Sierra Pacific brought an action for breach of fiduciary duty against Carter. To what relief, if any, is Sierra Pacific entitled?
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Sierra Pacific Industries purchased various areas of timber and six other pieces of real property, including a ten-acre parcel on which five duplexes and two single-family units were located. Sierra Pacific requested the assistance of Joseph Carter, a licensed real estate broker, in selling the nontimberland properties. It commissioned him to sell the property for an asking price of $850,000, of which Sierra Pacific would receive $800,000 and Carter would receive $50,000 as a commission. Unable to find a prospective buyer, Carter finally sold the property to his daughter and son-in-law for $850,000 and retained the $50,000 commission without informing Sierra Pacific of his relationship to the buyers. After learning of these facts, Sierra Pacific brought an action for breach of fiduciary duty against Carter. To what relief, if any, is Sierra Pacific entitled? |
Explanation
This case can be a breach of Fiduciary Duty by Individual C as Fiduciary Duty obligates an agent to disclose all the relevant information and material facts relating to the subject matter to the principal. In this case, Individual C has not mentioned the fact that the property belongs to Individual C's daughter and son-in-law, which is an act of misleading the principal by hiding relevant information.
An agent should not engage himself in dual representation of a transaction, must disclose all the material facts to the principal, and act as per their consent.
Company S has the right to recover the commission amount due to the breach of the contract.
Verified Answer
In this case, Industry S can claim to recover the amount of commission paid to Individual C along with the amount of loss, if any, which could have incurred by selling the property to Individual C's relative.
