JONES v. BILL GARLEN REAL ESTATE (2011)

In December 2008, LaMont Harmon entered into a contract to purchase a home in Jesup from Rick Hayes, who had listed the property with Bill Garlen Real Estate. After the sale failed to close, Harmon and his fiancee, Sandra Jones (collectively, “the appellants”), pro se, brought this action against Bill Garlen Real Estate, Bill Garlen individually, and Garlen's agent, Ann Grantham (collectively, “the appellees”) and against Hayes, in the Superior Court of Wayne County. The appellees moved to dismiss the complaint. After a hearing, the trial court determined that the complaint failed to state a claim against the appellees upon which relief could be granted and, therefore, granted their motions to dismiss. “We review de novo the trial court's grant of a motion to dismiss. A motion to dismiss may be granted only where a plaintiff would not be entitled to relief under any set of facts that could be proven in support of the plaintiff's claim.” (Citations and punctuation omitted.) Johnson v. Bd. of Commrs., Bibb County, 302 Ga.App. 266, 267, 690 S.E.2d 912 (2010). For the reasons explained below, we affirm.

In their complaint, the appellants alleged the following. On December 27, 2008, Harmon and Hayes executed a Purchase and Sale Agreement, which was contingent on the property being appraised for at least the purchase price of $195,000. The appraised value did not satisfy that contingency. The appellants then terminated their agreement with the appellees under which the appellees acted in a dual capacity as their (buyer's) agent as well as Hayes' (seller's) agent.

On January 29, 2009, Harmon, through the appellants' new agent, Angel Spry, and Hayes entered into a new Purchase and Sale Agreement. The second Agreement was contingent on closing on or before February 6, 2009. The sale failed to close by that date.

On February 9, 2009, the appellees prepared a third Purchase and Sale Agreement, showing a purchase price of $185,000 and requiring closing by February 17, 2009. Neither the appellants nor Hayes executed the third Agreement, however, and the appellees negotiated the sale of the property to another buyer.

On February 12, 2009, the appellants successfully offered to buy a different, less attractive property at less favorable terms and allegedly suffered other damages.

The appellants alleged that the appellees breached the second Agreement, which the appellants attached and incorporated into their complaint, by refusing to provide required documentation to the loan processor and by refusing to extend the closing date after the sale failed to close by February 6, 2009.¹ The appellants' complaint, taken as true for purposes of the appellees' motions, however, establishes that Grantham executed the second Agreement solely as the seller's agent, while Harmon was represented by Spry as the buyer's agent. As the trial court concluded, the express terms of the second Agreement fail to show that the appellees undertook any contractual duties in favor of the appellants.

On appeal, the appellants argue that the appellees' actions breached their duties under the Brokerage Relationships in Real Estate Transactions Act, OCGA § 10–6A–1 et seq. The General Assembly enacted the Act “to govern the relationships between sellers, landlords, buyers, tenants, and real estate brokers and their affiliated licensees” where such relationships “are not governed by specific written agreements between and among the parties.” OCGA § 10–6A–2 (a). “In place of general fiduciary duties, [the Act] enumerates specific duties which real estate brokers must exercise with reasonable care. These duties vary, depending upon whether a ‘customer’ or a ‘client’ relationship exists.” (Footnotes omitted.) Killearn Partners v. Southeast Properties, 279 Ga. 144, 146(1), 611 S.E.2d 26 (2005).² Further, a broker who performs brokerage services for a client or customer

shall owe the client or customer only the duties and obligations set forth in [the Act], unless the parties expressly agree otherwise in a writing signed by the parties. A broker shall not be deemed to have a fiduciary relationship with any party or fiduciary obligations to any party but shall only be responsible for exercising reasonable care in the discharge of its specified duties as provided in this chapter and, in the case of a client, as specified in the brokerage engagement.

OCGA § 10–6A–4 (a).

The Act defines a “[c]lient” as “a person who is being represented by a real estate broker in an agency capacity pursuant to a brokerage engagement [,]” which must be in writing.³ OCGA § 10–6A–3 (6). A “[c]ustomer,” on the other hand, is “a person who is not being represented by a real estate broker in an agency capacity pursuant to a brokerage engagement but for whom a broker may perform ministerial acts in a real estate transaction pursuant to either a verbal or written agreement.” OCGA § 10–6A–3 (8). “Relationships between a broker and a customer normally do not involve the exercise of professional judgment or skill, and may be established either orally or in writing.” (Footnote omitted.) Killearn Partners v. Southeast Properties, 279 Ga. at 146(1), 611 S.E.2d 26.

The appellants' complaint establishes that any broker-client relationship between the appellees and Harmon that may have been created when Grantham executed the first Purchase and Sale Agreement as both the buyer's agent and the seller's agent,⁴ ended when that Agreement failed due to the low appraisal. Thereafter, Harmon engaged Spry as buyer's agent, and the relationship between the appellees and Harmon was that of broker-customer. In the absence of a written agreement between them, the appellees' duties were those set out in OCGA § 10–6A–5 (duties owed by a broker engaged by a seller). Although a broker who is engaged only by a seller owes a buyer (who is a “customer” rather than a “client”) certain duties in terms of disclosure of information,⁵ the appellants' complaint does not aver that the appellees breached any of those duties. Accordingly, the trial court did not err in granting the appellees' motions to dismiss. Jenkins v. Ga. Dept. of Corrections, 279 Ga.App. 160, 161, 630 S.E.2d 654 (2006); Zager v. Brown, 242 Ga.App. 427, 430(1), 530 S.E.2d 50 (2000).

Judgment affirmed.

ELLINGTON, Chief Judge.

MILLER, P. J., and DOYLE, J., concur.