## Facts

- Anthony Bryan Rangel and Bridgette Rangel (the Rangels) entered into a February 2010 listing agreement with J. Wesley Dowling and Associates, Inc. (Dowling) to sell their home and 40 acres in DeSoto Parish.
- The listing agreement contemplated a mineral-rights arrangement in which the sale would include mineral rights to 20 acres and the Rangels would retain mineral rights to 20 acres, and it required the Rangels to notify Dowling if prospective buyers contacted them directly.
- In July 2010, Marlon and Cynthia Curtis contacted the Rangels directly about purchasing the property; the Rangels notified Dowling and asked Dowling to provide a prospective buyer’s purchase contract.
- The Rangels alleged Dowling refused to provide or prepare the contract because Dowling did not represent the Curtises.
- Mr. Rangel then drafted a purchase agreement himself for the Curtises to buy the home, land, and 20 acres of mineral rights for approximately $396,000.
- Before the Curtises secured financing, the Rangels moved out of the home, signed a six-month apartment lease, and leased separate business space for Mrs. Rangel’s barber business.
- The Curtises were unable to obtain financing and backed out of the purchase agreement, allegedly because the lender would not accept the home’s appraisal.
- The Rangels alleged they suffered financial losses after the sale collapsed, including expenses tied to the mortgage and the additional leases, and they alleged they were forced to sell some mineral rights to cover costs.
- The Rangels sued multiple defendants, including Bryce J. Denny, the Curtises, and Dowling, asserting that the Curtises breached the purchase agreement and that Dowling’s acts and omissions contributed to the Rangels’ losses.
- As to Dowling, the Rangels alleged Dowling breached duties owed to them as their broker by failing to help negotiate the sale, failing to use a state-approved contract form, failing to review offers, failing to follow up on transaction details, failing to discuss financing options, and failing to help the parties complete the sale.
- Dowling filed a peremptory exception of no cause of action. The trial court sustained the exception and dismissed the Rangels’ claims against Dowling with prejudice, reasoning in part that Dowling had no contractual relationship with the Curtises and that the Rangels’ theory of causation was speculative.
- The Rangels appealed the dismissal of their claims against Dowling.

## Issues

1. Whether, accepting the petition’s well-pleaded facts as true and construing them in the Rangels’ favor, the petition stated a cause of action against Dowling for breach of duty arising out of the broker-client relationship.
2. Whether the trial court erred in dismissing the Rangels’ claims at the pleading stage on the ground that it was speculative to allege Dowling’s failures contributed to the collapse of the sale and the Rangels’ resulting damages.

## Decision

- The court of appeal reversed the judgment sustaining Dowling’s exception of no cause of action and dismissing the claims against Dowling with prejudice.
- The court held the petition alleged a broker-client relationship, identified specific broker duties, and alleged conduct that could constitute a breach and could support causation and damages if proven.
- The case was remanded for further proceedings.

## Legal Principles

- A peremptory exception of no cause of action tests the legal sufficiency of the petition; the court accepts well-pleaded facts as true and construes the petition liberally in favor of maintaining the action.
- Dismissal is improper if the petition states a remedy under any legal theory supported by the pleaded facts.
- A real-estate broker owes clients a fiduciary duty to exercise reasonable care, skill, and diligence in performing brokerage services within the scope of the engagement.
- Allegations that a broker failed to perform core brokerage functions (including preparing required transaction paperwork when requested, reviewing offers, communicating and tracking key transaction terms, and advising clients about transaction risks) can state a claim at the pleading stage.
- At the no-cause-of-action stage, the court does not resolve factual disputes about causation or weigh the likelihood that a third party would have performed; allegations that the broker’s breaches contributed to the failed transaction and to identifiable losses may be sufficient to proceed.
- The absence of a contract between the broker and the prospective purchasers does not necessarily defeat claims by the broker’s own clients based on the broker’s duties arising from the broker-client relationship.

## Conclusion

The Louisiana Second Circuit held that the Rangels’ petition, read in the light most favorable to them, alleged enough facts to state claims against their listing broker arising from the broker-client relationship, including alleged failures to assist with contracting and transaction handling that could have contributed to the failed sale and resulting losses; the court therefore reversed the no-cause-of-action dismissal and remanded for further proceedings.


Rangel v. Denny, 104 So. 3d 68 (2012)