Action Real Estate Corp. v. BULECHECK

309 N.W.2d 502, 1981 Iowa Sup. LEXIS 1021
CourtSupreme Court of Iowa
DecidedAugust 26, 1981
Docket65228
StatusPublished
Cited by11 cases

This text of 309 N.W.2d 502 (Action Real Estate Corp. v. BULECHECK) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Action Real Estate Corp. v. BULECHECK, 309 N.W.2d 502, 1981 Iowa Sup. LEXIS 1021 (iowa 1981).

Opinion

HARRIS, Justice.

This was an action to recover a real estate commission upon the sale of defendants’ farm. Defendants counterclaimed on the basis of constructive fraud, breach of fiduciary duty, and wrongful instigation of suit. The jury found in favor of plaintiff. The trial court directed a verdict against the defendants on their counterclaim. We affirm.

Earl Hull, a broker licensed under chapter 117, The Code, who was associated with Action Real Estate, undertook the sale of defendants’ farm. Upon listing the farm, defendant A1 Bulechek mentioned four prospective buyers. One prospect was Donald Clausen, who eventually purchased the farm.

Although the evidence is conflicting, the jury could have believed plaintiff’s testimony that Hull thoroughly explained the listing agreement to defendants and reviewed the document with them before they signed it. Defendants maintain that Hull failed to reveal to them that they had an option of reserving the four prospective buyers by a “reserve prospect” provision. They also claimed that Hull failed to explain other matters, including the meanings of the terms “best efforts” and “immediately forward,” and failed to explain the commission to be paid or the method of withdrawing the listing. A1 Bulechek did say that Hull made it clear the listing could be revoked at any time.

After listing the farm A1 Bulechek chanced to meet Donald Clausen in a nearby community. Clausen had been told by someone else that the farm was for sale. The two discussed the sale of the farm and whether or not it was listed. Clausen later testified that A1 Bulechek told him that he did not know if he could avoid paying the commission.

Clausen made no offer for the purchase of the farm at the time but did arrange to later visit the farm. After this meeting Mrs. Bulechek called Earl Hull and advised him that A1 Bulechek had found someone who might be interested in the farm. She invited Hull to come to the farm immediately which Hull did, arriving before Clau-sen. Prior to Clausen’s arrival Hull called another prospective buyer who came to the farm but left without making an offer.

Mr. and Mrs. Clausen arrived at the farm sometime later the same day and Hull helped show them around. Mr. Clausen *504 made an offer of $3000 per acre which was accepted by defendants. A few days later the parties assembled at the office of an attorney who had been recommended by Hull. A land contract was signed and Clau-sens wrote a $5000 earnest money check which was made payable to Action Real Estate Trust Account.

Thereafter defendants refused to pay any of the commission, prompting this suit and defendants’ counterclaim.

I. At the close of the evidence the plaintiffs dictated a comprehensive motion for directed verdict on the counterclaim. Defendants believe there were 13 alternative grounds for the motion but we are unsure of the accuracy of this count. In some ways the grounds tended to be cumulative and plaintiff’s counsel made no attempt to number the grounds while orally dictating the motion. In sustaining the motion for directed verdict the trial court said:

I sustain the motion on each and every count which is there — sustain the motion on Count I in which I feel there is insufficient evidence, too small to submit this to the jury. On Count II, on the proximate cause question, and on Count III, the damage question.

Defendants believe the trial court must be reversed for its failure to comply with Iowa R.Civ.P. 118 which provides: “A motion, or other matter involving separate grounds or parts, shall be disposed of by separate ruling on each and not sustained generally.”

We are not inclined to reverse for noncompliance here. In the first place it would have been difficult to impossible for the trial court to fully comply with the rule because of the structure of the motion ruled upon. Even reading the transcript of the dictated motion we are unable to state with confidence the number of alternative grounds. It does not seem reasonable to reverse the trial court for a failure to untangle and separate the various grounds in the oral motion and comment upon them separately. Secondly, we think there was minimal compliance. Oakleaf Country Club, Inc. v. Wilson, 257 N.W.2d 739, 743 (Iowa 1977). The trial court’s ruling on the motion, and its reasons, were apparent.

