Nevada's highest court has considered whether a jury properly awarded a commission to a real estate salesperson.
In 1996, Larry Wood ("Salesperson") entered into a listing agreement with "John J. Casey, d/b/a Casey Ranches, Holland Livestock Ranches, et al., and his heirs and assigns" for the Grass Valley Ranch ("Ranch"). The Ranch was partially owned by John J. Casey ("Casey") personally, and he was a president and sole shareholder of the other three corporations who held ownership positions in the Ranch.
Upon execution of the listing agreement, Casey encouraged the Salesperson to contact Dr. Robert Parlasca ("Parlasca") about the Ranch's availability. The Salesperson contacted Parlasca, and Paralsca proposed exchanging property he owned for the Ranch. The Salesperson claims that he told Parlasca that he represented Casey and if Parlasca did make an offer through him, both Casey and Parlasca would need to execute dual agency disclosures. Parlasca reacted negatively to the idea of compensating the Salesperson. The Salesperson discussed Parlasca's offer with Casey, but never discussed Parlasca's providing additional compensation to the Salesperson. Casey told the Salesperson he would only accept cash for the Ranch.
The Salesperson had further discussions with Parlasca about the possibility of Parlasca selling his property so that he would have the capital to buy the Ranch. Again, Parlasca refused to discuss compensation with the Salesperson. In 1997, the Salesperson obtained an offer for the Ranch. Casey rejected the offer, and asked the Salesperson what it would take to buy the Salesperson out of the listing agreement. The Salesperson declined the offer. Following a failed attempt by Casey to terminate the listing agreement due to the Salesperson's alleged inability to "fairly represent Casey in negotiations", Casey died in March 1998. In December 1998, Parlasca purchased the Ranch. When his commission claims were rejected by Casey's estate ("Estate"), the Salesperson brought a lawsuit for his commission. A jury awarded the Salesperson $150,000, and the Estate appealed.
The Supreme Court of the State of Nevada affirmed the jury verdict. The Estate argued that the jury had ignored the evidence and the trial court should have ruled, as a matter of law, that the evidence established that the Salesperson breached his fiduciary duty owed to his client, Casey. The court looked at the jury instructions and found that the instructions given to the jury by the trial court properly set forth the legal standards for a breach of fiduciary duty. Since the jury had received the appropriate instructions and resolved this factual dispute in favor of the Salesperson, the court found that the trial court had properly refused to overturn the jury verdict.
Next, the Estate argued that the trial court should have instructed the jury that if it determined that Casey was not the owner of the Ranch, then the Estate should not be a party to this lawsuit. The trial court had rejected this instruction. The court found that Casey was the sole shareholder and president of each of the three corporations who held ownership stakes in the Ranch; was the only person authorized to sign the listing agreement on behalf of these corporations; and the evidence before the jury set forth Casey's attempts to avoid paying a commission to the Salesperson. The court found that the trial court had acted properly in refusing to give the jury this instruction. Thus, the jury verdict in favor of the Salesperson was affirmed.
The court addressed the amicus curiae brief filed by the Nevada Association of REALTORS®, which argued that Nevada law permitted real estate licensees to collect their commissions despite a breach of fiduciary duty. Since the court affirmed the award in favor of the Salesperson, the court stated that it was unnecessary to consider this argument.
Venturacci v. JJM, Inc., No. 37736 (Nev. Mar. 4, 2003). [Note: This opinion was not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion.]
Editor's Note: NAR Legal Affairs would like to thank Melody Luetkehans, General Counsel for the Nevada Association of REALTORS®, for alerting NAR to this decision.