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Knutsen v. Dion

Supreme Court of Vermont

November 8, 2013

Janet Knutsen
v.
David M. Dion, Thomas Gardner, David M. Dion Real Estate, Inc., and Vermont Association of Realtors, Inc.

On Appeal from Superior Court, Washington Unit, Civil Division Michael S. Kupersmith, J.

Kimberly B. Cheney of Cheney Saudek & Grayck PC, Montpelier, for Plaintiff-Appellant.

Thomas F. Heilmann and David D. Aman of Heilmann, Ekman & Associates, Inc., Burlington, for Defendant- Appellee Vermont Association of Realtors, Inc.

PRESENT: Dooley, Skoglund and Burgess, JJ., and Howard and Bent, Supr., JJ., Specially Assigned

DOOLEY, J.

¶ 1. Plaintiff Janet Knutsen appeals the decision of the superior court denying her motion for summary judgment and granting defendant Vermont Association of Realtors, Inc.’s (VAR) motion for summary judgment on her consumer fraud claim arising out of her purchase of a home in Moretown. Plaintiff argues that VAR’s form purchase and sale agreement, which was used in her real estate purchase—to which VAR was not a party—violates the Vermont Consumer Fraud Act (CFA) in that two provisions of the form are unfair and deceptive, and that she is therefore entitled to damages under § 2461(b) of the CFA. We affirm.

¶ 2. On May 20, 2007, plaintiff entered into a purchase and sales contract with Lorraine and Leonard Sweetser (sellers) for the purchase of their home. Sheila Jacobs, plaintiff’s broker, prepared the contract. The contract contained the following limitation of liability:

Limitation of Liability: Seller and Purchaser each agree that the real estate brokers identified in Section 31 hereof have provided both Seller and Purchaser with benefits, services, assistance and value in bringing about this Contract. In consideration thereof, and in recognition of the relative risks, rewards, compensation and benefits arising from this transaction to said real estate brokers, Seller and Purchaser each agree that such brokers, their agents, associates or affiliates, shall in no event be liable to either Purchaser, Seller or both, either jointly, severally or individually, in an aggregate amount exceeding the total compensation to be paid to such brokers on account of this transaction or $5, 000, whichever is greater, by reason of any act or omission, including negligence, misrepresentation, errors and omissions, or breach of any undertaking whatsoever, except for intentional or willful acts. This limitation shall apply regardless of the cause of action or legal theory asserted against the real estate brokers unless the claim is for an intentional or willful act. This limitation of liability shall apply to all claims, losses, costs, damages or claimed expenses of any nature whatsoever from any cause or causes, except intentional or willful acts, so that the total aggregate liability of all real estate brokers identified in Section 31 hereof shall not exceed the amount set forth herein. Seller and Purchaser each agree that there is valid and sufficient consideration for this limitation of liability and that the real estate brokers are the intended third-party beneficiaries of this provision.

(bolding and emphasis in original). Plaintiff initialed and dated the page containing the limiting language and signed the contract. The above section provided a liability limitation to “real estate brokers identified in section 31” of the contract. The brokers identified in section 31 are the firms for which sellers’ and buyer’s agents worked.

¶ 3. The contract also contained a clause calling for pre-suit mediation of disputes related to the contract. The mediation provision stated:

Mediation of Disputes: In the event of any dispute or claim arising out of or relating to this Contract, to the Property, or to the services provided to either Seller or Purchaser by any real estate agent who brought about this Contract, it is agreed that such dispute or claim shall be submitted to mediation prior to the initiation of any suit. The party seeking to mediate such dispute or claim shall provide notice to the other party and/or to the real estate agent(s) with whom mediation is sought and thereafter the parties and/or real estate broker(s) to be involved in the mediation shall reasonably cooperate with each other in the selection of a mediator and shall reasonably agree upon the selection of a mediator. The real estate agent(s) who brought about this Contract can be of assistance in providing information as to sources for obtaining the services of a mediator. Unless otherwise agreed to in writing, the parties and any real estate agent(s) involved in the mediation shall share the mediator’s fee equally. Seller, Purchaser and the real estate agent(s) who brought about this Contract acknowledge and understand that, although utilizing mediation in an effort to resolve any dispute or claim is mandatory under this Contract, the function of the mediator is to assist the parties involved in the mediation in resolving such dispute or claim and not to make a binding determination or decision concerning the dispute or claim. This provision shall be in addition to, and not in replacement of, any mediation or alternative dispute resolution system required by an order or rule of court in the event the dispute results in a lawsuit.

(bolding in original). Like the limitation of liability provision, plaintiff initialed and dated the page containing the mediation provision.

¶ 4. Although plaintiff’s broker prepared the purchase and sales contract, she used a template that VAR provided on its website. VAR is a Vermont trade organization comprised of more than 1800 licensed real estate brokers and salespersons. VAR makes available to its members generic, pre-printed real estate forms, including a purchase and sales contract form that a member can use as a template. VAR recommends the form to those involved in a real estate sale. The purchase and sales agreement form can be modified to meet the specifics of the agreement for any given purchase and sales transaction. The website page plaintiff attached to her motion for summary judgment indicates that VAR provides forms “through TrueForms.” [*]We take this to mean that the forms actually come from some external source, although the bottom of the form states, “This form developed by the Vermont Association of Realtors, Inc.”

¶ 5. Approximately one month prior to the closing on the contract, sellers presented plaintiff with a Sellers’ Property Information Report (SPIR). The SPIR notified plaintiff that “[t]his year the water table was extremely high; water seeped in at various places where cracks are visible. Controlled with wet/dry vac. Sump pump takes care of water during early spring [and] does not reach concrete.” Plaintiff initialed the page of the SPIR containing this ...


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