Defendant’s first assignment is without merit.

II. The trial court refused defendants’ request that the jury be instructed on the special duties that devolve on one acting in a fiduciary capacity. In Miller v. Iowa Real Estate Com’n, 274 N.W.2d 288, 292 (Iowa 1979), we explained: “Real estate brokers and salesman represent their clients in the capacity of agent. This is a fiduciary relationship which requires a high degree of honesty and trust between the parties.” Opinions which detail the obligations of fiduciaries include Stout v. Vesely, 228 Iowa 155, 157, 290 N.W. 116, 118 (1940), and Dawson v. National Life Insurance Company, 176 Iowa 362, 377, 157 N.W. 929, 931 (1916).

The difficulty with defendants’ position under this assignment is not with the rule but rather with the record. The Bulecheks’ sole evidence which might support a claim of any fiduciary breach is on their disputed assertion that Hull failed to make disclosures and explanations prior to the listing. We believe the trial court was right in refusing the instruction because the fiduciary relationship did not exist at the time of the claimed omissions.

The general rule is that “a person is not ordinarily subject to a fiduciary duty in making terms as to compensation with a prospective principal.” Restatement of Agency, Second, § 390E. We have long applied the same rule to real estate brokers. We refused to recognize a confidential relationship between a broker and a prospective seller prior to the listing in Larson v. Thoma, 143 Iowa 338, 343, 121 N.W. 1059, 1061 (1909).

Defendants also assign error in the trial court’s refusal to instruct on what they called affirmative defenses. The trial court refused to inform the jury that (1) the law required plaintiff to exercise skill, care and diligence in performing the contract; (2) plaintiff was required to use “best efforts” *505 in the performance of the contract; (3) the owners were entitled to sell their own property; and (4) a penalty clause is not enforceable in Iowa. We again find no evi-dentiary support for the instructions.

Defendants cite Kuehnle v. Schromen, 258 Iowa 989, 993, 140 N.W.2d 188, 191 (1966), as authority for plaintiff’s obligation to exercise skill, care and diligence in representing defendants. But there was no evidence that plaintiff or Hull did not exercise skill, care and diligence in connection with the sale of the farm. Neither is there any evidence that plaintiff, through Hull, failed to expend its best efforts to effectuate a sale.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Meyer Group, Ltd. v. United States
115 Fed. Cl. 645 (Federal Claims, 2014)
Hanson v. Hancock County Memorial Hospital
938 F. Supp. 1419 (N.D. Iowa, 1996)
Reedy v. White Consolidated Industries, Inc.
890 F. Supp. 1417 (N.D. Iowa, 1995)
Thompto v. Coborn's Inc.
871 F. Supp. 1097 (N.D. Iowa, 1994)
Thomas v. St. Luke's Health Systems, Inc.
869 F. Supp. 1413 (N.D. Iowa, 1994)
Rouse v. Farmers State Bank of Jewell, Iowa
866 F. Supp. 1191 (N.D. Iowa, 1994)
Martin v. Heinold Commodities, Inc.
510 N.E.2d 840 (Illinois Supreme Court, 1987)
Breas v. Breas
385 N.W.2d 743 (Michigan Court of Appeals, 1986)
Martin v. Heinold Commodities, Inc.
487 N.E.2d 1098 (Appellate Court of Illinois, 1985)

Cite This Page — Counsel Stack

Bluebook (online)
309 N.W.2d 502, 1981 Iowa Sup. LEXIS 1021, Counsel Stack Legal Research, https://law.counselstack.com/opinion/action-real-estate-corp-v-bulecheck-iowa-1981.