Kirkruff v. Wisegarver
State: Illinois
Court: 4th District Appellate
Docket No: 4-97-0667
Case Date: 06/26/1998
NO. 4-97-0667
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
JO ANN KIRKRUFF and JAMES L. ARMSTRONG, ) Appeal from
as Trustees of the HELEN B. ARMSTRONG ) Circuit Court of
FAMILY TRUST, ) Champaign County
Plaintiffs-Appellees and ) No. 94L1843
Cross-Appellants, )
v. )
TAD WISEGARVER, d/b/a TAD WISEGARVER )
REAL ESTATE, ) Honorable
Defendant-Appellant and ) Arnold F. Blockman,
Cross-Appellee. ) Judge Presiding.
_________________________________________________________________
JUSTICE STEIGMANN delivered the opinion of the court:
In December 1994, plaintiffs, Jo Ann Kirkruff and James L.
Armstrong, as trustees of the Helen B. Armstrong Family Trust (the
Trust), filed suit against defendant, Tad Wisegarver, alleging, inter
alia, that Wisegarver breached his fiduciary duty (count I) and violated
the Consumer Fraud and Deceptive Business Practices Act (Act) (815 ILCS
505/1 et seq. (West 1994)) (count III) in his capacity as their real
estate broker. (The trial court later granted plaintiffs' motion to
voluntarily dismiss the remaining three counts.) In February 1997, the
trial court contemporaneously conducted a jury trial as to count I and
a bench trial as to count III. A jury subsequently returned a verdict
in plaintiffs' favor on count I and awarded $58,200 in damages. In June
1997, the trial court found as a matter of law that damages totalled
$90,324.74 (Wisegarver's stipulated net profits) and entered judgment in
that amount on count I. The court also entered judgment in Wisegarver's
favor on count III.
Wisegarver appeals, arguing that the trial court erred by (1)
denying his motions for directed verdict and judgment n.o.v. because the
evidence failed to show that (a) a fiduciary relationship existed, (b)
Wisegarver breached his fiduciary duty, or (c) Wisegarver's breach of
fiduciary duty proximately caused plaintiff's injury; and (2) entering
judgment in plaintiffs' favor on count I in an amount exceeding the
jury's award. Plaintiffs cross-appeal, arguing that the court's finding
that Wisegarver did not violate the Act was against the manifest weight
of the evidence. We affirm in part, reverse in part, and remand for
further proceedings.
I. BACKGROUND
The material in this section is not to be published pursuant to Supreme
Court Rule 23. 166 Ill. 2d R. 23.
Nonpublishable material under Supreme Court Rul23 omitted.
II. ANALYSIS
A. The Trial Court's Denial of Wisegarver's Motions
for Directed Verdict and Judgment N.O.V.
Wisegarver first argues that the trial court erred by denying
his motions for directed verdict and judgment n.o.v. because the evidence
did not show that (1) a fiduciary relationship existed between Wisegarver
and plaintiffs; (2) Wisegarver breached his fiduciary duty; or (3)
Wisegarver's breach of his fiduciary duty proximately caused plaintiffs'
injury. We disagree.
1. Standard of Review
A trial court should not grant a motion for directed verdict
or judgment n.o.v. unless "all of the evidence, when viewed in its aspect
most favorable to the opponent, so overwhelmingly favors movant that no
contrary verdict based on that evidence could ever stand." Pedrick v.
Peoria & Eastern R.R. Co., 37 Ill. 2d 494, 510, 229 N.E.2d 504, 513-14
(1967); see Thacker v. U N R Industries, Inc., 151 Ill. 2d 343, 353, 603
N.E.2d 449, 454 (1992).
2. Existence of a Fiduciary Relationship
Specifically, Wisegarver contends that the evidence did not
show that a fiduciary relationship existed and, instead, the acts of the
parties constituted nothing more than the sharing of information to
develop the terms of some possible agreement. We disagree.
A contract to employ a real estate broker need not be in writ-
ing. In re Estate of Vallerius, 253 Ill. App. 3d 226, 230, 624 N.E.2d
459, 462 (1993). All that is required is action by the broker and
consent by the principal. Such consent may be oral, written, or implied
by the conduct of the parties. Letsos v. Century 21-New West Realty, 285
Ill. App. 3d 1056, 1063, 675 N.E.2d 217, 223 (1996). Whether an agency
relationship exists may be established by circumstantial evidence,
including the situation of the parties, their acts, and other relevant
circumstances. The existence of an agency relationship constitutes a
question of fact for the trier of fact. Matthews Roofing Co. v.
