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Buffington v. Wentz
Citations: 178 A.2d 417; 228 Md. 33Docket: [No. 156, September Term, 1961.]
Court: Court of Appeals of Maryland; March 12, 1962; Maryland; State Supreme Court
In the case of Buffington et ux. v. Wentz et al., the appellants, John W. Buffington and his wife, sued John A. Wentz, a real estate broker, and his wife, as well as Glens Falls Insurance Company, which was the surety on Wentz's statutory bond. The Wentzes did not contest the suit, resulting in a judgment against them for $3,874.62 plus costs. A stipulation was made in which the Wentzes agreed to pay the Buffingtons $2,000 initially and additional payments of $1,000 and $750 on specified future dates, with these payments intended to fully satisfy the judgment. The Circuit Court approved this arrangement, postponing the Buffingtons' claim against the Insurance Company until the Wentzes fulfilled their payment obligations. After the Wentzes defaulted on the first payment, the Buffingtons pursued their claim against the Insurance Company, which was tried without a jury. The court ruled in favor of the Buffingtons for a $200 deposit related to a contract with an associate of Wentz, but denied further claims against the Insurance Company. The Buffingtons appealed the ruling. Wentz, who was also a builder, had previously entered into a contract to sell four of the Buffingtons' lots and subsequently proposed a contract for the sale of all eight lots to Mrs. Womeldorf, an employee of his. The sale price for the eight lots was set at $3,475, with a $200 deposit mentioned, but Wentz's testimony about receiving that deposit was unclear. No commission was specified in either the Curley or Womeldorf contracts, as Wentz did not charge commissions on sales to employees. On January 25, 1956, Wentz and his wife sought a construction loan of $11,500 from a building and loan association for lots 19-22, which was granted on February 17, 1956. On March 19, 1956, the settlement date under the Womeldorf contract, Wentz informed the Buffingtons he would take the eight lots instead of Mrs. Womeldorf, providing them with a note for $3,475, payable within 120 days or upon completion of house sales. On June 6, 1956, Curley and his wife applied for an $18,000 loan on lots 23-26, with title listed under Wentz, and this was approved on June 15. Subsequently, on June 22, Wentz received a deed from the Buffingtons for the eight lots. The bond related to the claim is a statutory $5,000 bond for real estate brokers, executed by Wentz and a surety company on September 3, 1955. It stipulates that the bond is void if Wentz adheres to Maryland laws; otherwise, it remains valid for claims against him or the surety for damages due to his prohibited conduct. The trial judge noted Wentz's obligation to disclose all relevant facts, particularly his interest in transactions involving the Buffingtons. The judge concluded that Wentz's acquisition of property under the Womeldorf contract breached his duty to the Buffingtons and made the surety liable for potential damages. However, the judge also opined that the Buffingtons, knowing of Wentz's conflicting interest when they conveyed property to him, effectively ended their quasi-confidential relationship as broker and client. Therefore, any concealment by Wentz of prior relevant facts became inconsequential. The court agreed with the trial judge that brokers must fully disclose relevant facts to their clients. Although evidence of Wentz's status as the actual purchaser under the Womeldorf contract was limited and vague, it indicated that this fact was not disclosed to the Buffingtons prior to their agreement in March 1956. The court deemed it unnecessary to decide the implications of this nondisclosure following the Buffingtons' acceptance of Wentz as the purchaser due to other conclusions related to the Curley transaction. Wentz was engaged in negotiations with Curley for the sale of four Buffington lots and had received a $2,000 cash deposit prior to the signing of the Womeldorf contract. This information was not disclosed to the Buffingtons before they transferred eight lots to Wentz and his wife on June 22, 1956. The court found that this non-disclosure was material and would have influenced the Buffingtons' decisions regarding the Womeldorf contract, accepting Wentz as a substitute purchaser, and granting him extended payment terms. The court determined that Wentz's failure to disclose this information constituted a breach of his duty as a broker, violating the conditions of his license under the Real Estate Brokers subtitle of Art. 56 of the Code. Specifically, Sections 224 (r) and (s) address non-disclosure of material facts and actions demonstrating bad faith or untrustworthiness. The court concluded that Wentz's breach caused the Buffingtons' losses, as they likely would not have proceeded with the transactions had they known he had misrepresented his dealings. As a result, the surety was held liable under the bond, leading to a judgment reversal in favor of the appellants against the appellee Insurance Company for $2,068.35, plus interest at 6% from January 18, 1959, with costs awarded to the Insurance Company. The judgment amount was calculated based on the outstanding judgment against Wentz and subsequent payments.