This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The case concerns a dispute over a real estate commission. A buyer's agent agreement was executed between the buyer (Summit Investment Company, LLC) and a real estate broker (French & French, Inc.). Summit later excluded French from the transaction and took the commission for itself, claiming French refused to indemnify the seller (SFEDI) against claims from another broker (Bogle). The district court found that Summit breached its contractual obligations and acted in bad faith (paras 1-6).
Procedural History
- District Court of Santa Fe County, Carol J. Vigil, District Judge: Held Summit liable for breach of contract and awarded compensatory and punitive damages to French. Found Jeffery W. Potter, Summit's manager, individually liable for tortious interference and prima facie tort (paras 1, 6).
Parties' Submissions
- Appellants (Summit and Potter): Argued that no valid contract existed due to lack of mutual assent on the termination date, that the contract had expired before the purchase agreement was executed, and that Summit had no obligation to pay the commission. They also contested the findings of tortious interference, prima facie tort, and the punitive damages award (paras 8-10, 18, 25).
- Appellees (French & French, Inc.): Asserted that Summit breached the buyer's agency agreement by excluding French from the transaction and diverting the commission. They argued that Summit acted in bad faith and that Potter was individually liable for tortious interference and prima facie tort (paras 13-16, 20-22).
Legal Issues
- Was there a valid and enforceable contract between Summit and French?
- Did Summit breach the contract by excluding French from the transaction and diverting the commission?
- Was Potter individually liable for tortious interference with contract and prima facie tort?
- Was the award of punitive damages against Summit justified and reasonable?
Disposition
- The award of compensatory and punitive damages against Summit was affirmed.
- The judgment against Potter in his individual capacity was reversed (para 38).
Reasons
Per Bustamante J. (Kennedy and Vigil JJ. concurring):
Contract Validity and Breach: The court found that the buyer's agency agreement was valid and enforceable, with the term extending to June 1, 1999, based on evidence of industry custom and Summit's conduct. Summit breached the agreement by failing to attach the compensation agreement to the purchase contract and by excluding French from the transaction without justification (paras 10-16).
Tortious Interference and Prima Facie Tort: The court held that Potter could not be individually liable for tortious interference because his actions were not shown to be separate from Summit's interests. Similarly, the prima facie tort claim was rejected as the case was adequately addressed under established tort and contract doctrines (paras 20-24).
Punitive Damages: The court upheld the punitive damages against Summit, finding that its conduct—intentionally diverting the commission to itself without justification—was malicious and violated community standards of decency. The punitive damages award was deemed reasonable under constitutional standards, with a modest ratio to compensatory damages and alignment with comparable penalties under the Unfair Practices Act (paras 25-37).
Potter's Liability: The court reversed the finding of individual liability against Potter, as the evidence did not support claims of improper personal motives or actions distinct from Summit's interests (paras 21-24).