Holst v. Fireside Realty, Inc.

• Decision Date: 19 December 1997
• Docket Number: No. 19939-4-II,19939-4-II
• Citation: 948 P.2d 858,89 Wn.App. 245
• Court: Washington Court of Appeals
• Parties: Janet HOLST, Appellant, v. FIRESIDE REALTY, INC., and Arthur Bourgeois and "Jane Doe" Bourgeois, husband and wife, and Charles Fear and "Jane Doe" Fear, husband and wife, Respondents.

Page 245

89 Wn.App. 245

948 P.2d 858

Janet HOLST, Appellant, v. FIRESIDE REALTY, INC., and Arthur Bourgeois and "Jane Doe"

Bourgeois, husband and wife, and Charles Fear and

"Jane Doe" Fear, husband and wife, Respondents.

No. 19939-4-II.

Court of Appeals of Washington,

Division 2.

Dec. 19, 1997.

Duncan A. Bonjorni, Bonjorni, Harkness & Zoro, Auburn, for Appellant.

Thomas Walsh Top, Lane Powell Spears Lubersky, Seattle, for Respondents.

MORGAN, Judge.

The central question in this case is whether a jury could find that a real estate salesperson was acting as agent for both seller and buyer. Holding it could, we reverse the trial court's order granting summary judgment to the defendant.

On August 13, 1983, Janet Holst listed a parcel of land for sale with Fireside Realty, Inc. ¹ The listing agreement described the property as 33 acres and stated an asking price of $396,000. The listing agent was Charles Fear, a salesman employed by Fireside.

In September 1983, Lyle Rader drove by the property and noticed Fireside's "For Sale" sign. He then telephoned Fireside and spoke with Arthur Bourgeois, a Fireside broker whom he had previously met.

In early October 1983, Bourgeois showed Rader the property. Rader had questions about a water source, the condition of a barn, and a pile of gravel that was present on the property. They asked Henry Holst about the water source, and Rader toured the barn to determine its condition. After some research, Bourgeois informed Rader that the gravel belonged to a third party, who was "to get it off the property." ²

Bourgeois also gave Rader a map of the property. When Rader studied the map, he discovered that the parcel contained approximately 50 acres, rather than the listed 33 acres. He did not disclose this fact to Bourgeois, Fear, or Holst.

Rader orally told Bourgeois he would offer $250,000 for the property. Responding that Holst would probably not accept that price, Bourgeois asked what Rader's highest offer would be. Rader said $300,000, and Bourgeois wrote an offer for that amount.

On or about October 19, 1983, Holst accepted the $300,000 offer and signed an earnest money agreement. The agreement did not state the property's acreage. It did state that the "Listing Agent" was "Chuck Fear by Fireside Realty," and that the "Selling Agent" was "Art Bourgeois by Fireside Realty, Inc." ³

The earnest money agreement was subject to the corners of the property being staked by a surveyor, to an inspection of the buildings on the premises, and to marketable title. Bourgeois, according to his own testimony, obtained survey bids at Rader's request. He took Rader through the buildings, as a means of satisfying the inspection condition. He also discussed with Rader and the closing agent a problem concerning marketable title.

At a time not certain from the record, Rader asked Bourgeois to obtain bids for removing timber from the property. As Bourgeois later described the request:

Mr. Rader, in trying to maximize the amount of acreage that he could plant the raspberries, told me that he intended to remove some timber following the closing of the sale, then asked me to get bids on it. I went to a number of loggers and got bids. The file contains survey copies and four bids from various loggers and timber people.[ ⁴

The bids ranged from $10,500 to $22,500, and Bourgeois did not inform Holst they had been obtained. ⁵

On December 27, 1983, Holst sued Rader, but not Fireside, Fear or Bourgeois. She alleged that she and Rader had formed an earnest money agreement; that she subsequently had discovered the property had between 47 and 50 acres; and "that she would not proceed under the present Earnest Money Agreement for the stated consideration of Three Hundred Thousand ($300,000.00) Dollars, when such consideration was based upon the purchase of 33 acres." ⁶ She prayed for a judgment "declaring that said Earnest Money Agreement shall be subject to [ ]rescission or, in the alternative, that performance under it would [be] unconscionable and inequitable and, therefore, that [she] need not further proceed...." ⁷

On January 5, 1984, Holst's then-attorney took Fear's deposition. Fear said that during the events above described, Bourgeois was working for Rader. ⁸

Apparently because Rader filed some counterclaims not shown in the record, Holst decided voluntarily to dismiss her suit and proceed with the sale. The sale actually closed in the latter part of January, 1984.

