482 A.2d 359 (D.C. 1984), 81-1471, Vicki Bagley Realty, Inc. v. Laufer
| Citation | 482 A.2d 359 |
| Party Name | VICKI BAGLEY REALTY, INC., et al., Appellants, v. Steven Z. LAUFER, et al., Appellees. |
| Case Date | September 24, 1984 |
| Court | D.C. Court of Appeals |
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Argued Dec. 9, 1982.
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[Copyrighted Material Omitted]
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Roy E. Green, Washington, D.C., for appellant Vicki Bagley Realty, inc.
Michael G. Charapp, Washington, D.C., for appellant D'Amecourt Realty, Inc.
Richard T. Rossier, Washington, D.C., with whom Michael B. McGovern, Washington, D.C., was on brief, for appellees.
Before FERREN and TERRY, Associate Judges, and KERN, Associate Judge, Retired. [*]
TERRY, Associate Judge:
The appellants in this case, defendants below, are two real estate brokerage companies, Vicki Bagley Realty, Inc. ("Bagley"), and D'Amecourt Real Estate, Inc. ("D'Amecourt"). The trial court, sitting without a jury, found that each appellant had breached a fiduciary duty owed to the appellees and that D'Amecourt's conduct also constituted negligence. The court entered an $8,000 judgment against the real estate companies and a third defendant, John T. Laye. [1] We affirm the trial court's finding of liability, but hold that appellees are limited to a recovery of $5,000 by the liquidated damages clause of the agreement they made with appellant Bagley and co-defendant Laye.
I
Steven and Daniella Laufer owned a town house on Waterside Drive in Northwest Washington. When they decided to sell it, Dr. Laufer, whom the trial court found to be "a knowledgeable, experienced businessman with education, experience, and training in the real estate field," listed the property with D'Amecourt, asking a price greater than its apparent market value.
Bagley, serving as a "cooperating broker," submitted a contract offer on behalf of John T. Laye for purchase of the property. Laye's proposed contract provided, inter alia, that he would buy the house after renting it for three months at a rental of $1,000 per month. Apparently worried that such a tenancy, coupled with an escape clause that would have allowed Laye to avoid the contract if he could not obtain financing, might not lead to the sale of the house, Laufer added a clause providing that, at his option, he could take back a deferred purchase money trust, thereby making financing available. The trial court found that Dr. Laufer was not concerned with the credit of the purchaser, and concluded
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that Laufer believed that an agreed-upon $10,000 deposit, coupled with a total down payment of $50,000, which apparently was never made, constituted a sufficient credit recommendation. Laye and Laufer agreed to go to settlement on May 1, 1979.
On January 23, 1979, the parties signed certain contracts. Although the precise nature of these documents is not entirely clear from the record, it is undisputed that they included a sales contract and a lease, which was attached to the sales contract. On or about the same date, Bagley received three checks drawn by Laye. [2] One check, payable to the Laufers in the amount of $3,000, was for three months' rent from February through April. A second check for $1,000, payable to Bagley, was given as a security deposit to protect the Laufers against waste or damage to their property during the rental period. The third check, also payable to Bagley, was for $10,000 and represented an earnest money deposit on the contract of sale. The $10,000 check was dated January 22, 1979. On the other two checks, however, the original date was whited out, and February 1 was typed in its place. [3] All three checks bounced.
Dr. Laufer received the $3,000 check from D'Amecourt [4] on or about February 1. When he deposited it a few days later, he discovered that the account upon which it was drawn had been closed. At about the same time he learned that the $10,000 check made out to Bagley had also been dishonored, even though Bagley, knowing that there would not be sufficient funds in Laye's account until February 1, had held the check for approximately nine days after receiving it in order to make sure it cleared. [5]
The Laufers filed a complaint for possession in the Landlord and Tenant Branch of the Superior Court on April 30, and Laye moved out soon thereafter. A few months later the Laufers filed suit against Bagley, D'Amecourt, and Laye, charging the two brokers with various instances of misrepresentation, failure to account for and remit money, and unworthiness or incompetence to act as real estate brokers, all in violation of D.C.Code § 45-1408 (1973). The trial court entered judgment for $8,000 against the three defendants, [6] and the brokers now appeal, claiming (1) that the trial court should have granted their motion to dismiss the complaint, (2) that the trial court erred in finding them liable, and (3) that even if they were liable, the measure of damages was wrong.
