Agency ET/AL

Dave, a licensed real estate agent, and Jim a real estate developer, worked together on past real estate deals and knew each other from their numerous prior successful business relationships.  Jim, for many years had attempted to purchase a parcel of land owned by Clark County, NV located at Tropicana and the Beltway in Las Vegas (the Parcel), but Jim had been unsuccessful in his efforts.

Dave had a great relationship with the Manager of Clark County knew and knew that the County might now be interested in selling the Parcel provided a buyer could close quickly.  Based on this information Dave contacted Jim, knowing of Jims long-standing interest.

Based upon Daves suggestion and proprietary information that Dave had by virtue of his personal relationship with the Manager of Clark County, Jim offered $3,000,000 to buy the Parcel.  With this offer, Jim told Dave he would pay him a 3% real estate commission.  Dave believed that this was a sure thing that would pay him $90,000 when Jim purchased the property.

Clark County rejected Jims offer and the deal suggested by Dave fell apart.

Shortly thereafter Jim formed a new LLC that he named SDU Partners, LLC (SDU stands for Shady, Deceitful and Underhanded Partners in Jims mind.  This acronym and its meaning is unknown to Dave and Dave is unaware of this entity).

SDU, LLC then approached Clark County directly and offered $3,500,000; an offer that the County accepted.  The transaction closed two weeks later, and Dave was not paid a real estate commission.

After the closing, Dave discovered that Jim had defrauded him by creating SDU, LLC to approach the County directly.

Was a valid agency relationship created between Dave and Jim that would entitle Dave to receive his real estate commission, and what other damages might exist from this transaction?

What should Dave have done differently to make sure that his commission would be paid?

 

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