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Maine's highest court has ruled on whether a broker who failed to disclose to purchasers that she was interested in buying property while she accompanied them on a property viewing and listened to a discussion of their offer with the listing agent could be liable for tortious interference with prospective economic advantage.
Raymond and Carol McGeechan ("Neighbors") owned a twenty-five acre parcel in Hampden, Maine. In 1995, they learned that a four-acre parcel adjoining their land was for sale. The Neighbors contacted the listing agent, David Caliendo ("Listing Agent") of Bangor Real Estate ("Brokerage"). Another broker with the Bangor Real Estate firm, Mary Sherwood ("Purchaser"), forwarded to the Neighbors a property disclosure form completed by the sellers. The Purchaser also informed the Listing Agent that she was interested in purchasing the property, and accompanied the Neighbors during their viewing of the property. She also allegedly listened to the Neighbors discuss their offer with the Listing Agent, during which the Listing Agent told the Neighbors that their offer of $30,000 would likely be accepted by the sellers. At no time during the viewing were the Neighbors informed that the Purchaser was also interested in buying the property, as they assumed she was simply another broker from the Brokerage accompanying them during the property viewing.
The Neighbors submitted their $30,000 offer, and shortly thereafter the Purchaser submitted her offer of $35,000. The Listing Agent submitted both offers to the seller, and the seller accepted the Purchaser's offer. Following acceptance, a dispute arose between the Purchaser and the Neighbors over the location of the property line. The Neighbors filed a lawsuit seeking a declaratory judgement as to the location of the property line. In addition, the Neighbors alleged that the Purchaser and the Brokerage had tortiously interfered with their prospective economic advantage in the Neighbors' attempt to purchase the property. The trial court ruled in favor of the Neighbors in the property line dispute, but ruled in favor of the Purchaser on the tortious interference with economic advantage allegations. Both parties appealed.
The Supreme Judicial Court of Maine affirmed the ruling of the trial court in the property line dispute, but reversed the ruling on the tortious interference with economic advantage allegations and sent the case back to the trial court for further proceedings. The court stated that in order to allege a tortious interference with an economic relationship, a party must show either intimidation or fraud. The Neighbors alleged that the active concealment of the Purchaser's identity amounted to a fraudulent misrepresentation. The trial court had ruled that the Neighbors had failed to produce any evidence of the Listing Agent and Purchaser's "active concealment" of the Purchaser's identity and so had ruled in favor of the Purchaser.
The court ruled that there were questions of fact about whether an active concealment of the Purchaser's identity had occurred, and so the court sent this back to the trial court for further proceedings. Quoting from Kezer v. Mark Stimson Associates, a case previously summarized in The Letter of the Law- click here to read, the court stated that an active concealment occurs when a party has taken steps to hide the true state of affairs from another. The court found that the evidence could show that the Purchaser had allowed herself to be identified as simply another broker to the Neighbors (and not as an interested purchaser), and that she was present during the discussion of the Neighbor's offer. Thus, a question of fact as to whether the Purchaser's hiding of her identity was an attempt to induce the Neighbors to freely discuss the amount of their offer in her presence existed, and the trial court needed to hold further proceedings to resolve this issue. Additionally, the court found that it could be inferred that the Listing Agent's failure to reveal the Purchaser's true purpose for accompanying the Neighbors on the property viewing could be seen as part of the active concealment plan. Thus, the trial court needed to conduct further proceedings to resolve these fact issues.
The court also stated that the evidence suggested that the Brokerage and the Listing Agent may have breached their statutory duty to the Neighbors. In Maine, a listing agent has a "duty to treat all buyer's honestly and...not knowingly give false information [to the buyer]." Thus, questions of fact also existed whether the Purchaser and the Brokerage violated this statutory duty. Thus, the court reversed the rulings on the tortious interference with prospective economic advantage allegations and sent the case back to the trial court to resolve these issues of fact.
McGeechan v. Sherwood, 2000 Me. 188, 760 A.2d 1068 (2000).