Brushwitz v. Ezell

• Decision Date: 21 January 2000
• Citation: 757 So.2d 423
• Parties: Ron BRUSHWITZ and Faye Brushwitz v. Carl W. EZELL and Ezell, Ryberg & Associates, Inc.
• Court: Alabama Supreme Court

757 So.2d 423

Ron BRUSHWITZ and Faye Brushwitz v. Carl W. EZELL and Ezell, Ryberg & Associates, Inc.

1980621.

Supreme Court of Alabama.

January 21, 2000.

Thomas S. McGrath, Huntsville, for appellants.

Robert V. Wood, Jr., and Richard L. Morris of Spurrier, Rice, Wood & Hall, Huntsville, for appellees.

BROWN, Justice.

The plaintiffs Ron Brushwitz and Faye Brushwitz appeal a summary judgment entered in favor of the defendants Carl W. Ezell and Ezell, Ryberg & Associates, Inc. (together referred to as "Ezell").

On June 21, 1998, the Brushwitzes sued Ezell; Kinco Pest Control, Inc.; Edward Collier; and Complete Residential Inspections, L.L.C. Their claims arose out of their purchase of a used residence in Madison County. The complaint alleged that on June 9, 1997, following an appraisal, a termite inspection, and a home inspection finding no termite infestation or damage, wood-decaying fungus, or moisture damage, the Brushwitzes purchased a residence located at 2697 Ready Section Road in Toney. The complaint also alleged that on May 6, 1997, Ezell inspected the property and issued an appraisal containing the following phrases appearing under the heading "Foundation":

"Dampness NO EVIDENCE

"Settlement NO EVIDENCE

"Infestation NO EVIDENCE"

(C. 5.)

The complaint alleged that on September 12, 1997, however, evidence of termite infestation, termite damage, excessive moisture, wood-decaying fungus, and wood rot was discovered in various parts of the Brushwitzes' house, including the crawl space, the foundation, and the attic. The Brushwitzes' complaint alleged that the defendants had negligently or wantonly inspected their home for termite infestation and fungal growth; that they had suppressed the condition of the house; and that they had recklessly, willfully, and fraudulently misrepresented the condition of the residence and the presence of termite infestation, termite damage, and wood-decaying fungus.

Ron Brushwitz, a technical writer and editor of weapon-system manuals for the Army Aviation and Missile Command at Redstone Arsenal, testified by deposition that he and his wife, after looking at the house approximately two times, decided to purchase it. Norwest Mortgage, Inc. ("Norwest"), sent an appraisal notice to the Brushwitzes for their signature. The notice, which was signed by the Brushwitzes on March 27, 1997, included this disclaimer:

"You should note that:

"1) The appraisal was performed for the lender's use to determine the adequacy of the property as security for the loan and not for your use to determine value,

"2) the appraisal does not guarantee nor imply that the house is free of defects, and

"3) you need to take whatever steps you feel are necessary to assure yourself that the house is acceptable to you before closing the purchase of the home."

(C. 208.)

Mr. Brushwitz testified that on April 2, 1997, Edward Collier, who was employed by Complete Residential Inspections, inspected the home. Mr. Brushwitz agreed that the inspection report stated that the property was reinspected on April 5, May 4, and May 22, 1997, to follow up on problems with the heat pump and the water heater. Mr. Brushwitz also testified that the appraisal and the termite inspections were performed before the closing occurred on June 9, 1997.¹ Norwest had retained Ezell to perform the appraisal.

After purchasing the house, the Brushwitzes discovered "flying ants" on the patio. They telephoned Morgan Pest Control. Donald Morgan of Morgan Pest Control inspected the house and reported that the house had active termites, black fungus, and rotten lumber. Mr. Brushwitz contacted the State Department of Agriculture, which sent someone to inspect the property.²

Mr. Brushwitz testified that, despite his reading and signing the disclaimer sent by Norwest, he did not obtain another appraisal for the property. However, Mr. Brushwitz was unable to recall exactly when he received and read the appraisal report. All that he could say was that he had read the report before or at closing. In addition, he testified that he understood the sales contract, which stated that with a conventional loan "any appraisal required by the lender is used by the lender to determine the maximum mortgage amount and does not warrant the value or condition of the property, to the lender."³ (Deposition of Ron Brushwitz, p. 252.) Mr. Brushwitz also testified that he would not have bought the house if he had known of the termite and fungal problems.

At her deposition, Faye Brushwitz testified that she had worked as a licensed realtor in Trenton, Illinois, for five years. She stated that in her years as a realtor she was involved in making arrangements for termite and home inspections. She agreed that the home inspector, the termite inspector, and the appraiser had different and distinct jobs. She could not recall, however, whether she saw the real-estate appraisal for the home before the closing or saw it afterwards. Mrs. Brushwitz stated that she understood the disclaimers contained in the sales contract and the appraisal notice sent to the Brushwitzes from Norwest.

Carl Ezell, a licensed appraiser and owner of Ezell, Ryberg & Associates, Inc., testified by deposition that Norwest retained him to perform an appraisal in anticipation of the purchase of this piece of property. He had appraised this same residence in 1992, and he used some of the information from the prior appraisal to reach the conclusions for the 1997 appraisal.

Mr. Ezell testified that he was subject to the Uniform Standards of Professional Appraisal Practice ("USPAP").⁴ When questioned about his normal procedure for appraising a house, he stated:

"A. Okay. Physically we go and make observations of the property, such as you see on the report, you know, it's got gutters or what type of windows, and we make observations—

"Q. Okay.

"A. —basic observations. We measure the house, get all the dimensions so that we can accurately and adequately determine how large it is. Of course, we walk through the inside and look at the outside with a very limited inspection and basically gather the information on our worksheet, come back to the office, determine how big it is by, you know, figuring the square footage.

"And then we begin pulling comparable sales from the Huntsville Board of Realtors to find homes in the area that are similar to it, and we make a list of those. We complete the first part of the report.

"We then go to the valuation section and start trying to determine which comparables are the best to use for this particular property, and we put those in the grid and fill that out. And all through this process we're gathering other information such as lot dimensions, you know, the information you need."

(Deposition of Carl Ezell, pp. 35-36.)

The "Uniform Residential Appraisal Report" submitted by Mr. Ezell contained a "Statement of Limiting Conditions" and an "Appraiser's Certification." The report, in its "Statement of Limiting Conditions," carried the following paragraph:

"6. The appraiser has noted in the appraisal report any adverse conditions (such as, needed repairs, depreciation, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property."

(C. 99.) Under the heading "Appraiser's Certification," the report stated:

"8. I have personally inspected the interior and exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware and have made adjustments for these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them. I have also commented about the effect of the adverse conditions on the marketability of the subject property."

(C. 100.)

Mr. Ezell testified that during his inspection of the Brushwitzes' house, he did not go into the crawl space or onto the roof. He could not recall if he looked into the attic. He did, however, look at the exterior and the interior of the house. He also opened the crawl-space door and looked inside. He observed the roof by stepping away from the house and looking.

Mr. Ezell stated that his contract was exclusively between himself and Norwest and that the Brushwitzes had had no reason to rely on his appraisal. He noted that many borrowers never look at the appraisal performed for the mortgage company. Ezell also explained that the purpose of the appraisal is to express an opinion of value, not an opinion of condition. He stated that he formed an opinion of value based on observations, not based on factual information. In his affidavit, he described his job:

"While typically and in this case, I did visually inspect the property in accordance with the standards of my profession, this is done for the purpose of determining that the house and improvements are as described, and are generally comparable

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