Sierra Pacific Industries v. Carter
a. Case History
i. Trial court granted a motion for a new trial, Carter appeals
b. Facts
i. During the fall of 1975, Sierra purchased the property in question
1. 10 acre parcel with 5 duplexes and 2 single family homes
ii. Sierra requested Carter, a real estate agent of 26 years, sell the property
1. Carter was familiar with the property having tried to sell it before
iii. Both parties agreed that the selling price would be $85,000 and Carter would receive $5,000 in commission
iv. The trial testimony was in conflict over what would happen if Carter sold the property for more than $85,000
v. In
June of 1976, Carter sold the property to his daughter and son-in-law
for $85,000 and took the $5,000 commission without informing Sierra that
he had sold the property to family
vi. Sierra initiated a fraud action
1. A jury found for Carter and judgment was entered
c. Ruling
i. An agent has a fiduciary duty to disclose to his principle, all information in his possession relevant to the agency
ii. And
agent may not compete with the principle or act as an agent for another
party whose interests might conflict with the principle’s
iii. A real estate agent must refrain from dual representation during a sale, unless he has the consent of both principles
1. This
means that a real estate agent must disclose that the buyer is a family
member if the relation is such that the agent could be said to be
acquiring an interest in the subject property
iv. Carter owed a duty to disclose whom he sold the property to
v. Carter cannot receive the commission, and is liable for a minimum of $5,000
1. The jury was in error
vi. The
order granting a new trial is affirmed with instructions to direct of
verdict as to duty and breach. The only matter for consideration is the
amount of damages
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