This suit was brought under the unfair business practices act (Consumer Protection Act), RCW 19.86, to recover damages allegedly suffered by the plaintiff, a real estate salesman, due to his having been deprived of access to the defendant's multiple listing service. The court held on summary judgment that there was a violation of the statute and permanently enjoined the defendant from denying plaintiff access to the listing service. It found, after a trial on the damage issue, that during the period he was unemployed, the plaintiff had lost earnings of $13,500, but that $6,000 of this could have been avoided by a reasonable effort on the plaintiff's part. Accordingly, the court awarded him a total of $7,500. It refused to treble these damages, finding that the defendant had acted in good faith, with no intent to violate the law. This court has accepted a direct appeal by the plaintiff, challenging the amount of damages. The defendant did not appeal from the holding that the unfair business practices act had been violated or from the granting of the injunction.
The plaintiff is a former member of the navy who was stationed at the Whidbey Island Naval Air Station, and had become a resident of the area when he retired in 1977. In 1978, he applied for and received a real estate salesman's license, pursuant to RCW 18.85.095. He was hired by a broker named Johnson in Oak Harbor, where he was employed from April to November 1978.
The broker was a member of the Whidbey Island Board of Realtors and, as such, had access to its multiple listing service. This is a service provided by an association to its members, whereby they agree to share their listings with each other, thereby increasing the chances that particular property will be sold and increasing the number of persons who will have an opportunity to sell it. They also agree to divide the commission equitably between the listing and selling brokers. The system works to the advantage of real
Such associations are legal under RCW 18.85.400; but they are required to submit their entrance requirements to the Real Estate Commission for approval. The statute sets forth certain requirements that may be imposed upon an entrant, including a requirement that he be a licensed broker, and that an initiation fee (not in excess of $2,500) be paid. The association here (the Whidbey Island Board of Realtors) required that an entrant be a broker, and that he join the board. Brokers who were members were entitled to allow their licensed salesmen to use the listings, but were required to pay additional dues for each salesman, as an associate member, and salesmen were required to abide by the rules of the board. The plaintiff signed an agreement to do so and was granted access to the multiple listing service. After 6 months, however, when he had not paid his dues and had not attended an orientation course required under the rules, his privilege to use the service was revoked. Thereafter, he was unable to function effectively as a salesman because of his lack of access, and his employment was terminated.
Under RCW 18.85.320, Johnson, the broker, was required to return the plaintiff's license to the state board, and did so. However, the section provides for reinstatement of the license if a salesman finds other employment. Evidence presented by the defendant in this action showed that, while brokers on the north end of Whidbey Island would not be likely to hire the plaintiff because of the requirements of the real estate board, there were brokers on the south end of the island who did not use multiple listing services and who were in the market for salesmen. The brokers at the south end were no further from the plaintiff's home than those on the north end. However, his associations had been established on the north end of the island.
It is first argued that the lower court erred in applying the doctrine of avoidable consequences (often termed "mitigation
With respect to torts, the rule is found in Restatement (Second) of Torts § 918 (1979), to the effect that one injured by a tort of another is not entitled to recover damages for any harm that he could have avoided by the use of reasonable effort or expenditure after the commission of the tort, except where the tort-feasor intended the harm or was aware of it and was recklessly disregardful of it, and not then if the injured person intentionally or heedlessly failed to protect his own interests. The director of the American Law Institute, in an introduction to division 9 of the Restatement, draws attention to the fact that the law with respect to unfair trade practices is no longer covered by the Restatement, since it has become a specialized field, governed extensively by statute, and largely divorced from its original grounding in the law of torts.
We have found no federal case which has rejected the principle, although a California appellate court, in Guild Wineries & Distilleries v. J. Sosnick & Son, 102 Cal.App.3d 627, 637, 162 Cal.Rptr. 87 (1980), has stated without citation of authority that "a broad mitigation rule finds no support in appellate antitrust decisions." Nevertheless, that court held that the plaintiff must show that there was no alternative comparable substitute for the products formerly obtained from the defendant, and thus the court gave effect to the "avoidable consequences" doctrine.