Community Bank & Trust Co., 194 Ill. App. 3d 200, 206, 550 N.E.2d 1189,
1193 (1990). A plaintiff must prove the existence of an agency
relationship by clear and convincing evidence. See State Security
Insurance Co. v. Frank B. Hall & Co., 258 Ill. App. 3d 588, 595, 630
N.E.2d 940, 945 (1994).
A real estate broker serves as an agent of a property owner,
and an agency relationship engenders a type of fiduciary affiliation in
which the principal has the right to control the agent's conduct, and the
agent has the power to act on the principal's behalf. Once an agency
relationship is found, a fiduciary relationship arises as a matter of
law. Letsos, 285 Ill. App. 3d at 1064, 675 N.E.2d at 223-24.
Initially, we note that Wisegarver correctly points out that
the supreme court in Martin v. Heinold Commodities, Inc., 163 Ill. 2d 33,
44-45, 643 N.E.2d 734, 740 (1994) (Martin II), quoting Martin v. Heinold
Commodities, Inc., 117 Ill. 2d 67, 78, 510 N.E.2d 840, 844-45 (1987)
(Martin I), quoting Restatement (Second) of Agency 389, comment b
(1958), adopted the general rule that "an `agent is subject to no
fiduciary duty in making the agreement by which he becomes [an] agent.'"
However, he fails to point out that the supreme court also adopted the
following exception to the general rule:
"`[W]e are unwilling to conclude, as a matter of
law, that a fiduciary duty can never be imposed
upon a prospective agent prior to the formal
creation of an agency relationship. Thus, while
the general rule governing preagency [contacts]
does not require disclosure of the terms of a
prospective agent's compensation, we believe that
facts could be established which would support
imposition of a fiduciary duty upon a prospective
agent applicable to preagency [contacts].'" Martin
II, 163 Ill. 2d at 45, 643 N.E.2d at 740, quoting
Martin I, 117 Ill. 2d at 78-79, 510 N.E.2d at 845,
citing Restatement (Second) of Agency 390, Comment
e (1958).
The court also noted that "[a]ll that is required is that the creation
of the agency relationship involve peculiar trust and confidence, with
reliance by the principal on the fair dealing by the agent." (Emphasis
omitted.) Martin II, 163 Ill. 2d at 47, 643 N.E.2d at 741.
The evidence here showed that Kirkruff responded to
Wisegarver's advertisement in which he held himself out as a specialist
in "land development" and "subdivision marketing and sales." Kirkruff
testified that she initially contacted Wisegarver to be her agent in
developing the property. Wisegarver testified that he holds himself out
as a specialist in the marketing and sales of development land, and
during his first conversation with Kirkruff, she told him she was inter-
ested in Wisegarver marketing the property and determining whether it
could be developed. Kaisner opined that a fiduciary relationship existed
between Wisegarver and Kirkruff when Kirkruff initially contacted
Wisegarver to seek his advice and opinion regarding the property.
Kirkruff also testified that between the time Wisegarver told
her it was not economically feasible to develop the land and the date she
entered into the agreement to sell the land to him, she asked him to sell
the property for her based upon his representations, and they agreed upon
a commission of "[a]round 6 percent." Further, Wisegarver effectively
conceded that he was Kirkruff's agent when he testified that he thought
the property could have sold for $2,500 per acre, "but in the situation
between [him and Kirkruff], if [he] were to market the property, [he]
would charge a commission which basically off of that would be the same
net to [Kirkruff]." (Emphasis added.) See Letsos, 285 Ill. App. 3d at
1068, 675 N.E.2d at 226 (real estate broker effectively conceded that he
was still property owner's broker by having pursued his broker's
commissions after having entered into the contract of sale between
himself and the owner). Kirkruff stated that during the period from
January 1993 through April 30, 1993 (when the parties closed the sale),
she trusted Wisegarver and believed he was working for her as her real
estate agent. Moreover, Kaisner opined that even after Wisegarver in-
formed Kirkruff of his interest in purchasing the property, his fiduciary
duty to Kirkruff continued. See Letsos, 285 Ill. App. 3d at 1068, 675
N.E.2d at 226-27 (fiduciary duty continued after property owner
contracted to sell property to broker).
