Barber's Super Markets, Inc. v. Stryker

• Decision Date: 07 July 1972
• Docket Number: No. 763,763
• Parties: BARBER'S SUPER MARKETS, INC., a New Mexico corporation, Plaintiff- Appellant, v. Robert L. STRYKER; Stryker Realty, Inc.; I. E. Shahan; Wendel Owen and Owen & Associates, Inc., Defendants-Appellees.
• Court: Court of Appeals of New Mexico

Page 1304

500 P.2d 1304

84 N.M. 181

BARBER'S SUPER MARKETS, INC., a New Mexico corporation Plaintiff- Appellant, v. Robert L. STRYKER; Stryker Realty, Inc.; I. E. Shahan Wendel Owen and Owen & Associates, Inc. Defendants-Appellees.

No. 763.

Court of Appeals of New Mexico.

July 7, 1972.

Certiorari Denied Aug. 4, 1972.

Quincy D. Adams, Adams & Foley, Albuquerque, for appellant

Russell Moore and Dennis M. McCary, Keleher & McLeod, Albuquerque, for appellees Stryker and Stryker Realty.

T. K. Campbell, Las Cruces, for appellees Shahan, Owen and Owen & Associates, Inc.

OPINION

SUTIN, Judge.

Barber's Super Markets, Inc., in Count I, sought damages arising out of an alleged conspiracy to defraud and breach of fiduciary duties by defendants. In Count II, Barber's sought damages in the alternative against Stryker for violation of fiduciary duties and for negligence, all in connection with the sale to Barber's of an 18 acre tract of land in Las Cruces, New Mexico, hereinafter called the Chisholm tract.

At the close of Barber's evidence, the trial court held that Barber's was not entitled to jury trial on Count I. It assumed jurisdiction as trier of the facts. Thereafter, the court made findings of fact and conclusions of law and entered judgment for defendants. On Count II, the trial court directed a verdict for defendant Stryker. From the order and judgment entered, Barber's appeals.

Barber's relies upon three claims of error: (1) denial of Barber's right to a jury trial on the issues raised by Count I of the second amended complaint; (2) dismissal of Count I of second amended complaint; (3) instructing a verdict in favor of Stryker on Count II of the second amended complaint.

We reverse.

A. Facts Most Favorable to Barber's

Barber's was a corporation with its principal place of business in Albuquerque, New Mexico. J. C. Horn was its president and general manager. He had full authority to acquire real estate as a site for location of a supermarket.

Stryker Realty, Inc., was a licensed real estate broker with offices in Las Cruces, New Mexico. Robert L. Stryker was its qualifying broker. It was owned by Stryker and it employed other real estate brokers and salesmen.

Wanda Hyatt was a licensed real estate broker with Pioneer Land Company in December, 1966. On February 13, 1967, she obtained a broker's license and became associated with and employed by Stryker until May, 1968. With reference to the property involved in this case, Hyatt was instructed to present offers to Stryker because Stryker could better handle them.

Shahan was a licensed real estate salesman employed by Stryker from October 18, 1966, to and through April 30, 1967, but Shahan's license remained in Stryker's office from October, 1966 to December 31, 1967. Stryker did not surrender Shahan's license for cancellation prior to December 31, 1967, as required by § 67--24--28(E), N.M.S.A.1953 (Repl.Vol. 10, pt. 1, Supp. 1971). On December 29, 1967, Stryker mailed the Shahan license to the Real Estate Commission and advised them that Shahan was no longer associated with his office.

To avoid confusion, defendants Owen and Owen & Associates, Inc. are included when reference is made to 'Shahan.' See Barber's Super Markets, Inc. v. Stryker, 81 N.M. 227, 465 P.2d 284 (1970).

The property involved consisted of approximately 18 acres of vacant land in Las Cruces originally owned by Chisholm, Inc. On August 25, 1967, it agreed to sell the property to Shahan for $150,000.00. On October 27, 1967, Barber's agreed to purchase the property from Shahan for $275,000.00.

Under Count I, Barber's claimed, (1) that the defendants and each of them did conspire with one another to perpetrate a fraud on Barber's and did in fact perpetrate a fraud; (2) that Shahan and Stryker breached their fiduciary duties toward Barber's; (3) Barber's suffered damages in the sum of $125,000.00.

We recite the background picture in order to lead to the vital issues in this case.

In December, 1966, Hyatt visited Horn in Albuquerque to discuss the sale and purchase of property in Las Cruces. Horn told Hyatt he was definitely interested in a site to build a retail supermarket. In February, 1967, Hyatt, then associated with Stryker, told Stryker that Barber's was interested in locating a store in Las Cruces. Hyatt and Stryker agreed to see if they could, with all speed, interest Barber's in a location in Las Cruces. Stryker told Hyatt if she secured a written offer on the property from Barber's, he would submit the offer to Chisholm.

