Ramalingam v. Keller Williams Realty Group, Inc.
121 A.3d 1034
| Pa. Super. Ct. | 2015Background
- Buyer Govindaraju Ramalingam signed a new-construction Agreement of Sale (9/30/09) that expressly required the deposit to be paid directly to the builder (CLM Builders) to be used toward construction.
- Buyer also signed a Keller Williams broker agreement and dual-agent disclosure naming agent Janet Palladino as licensee and advising buyers to seek independent legal/financial advice; the broker agreement stated brokers will escrow deposits they receive but allows waiting to deposit uncashed checks until acceptance.
- Buyer personally delivered a $44,990 check payable to CLM Builders (not to the broker) in the presence of Palladino and CLM representatives; he later disputed construction issues and sought damages.
- Buyer retained counsel after signing the Agreement and did not demand the deposit back from CLM or request termination of the Agreement prior to arbitration and litigation.
- At bench trial, the court found Buyer knowingly complied with the Agreement’s direct-deposit term, that Palladino did not receive funds to escrow, and entered judgment for the defendants; the Superior Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Palladino was negligent (including negligence per se) for failing to escrow the buyer's deposit | Ramalingam: broker had a nonwaivable duty under the Pa. Admin. Code to escrow deposit funds and Palladino breached that duty | Defendants: escrow duty applies only when the broker receives funds; Buyer signed and delivered the deposit to the builder, so Palladino never received escrow funds | Court: No negligence; escrow rules do not apply because broker never received the funds and Buyer knowingly complied with the contract requiring direct payment to builder |
| Whether dual agency/fiduciary duties were breached | Ramalingam: as dual agent Palladino owed heightened fiduciary duties and conflicted interests (prior dealings, in‑house title interest) required disclosure and protection | Defendants: no special fiduciary duty shown; disclosures were made; incidental or prior dealings do not create fiduciary breach | Court: No fiduciary breach; claims undeveloped and unsupported; Basile indicates incidental benefits do not create heightened fiduciary duty |
| Whether there is an ambiguity between the Keller Williams broker agreement and the Agreement of Sale | Ramalingam: alleged conflict/ambiguity between the broker contract (escrow language) and the builder’s Agreement requiring direct deposit | Defendants: Agreement of Sale plainly required direct payment to seller; no ambiguity exists | Court: No ambiguity; unambiguous written Agreement controls and Buyer knowingly waived escrow by signing the Agreement of Sale |
| Whether the trial court improperly rejected Buyer's expert opinion | Ramalingam: trial court should have accepted expert that broker breached fiduciary duty by allowing deposit to go to third party | Defendants: expert conflicts with law and other testimony; trial court as factfinder may credit or reject experts | Court: No abuse of discretion; trial court permissibly weighed conflicting expert views and applied statutory provision allowing written agreement to have deposits held by a person other than brokers (63 P.S. § 455.608e(k)) |
Key Cases Cited
- Totten v. Lampenfeld, 466 A.2d 663 (Pa. Super. 1983) (general non-jury verdicts accorded same weight as jury verdict)
- Kornfeld v. Atl. Fin. Fed., 856 A.2d 170 (Pa. Super. 2004) (standard of review for non-jury trial findings)
- Commonwealth v. Flaherty, 89 A.3d 286 (Pa. Super. 2014) (de novo review for statutory interpretation)
- Commonwealth v. Williams, 941 A.2d 14 (Pa. Super. 2008) (administrative code review principles)
- In re Wilson, 879 A.2d 199 (Pa. Super. 2005) (appellate scope for questions of law)
- Schemberg v. Smicherko, 85 A.3d 1071 (Pa. Super. 2014) (elements for negligence per se)
- Gorman v. Costello, 929 A.2d 1208 (Pa. Super. 2007) (jury instruction error context discussed by plaintiff but inapposite here)
- Reilly v. Tiergarten Inc., 633 A.2d 208 (Pa. Super. 1993) (negligence causation discussion cited by plaintiff)
- Basile v. H & R Block, Inc., 761 A.2d 1115 (Pa. 2000) (mere incidental benefit or business relationship does not, as a matter of law, create heightened fiduciary duty)
- Murphy v. Duquesne Univ., 777 A.2d 418 (Pa. 2001) (contract interpretation: unambiguous writings construed by their terms)
- In re Breyer's Estate, 379 A.2d 1305 (Pa. 1977) (when writing is clear, court looks only to the document for intent)
- Ettinger v. Triangle-Pac. Corp., 799 A.2d 95 (Pa. Super. 2002) (trial court has discretion to admit/exclude expert testimony; appellate review limited)
- Prieto Corp. v. Gambone Const. Co., 100 A.3d 602 (Pa. Super. 2014) (appellate court may affirm on any legally correct basis)
- Mudano v. Philadelphia Rapid Transit Co., 137 A.104 (Pa. 1927) (trier of fact may discredit both conflicting experts)