On February 17, 1984, Holst filed the present action against Fireside, Bourgeois, and Fear. She stated claims for breach of contract, breach of fiduciary duty, and violation of the Consumer Protection Act. ⁹ As a basis for these claims, she alleged that "ARTHUR BOURGEOIS [had] agreed to represent LYLE RADER as a purchaser for the property" before the earnest money agreement had been submitted to her, and that "[t]his information was not made known to JANET HOLST." ¹⁰ On March 26, Fireside filed an answer denying that Bourgeois had agreed to represent Rader.

On January 4, 1985, Fireside moved for summary judgment. It argued that if it had acted as agent for both Holst and Rader, it had adequately disclosed the dual agency by showing, on the face of the earnest money agreement, that it was acting as both "listing agent" and "selling agent." Holst responded that "[a]t no point in time from my first contact with CHARLES FEAR of FIRESIDE REALTY until the sale ... did either CHARLES FEAR or ARTHUR BOURGEOIS advise me that FIRESIDE REALTY was representing the purchasers also." ¹¹ The trial court granted Fireside's motion, and Holst appealed.

On February 5, 1987, this court issued an unpublished opinion reversing the trial court's grant of summary judgment and remanding for further proceedings. We ruled that if Fireside was acting as a dual agent, "the mere indication on the earnest money agreement that the listing agent and the selling agent both were Fireside Realty was not a full and fair disclosure of the dual representation." ¹² Although we did not elaborate then, we note now, as set forth more fully below, that the listing agent is ordinarily the agent of the seller, and that the selling agent is ordinarily the agent or sub-agent of the seller also. ¹³

Seven years elapsed. Then, on September 8, 1994, Holst filed an amended complaint that again set forth claims for breach of contract, breach of fiduciary duty, and violation of the Consumer Protection Act. On January 19, 1995, Fireside filed an answer again denying that it had acted as Rader's agent during the sale.

On December 27, 1994, Fireside filed a second motion for summary judgment. This time, it did not argue that if it had been a dual agent, it had adequately disclosed that fact; rather, it argued that it had not been a dual agent in the first instance, because it had never entered into an agency relationship with Rader. It relied on affidavits from Rader and Bourgeois, who stated that Bourgeois had not acted as Rader's agent. Holst relied in part on Fear's deposition from January 5, 1984, in which Fear stated that Bourgeois was working for Rader. Fireside replied to Fear's deposition with a declaration from Fear, dated August 24, 1988, in which Fear stated: During the course of my deposition I was asked by [Holst's attorney] if [Bourgeois] was "representing" the purchasers Mr. and Mrs. Lyle Rader. I answered that question affirmatively. In so answering that question, my meaning was not that Mr. Bourgeois was "representing" the purchasers in the legal sense of principal and agent, but only that Mr. Bourgeois had talked and met with the Raders and received their offer to purchase the parcel of land for $300,000. It was not my intent to state or imply that Mr. Bourgeois was representing or acting as agent for Mr. and Mrs. Rader in any legal sense.[ [ ¹⁴

On January 19, 1995, Holst filed a cross-motion for summary judgment. She argued, among other things, that this court had ruled in its 1987 unpublished opinion that Fireside was acting as a dual agent, and that the law-of-the-case doctrine precluded the trial court from revisiting that question. She also argued that Fireside was judicially estopped from arguing that it was not acting as a dual agent, because it had said in the 1985-87 proceedings that it was so acting.

On August 16, 1995, the trial court granted Fireside's motion and denied Holst's. It then dismissed the case once again, and Holst filed the present appeal. Holst now claims (1) that the trial court erred by granting Fireside's motion for summary judgment, and (2) that the trial court erred by denying her motion for summary judgment. In evaluating these claims, we engage in the same inquiries as the trial court, ¹⁵ and we take the facts and all reasonable inferences in the light most favorable to Holst, the nonmoving party. ¹⁶ On factual issues, we reverse if reasonable people could reach different conclusions, ¹⁷ but affirm if reasonable people could reach but one conclusion. ¹⁸

I. FIRESIDE'S MOTION FOR SUMMARY JUDGMENT

It is a "general and basic premise," the Supreme Court has said, "that a real-estate brokerage firm with whom property is appropriately listed for sale becomes the agent of the seller for the purpose of finding a purchaser." ¹⁹ Moreover,

there flows from this agency relationship and its accompanying obligation of utmost fidelity and good faith, the legal, ethical, and moral responsibility on the part of the listing broker, as well as his subagents, to exercise reasonable care, skill and judgment in securing for the principal the best bargain possible; to scrupulously avoid representing any interest antagonistic to that of the principal in transactions involving the principal's listed property, or otherwise self-dealing with that property, without the explicit and fully informed consent of the principal; and to make, in all instances, a full, fair, and timely disclosure to the principal of all facts within the knowledge or...