Based on our review of the record in this case, we conclude
that the evidence supports the jury's verdict under the Pedrick standard.
3. Breach of Fiduciary Duty
Wisegarver also contends that the evidence failed to show that
he breached his fiduciary duty. We disagree.
The fiduciary relationship between a broker and a principal
requires full disclosure of all relevant facts relating to the trans-
action or affecting the subject matter of the agency. An agent owes
general duties of good faith, loyalty, and trust to his or her principal.
If a broker, as an agent, enters into a contract with the principal, the
same duties of good faith and disclosure continue. Where a fiduciary
relationship exists at the time of the transaction and the broker appears
to benefit, the transaction is presumptively fraudulent, which may be
rebutted by clear and convincing evidence of good faith, showing that the
broker did the following: (1) fully disclosed all relevant information
to the principal before entering into the transaction; (2) paid adequate
consideration; and (3) provided competent and independent advice to the
principal. Letsos, 285 Ill. App. 3d at 1066-67, 675 N.E.2d at 225-26.
Further, a broker cannot purchase from a principal unless the principal
expressly assents thereto or, with full knowledge of all the facts and
circumstances, acquiesces in such a transaction. Even if the principal
gives her assent to a purchase by the broker, the broker's actions
throughout must be characterized by the utmost good faith. Letsos, 285
Ill. App. 3d at 1068-69, 675 N.E.2d at 227.
The evidence here showed that (1) although Wisegarver found
out in early February 1993 that the property was not within the city's
zoning limits (which meant that it would be subject to less demanding
development requirements), he nonetheless told Kirkruff that it would be
a "very risky development"; (2) in early February 1993, Wisegarver
entered into an agreement with Altech, in which Altech agreed to plat a
20-acre subdivision for a project named "Wisegarver Section 32 Subdivi-
sion"; (3) according to Kirkruff, Wisegarver never informed her that he
had hired Altech to develop the property as his subdivision; (4)
Wisegarver never told Kirkruff that the property's location outside the
city's zoning limits was good for development purposes or that he had
contacted Altech to determine the property's location relative to the
city; (5) Wisegarver never listed or advertised the property as Kirkruff
requested him to do; (6) according to Kirkruff, Wisegarver never showed
her the February 12, 1993, letter from Marathon indicating that it had
completed flagging of the pipeline on the property; (7) during January
through April 1993, Wisegarver never advised Kirkruff that he was at-
tempting to develop the property for his own gain and that she should
find another realtor to represent her interests; (8) Wisegarver failed
to give plaintiffs written notice that he was acting on his own behalf
in the transaction between them; and (9) Wisegarver failed to disclose
to plaintiffs the potential costs and profits of developing and
subdividing the property.
Based on our review of the record in this case, we conclude
that the evidence supports the jury's verdict under the Pedrick standard.
4. Proximate Causation
Wisegarver also contends that the evidence failed to show that
his breach of his fiduciary duty proximately caused plaintiffs' injury
because plaintiffs presented no competent expert testimony that they
could have duplicated Wisegarver's $90,324.74 profit. We disagree.
The supreme court in Martin II held that "plaintiffs must
prove that a defendant's actions proximately caused their injuries before
they can recover in tort, even in instances of intentional torts where
fiduciaries are involved." (Emphasis added.) Martin II, 163 Ill. 2d at
59, 643 N.E.2d at 747. Plaintiffs agree that the Martin II court so
held; however, they contend that because Martin II involved a securities
case, the supreme court's discussion of "loss causation" (a term
originally used by federal courts in dealing with proximate cause in
securities cases) is inapplicable to the present case.
In Martin II, a group of investors sued a securities broker
for breach of fiduciary duty and fraud. In determining whether the
plaintiffs could recover their full investment losses under the Act, the
supreme court held that in securities cases, plaintiffs must prove both
(1) transaction causation (cause in fact), and (2) loss causation (a term
analogous to proximate cause). The court set out the specific question
to ask under such circumstances to determine whether a plaintiff has
proven loss causation, or proximate cause, as follows:
"'Would the decline in plaintiff's investment have
occurred even if defendant's misrepresentation had
been true? If the answer to this question is
"yes," plaintiff has failed to prove that the
misrepresentation proximately caused the decline.'"
Martin II, 163 Ill. 2d at 62, 643 N.E.2d at 748,
quoting W. Prosser, Torts 110, at 732 (4th ed.
1971).
