Zee v. Assam
| Decision Date | 06 July 1983 |
| Docket Number | No. 13985,13985 |
| Citation | 336 N.W.2d 162 |
| Parties | Gary Van ZEE and Michael C. Thurman, Plaintiffs and Appellees, v. Fred ASSAM, d/b/a Fred Assam Real Estate, and Jake Fretty, Defendants and Appellants. |
| Court | South Dakota Supreme Court |
Edwin E. Evans of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for plaintiffs and appellees.
John E. Burke, Sioux Falls, for defendants and appellants; N. Dean Nasser, Jr., Sioux Falls, on brief.
This is an appeal from a judgment awarding $20,000 with interest for damages sustained by buyers in a real estate transaction and from the trial court's denial of a motion for judgment notwithstanding the verdict. We affirm in part and modify in part.
In August of 1979, Gary Van Zee and Michael C. Thurman (buyers) were approached by Jake Fretty, an employee of Fred Assam d/b/a Fred Assam Real Estate (collectively referred to herein as appellant), in connection with the purchase of some investment property in Sioux Falls, South Dakota. The property was owned by Ronald P. Shawd (seller). Pursuant to a valid real estate listing, seller listed the property for sale with appellant.
Buyers subsequently inspected the property and decided to make an offer. Knowing the seller was asking $90,000 for the property, buyers authorized appellant to offer the seller $80,000, of which $15,000 would be the down payment. Buyers also wanted seller to be responsible for one-half of the title insurance expense. Appellant conveyed this offer to seller and returned with a counteroffer accepting the $80,000 purchase price but requiring an $18,000 down payment and refusing to pay one-half of the title insurance.
Following the counteroffer, appellant and buyers discussed the new terms. Buyers were advised not to let the "title insurance thing blow the deal because it was a good deal." Appellant further advised that "title insurance would be a waste of money" and counseled that buyers should "just forget about the title insurance." Following this advice, buyers signed a written purchase agreement and made a deposit. The agreement called for an $18,000 down payment and the remainder of the $80,000 purchase price to be paid in annual installments of $5,000, plus interest at nine percent, with a balloon payment for the remainder due on January 1, 1983.
While arranging financing for the down payment, one of the buyers was advised by his banker that it was always a good policy to procure title insurance on land transactions. Later that same day, buyers delivered a check for the balance of the down payment to appellant and also requested that appellant's secretary procure title insurance for them. Buyers also signed the contract for deed, which called for an abstract of title to be duly updated and certified, reflecting merchantable title, free and clear of encumbrances prior to the date of the balloon payment.
The title insurance preliminary commitment was returned to buyers over a month later and it showed that an interest of the National Bank of South Dakota (Bank) appeared as an encumbrance on the title. Seller had apparently purchased the land on a contract for deed and later assigned all his rights, title and interest in the contract to Bank as collateral for a loan of $27,560. Buyers confronted appellant with this information. At that point, buyers learned for the first time that seller had called Bank from appellant's office seeking permission to sell the property both prior to listing it and prior to selling it to buyers.
Aside from paying the now bankrupt seller the $18,000 down payment, buyers were required to pay Bank $27,560 in settlement of their claim, and $48,000 to the party who held the original contract for deed from seller. Thus, buyers paid $93,560 for the property which was originally sold to them for $80,000.
Buyers brought an action against appellant, seller and Bank. Seller, who had a stay from his petition in bankruptcy, and Bank were dismissed. The case against appellant was tried and a jury returned a verdict in the amount of $20,000 on the grounds of both negligence and breach of a fiduciary duty. The request for punitive damages was denied. Appellant now asks us to review the case.
Appellant presents us with five issues but we need only address three: (1) whether the trial court properly instructed the jury as to the nature of agency relationships; (2) whether the evidence was insufficient to establish an agency relationship and a breach of fiduciary duty; and (3) whether the evidence of damages entitles appellant to a remittitur. We address each in turn.
Appellant first contends the trial court erred in instructing the jury as to the requirements of an agency relationship and that the legal consequences of the breach of this relationship is negligence. There is no dispute that a written agency relationship existed between appellant and seller. The question presented to us is whether a similar relationship developed between appellant and buyers.
Whether one is an agent for another is normally a question of fact to be determined by the jury, Barnard-Giles-Moses Co. v. Christy, 41 S.D. 61, 168 N.W. 737 (1918), but before the matter may be submitted for jury determination, there must be competent evidence in the record to support it. Wolf v. Graber, 303 N.W.2d 364 (S.D.1981). In considering whether there is evidentiary support for an instruction, a reviewing court must give the evidence the most favorable construction it will reasonably bear. If there is some evidence bearing on the issue, a reviewing court will not disturb the trial court's giving of an instruction. Sandhorst v. Mauk's Transfer, Inc., 252 N.W.2d 393 (Iowa 1977).
Appellant believes there was no evidence in the record to support giving these instructions. Appellant argues that he...
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