Award Against Licensee Upheld

Read the full decision: Briggs v. Kidd & Leavy Real Estate Co.

Michigan court affirms lower court award in favor of buyers based on alleged misrepresentations by their representative that they would receive an adjoining garden lot that the sellers had sold a year earlier.

A married couple (“Buyers”) sought to purchase a home for the wife’s mother. The Buyers received a recommendation for a salesperson (“Buyer’s Representative”) at a particular brokerage (“Firm”). The Buyers contacted the Buyer’s Representative, who arranged for them to see a number of properties.

The Buyers became interested in a property that had an adjoining garden lot (“Garden Lot”). The MLS listing showed three lots for sale- the two lots on which the home sat and the Garden Lot. The Buyers also claimed that the Buyer’s Representative made them believe that the Garden Lot was part of the property for sale. In fact, the owner had sold the Garden Lot a year earlier. However, the listing broker had failed to update the MLS listing.

The Buyers submitted an offer to purchase the property. After a series of offers, the Buyers’ offer was accepted to purchase lots 5 and 6 but not lot 7, where the Garden Lot was located. Following the completion of the purchase, the Buyers discovered that they had not purchased the Garden Lot. The Buyers filed a lawsuit against the sellers, who then impleaded multiple parties to the lawsuit. Eventually, a judgment was entered against the Firm for $100,000, the amount for which the owners had sold the Garden Lot. The Firm appealed the ruling.

The Court of Appeals of Michigan affirmed the trial court ruling. The Firm argued that the purchase agreement was clear that the Buyers were only receiving lots 5 and 6, and the Buyers had received information which showed that the Garden Lot was lot 7. However, the Firm was not a party to the purchase agreement and therefore the court ruled that the Buyers were not barred by the purchase contract for pursuing an action against the Firm based on the Buyer’s Representative’s conduct.

Next, the court considered the misrepresentation claims. The Firm argued that the Buyers had not shown justifiable reliance on the alleged misrepresentation by the Buyer’s Representative because the Buyers had access to information which demonstrated that the Garden Lot was not part of their purchase. To allege a fraudulent misrepresentation, a party must allege that the party made a material misrepresentation that was false and the party knew it was false intending the other party to rely upon it, and the other party justifiably relied upon the statement to their detriment.

The court upheld the trial court’s ruling that the Buyers had adequately demonstrated fraud and negligent misrepresentation. Not only did the MLS listing show the Garden Lot as part of the property for sale, the Buyer’s Representative had also sent an email confirming that the Garden Lot was part of the purchase. Thus, the Buyers had established justifiable reliance. The court also ruled that the sold price for the Garden Lot was an adequate measure of damages. Thus, the trial court affirmed the lower court.

Briggs v. Kidd & Leavy Real Estate Co., No. 340713, 2018 WL 4603900 (Mich. Ct. App. Sept. 25, 2018). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information.]

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