We agree with plaintiffs that the Martin II court's specific
discussion regarding loss causation in securities cases does not apply
to the present case. In our judgment, however, the Martin II court's
general discussion of proximate cause informs our analysis of the proxi-
mate cause issue in this case.
In Lee v. Chicago Transit Authority, 152 Ill. 2d 432, 455, 605
N.E.2d 493, 502 (1992), the supreme court discussed proximate cause, as
follows:
"The term 'proximate cause' describes two
distinct requirements: cause in fact and legal
cause, which is a policy decision that limits how
far a defendant's legal responsibility should be
extended for conduct that, in fact, caused the
harm."
Prosser has noted that while a misrepresentation may have induced a
transaction, proximate cause limits recovery to "those damages which
might foreseeably be expected to follow from the character of the
misrepresentation itself." W. Prosser, Torts 110, at 732 (4th ed.
1971). In addition, section 548A of the Restatement (Second) of Torts
provides, as follows:
"A fraudulent misrepresentation is a legal cause of
a pecuniary loss resulting from action or inaction
in reliance upon it if, but only if, the loss might
reasonably be expected to result from the reli-
ance." Restatement (Second) of Torts 548A, at
106 (1977).
Restatement (Second) of Torts, section 548A, comment b, provides:
"Pecuniary losses that could not reasonably
be expected to result from the misrepresentation
are, in general, not legally caused by it and are
beyond the scope of the maker's liability. This
means that the matter misrepresented must be
considered in the light of its tendency to cause
those losses and the likelihood that they will
follow." Restatement (Second) of Torts 548A,
Comment b, at 107 (1977).
Consistent with this authority, we hold that to recover for
misrepresentation in cases involving breach of fiduciary duty, plaintiffs
must prove (1) cause in fact--namely, that the misrepresentation in fact
induced the recipient to enter into the transaction; and (2) proximate
cause--namely, that the character of the fiduciary's misrepresentations
could reasonably be expected to result in the recipient's injury.
Therefore, in this case, plaintiffs had to show that the character of
Wisegarver's misrepresentations and omissions could reasonably be expect-
ed to result in their injury--that is, their missed opportunity to
develop the property. It follows then that plaintiffs' missed opportuni-
ty to develop the property could not reasonably be expected to result
from Wisegarver's misrepresentations and omissions if plaintiffs could
not have developed the property regardless of Wisegarver's misrepresenta-
tions and omissions. However, we disagree with Wisegarver's assertion
that plaintiffs had to show that they could have developed the property
on their own. If we were to accept such an assertion, a realtor could
almost always avoid liability for his misrepresentations or omissions
given that few untrained private property owners could develop property
without any assistance whatsoever. Moreover, we disagree with
Wisegarver's contention that plaintiffs had to show that they could have
duplicated Wisegarver's profits. That contention goes solely to the
measure of damages.
The evidence here showed that (1) Wisegarver told Kirkruff
that problems existed with the property--namely, a gas pipeline ran
through the property and problems would arise with the annexation; (2)
Wisegarver told her that developing the property would be "too costly"
and "too time-consuming" for her to do it; (3) even though Wisegarver
knew the property was not within the city's zoning limits (which meant
that it would be subject to less demanding development requirements), he
nonetheless told Kirkruff that it would be a "very risky development";
(4) he failed to give plaintiffs written notice that he was acting on his
own behalf in connection with the development; (5) he told Kirkruff the
property was worth no more than $2,300 per acre; and (6) he failed to
tell Kirkruff that he was attempting to develop and subdivide the land
on his own or that she should find another realtor to represent her
interests.
Further, the evidence showed that had Kirkruff known that
Wisegarver was in the process of developing and subdividing the property
on his own, she would not have sold him the property for $46,000.
Instead, she would have contacted another realtor to assist her in
developing the property herself, and she "[e]asily" had enough assets to
develop the property. Kaisner, plaintiffs' expert, testified that
although she did not know of anyone who would simply hire themselves out
to develop property for an out-of-town property owner, her experience has
shown that "most people would be interested in doing it, doing it for
himself or with partners or some type of a partner arrangement." In
addition, DiNovo, director of the county's zoning and planning depart-
ment, testified that if a property owner has a right to develop property
based upon its zoning classification, the Department has a duty to allow
the development if the owner complies with the technical requirements.
Finally, perhaps the best evidence of the property's development
potential was the fact that Wisegarver actually developed it.
