104 So. 3d 68
La. Ct. App.2012Background
- Plaintiffs contracted with Dowling in Feb 2010 to sell their house on 40 acres, including mineral rights; plaintiffs retained 20 acres of mineral rights.
- Plaintiffs allege they informed Dowling of a prospective buyer (Curtises) and Dowling refused to provide a prospective buyer’s contract because Dowling did not represent the Curtises.
- Rangel drafted an agreement for the Curtises to buy the house, land, and 20 acres of mineral rights for about $396,000 when financing was attempted.
- Curtises backed out after failing to obtain financing; plaintiffs claim damages included mortgage, apartment, and business lease expenses, plus lost mineral rights.
- Dowling moved for and obtained an exception of no cause of action; trial court dismissed Dowling; plaintiffs amended alleging breaches of professional duties and customary real estate practices.
- Court held that plaintiffs stated a cause of action against Dowling and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did petition allege a cognizable duty owed by Dowling to plaintiffs? | Rangel asserts Dowling breached duties of representation and contract formation. | Dowling contends its duty was limited to advertising and presenting offers under the exclusive listing; no duty to draft a contract for Curtises. | Yes; petition states a duty and potential breach by Dowling. |
| Was Dowling’s duty governed by exclusive-right-to-sell terms and RS 37:1449.1? | Dowling breached duties by failing to draft/assist with a purchase agreement and financing discussions. | Dowling had no duty to represent unrepresented buyers or to draft contracts for third parties. | Not dispositive at this stage; duties could extend beyond mere advertising. |
| Did plaintiffs plead causation and damages sufficient to survive an exception of no cause of action? | Dowling’s conduct caused damages by affecting sale, financing, and move-out decisions. | Damages were caused by Curtises’ contract breach, not Dowling’s actions. | Yes; the petition plausibly links Dowling’s alleged breaches to plaintiffs’ damages. |
Key Cases Cited
- Treś Chic in a Week L.L.C. v. Home Realty Store, 993 So.2d 228 (La.App. 1st Cir. 2008) (broker duties; fiduciary standard in real estate transactions)
- Hughes v. Goodreau, 836 So.2d 649 (La.App. 1st Cir. 2001) (duty of care in real estate brokerage; duty depends on contract facts)
- Latter & Blum, Inc. v. Richmond, 388 So.2d 368 (La.1980) (brokerage duties and fiduciary relationships)
- Cousins v. Realty Ventures, Inc., 844 So.2d 860 (La.App. 5th Cir. 2003) (real estate duties; standards for broker liability)
- Birdsong v. Hirsch Memorial Coliseum, 963 So.2d 1095 (La.App. 2nd Cir. 2007) (no cause of action standard; pleading sufficiency; allowance for inferences)
- City of New Orleans v. Board of Directors of Louisiana State Museum, 739 So.2d 748 (La.3/2/1999) (peremptory exceptions; standard for ruling on no-cause-of-action)
- In re Succession of Carroll, 72 So.3d 384 (La.App. 2nd Cir. 2011) ( pleading standards; de novo review on no-cause-of-action)