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Court Holds that Listing Agent has Fiduciary Obligation to the Buyer Where the Broker acted in a Dual Agency Capacity, But With Separate Agents

In Horiike v. Coldwell Banker Residential Brokerage Company, a California Appellate Court recently held that a listing agent could have fiduciary obligations to a buyer where a different agent from the same brokerage represented the buyer.  In Horiike, Chris Cortazzo was a salesperson with Coldwell Banker.  He listed a property for sale on the Multiple Listing Service (“MLS”).  The MLS provided him with public information indicating that the square footage of the property was less than that represented by Cortazzo on the MLS.  Cortazzo subsequently changed the MLS listing to state that the approximate square footage was “0/O.T.,” which he meant zero square footage and other comments.  Plaintiff engaged Coldwell Banker and a different agent from a different office to represent him in the purchase of a property.  He visited the property at issue.  The listing agent gave the buyer a copy of a flyer that listed the property with the original square footage noted in the MLS.  The buyer made an offer and escrow was opened.  A confirmation of agency relationships was signed.  Escrow subsequently closed.  The buyer subsequently sued the listing agent and Coldwell Banker for misrepresentations relating to the square footage.  That claim included a breach of fiduciary duty claim. 

The matter proceeded to trial.  At the close of the plaintiff’s case, the listing agent moved for nonsuit on the breach of fiduciary claims on the grounds that he, as the listing agent, had no fiduciary obligations to the buyer.  The court granted the motion.  The court then instructed the jury that in order to find Coldwell Banker liable for breach of fiduciary duty, the jury had to find some agent of Coldwell Banker other than the selling agent or listing agent had breached their fiduciary obligation to the buyer.  The jury returned a verdict in favor of the listing agent and Coldwell Banker on all of the claims.  The plaintiff appealed contenting that the listing agent had a fiduciary duty equivalent to Coldwell Banker’s fiduciary duty.

 

The court of appeal reversed holding that the buyer could prosecute a fiduciary claim against the listing agent.  The court found that under Civil Code §2079.17, which requires agents to provide an agency confirmation, the confirmation states that a dual agent has a fiduciary duty to either the buyer or the seller.  As such, the listing agent, as an associate with Coldwell Banker, had the same fiduciary obligations to the buyer as Coldwell Banker.  Therefore, the court found that the motion for nonsuit should not have been granted and the claims against the listing agent should have been submitted to the jury.  The court also erred in its instruction to the jury that Coldwell Banker should not be held liable for a breach of fiduciary claim based on the listing agent’s actions.

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