Baumgarten v. Coppage, 99CA1893.

• Decision Date: 09 November 2000
• Docket Number: No. 99CA1893.,99CA1893.
• Parties: Joanne M. BAUMGARTEN and Christian A. Baumgarten, Plaintiffs-Appellants, v. R. Donald COPPAGE and Harris Reitter, d/b/a Rocky Mountain Estate Group, an individual proprietorship, Defendants-Appellees.
• Court: Colorado Court of Appeals

15 P.3d 304

Joanne M. BAUMGARTEN and Christian A. Baumgarten, Plaintiffs-Appellants, v. R. Donald COPPAGE and Harris Reitter, d/b/a Rocky Mountain Estate Group, an individual proprietorship, Defendants-Appellees.

No. 99CA1893.

Colorado Court of Appeals, Div. IV.

November 9, 2000.

H. Paul Cohen, Denver, CO, for Plaintiffs-Appellants.

Thomas A. Walsh, Golden, CO, for Defendant-Appellee R. Donald Coppage.

Vernon A. Evans, Golden, CO; Joel M. Hunsaker, Arvada, CO, for Defendant Appellee Harris Reitter. Opinion by Judge CASEBOLT.

In this action arising from the sale of a residence, plaintiffs, Joanne M. and Christian A. Baumgarten, appeal the judgment dismissing their complaint against defendants, R. Donald Coppage, and Harris Reiter d/b/a Rocky Mountain Real Estate Group, who are both licensed real estate brokers. The judgment was premised on plaintiffs' failure to comply with the certificate of review requirements of § 13-20-602, C.R.S.2000. We affirm in part, reverse in part, and remand for further proceedings.

Defendant Coppage owned the subject property. Plaintiffs purchased it through the listing of the property for sale with defendant Reiter's business, by whom Coppage was then employed. According to plaintiffs' complaint, unbeknownst to them, the residence they acquired had substantial hidden damage to its foundation walls. Plaintiffs further alleged that defendants had actual knowledge or should have known of the damage to the foundation walls, but did not disclose this damage to them. In addition, plaintiffs alleged that defendants had affirmatively misrepresented to them that there were no structural problems with the improvements on a property disclosure form.

Based on these allegations, plaintiffs sought to recover damages premised on defendants' alleged breach of a statutory duty of disclosure imposed on brokers under § 12-61-804(3)(a), C.R.S.2000. Further, they sought to recover damages on the basis that defendants had engaged in deceptive trade practices in violation of §§ 6-1-105(1)(e) and 6-1-105(1)(g), C.R.S.2000, of the Colorado Consumer Protection Act.

Defendants moved for dismissal based on plaintiffs' failure to file a certificate of review under § 13-20-602. Finding that statute applicable and that its requirements had not been met, the trial court granted the motion, and this appeal followed.

I.

Plaintiffs contend the trial court erred in dismissing their complaint because the requirement for a certificate of review does not apply here. We conclude that, to the extent plaintiffs' claims concern allegations that defendants breached statutory duties or standards that are based on defendant's actual knowledge, no certificate of review was required, and the dismissal of such claims cannot stand. However, to the extent that plaintiffs' claims involve allegations that defendants breached a standard of care premised on what they should have known, such claims were properly dismissed for lack of a certificate of review because expert testimony would be required to establish such claims under the facts alleged here.

Section 13-20-602 requires a plaintiff to file a certificate of review within sixty days of the service of the complaint as to any claim against a licensed professional based upon allegations of professional negligence that require expert testimony to establish a prima facie case. The purpose of the certificate of review requirement is to demonstrate that the plaintiff has consulted with a person who has expertise in the area and that the expert consulted has concluded that the claim does not lack substantial justification. See § 13-20-602; State v. Nieto, 993 P.2d 493 (Colo.2000); Shelton v. Penrose/St.Francis Healthcare System, 984 P.2d 623 (Colo.1999).

Failure to file a certificate of review, when one is required, must result in the dismissal of such claims. See § 13-20-602(4), C.R.S.2000; Kelton v. Ramsey, 961 P.2d 569 (Colo.App.1998).

The requirements of § 13-20-602 apply not only to negligence claims, but also apply to claims "based upon" the alleged professional negligence of a licensed professional. This broad statutory language includes every claim that requires proof of professional negligence as a predicate to recovery, whatever the formal designation of the claim may be. Martinez v. Badis, 842 P.2d 245 (Colo.1992).

Negligence claims are based on the premise that persons or entities have certain legislatively or judicially recognized duties toward others and are required to act reasonably to fulfill such duties. Martinez v. Badis, supra.

Initially, we agree with defendants' assertion that both of plaintiffs' claims are predicated on allegations that defendants, as licensed professionals, breached certain legislatively imposed duties or standards applicable to their professional responsibilities and business dealings. Thus, because these claims are essentially "based upon" allegations of failure to perform a professional duty within the meaning of Martinez v. Badis, supra, they are subject to the certificate of review requirements of § 13-20-602.

The dispositive issue, then, is whether expert testimony would be necessary to establish a prima facie case as to these claims. See § 13-20-602.

Plaintiffs' first claim is based on allegations that defendants breached a statutory duty of disclosure imposed on brokers to prospective buyers under the provisions of § 12-61-804(3)(a), which provides that:

A broker acting as a seller's or landlord's agent owes no duty or obligation to the buyer or tenant; except that a broker shall. . . disclose to any prospective buyer or tenant all adverse material facts actually known by such broker. Such adverse material facts may include but shall not be limited to adverse material facts pertaining to the title and the physical condition of the property, any material defects in the property, and any environmental hazards affecting the property which are required by law to be disclosed. (emphasis added)

Under these provisions, a broker's duty to disclose adverse material facts to a prospective buyer is limited to such adverse facts as are "actually known" by the broker. Consequently, to establish this claim, plaintiffs need only prove that defendants had actual knowledge of adverse material facts pertaining to the physical condition of the residence and that they failed to disclose such facts to plaintiffs.

We agree with plaintiffs that no expert testimony would be necessary to establish such matters. As to this claim, the professional duty allegedly breached is based on a statutory standard involving a particular broker's actual knowledge. Hence, to establish a prima facie case, it would not be necessary for plaintiffs to present expert testimony concerning the standard of care generally applicable to brokers regarding disclosures. See Melville v. Southward, 791 P.2d 383 (Colo. 1990) (when subject matter of claim is within common knowledge of ordinary persons, expert testimony is not required). Accordingly, no certificate of review was required for this claim, and the trial...