Late in March and early in April, 1967, Hyatt wrote letters to Horn on Stryker stationery, made telephone calls, sent him maps, plats and other material, including maps of the Chisholm tract. In April 1967, Hyatt requested Horn to come to Las Cruces to look at some locations. Horn came down and looked at a number of locations, including the Chisholm tract. Horn told Hyatt his first choice was four and one-half acres of the Chisholm tract, and asked her to get a price. She agreed to do this. Horn was not then interested in buying 18 acres. Horn said the negotiations went on from there with Hyatt, until the deal was closed in September. During and interim, a zoning problem was involved and Hyatt offered to try to get it changed. At Horn's request, she got a traffic count and the cost of fill dirt for the tract.

Later, there were a number of telephone conversations and another visit or two by Horn to Las Cruces, but he could not get a firm price on the four and one-half acres. Horn did not request Hyatt to bring him a contract, but he tried to get some kind of deal on the property. Finally, in July or August, 1967, he met with Stryker who said he would see if he could help Mrs. Hyatt to get a deal on the property. Horn did receive three or four price quotations from Hyatt and Stryker on the four and one-half acres, each of which kept going up. Hyatt said the owner was hard to deal with.

Neither Hyatt nor Stryker ever told Mrs. Chisholm that Barber's was interested in buying the four and one-half acres before she sold the 18 acre tract to Shahan. If Mrs. Chisholm had been told during May and June, 1967, that Barber's was interested in a store location, she would have attempted to sell the tract to Barber's. Neither Hyatt nor Stryker had a listing on this property, and never secured a written offer from Barber's.

It should be noted that between April, 1967 and September, 1967, Barber's was interested solely in a 4 1/2 acre portion of the tract, not the 18 acre tract, and it was not interested in the name of the owner. Inasmuch as a 4 1/2 acre tract was not purchased by Shahan nor sold by Shahan to Barber's, no claim for damages can arise under Count I with respect to the 4 1/2 acre tract.

Horn did not meet Shahan until September 23 or 24, 1967, a month or so before Barber's agreed to purchase the property. He did not know that Shahan had ever been employed as a real estate salesman by Stryker, nor know that the property was owned by Chisholm, Inc., but it was immaterial to him who owned the property.

Before September 22, 1967, Horn did not ask Stryker to go to the owner to get a price on the 18 acre tract. But on September 22, 1967, he did. Stryker got in touch with Shahan, obtained the price of $275,000.00 and relayed the price to Horn. Horn agreed with the price. Shahan knew that Barber's was interested in this property before September 22, 1967.

During the trial, Stryker was asked this question to which he made this answer:

Q. Before you went to ask Mr. Shahan what price he would sell for, did you ask Mrs. Hyatt to get some earnest money from Barbers (sic)?

A. No, sir, because Mr. Horn had definitely given me instructions personally to try to procure that tract for Barbers (sic) Super Markets. (Emphasis added).

On September 24 or 25, Horn came to Las Cruces to try to complete the deal on the property. He met with Shahan, Stryker, and Hyatt. Stryker introduced Horn to Shahan. Mr. Horn said, 'my dealing at that time was with Shahan because he had been introduced as the owner of the property and that was what I was concentrating on, was closing the deal.' Shahan told Horn he could not sell the property for six months because of a tax problem. Horn suggested a lease with an option to purchase. Shahan agreed. The subject matter was submitted to attorney's to prepare the necessary documents, and the transaction would be completed as soon as the lease-purchase arrangement was worked out. The papers were completed and signed on October 27, 1967.

During the month of October, the time of the preparation of the papers, Stryker followed the instructions of Barber's attorney in closing the deal. He had numerous telephone conversations with Barber's attorney, correspondence, and on at least one occasion he stopped in the attorney's office in Albuquerque. Barber's put the first month's rent of $2,000.00 and a $10,000.00 option fee in Stryker's hands which he held in his trust account until the matter was ready to be closed. The lease and option agreement, and copies thereof, were mailed to Stryker. Stryker obtained signatures and returned the papers. On October 31, 1967, Stryker was authorized to release the rent and option money to Shahan.

At no time did Shahan or Stryker inform Horn, (1) that Shahan had been a real estate salesman in Stryker's office; (2) that Shahan's license remained in Stryker's office during the negotiations and up past the closing of the deal; (3) that Stryker was acting as a broker for Shahan; (4) that Shahan agreed to purchase the property from Chisholm in August, 1967, at a price of $150,000.00; (5) that Stryker had attempted to negotiate a lesser price from Shahan for the property; (6) what the market value of the property was; (7) nor disclose any other facts or circumstances, acts or conduct which duty a broker owes to a principal.

Stryker had no oral or written agreement with Barber's for a real estate commission, but...