In accordance with the directive contained in RCW 19.86.920, we conclude that the doctrine of avoidable consequences applies in damage actions authorized by RCW 19.86.
The plaintiff maintains that he could not have hoped to realize earnings in the southern part of the island because he did not have social or business contacts there. This was a matter considered by the trial court in deciding whether the plaintiff could reasonably be expected to seek employment there and also the amount he probably would have earned. It found that there was no appreciable difference in the distances from the plaintiff's home. Evidently taking into account the plaintiff's evidence that he had no associations on the southern part of the island, the court found that, had he taken a position, he would have earned only half as much as the evidence showed other salesmen were earning there. The plaintiff introduced no evidence showing that lack of associations in an area precludes success as a real estate salesman. The court's finding as to the plaintiff's probable earnings was supported by substantial evidence and will not be disturbed.
The plaintiff also contends that the court should have found that his net earnings, had he remained with Johnson Properties and retained access to the multiple listing service, would have been about $24,000 rather than the $13,500 found by the court.
The plaintiff testified as to his calculations of his anticipated earnings, but the court observed the speculative nature of that evidence and found that he had failed to take into account significant factors affecting his probable income. Its finding is supported by the evidence.
The Superior Court's ruling that RCW 19.86 was violated was based on the failure to obtain state approval and on a California case, Marin County Bd. of Realtors, Inc. v. Palsson, 16 Cal.3d 920, 549 P.2d 833, 130 Cal.Rptr. 1 (1976).
The question whether the defendant violated the Consumer Protection Act is not before us, as no appeal was taken from the Superior Court's ruling on that matter. However, in determining whether that court abused its discretion in denying treble damages, it is necessary to examine the circumstances which gave rise to the lawsuit.
It is not claimed that failure to file a report with the Real Estate Commission caused the plaintiff's damage. It is evident that he lost his access to the multiple listing service because he refused to pay dues as an associate member of the Whidbey Island Board of Realtors,
RCW 18.85.010(8) provides:
RCW 18.85.400 requires each "multiple listing association" to submit to the real estate commission for approval or disapproval its entrance requirements.
As for the requirement that users of the listing service attend an orientation course, this would appear to be authorized by RCW 18.85.400(5), permitting an association to require an applicant to follow any rules of the association which apply to all members. It is undisputed that the rules which were applied in the plaintiff's case were applicable to all other persons in the same position.
Inasmuch as the officers of the defendant board could reasonably believe, as the evidence shows they did, that the requirements which they imposed upon the plaintiff were not objectionable under the law, we find no abuse of discretion on the trial court's part in refusing to order punitive damages.
BRACHTENBACH, C.J., and STAFFORD, UTTER, DOLLIVER, HICKS, WILLIAMS, DORE, and DIMMICK, JJ., concur.
"(1) Require the applicant at the time of application and admission to be a licensed broker under chapter 18.85 RCW;
"(2) Require the applicant, if all members of the real estate multiple listing association are so required, to obtain and maintain a policy of insurance, containing specified coverage within designated limits protecting members from claims by sellers who have made keys to their premises available to members for access to their properties, against losses arising from damage to or theft of contents of such properties;
"(3) Require the applicant to pay an initiation fee computed by dividing an amount equal to five times the book value of the real estate multiple listing association concerned (exclusive of any value for listings and exclusive of all investments not related to the operation of the real estate multiple listing association and exclusive of all real estate), by the number of real estate broker members of said organization: Provided, That in no event shall the initiation fee exceed twenty-five hundred dollars;
"(4) Require the applicant for membership to have been:
"(a) A broker in the territory of the real estate multiple listing association for a period of one year; or
"(b) An associate broker with one year's experience in the area of the real estate multiple listing association, who in addition has had one year's experience as a broker in any other area of the state.
"(5) Require the applicant to follow any other rules of the association which apply to all the members of such association: Provided, That such other rules do not violate federal or state law: Provided, That nothing in this 1969 amendatory act shall be construed to limit the authority of any real estate multiple listing association to engage in any activities which are not otherwise prohibited by law." RCW 18.85.400.