II
Appellants contend that the trial court erred in denying their motion to dismiss the Laufers' complaint. [7] They maintain that the complaint failed to state a claim upon which relief could be granted when it charged them with violations of D.C.Code § 45-1408 (1973) [8] instead of specifying
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a cause of action grounded in the common law.
D.C.Code § 45-1408 (1973) was originally enacted by Congress in 1937 as part of an act to regulate real estate brokers in the District of Columbia. Act of August 25, 1937, ch. 760, § 8, 50 Stat. 787, 793. The same statute established the Real Estate Commission of the District of Columbia and gave the Commission the authority to license real estate brokers and agents. In the ensuing years the Commission underwent various reorganizations and name changes. By the time this suit was filed in 1979, its duties had been delegated to the Department of Licenses, Investigations, and Inspections. See Commissioner's Order No. 69-96, 15 D.C.Reg. 186 (1969); Mayor's Order No. 78-42, 24 D.C.Reg. 7532 (1978). [9]
Like the commissions that preceded and followed it, the Department had the power to revoke and suspend real estate brokers' licenses. In particular, D.C.Code § 45-1408 (1973) authorized such action when, inter alia, (1) the licensee made a "substantial misrepresentation" (subsection (a)), (2) "[p]ursued a continued course of misrepresentation, or [the] making of false promises through agents or salesmen" (subsection (c)), (3) "[f]ailed, within a reasonable time, to account for or to remit any money ... which belong[ed] to others" (subsection (g)), or (4) "[d]emonstrated such unworthiness or incompetency to act as a real-estate broker ... as to endanger the interests of the public" (subsection (h)). In their complaint below the Laufers alleged a violation of each of these four subsections as a ground for their action against the brokers. Appellants contend, however, that the enforcement of section 45-1408 fell exclusively within the regulatory domain of the administrative agency, and that the statute did not give the Laufers a private right of action. Therefore, they argue, the complaint stated no claim upon which relief could be granted. We find appellants' arguments unpersuasive.
We do not reach the question of whether the Code implied a private cause of action in this instance. Although the Laufers' complaint with respect to the brokers is divided into segments that focus on the four subsections of D.C.Code § 45-1408 (1973) quoted above, we decline to view it as based exclusively on the Code. Instead, we read the four pertinent sections of the complaint as encompassing a common law cause of action for breach of fiduciary duty, [10] and hence we affirm the trial court's denial of the motion to dismiss. Even though the Laufers failed in each of the four sections of the complaint to state in so many words that their claims against the brokers were based on a breach of fiduciary duty, they alleged facts which, if proved, would establish both the existence of a fiduciary duty and a breach. We therefore hold that the complaint stated a claim against each broker cognizable at common law and that the statutory references were mere surplusage.
This court has long adhered to "the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)
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(footnote omitted); see, e.g., Perry v. District of Columbia, 474 A.2d 824, 826 (D.C.1984); Owens v. Tiber Island Condominium Ass'n, 373 A.2d 890, 893 (D.C.1977); Liberty Mutual Insurance Co. v. Citizens Casualty Co., 94 A.2d 924, 925 (D.C.1953). We have also held that a court, when considering a motion to dismiss for failure to state a claim, must construe the complaint in the light most favorable to the plaintiff and assume, for the purpose of the motion, that the allegations in the complaint are true. McBryde v. Amoco Oil Co., 404 A.2d 200, 202 (D.C.1979); see Seek v. Edgar, 293 A.2d 474, 476 (D.C.1972) ("pleadings should be liberally construed in favor of the pleader"). Finally, Super.Ct.Civ.R. 8(f) provides that "[a]ll pleadings shall be so construed as to do substantial justice."
When read in light of these principles, the Laufers' complaint easily passes muster. It sets forth specific factual allegations under each of the four headings in the sections relating to the brokers. Appellees argue that the statutory references, which appear at the end of each section, should be interpreted simply as a means of defining the duty of a broker, not as an assertion of a private right of action. Since such an interpretation is by no means unreasonable, we must reject appellants' contention and sustain the trial court's denial of the motion to dismiss. [11]
III
A real estate broker, like any other agent, owes a fiduciary duty to his principal. Jay v. General Realties Co., 49 A.2d 752,...
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Liquidated Damages In The Nation's Capital
...should be enforced." (quoting United States v. Bethlehem Steel Co., 205 U.S. 105, 119 (1907)); accord Vicki Bagley Realty, Inc. v. Laufer, 482 A.2d 359, 367 (D.C. 1984). In the context of liquidated damages, this principle is generally consistent with Powell on Real Property, which would al......