Real Estate Law – transactional broker malpractice
Denver real estate lawyer Brian Stutheit
learned of the the Gibbons v. Ludlow case which was decided by the Colorado Supreme Court in July, 2013.
Sellers of a large piece of land sued a realtor with whom they were working. Sellers claimed that the broker failed to alert them to fine print in a complicated purchase offer which forced them to give the buyer a credit toward the purchase if they did not have the property ready for development (roads and sewer lines) when the sale closed. Sellers claimed that they would not have sold the property had they been aware of the credit clause, but they would have held the land and sold it for a higher price. The Supreme Court threw out the Sellers’ lawsuit. It said
“The Sellers have not, however, presented any actual evidence, whether in pleadings or other supporting documents, showing that they would have realized a sale price of $6.6 million on the property but for the Brokers’ negligence. First, the Sellers provided an affidavit from an appraiser who valued the property for the transaction at issue here. The appraiser “concluded the market value of the [p]roperty, in ‘as is’ condition, was $6, 600, 000″ … , the affidavit is not sufficient to establish that the Sellers could have actually sold the property for $6.6 million but for the Brokers’ negligence. The appraiser stated in his deposition that he could not determine whether the Sellers would have been able to find a willing buyer at that time, or what that buyer would have paid for the property.”
The case teaches that claim for lost profits may not be sustained by evidence which is speculative or remote. The amount of damages need not be “established with mathematical certainty”; however, the fact of damage must be established and must be the traceable to, and the direct result of, the negligent act.