On Appeal from Superior Court, Washington Unit, Civil Division Helen M. Toor, J.
Kimberly B. Cheney of Cheney, Saudek & Grayck PC, Montpelier, for Plaintiffs-Appellants.
Philip C. Woodward of Woodward & Kelley, PLLC, South Burlington, for Defendant-Appellee.
PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.
¶ 1. Plaintiffs Heidi and James Glassford appeal the decision of the Washington Superior Court denying summary judgment to plaintiffs and granting summary judgment to defendant Dufresne & Associates, P.C. on plaintiffs’ claims of negligent misrepresentation and violation of the Vermont Consumer Protection Act (CPA). We affirm.
¶ 2. The following facts are undisputed. Plaintiffs are homeowners who purchased their home direct from the builder, D&L Homes by Design, LLC (D&L). D&L hired defendant to certify that the on-site mound sewage disposal system constructed for the home satisfied state permitting requirements. This certification was made pursuant to 10 V.S.A. § 1973, which requires a permit for “constructing, replacing, or modifying a potable water supply or wastewater system, ” id. § 1973(a)(3), and imposes the certification requirement as follows:
(e) No permit issued by the Secretary shall be valid for a substantially completed potable water supply and wastewater system until the Secretary receives a statement from an installer or licensed designer certifying that, in the exercise of his or her reasonable professional judgment, the installation-related information submitted is true and correct and the potable water supply and wastewater system:
(1) were installed in accordance with:
(A) the permitted design and all permit conditions; or
(B) record drawings and such record drawings are in compliance with the applicable rules, were filed with the Secretary, and are in accordance with all other permit conditions;
(2) were inspected;
(3) were properly tested; and
(4) have successfully met those performance tests.
Id. § 1973(e).
¶ 3. As the language of the statute makes clear, this is a post-permit requirement that must be completed before the permit becomes effective. The statute does not require that the certification be recorded in the land records, and it provides no private remedy against an installer or licensed designer who made inaccurate representations in the statement. The Secretary of Natural Resources is authorized to take certain enforcement actions with respect to § 1973.
¶ 4. On April 19, 2005, the Vermont Agency of Natural Resources issued a Wastewater System and Potable Water Supply Permit for construction of the sewage disposal system on the property, subject to receiving a certification pursuant to § 1973(e). On October 20, 2005, defendant’s employee sent to the Agency the certification required by § 1973(e), stating as follows: “I hereby certify that, in the exercise of my reasonable professional judgment, the installation-related information submitted is true and correct and the wastewater system was installed in accordance with the permitted design and all permit conditions, was inspected, was properly tested, and has successfully met those performance tests.” Defendant’s certification was for the Agency’s use in determining whether the system was installed according to the permitted design.  On November 4, 2005, the Agency wrote defendant stating that “all conditions pertaining to... [the] permit have been satisfied.”
¶ 5. On December 20, 2005, plaintiffs signed a purchase-and-sale agreement to purchase the home from D&L. Although the seller represented that the home and property had received all the necessary permits, plaintiffs never saw the certificate or the letter from the Agency stating that the certification requirement was satisfied. Sometime thereafter, plaintiffs hired an attorney in connection with the closing, which occurred on January 17, 2006. On January 13, just prior to the closing, plaintiffs’ attorney prepared a certificate of title that noted the wastewater and water supply permit and stated: “The permit requires a certificate from the designer or installer filed with [the] District Environmental Office certifying completion of the water and sewage conditions.” The title certificate was provided to plaintiffs and was not thereafter amended. Correspondence between plaintiffs’ attorney and the attorney for the seller included a request for a copy of the water and sewage certificate, and a copy was included in a FAX from January 12. In an affidavit, plaintiff Heidi Glassford stated, “We would not have purchased the property if Attorney Palmisano had warned us that the certificate was missing and might be a cause of concern about our title to the property, or the proper construction of the waste water system.” Plaintiffs never saw the certificate until after the sewage disposal system failed.
¶ 6. In February 2006, the sewage disposal system failed. In November 2008, plaintiffs hired defendant to investigate the system’s failure because they knew defendant had inspected the system prior to their purchase. Defendant prepared a report stating that he had “completed the original” inspection in 2005 and found the system had been installed according to the permitted design. Plaintiffs received other opinions about the disposal system’s failure both before and after hiring defendant to inspect the system.  In general, plaintiffs’ position is that the sewage disposal system failed because the soil placed over the system was improperly graded.  Defendant’s position is that the system failed because the house was too large, plaintiffs operated a daycare center that added to the wastewater entering the system, and plaintiffs’ horses were allowed to walk over the system.
¶ 7. Plaintiffs filed a complaint in superior court alleging pecuniary losses from defendant’s failure to properly inspect the sewage disposal system and subsequent misrepresentation about the construction of the system in the certification to the Agency.  Specifically, they alleged damages in tort for negligence-which, as discussed below, the superior court defined as a negligent misrepresentation claim-and under the CPA. Both parties moved for summary judgment, and the court entered judgment for defendant on both claims.
¶ 8. As related to this appeal, the superior court held that plaintiffs’ negligent misrepresentation claim failed because plaintiffs did not see defendant’s certification until the proceedings in this case and therefore did not rely on the alleged misrepresentation. With respect to the CPA claim, the court held that the claim failed because the parties did not contract for a sale of goods or services as required under the CPA. Plaintiffs appealed.
¶ 9. On appeal, plaintiffs argue that, with respect to the negligent misrepresentation claim, the superior court erred in finding that they did not rely on the certificate. They contend that defendant was under a public duty to furnish this information and that therefore they fall within the class of plaintiffs sought to be protected by the public duty. They further contend that, although they never saw the certificate prior to their purchase, they relied on it through their agent attorney, whose knowledge of the certificate was imputed to plaintiffs. They also argue that the superior court erred in concluding that the CPA requires privity between the parties and ...