Baker v. Dennis Brown Realty, Inc

Brief Fact Summary.

Sharon Baker, through her agent and an agent of Dennis Brown Realty, Inc., made an offer of full asking price on the house owned by Sarah Landry. Douglas Bush, another agent of Dennis Brown Realty, after requiring Baker add two additional conditions to her already signed sale agreement, showed the house to his own clients whom he informed of Baker’s offer. Bush’s clients offered above asking price, Baker was never informed, and Landry accepted the offer of Bush’s clients. Baker was later able to find another home to purchase in the neighborhood at a higher price.

Synopsis of Rule of Law.

Under the Restatement of Torts, “[o]ne who, without a privilege to do so, induces or otherwise purposely causes a third person not to . . . enter into or continue a business relation with another is liable to the other for the harm caused.†A cause of action for the tort of intentional interference with a prospective contractual relationship will fail if a defendant’s actions are privileged. The burden of proof to show privilege rests on the defendant, however, a trial court may “disbelieve any evidence tending to show a privileged occasion.†In a cause of action for interference with contractual relationships, speculative damages are improper, however, damages are permitted to be increased if it is shown the defendant acted maliciously, wantonly or exhibited oppressive conduct.

Facts.

Plaintiff is Sharon Baker. She used Keeler Family Realty to find a house to buy in Concord. Agent Jody Keeler found a listing to show to Plaintiff. Dennis Brown Realty, Inc. (Defendant) had exclusive listing authorization from the owner (Sarah Landry) of the house in question. Keeler contacted Defendant to arrange for a house showing, and it was shown to Plaintiff by Keeler and Faye Olson, one of Defendant’s agents. These two agents would equally split the sales commission if Plaintiff purchased. Plaintiff offered full asking price $26,900 and signed an unconditional purchase and sale agreement. Douglas Bush, another of Defendant’s agents, arrived at the house and informed Plaintiff and Keeler two conditions must be added to the contract: (1) bank financing, and (2) sale of Plaintiff’s house. After some debate, Plaintiff agreed to the two new conditions. The same day, Bush showed the house to the Piars, his clients. He informed Piars of Plaintiff’s offer and Piars offered $300 more than full asking price. Bush did not include the second condition that he required Plaintiff to agree to. Plaintiff was not informed about the Piars’ offer. Landry accepted Piars’ offer and the full commission went to Defendant with Bush receiving 35% (the Piars had no other agent/firm to share commission with). At some later time, Plaintiff purchased a similar house in the same neighborhood as the original listing at $3,100 more than her original offer on the Landry house. Plaintiff sued Defendant for intentional interference with prospective contractual relationship. Concord District Court found in favor of Plaintiff in the amount of $3,525.29. Defendant appealed.

Issue.

Whether Defendant’s action was privileged thereby barring a cause of action for intentional interference with the prospective contractual relationship; whether the amount of damages awarded was speculative.

Held.

This Court agreed with the trial court’s finding that Bush did not have full immunity as a real estate agent and was not privileged in the actions he took. The trial court’s award as to the difference between mortgage rates and tax assessments were too speculative and unforeseeable. The award as to the difference in Plaintiff’s first offer and that of the house she later purchased was correct. Affirmed in part. Judgment of $3,100 for Plaintiff.

Concurrence.

Batchelder, J., did not sit. Others concurred.

Discussion.

Defendant makes two arguments, which are inapplicable because they are based on contract law and not tort law: (1) That no interest or right of the Plaintiff is protected because there was merely an offer and not an acceptance, and (2) Plaintiff may only be awarded actual damages/net loss if damages at the time in question are not foreseeable. Bush’s actions showed intent that “purposely caused†Landry not to enter the contract, the business relationship, with Plaintiff.