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PH West Dover Property, LLC v. Lalancette Engineers

Supreme Court of Vermont

March 20, 2015

PH West Dover Property, LLC., Mitchell Frankenberg and Jennifer Fredreck
v.
Lalancette Engineers, Richard and Barbara Lalancette and Barbara Walowit Realty, Inc.

On Appeal from Superior Court, Windham Unit, Civil Division John P. Wesley, J.

James A. Valente of Costello Valente & Gentry, P.C., Brattleboro, for Plaintiffs-Appellants.

Potter Stewart, Jr. of Potter Stewart, Jr. Law Offices, P.C., Brattleboro, for Defendant-Appellee Barbara Walowit Realty, Inc.

PRESENT: Dooley, Skoglund, Robinson and Crawford, [1] JJ., and Eaton and Morris (Ret.), Supr. JJ., Specially Assigned

SKOGLUND, J.

¶ 1. Plaintiff buyers in this consumer fraud action appeal from a summary judgment order in favor of defendant realtor who represented the seller in the sale of an inn. Plaintiffs argue that the trial court erred in concluding that defendant’s alleged misrepresentation and omission were immaterial as a matter of law. We affirm.

¶ 2. For purposes of our review, we consider the relevant facts in the light most favorable to the non-prevailing party-in this case, plaintiffs. Chase v. Agency of Human Servs., 2011 VT 31, ¶ 14, 189 Vt. 613, 19 A.3d 167 (mem.). Based on the evidence presented in connection with the parties’ cross-motions for summary judgment, those facts are as follows. Defendant Barbara Walowit Realty, Inc. was the listing agent for an inn in West Dover. [2] After Ms. Walowit secured the listing for the inn, she contacted a prior-prospective purchaser to renew discussions about a potential sale. The prior-prospective purchaser claims she told defendant during their conversation that she had witnessed flooding in the parking lot and had learned of “major problems with the roof and that there was a possibility of collapse.” The prospective purchaser stated in her affidavit that defendant told her that flooding was a common occurrence. There is no evidence that the prior-prospective purchaser provided any information about the specific claimed problems with the roof or a description of any flooding, or any information about the source or basis for her complaints.

¶ 3. Following this exchange, defendant asked the seller, who had himself performed much of the carpentry work at the inn, about the condition of the roof. In her deposition, defendant stated that the seller said he believed the roof to be satisfactory. Again, in her deposition testimony, defendant testified she recommended that the seller “ secure[ ] an estimate” because “this issue might be raised in an inspection and he should be prepared to be able to either compensate, fix, or do something.” In response, the seller gave defendant a document labeled “Roof Materials List” reflecting the materials cost for shingles, flashing, and nails for 6, 600 square feet of roof. The estimated cost of the materials was $5, 000.

¶ 4. In the meantime, plaintiffs Mitchell Frankenberg and Jennifer Fredreck formed PH West Dover Property, LLC (hereinafter plaintiffs) for the purpose of buying an inn. They contacted defendant, who showed them the property in West Dover. Defendant did not disclose to plaintiffs the substance of her conversation with the prior-prospective purchaser, the $5000 materials estimate for roof repairs, or any concerns about the condition of the roof.

¶ 5. Before entering into a purchase-and-sale agreement with the seller, plaintiffs received a written disclosure from the seller concerning the condition of the property. The “Seller’s Property Information Report” states “[t]his report is not a warranty of any kind by the seller or by any real estate agent representing the seller. This report is not a substitute for a property inspection.” The Report stated that the seller was aware of no “current problems with the roof, ” and that there was no “flooding, drainage or grading problems on the property.” Plaintiffs entered into a purchase-and-sale agreement with the seller in December 2007. The agreement contained an inspection contingency.

¶ 6. At the recommendation of defendant, plaintiffs then hired Lalancette Engineers to perform a pre-purchase structural inspection of the property, and received an inspection report in late January 2008. The report included a statement that “[t]he visible portion of the upper roof on the main inn is showing signs of wear and should be kept under observation. Resurfacing of this portion of the roof should be planned for within the next three to five years.” Specifically, the report recommended replacement of “torn and missing shingles at a few locations... and repair of active roof leaks that were noted in the right attic at the right front plumbing vent and right rear metal chimney.”

¶ 7. The sale closed in May 2008. In September 2008, after encountering various problems relating to the condition of the inn, plaintiffs sued defendant for negligence and consumer fraud for defendant’s alleged misrepresentations and omissions concerning the condition of the inn. [3] Plaintiffs and defendant filed cross-motions for summary judgment.

¶ 8. On the claim of negligence, the trial court granted summary judgment to defendant. That ruling is not before us on appeal. As to the claim of consumer fraud, the court considered, among other things, defendant’s alleged failure to disclose the contents of her conversation with the prior-prospective purchaser and to disclose the estimate of roof repair costs that was in her files. The court concluded that the statements from the prior-prospective purchaser were “simply too vague and foundationless to give rise to knowledge of specific material facts that [defendant] would have a duty to disclose” under the Consumer Fraud Act. [4] The court further concluded that defendant’s failure to disclose the roof-repair estimate was not a material omission because plaintiffs “already knew the roof needed repairs” from the Lalancette report, and disclosure “would have left them in the same position in which the report placed them; needing to make further inquiry.” Thus, the court concluded that the estimate “cannot be considered material as a matter of law, ” and granted judgment to defendant. Plaintiffs appealed.

¶ 9. We review de novo a motion for summary judgment, applying the same standard of review as the trial court. Madowitz v. Woods at Killington Owners’ Ass’n, 2010 VT 37, ¶ 9, 188 Vt. 197, 6 A.3d 1117. Summary judgment is appropriate only when “the record clearly shows that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law.” Id. (quotation omitted); see V.R.C.P. 56(a). Therefore, we afford the nonmoving party “the benefit of all reasonable doubts and inferences.” Doe v. Forrest, 2004 VT 37, ¶ 9, 176 Vt. 476, 853 A.2d 48.

¶ 10. We have recognized that “[r]eal estate brokers and agents are marketing agents, not structural engineers or contractors. They have no duty to verify independently representations made by a seller unless they are aware of facts that tend to indicate that such representations are false.” Provost v. Miller, 144 Vt. 67, 69-70, 473 A.2d 1162, 1164 (1984) (quotation omitted). They can, however, be liable under the consumer protection statute for misrepresenting or omitting facts known to them that are important enough to affect a reasonable buyer’s conduct. Vastano v. Killington Valley Real Estate, 2007 VT 33, ...


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