Elissa Koopmans Schwartz v. Real Estate One Inc
328727
| Mich. Ct. App. | Jan 26, 2017Background
- Seller Elissa Koopmans Schwartz signed a one-year Exclusive Right to Sell or Lease Listing Agreement with Real Estate One (REO), broker Christopher Lee, and agent Jan Britton; the $8,000/month rental figure and related lease-compensation paragraph were crossed out by seller but the contract still granted REO the exclusive right to lease or sell the property.
- In late October–early November 2013 seller asked Lee to add a rental listing to the MLS because tenants were vacating and she wanted to mitigate accelerated-rent damages; Lee told her he would list it but did not do so.
- Another nearby property was rented for $13,500/month; seller later learned market rent for her house was about $15,000/month per two experts.
- Seller sold the house in January 2014 at a large loss and claimed lost accelerated rent (~$18,500) she could have earned if leased at market rates; she sued for breach of fiduciary duty, breach of contract, fraud (including silent fraud), negligence, professional negligence, and sought sanctions against defendants’ counsel.
- The trial court granted defendants’ motion for summary disposition under MCR 2.116(C)(8). The Court of Appeals reversed as to fiduciary duty, contract, fraud, and negligence claims, affirmed dismissal of professional‑negligence, and remanded for sanctions against defense counsel for filing a false praecipe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of fiduciary duty (statutory and common‑law) | Lee/REO owed duties of loyalty, care, disclosure under the Listing Agreement and MCL 339.2512d; failing to list and failing to disclose refusal breached duties | No private cause of action under Occupational Code; no binding representation to lease | Reversed: fiduciary duties existed and plaintiff stated viable claims; MCL 339.2512d does not bar private suit here |
| Breach of contract (oral modification/listing for rent) | Seller instructed and obtained Lee’s oral promise to add rental listing; exclusive right to lease remained in contract; oral modification and new consideration (one month’s rent) made it enforceable | Integration clause and statute of frauds preclude oral modification; struck $8,000 term shows no representation | Reversed: pleadings support enforceable oral modification/meeting of minds and breach claim survives C(8) |
| Fraud and silent fraud (misrepresentation re: $8,000 FMV and failure to list) | Lee/REO represented $8,000 FMV and omitted material facts (refusal to list); seller relied and suffered loss | Crossed‑out $8,000 removes any representation; at most an agreement term, not a present fact | Reversed: allegations plausibly show a present factual representation and nondisclosure claim; failure to list claim also survives |
| Negligence (statutory duties) | Statutory duties under MCL 339.2512d create a duty; defendants breached those duties causing damages | Occupational Code claims must be enforced administratively; no independent common‑law duty | Reversed: statutory duties can support private negligence claims here; C(8) dismissal improper |
| Professional negligence (malpractice against realtors) | Realtor’s specialized skills support professional‑negligence claim | Michigan common law historically did not recognize malpractice against realtors; malpractice framework not applicable | Affirmed: professional‑malpractice claim not recognized as a common‑law basis for realtor malpractice; dismissal proper |
| Sanctions (false praecipe) | Defense counsel falsely certified contacting opposing counsel before the motion; rule violation mandates sanctions | Defense conceded counsel did not contact plaintiff; argued no prejudice | Reversed/remanded: court must impose mandatory sanctions under MCR 2.114(E) for the false certification |
Key Cases Cited
- Maiden v. Rozwood, 461 Mich 109 (Michigan 1999) (summary‑disposition C(8) standard; accept well‑pleaded facts)
- Quality Prod. & Concepts Co. v. Nagel Precision, Inc., 469 Mich 362 (Michigan 2003) (oral modification and waiver of written‑modification clauses)
- Zurcher v. Herveat, 238 Mich App 267 (Mich. Ct. App. 1999) (statute‑of‑frauds analysis for oral modifications to agreements requiring writing)
- Local 1064, RWDSU, AFL‑CIO v. Ernst & Young, 449 Mich 322 (Michigan 1995) (approach to recognizing common‑law malpractice for professions)
- Pennock v. Fuller, 41 Mich 153 (Michigan 1879) (historical common‑law view that real estate agencies were not treated as professions for malpractice purposes)