that the properties weren’t listed for sale at the time Underwood contacted the other real estate agent doesn’t necessarily preclude the conclusion that Underwood was Demming’s agent under the agency chapter. They also held that Underwood breached the fiduciary duties owed to Demming under statute.

The judges ruled that genuine issues of material fact preclude summary judgment on the breach of fiduciary duty and constructive fraud claims and that summary judgment was an “inappropriate vehicle for the trial court to dispose of Demming’s request for the imposition of a constructive trust.” They also reversed summary judgment in favor of Kinney on the claim of vicarious liability and remanded for further proceedings.


Post a comment to this story

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
Subscribe to Indiana Lawyer
  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  3. Paul Hartman of Burbank, Oh who is helping Sister Fuller with this Con Artist Kevin Bart McCarthy scares Sister Joseph Therese, Patricia Ann Fuller very much that McCarthy will try and hurt Patricia Ann Fuller and Paul Hartman of Burbank, Oh or any member of his family. Sister is very, very scared, (YES, I AM) This McCarthy guy is a real, real CON MAN and crook. I try to totall flatter Kevin Bart McCARTHY to keep him from hurting my best friends in this world which are Carolyn Rose and Paul Hartman. I Live in total fear of this man Kevin Bart McCarthy and try to praise him as a good man to keep us ALL from his bad deeds. This man could easy have some one cause us a very bad disability. You have to PRAISAE in order TO PROTECT yourself. He lies and makes up stories about people and then tries to steal if THEY OWN THRU THE COURTS A SPECIAL DEVOTION TO PROTECT, EX> Our Lady of America DEVOTION. EVERYONE who reads this, PLEASE BE CAREFUL of Kevin Bart McCarthy of Indianapolis, IN My Phone No. IS 419-435-3838.

  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.