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Gardner Realtors, LLC v. Iteld

Court of Appeals of Louisiana, Fourth Circuit

March 22, 2017

GARDNER REALTORS, LLC
v.
DR. BRUCE ITELD, ET AL

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2013-02221, DIVISION "J" Honorable Paula A. Brown, Judge

          Jack A. Ricci Michael S. Ricci Jonathan L. Schultis RICCI PARTNERS, LLC, COUNSEL FOR PLAINTIFF/APPELLEE

          Lanny R. Zatzkis LAW OFFICES OF LANNY R. ZATKIS, LLC, COUNSEL FOR DEFENDANT/APPELLANT

          Judge Dennis R. Bagneris, Sr., Judge Sandra Cabrina Jenkins

         

          JAMES F. MCKAY III CHIEF JUDGE

          This case involves an alleged breach of contract case between the owners of an immovable piece of property and their real estate agent.

         FACTS AND PROCEDURAL HISTORY

         Following initial contacts with real estate agents Eleanor Farnsworth and Lauren McCulloch, on December 11, 2009, Dr. Bruce Iteld and his wife, Sandy Iteld, entered into a marketing agreement with Gardner Realtors, LLC (Gardner) to market and sell their home located at 1516 Robert Street in New Orleans. The property was initially listed for sale at a price of three million three hundred fifty thousand dollars ($3, 350, 000.00). The home was over eight thousand (8, 000) square feet and had many amenities, including a large generator, a wine cellar, a gymnasium, a saltwater pool, three home theatres, an elevator and an eight hundred (800) square foot guest house.

         In December of 2009, Ms. Farnsworth placed a Gardner advertising sign in front of the subject property; this sign remained in front of the home for approximately two and a half years. Ms. Farnsworth and Ms. McCulloch also advertised the subject property on the multiple listing service (MLS) as well as via a number of websites (Gardner's website, eleanorfarnsworth.com, and luxuryrealestate.com) and publications (St.Charles Avenue Magazine, The Times-Picayune, and Preservation Resource). Ms. Farnsworth, with the approval of Mrs. Iteld, had created a professionally-made brochure which included color photographs of the property. Soon after the property was initially listed with them, Gardner set up a large catered open house and invited a number of real estate brokers.

         On December 17, 2010, Ms. McCulloch sent an email on Ms. Farnsworth's email account to Mrs. Iteld seeking to extend the marketing agreement for another six months. After consulting with her husband, Mrs. Iteld agreed to the extension by replying "OK" to the email later that day. During this first extension, on April 26, 2011, Ms. Farnsworth received an offer of two million nine hundred thousand dollars ($2, 900.000.00) to purchase the subject property from Frederic Larson, a real estate agent with Keller Williams, on behalf of one of his clients. However, the offer was rejected. Additionally, on April 28, 2011, the Itelds required that any potential buyers have a letter of pre-qualification before any viewing of the premises.

         On June 24, 2011, Ms. Farnsworth sent an email to Mrs. Iteld seeking a second six month extension of the marketing agreement. After consulting with her husband, Mrs. Iteld agreed by emailing back "OK. Sandy" later that day. On October 31, 2011, Ms. Farnsworth received a "Letter of Intent to Purchase, " which the Itelds rejected.

         On January 9, 2012, Ms. McCulloch again emailed Mrs. Iteld seeking a third six month extension. Mrs. Iteld once again, with the consent of her husband, agreed to a six month extension. On March 1, 2012, Gardner received a pre-qualification letter from Eric Gordon, a professional basketball player with the then New Orleans Hornets. Gardner showed the property to Mr. Gordon, but he did not make an offer. Hollywood actor Leonardo DiCaprio also viewed the property on three occasions in 2012.[1]

         On June 20, 2012, Linda Phoenix, a real estate agent for then New Orleans Saints player Jabari Greer and his wife Katrina Greer, contacted Ms. Farnsworth regarding the Greers' interest in the property. Ms. Phoenix provided Gardner with a letter from UBS Financial Services, Inc., which showed the Greers' financial capability to purchase the property. After viewing the property, the Greers made an offer of two million one hundred thousand dollars ($2, 100, 000.00) on June 5, 2012. Dr. Iteld and Mrs. Iteld both signed a counteroffer to the Greers, offering to sell the subject property to the Greers for three million fifty thousand dollars ($3, 050, 000.00). On June 7, 2012, the Greers, through their agent Ms. Phoenix, executed an "Amendment to Agreement to Purchase or Sell" offering to purchase the subject property for two million four hundred thousand dollars ($2, 400, 000.00) in all cash. This offer was rejected by the Itelds.

