ShareA federal appellate court has reduced a jury verdict involving a commission dispute and returned the case to the lower court for further proceedings.
Coldwell Banker Joseph M. Endry Realty (“Broker”) had an exclusive arrangement to market units in a condominium development (“Development”). The Broker contracted with Clara Plummer (“Plummer”) to serve as the co-listing salesperson for the project, with the parties agreeing to split all commissions.
Plummer interviewed Tia Saucier (“Salesperson”) about acting as a salesperson at the Development. The Salesperson had moved to the state from Florida and obtained her real estate license. The Salesperson entered into two agreements with the Broker that were identical to the agreement between Plummer and the Broker. Allegedly, the Salesperson also entered into a separate agreement with Plummer, where they agreed to split all commissions earned from sales in the Development with each other.
A few months later, the Salesperson resigned and claimed that Plummer had breached the oral agreement to split all commissions. The Salesperson brought a lawsuit against Plummer and the Broker, alleging misrepresentation, conspiracy, and breach of contract.
The trial court dismissed the allegations against the Broker, but let the jury consider the breach of an oral contract allegations against Plummer. The jury returned a verdict in favor the Salesperson and awarded her $410,000. Following the verdict, the court ruled that the facts did not support the award and so sent the case back to the lower court for further proceedings and reduced the award to $30,411.51. The Salesperson appealed.
The United Court of Appeal for the Fifth Circuit partially affirmed and partially reversed the trial court. The court first considered whether the trial court had properly determined that the evidence did not support the allegations that Plummer had apparent authority to bind the Brokerage to the alleged oral contract. A party claiming apparent authority must demonstrate the following: acts or conduct by principal allowing the conclusion that the person has apparent authority; reasonable reliance by the other party; and detrimental change in the other party’s position because of this reliance.
The court agreed that the evidence did not support the apparent authority argument. The trial court had ruled that the Salesperson’s allegations did not satisfy either of the first two elements. The Salesperson argued that Plummer’s contract with the Broker gave her the authority to bind the Broker to her alleged agreement with the Salesperson, but the court ruled that the agreement actually stated that the Broker would not be bound by any separate agreement between the salespeople unless the Broker approved the arrangement. There was no evidence that the Broker had approved or had any knowledge of the arrangement between the salespeople. Therefore, the court agreed that the evidence did not support the apparent authority argument and so affirmed the trial court’s ruling ordering a new trial.
Next, the court considered the reduction of the jury verdict. The trial court had limited the damages that the Salesperson could recover to the period up to her resignation. However, the Fifth Circuit disagreed with this interpretation, ruling that the jury had found that there was a valid oral contract and so that contract would extend to commissions earned from Development sales after her resignation as well. The court found that the jury had also not properly calculated the contractual damages, merely estimating the sales volume from the project. Therefore, the court sent the case back to the lower court to calculate damages based on the project’s actual sales prices.
Saucier v. Coldwell Banker Joseph M. Endry Realty, 302 Fed.App’x 302 (5th Cir. 2008).