Based on our review of the record in this case, we conclude
that the evidence supports the jury's verdict under the Pedrick standard.
Accordingly, we hold that the trial court did not err by
denying Wisegarver's motions for directed verdict or judgment n.o.v.
B. The Trial Court's Entry of Judgment on Count I
in Excess of the Jury's Award
Last, Wisegarver argues that the trial court erred by entering
judgment on count I in an amount in excess of the jury's award of
$58,200. In response, plaintiffs argue that the court properly ordered
an additur because once the jury found Wisegarver liable on count I, the
amount of damages was fixed and liquidated in the amount of $90,324.74.
We agree with plaintiffs.
In J.I. Case Co. v. McCartin-McAuliffe Plumbing & Heating,
Inc., 118 Ill. 2d 447, 456-57, 516 N.E.2d 260, 264-65 (1987), the supreme
court discussed additur, as follows:
"Additur, though not available in the Federal
courts [citation], has been used in State courts
and, indeed, may have first appeared in an Illinois
case, Carr v. Miner (1866), 42 Ill. 179 ([cita-
tion]). In Carr, an action in assumpsit, the jury
erroneously allowed the plaintiff 6% interest on
his award rather than 10%, a rate that the defen-
dant had previously agreed to pay. The defendant
consented to an additur, and the trial judge there-
fore denied the plaintiff's motion for a new trial,
finding no other error in the case. This court
affirmed the trial judge's action:
`The evidence showed that defendant
always recognized his liability to pay
ten per cent interest, and under the
statute he could bind himself for that
rate, by agreement. This the jury
should have allowed. *** It was a
case in which the amount could be cal-
culated with certainty when the basis
was found. The practice is one that
should be sparingly indulged, and
should never be adopted except in clear
cases.'"
Additur is unavailable where unliquidated tort damages are at issue.
Bernesak v. Catholic Bishop, 87 Ill. App. 3d 681, 691-92, 409 N.E.2d 287,
295 (1980).
In Perry v. Engel, 296 Ill. 549, 554, 130 N.E. 340, 343
(1921), the supreme court discussed the measure of damages in cases
involving misrepresentation by a real estate broker and wrote the
following:
"An agent cannot take any advantage of his position
to speculate to the injury of his principal, and
all profits and advantages gained in the transac-
tion of the agent belong to the principal. The
relation of principal and agent is one of trust and
confidence, and where such confidence is reposed
and such relation exists it must be faithfully
acted upon and preserved from any intermixture of
imposition. The rule is the same no matter how
large or how small the commission paid may be or
whether the agent is a mere volunteer at a nominal
consideration. [Citations.] Under the relation of
the parties here, [the principals] had a right to
all the benefits and advantages of the transaction
***." (Emphasis added.)
In Perry, a real estate broker misrepresented information to his clients
and profited personally from the purchase and resale of the clients'
property. Perry, 296 Ill. at 552, 130 N.E. at 342. In Sams v. Rigg, 339
Ill. App. 25, 31, 88 N.E.2d 673, 676 (1949), the real estate broker did
business secretly with a purchaser who paid more for the property than
the broker disclosed to his principals. The Sams court, relying on
Perry, held that the principals had a right to the profit the broker made
from the secret transaction. Sams, 339 Ill. App. at 31, 88 N.E.2d at
676.
The rule set forth in Perry comports with section 549, comment
i of the Restatement (Second) of Torts, which discusses the measure of
damages in misrepresentation cases where the recipient of the misrepre-
sentation has suffered no out-of-pocket loss. That section provides as
follows:
"When the value of what the plaintiff has
received under the transaction with the defendant
is fully equal to the value of what he has parted
with, he has suffered no out-of-pocket loss, and
under the rule stated in [s]ubsection (1), [c]lause
(a) [providing that the recipient of misrepresenta-
tion may choose to recover his actual out-of-pocket
loss], he could recover no damages. This would
mean that the defrauding defendant has successfully
accomplished his fraud and is still immune from an
action in deceit. Even though the plaintiff may
rescind the transaction and recover the price paid,
the defendant is enabled to speculate on his fraud
and still be assured that he can suffer no pecu-
niary loss. This is not justice between the
parties. The admonitory function of the law
requires that the defendant not escape liability
and justifies allowing the plaintiff the benefit of
his bargain." (Emphasis added.) Restatement
(Second) of Torts 549, Comment i, at 115 (1977).
