ShareNote: This case is not published in an official reporter and may not be cited as authority. Consult with counsel before relying on this case.
In Mouning v. Carswell, the Superior Court of Connecticut addressed allegations of fraud, negligence, and breach of contract by a buyer against a broker. The court dismissed the fraud and negligence claims under the statute of limitations, but found that the broker breached an implied agency contract under which she, as agent, owed a duty to act in the best interests of the buyer/principal.
Mouning (Buyer) sought to purchase a house and was referred to Russell (Broker). When Buyer entered the brokerage, Evans (Owner) “happened” to be present. Buyer testified that Broker said she would “help her find a home,” and that a house could be bought with “no money down.” After this, Owner took Buyer to tour “his” house. On October 24, 1985, Owner and Buyer executed a purchase contract, including a commission for Broker. Buyer applied for a mortgage but was rejected. Buyer testified that Broker gave her a $4,000 check and told her to tell the bank that she had received a gift from her aunt. Thereafter, a mortgage of $44,000 (based on a $55,000 purchase price) was approved. The closing was set for March 21, 1986, at the offices of Carswell, an attorney.
At the closing, Garcia, a lawyer who operated out of Carswell’s office, represented Owner. Buyer was given a warranty deed that failed to mention the tenant who occupied the home and rented from the law firm of Blank and Blank. It also appeared that Owner did not own the home at the time of the purchase contract, as evidence was produced that he received his title on November 18, 1985 from grantors Blank and Gorbach Properties. After purchasing the home, Buyer encountered financial difficulties and eventually lost the home by forclosure in 1991. Buyer sued Broker for fraud, negligence, and breach of contract.
The Superior Court of Connecticut first addressed the fraud and negligence claims. The court noted that because these claims were based on tort law, the applicable statute of limitations was three years. The court also noted that Buyer did not bring her suit until nearly six years after the closing. The court rejected Buyer’s claim that an exception to the statute applied because Broker’s actions constituted a continuous course of conduct. The court found that Broker’s tortious acts ended on the date of the closing and dismissed these claims because the suit was not filed within three years of that date.
Regarding the breach of contract claim, the Superior Court of Connecticut observed that a real estate broker owes a fiduciary duty to his or her principal. The court noted that while there was no express agreement between Broker and Buyer, such an agreement “may be implied from words, actions or conduct.” Because the court found an implied agency contract, it further found that Broker was required to exercise fidelity and good faith and not put herself in a position antagonistic to the plaintiff’s interest or fail to communicate information she possessed which was or might be material to the plaintiff’s advantage. The court found that: (1) Broker knew that Owner did not own the property when he contracted to sell it on October 24, 1985; (2) she knew who the real owner was; (3) she knew the property could be bought for $35,000; and (4) she was part of the arrangement to have owner take title for $35,000. The court stated that “knowing that a more advantageous price might have been made, such should have been communicated to the plaintiff.” Thus, the court found a breach of an implied contract and awarded Buyer $15,600 in compensatory damages and $15,000 in punitive damages.
Mouning v. Carswell, 1996 WL 383347 (Conn. Super. Ct. 1996). [Note: This opinion was not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion.]