          Mrs. Iteld informed Gardner that the Itelds were seeking to refinance the subject property in 2012 and needed for the property to be removed from the MLS but requested that Gardner continue to market the property during the refinancing period. Temporarily removing a property from the MLS in order to effectuate a refinancing is common process. On June 28, 2012, Ms. McCulloch sent an email to the Itelds stating the following: "Dear Sandy, Please find attached the cancellation of the marketing agreement for 1516 Robert Street. Please sign and return so we can process it. Let me know when the refinancing has been completed so that we can enter it back into the system." Thereafter, on June 28, 2012, both of the Itelds and Ms. Farnsworth, on behalf of Gardner, executed the cancellation of marketing agreement. In pertinent part, the marketing agreement stated as follows:

It is hereby agreed that the expiration of the above referenced Marketing Agreement be changed from 7/29/2012 to 6/28/2012 in consideration of the early termination…In addition, any sale of the property negotiated within 6 months after the amended termination date to any party to whom said property was submitted during the term of the Marketing Agreement will be subject to a commission of 6/4% or $N/A. It is further agreed that if this property is offered for sale at any time within six (6) months after the amended termination date, the property will be listed exclusively with GARDNER REALTORS, for a period of no less than the original Marketing Agreement at the commission terms, and conditions agreed to in the Marketing Agreement…

         The cancellation agreement illustrates that the Itelds were under contract with Gardner through July 9, 2012, and that if they desired to offer the property for sale within the next six (6) months, they were contractually required to use Gardner to do so. Therefore, Gardner continued to place a for sale sign in front of the subject property and continued to market the property in various periodicals throughout the remainder of 2012.

         On July 2, 2012, Mrs. Iteld left a message on Ms. Farnsworth's voicemail asking Ms. Farnsworth to call her. Ms. Farnsworth returned Mrs. Iteld's call and was informed by her that a new prospective purchaser, Ashton Soniat, was interested in the property. Thereafter, Ms. Farnsworth made contact with Mr. Soniat and sent him a copy of the brochure she had made. Ms. Farnsworth informed Mr. Soniat about the details of the home, the location, the neighborhood, and that the Itelds were not interested in any lowball offers. Ms. Farnsworth and Ms. McCulloch communicated with Mr. Soniat on several more occasions during July of 2012, both by phone and email.

         On July 29, 2012, Ms. McCulloch spoke with Mrs. Iteld by telephone. During this conversation, Mrs. Iteld mentioned that Mr. Soniat had discussed the idea of cutting out her agents. In early August of 2012, the Itelds, through their attorney Lanny Zatzkis, received an offer from Mr. Soniat to purchase the subject property. This offer was apparently rejected by the Itelds.

         On September 6, 2012, the Itelds received a second offer to purchase the property from Mr. Soniat, again through Mr. Zatzkis. On September 13, 2012, the Itelds executed a "Louisiana Agreement to Buy or Sell." The Itelds agreed to sell the subject property to Mr. Soniat for two million eight hundred thousand dollars ($2, 800, 000.00). The property was sold to Mr. Soniat on December 3, 2012. Gardner was not included in this transaction and no commission was paid. In early January of 2013, Ms. McCulloch discovered that Mr. Soniat had purchased the subject property from the Itelds.

         On March 6, 2013, Gardner filed its petition for breach of contract and damages against the Itelds. Gardner later amended its petition to reflect its name change from GBS Properties LLC d/b/a Prudential Gardner ...


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