What defenses can a real estate broker use if a suit is filed against them for vicarious liability for the actions of the brokers agent?The agent was not acting in the scope of employment of the broker.
You have obviously started doing some legal research to come up with "vicarious liability" and your additional comment "course and scope of employment."
First, legal defenses arise in any case depend on an in depth analysis of facts.You need to find a legal counsel experienced in representing brokers (or suing brokers.)
Second, and perhaps first, you should determine if you have insurance coverage and tender any defense to your carrier. They will then worry about defenses and deal with your indemnification.
I would offer our offices, but I think you would best be served by a local San Jose attorney. If the litigaiton, however, involves Los Angeles, you may contact us through our Avvo profile.
The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
I don't think there is sufficient information to answer your question. In most instances, the broker is vicariously liable for the acts and omissions of the agent. However, if the agent acted outside the scope of his employment, it would be a defense to vicarious liability.
The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author (who is only admitted to practice law in the State of California). For specific advice about your particular situation, consult your own attorney.
Good theories, but need facts, as my colleagues point out. Depending on the facts, there could be myriad defenses, or none at all.
This is general legal information, not intended to apply to your specific case. And I may not be licensed to practice in your particular state. Under Federal Law, I am a debt relief agent.
My colleagues all offer good advice.
With respect to your comment about the agent not being in the course and scope of employment, you should be aware that is what the law calls a "legal conclusion." There are many factors that are relevant to deciding whether one person was in the course and scope of his/her employment by another, and it is a question of fact. In other words, if the matter proceeds to trial, the jury (or a judge if there is no jury) will decide this question based on those many factors including evaluation of the truth or veracity of witnesses.
This response is provided as general information only. It is not intended to be legal advice. Legal advice must be based on the exact facts of the particular situation, and by necessity this forum is not appropriate for discussion of specific, exact facts. Contact a lawyer for more specific advice. My answer to your question on AVVO does not create an attorney-client relationship.
Any analysis that needs to be done will really depend on the documents in the matter, the relationship of the parties and any contracts that exist between the respective parties.
1. The analysis has to begin with who the plaintiff is. Is it the "client" of the agency? A seller with a listing agreement with your company? What does the listing agreement say about liability of the Broker? What forms were used? The CAR forms have substantial language regarding the issues you relate.
2. Was there a "dual agency?" The scope of damages claimed, increases in a huge way if there is claim against a "fiduciary" as opposed to an agent working for the opposite party to the transaction in issue.
3. If you are the "employing Broker" of an sales agent, you may have defenses based on the actions of the agent. Generally, however, the risk of harmful acts by an "agent" are visited upon the Broker, unless you show facts that reflect acts by the agent that are outside of the licensed activities of the agent.
The insurance you may carry for professional liability, should provide you a defense to the claims. If you do not carry such insurance, you will need to defend the matter on your own, and seek contribution from the acting agent, and perhaps the client in the transaction.
I urge you to gather all the papers in the transaction, your agreements with the agent and any other relevant materials and call a seasoned real estate litigation lawyer for an analysis and a determination of your defense issues. Such a lawyer with long experience in the field can help and guide your efforts to seek a resolution in the matter.
Remember too that the CAR forms, and several other forms used in the industry, call for arbitration and mediation as a condition to litigation in the courts. It is a determination that much be made in each case. Of the many cases I have handled in Santa Clara County, Santa Cruz and Alameda, I have found that is the first element that must be determined.
I hope this answer better sets the issues for you.
If you need further assistance, you can reach me at 408/275-1955, in downtown San Jose.
DISCLAIMERâ€”This answer is for informational purposes only under the AVVO or LinkedIn systems and their respective terms and conditions. It discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship.
Was the Agent even an "employee" or might the Agent qualify as a "independent contractor." In Connecticut, there is generally not vicarious liability for an independent contractor, but this may be dependent on a question of fact for the trier to decide either at trial, or upon a motion to dismiss or a motion for summary judgment.
California law treats an agent as an employee of the broker with whom he has an employment contract for liability even if the agent is treated as an independent contractor for tax purposes.
That being the case, whether or not the employer is vicariously liable for the employee's actions is usually a question of fact, often not a clear cut determination.
I will give you an example. Say this agent advertises a property for sale on a newspaper as a favor to a friend who didn't have a written listing contract with this agent. And since the agent is employed with this broker, he's required under the code of ethics to identify the broker on the ad. The ad misrepresented the number of legally approved bedrooms in the property. Someone relied on the ad but directly contacted the agent's friend (since the ad has the friend's phone number) and bought the property and suffered damages. Assuming there's negligent misrepresentation by the agent, is the broker liable? This is going to be a question of fact. You would expect that his employment contract with his broker allows him to place ads on newspaper for a property that he's selling. Certainly his broker might not have agreed to allow him to do so if he's simply doing this as a favor to a friend, not expecting to receive any compensation at all. Not sure why he would do that favor with nothng to gain. What if he placed the ad gratuitously because he's received compensation from this friend (or client) for other deals involving other properties unrelated to this one? What if his broker knew what he was doing and allowed it? Much of this is going to come out during litigation. And it could be a factual determination.
Here's another example. A real estate agent acts as a property manager for a general partnership of which she's a partner. She receives a fee for her services for managing the propety the partnershp owns. In California, propery managers are not required to be licensed real estate agents. Her employment contract with her broker only covers sales and leases of real properties but not property management. She's now being sued for mismanaging the partnership's property while she's being employed by the broker.. What if the broker actually allowed her to do this even though the employment doesn't cover this? What if the broker actualy received a fraction of her fees? This is going to be another factual determination.
Years licensed, work experience, education
Peer endorsements, associations, awards
Publications, speaking engagements