Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
BROKERS: Brokerage firm not liable for malfeasance of a broker who is an independent contractor. Glynn, a licensed real estate agent, entered into an “independent contractor agreement” with Gonsalves-Pastore, a real estate brokerage firm. The agreement stated that Glynn is not an employee of the firm and that she “retains absolute discretion and judgment” in the way she carries out listing and selling activities, but that she agrees to act according to the policies and procedures of the firm. Glynn could work when and where she chose, including at the firm’s office; she was free to accept other engagements, and she and the firm would split commissions. Poletti, a real estate investor, engaged Glynn to help him purchase and manage properties. Poletti maintained that one of the factors motivating the arrangement was Glynn’s association with Gonsalves-Pastore. Poletti purchased and resold real property based on investment advice given by Robin Pastore, a principal of Gonsalves-Pastore. After the sale, Poletti discovered that Glynn had granted two mortgages on the property in the amounts of $180,000 and $200,000 without Poletti’s authorization and used the funds in contravention of the investment plan. Poletti sued Gonsalves-Pastore, alleging that, as Glynn’s employer or principal, it owed him a fiduciary duty to oversee and supervise Glynn to ensure she acted honestly and prudently. The trial court granted summary judgment to Gonsalves-Pastore on the basis that it owed no fiduciary duty because Glynn was an independent contractor and, even if she were an employee, her acts of alleged malfeasance were outside the scope of her employment. The supreme court affirmed. There was no formal or informal agreement with Gonsalves-Pastore to carry out Poletti’s investment plan. Instead, Poletti engaged Glynn for this purpose. Even though Poletti may have relied upon Pastore’s investment advice, that alone is not sufficient to establish a fiduciary relationship. If Glynn were an employee, Gonsalves-Pastore could not be liable absent a showing that Glynn acted with a purpose to serve the Gonsalves-Pastore firm when she mortgaged the property. Also, Gonsalves-Pastore received no benefit from Glynn’s improper actions. Poletti v. Glynn, 234 A.3d 941 (R.I. 2020).
Premium Content For:
- Real Property, Trust and Estate Law Section