See also W. Keeton, Prosser & Keeton on Torts 110, at 768 (5th ed. 1984)
("in many cases the out-of-pocket measure will permit the fraudulent
defendant to escape all liability and have a chance to profit by the
transaction if he can get away with it").
Based upon the foregoing authority, we conclude that once the
jury found Wisegarver liable, the amount of damages was fixed at the
amount of Wisegarver's net profit on the subdivision. In so concluding,
we note that Wisegarver contends that the net profit included his
personal services as developer, organizer, monitor, construction manager,
and sales broker, and that those personal services arguably totalled
$90,000, thereby leaving him with no profit. However, Wisegarver himself
prepared the account ledger which indicated his net profit totalled
$90,324.74, and had he so desired, he could have reflected the costs of
his personal services on that ledger or testified as to the costs of his
services.
C. The Trial Court's Determination That Wisegarver
Did Not Violate the Act
On cross-appeal, plaintiffs argue that the trial court's
determination that Wisegarver did not violate the Act (815 ILCS 505/2
(West 1992)) was against the manifest weight of the evidence. Although
we accept the court's factual findings, we nonetheless hold that it erred
by determining that Wisegarver's actions and omissions did not violate
the Act.
Section 2 of the Act provides as follows:
"Unfair methods of competition and unfair or
deceptive acts or practices, including but not
limited to the use or employment of any deception,
fraud, false pretense, false promise, misrepresen-
tation or the concealment, suppression[,] or
omission of any material fact, with intent that
others rely upon the concealment, suppression[,] or
omission of such material fact, or the use or
employment of any practice described in [s]ection
2 of the 'Uniform Deceptive Trade Practices Act',
*** are hereby declared unlawful whether any person
has in fact been misled, deceived[,] or damaged
thereby." 815 ILCS 505/2 (West 1992).
Section 2 of the Uniform Deceptive Trade Practices Act (Uniform Act)
provides, in relevant part, as follows:
"A person engages in a deceptive trade
practice when, in the course of his business,
vocation[,] or occupation, he:
* * *
(12) engages in any other conduct which
similarly creates a likelihood of confusion or of
misunderstanding." 815 ILCS 510/2(12) (West
1992).
Thus, to state a claim under section 2 of the Act, a plaintiff
must allege and prove that (1) the defendant performed a deceptive act
or practice, including concealment or omission of any material fact; (2)
the defendant intended that the plaintiff rely on the deception; and (3)
the deception occurred in the course of conduct involving trade and
commerce. Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 501, 675 N.E.2d
584, 593 (1996). A material fact exists where the plaintiff would have
acted differently had she been aware of it, or if it concerned the type
of information upon which she would be expected to rely in making her
decision to act. Connick, 174 Ill. 2d at 505, 675 N.E.2d at 595. In
addition, courts should liberally construe and broadly apply the Act to
eradicate all forms of deceptive and unfair business practices. Randels
v. Best Real Estate, Inc., 243 Ill. App. 3d 801, 805, 612 N.E.2d 984, 987
(1993).
In its June 1997 order, the trial court wrote the following:
"Although the Act clearly applies to
[Wisegarver], the [c]ourt does not find that the
plaintiff has proven, by a preponderance of the
evidence, any deception, fraud, false pretense,
false promise, misrepresentation[,] or the conceal-
ment, suppression[,] or omission of any material
fact within the meaning of the Act.
The [c]ourt, however, does have concerns
about [Wisegarver's] actions vis a vis the plain-
tiff from a fiduciary standpoint during the period,
at the least, from January 7, 1993[,] to February
8, 1993[,] and, possibly, until when the sales
contract was actually signed on April 14, 1993.
The court's concerns, however, are technical in
nature and relate solely to the high duties imposed
legally upon a fiduciary in this situation. The
[c]ourt does not believe that its findings on this
count are inconsistent with the jury's finding on
[c]ount I. The jury could have found that the
breach of fiduciary duty did not stem from any
deception, fraud[,] or misrepresentation, but
simply from technical, albeit intentional, breaches
of the duty. For instance, the issues instruction
indicates that the fiduciary relationship could
have been breached by failure to give written
notice that he was acting on his own behalf (i), by
failing to use his best efforts to procure the best
and highest selling price (h), by failing to remain
loyal to the interest of the plaintiffs when he
failed to list the property for sale (e), and by
placing his own interests ahead of the plaintiffs
(d) ***. The jury was also informed of a statute
that required that a person holding a real estate
license cannot act for more than one party without
providing written notice ***. Indeed, the only
allegation of breach of fiduciary relationship by
a material misrepresentation in the issues instruc-
tion was subparagraph (a) [namely, Wisegarver
misrepresented to plaintiffs that it was not eco-
nomically feasible to subdivide the land]."
