“Tracking the spoor of a very healthy commission.”

Virginia Oak Venture, LLC v. Fought, 448 S.W.3d 179 (Tex.App.-Texarkana 2014, no pet.).  Fought was a real estate salesman who was hired by the seller to find a buyer for the apartment complex.  He located a buyer and wooed her extensively.  Fought not only located an attorney to create the LLC to act as the purchasing entity, he agreed to be personally named as Texas resident agent for service of process for the entity. Fought was extremely solicitous of Buyer by acting as her chauffeur from the airport, personally taking her through each of the ten properties he was attempting to sell her, directing her to a particular lender, and preparing all the documents involved in the transaction.

Buyer bought the apartment complex.  It turned out to have been a bad investment and she sued everyone in sight.  Among her claims were that Fought had grossly misrepresented the occupancy levels of the property, the income and expenses of the property, that he supplied false information to be used by the appraiser and the lender, and hid from Buyer, the appraiser, and the lender more accurate rent rolls, financial data, and most importantly, a sale of the property just ten months earlier at nearly half the price, all so that an inflated appraisal and inflated loan would result, and so Buyer would rely on the information given them and on the loan and appraisal to close the purchase.

Buyer also claimed that Fought was acting as her agent in connection with the purchase, citing all the things he did for her, as described above.   The question went to the jury, which found that Fought was not acting as her agent.  Although there was some behavior on Fought’s part that could be construed to support the conclusion that he was acting as her agent, it could likewise be construed to simply have been the Broker helping Buyer in order to “grease the wheels” of the deal.  The Court found that while one could believe that those activities, taken as a whole, might suggest the existence of a personal relationship, they may also be representative of a dedicated salesman “tracking the spoor of a very healthy commission.”