Reading the trial court's comments in context, it appears
that--contrary to plaintiffs' assertion--the court was aware that
concealment, suppression, or omission of information could support a
violation of the Act. The court, in discussing "technical" breaches, was
instead referring to whether Wisegarver's actions or omissions involved
material facts, not whether Wisegarver had concealed, suppressed, or
omitted facts. Moreover, it appears that the court accepted most of the
jury's findings of fact. In particular, the court noted that the jury
could have found that Wisegarver's breach of his fiduciary duty stemmed
from "technical, albeit intentional breaches," such as (1) Wisegarver's
failure to give written notice that he was acting on his own behalf to
develop the property as a subdivision; (2) his failure to use his best
efforts to procure the best and highest selling price for the property
on plaintiffs' behalf; (3) his failure "to remain loyal to the interest
of the plaintiffs when he failed to list the property for sale"; (4)
Wisegarver's placing his own interests ahead of plaintiffs' interests
when he proceeded to subdivide the land and sell the parcels for a
substantially higher aggregate price than he paid for the land; and (5)
his failure to provide written notice that he was acting for more than
one party. Although the court apparently accepted those factual
findings, it nonetheless determined that those acts and omissions by
Wisegarver did not come within the scope of the Act.
Generally, a reviewing court will not reverse a trial court's
decision in a bench trial regarding whether the plaintiff has proved the
elements under the Act unless that decision is against the manifest
weight of the evidence. This is so because whether the plaintiff has
proved those elements usually constitutes a question of fact. Malooley
v. Alice, 251 Ill. App. 3d 51, 55, 621 N.E.2d 265, 268 (1993). In
reviewing the trial court's decision in this case, however, we accept its
factual determinations. Thus, because only the trial court's legal
conclusions are at issue, we review those conclusions de novo. See In
re D.G., 144 Ill. 2d 404, 408-09, 581 N.E.2d 648, 649 (1991) ("where
neither the facts nor credibility of the witnesses is contested, the
issue *** is a legal question which a reviewing court may consider de
novo").
Although we accept the trial court's factual determinations,
we disagree with its application of the Act to those determinations. In
particular, we note that Wisegarver's failure to provide plaintiffs with
written notice that he was not acting solely for plaintiffs but was
instead acting on his own behalf to develop the property as a subdivision
constituted a violation of the Act. Clearly, this is the type of
information upon which plaintiffs would be expected to rely in making a
decision to act and had Kirkruff known that fact, she testified that she
would have acted differently--namely, she would not have sold Wisegarver
the property. Nor can there be any serious contention that Wisegarver
did not intend for plaintiffs to rely upon such an omission on his part.
See Seligman v. First National Investments, Inc., 184 Ill. App. 3d 1053,
1064, 540 N.E.2d 1057, 1064 (1989) (where the court held that the failure
of real estate brokers to disclose such self-dealing constituted consumer
fraud under the Act). Moreover, we note that Wisegarver's actions and
omissions constituted deceptive acts and omissions under section 2(12)
of the Uniform Act (815 ILCS 510/2 (West 1992)). In particular, the
following acts by Wisegarver constituted conduct which created "a likeli-
hood of confusion or of misunderstanding" on Kirkruff's part regarding
the property's development potential and value: (1) his failure to
provide written notice that he was acting on his own behalf; (2) his
failure to list the property for sale as he had agreed to do; (3) his
failure to use his best efforts to procure the best and highest selling
price for the property on the plaintiffs' behalf; and (4) his placing his
own interests ahead of plaintiffs' interests by proceeding to subdivide
the land and sell the parcels. Thus, because we conclude that Wise-
garver's acts and omissions--which the trial court accepted as proven--
constituted violations of the Act, we hold that the trial court's deci-
sion to the contrary was erroneous.
III. CONCLUSION
In closing, we commend the trial court for its thoughtful
memorandum, which we found very helpful.
For the reasons stated, we affirm the trial court's judgment
in part, reverse in part, and remand for further proceedings.
Affirmed in part; reversed in part; remanded for further
proceedings.
GARMAN, P.J., and McCULLOUGH, J., concur.
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