Carter v. Gugliuzzi

• Decision Date: 22 May 1998
• Docket Number: No. 97-094,97-094
• Citation: 716 A.2d 17,168 Vt. 48
• Parties: Diana CARTER v. Flavia GUGLIUZZI, et al. and Synergy Group, Inc.
• Court: Vermont Supreme Court

Page 17

716 A.2d 17

Diana CARTER v. Flavia GUGLIUZZI, et al. and Synergy Group, Inc.

No. 97-094.

Supreme Court of Vermont.

May 22, 1998.

James A. Dumont of Keiner & Dumont, P.C., Middlebury, for Plaintiff-Appellant.

John D. Monahan, Jr., Shapleigh Smith, Jr., and Craig S. Nolan of Dinse, Knapp & McAndrew, P.C., Burlington, for Defendant-Appellee.

Before AMESTOY, C.J., and DOOLEY, MORSE, JOHNSON and SKOGLUND, JJ.

JOHNSON, Justice.

Defendant Synergy Group, Inc., doing business as Smith Bell Real Estate, appeals from a superior court judgment in favor of plaintiff Diana Carter. Carter's suit alleged that Smith Bell, through its agents, had made a number of misrepresentations and omissions in connection with her purchase of a house. Smith Bell contends the court erred in ruling: (1) that the Vermont Consumer Fraud Act, 9 V.S.A. §§ 2451-2480g, applied to deceptive acts or practices of real estate brokers with respect to home buyers; and (2) that the knowledge of its agent concerning wind conditions on the property could be imputed to Smith Bell. Carter also appeals, contending that the court erred in determining damages. We affirm the judgment imposing liability on Smith Bell, and reverse and remand on the issue of damages.

The material facts are largely undisputed: In 1990, Flavia Gugliuzzi and Ana Barreto (sellers) asked Ruth Bennett, a licensed real estate salesperson, to list their house for sale. Sellers had owned the house since 1987, and had originally purchased it through Bennett, who worked for Smith Bell. Bennett worked under the supervision of David Crane, a licensed real estate broker and an officer, director, and shareholder of the company. In response to sellers' call, Bennett went to the house, located in the Pleasant Valley area of Underhill, to fill out a sales authorization, Multiple Listing Service (MLS) sheet, and a fact sheet highlighting special features of the house. Sellers told Bennett that they had installed new hardwood floors in the downstairs and had replaced some windows, and that the window boxes would stay with the house. They pointed out the boundaries of the property. Bennett measured the interior dimensions of the rooms and the exterior dimensions of the house. She prepared an MLS listing sheet and a fact sheet and showed them to sellers, who confirmed that they were accurate. The listing sheet stated that the house contained 1880 square feet above grade, was heated by electric/wood, and was "in pristine condition. New pegged floors throughout first floor." The Smith Bell fact sheet, under the heading "Further Features," stated: "New oak-pegged floors throughout first floor," "[w]indow quilts at all windows with new valances," and "[c]ustom made flower boxes at all windows." Under the heading "Location," the fact sheet stated, "400 to 600 planted pine trees around borders of property" and "[v]acant beaver pond."

The sheets, in fact, contained a number of errors and omissions. The downstairs hardwood floor did not run "throughout" the house but covered only about half the downstairs and was a simulated rather than a real pegged floor; the rest of the floor was carpeted. The wood floor was not in "pristine" condition, but had buckled or "cupped" due to the lack of an underlying vapor barrier. The listing sheet did not indicate that the den and upstairs bathroom were unheated. The fact sheet stated that "all" windows had quilts and valances, although only about half had these features. In addition, the fact sheet failed to disclose that half of the advertised "beaver pond" was on a neighbor's property, and misstated the number of trees as 400 to 600 when, in fact, there were only about 250.

The court further found that Crane knew, but did not disclose to Bennett or Carter, that the house was subject to frequent and severe winds, that one of the windows in the house had blown in years earlier, and that other houses in the area had suffered wind damage. Crane had lived in the Pleasant Valley area for seven years, had sold a number of nearby properties, and had been Underhill's zoning administrator. He was aware that Pleasant Valley occasionally experienced winds of over 80 miles-per-hour and often had winds in the 40 to 50 mile-per-hour range, and that many Valley residents, including Crane, had wind gauges on their homes to measure and compare wind speeds with their neighbors.

Diana Carter, a lawyer living in California, had been looking for a house to buy in Vermont since mid-1990. She contacted several realtors, including Liz Merrill, an agent from Lang Associates, who provided her with information on a number of houses, including the listing and fact sheets relating to the Underhill property. Carter was attracted by the size of the house, the acreage, and the fact that it was listed as being in "pristine" condition. Merrill, acting as a sub-agent for the seller, showed Carter the house twice. Carter did not note the lack of heat in the upstairs rooms, the condition or extent of the wood floor downstairs, or the number of trees on the property. She later asked Merrill to provide additional information about the neighborhood and the condition of the house. Bennett informed Merrill that a storm had washed out the beaver pond since Carter's last visit, but that it could be reestablished with minimal cost and effort. Apart from the pond, Bennett assured Carter and Merrill that there had been full disclosure.

Carter's offer of $200,000 for the house was accepted in August 1990. After moving in, Carter discovered that the den and bathroom were unheated, the downstairs wood floor was in poor condition and covered only a portion of the floor, several hundred trees, the window flower boxes, and cabinets in the garage were missing, half of the beaver pond was on a neighbor's property, and expensive engineering studies and permits would be required to reestablish the pond. Several months later, a series of high winds toppled several trees on the property, blew in a number of windows, tore shingles off the house and garage, and blew gutters off the house.

Carter sued sellers and Smith Bell for fraud, negligent misrepresentation, and breach of contract, and Smith Bell for violation of the Consumer Fraud Act. Following a court trial, the court ruled, inter alia, that Crane's knowledge of the presence of high winds was imputable to Smith Bell, and that the company, through its agents, was liable in tort for a number of misrepresentations and omissions, and for violations of the Act. The court found both Smith Bell and sellers liable for the wind damage, future replacement of windows, the cost of additional trees to create a wind break, additional window quilts, and replacement of the downstairs carpet with an oak pegged floor. The total judgment was for $30,624 plus interest and costs. The court found sellers additionally liable for the missing window flower boxes, replacement of the cupped floors, and reestablishment of the pond for an additional judgment of $19,700. The court declined to impose liability on Smith Bell for misrepresenting the total above-grade square footage of the house and the number of trees on the property, failing to disclose that a portion of the house was unheated, repairing the cupped flooring, reestablishing the pond, replacing the missing flower boxes and garage cabinets, and certain prospective wind repairs.

I.

Smith Bell first contends the court erred in ruling that the Consumer Fraud Act applied to the deceptive acts of real estate brokers against home buyers. The express statutory purpose of the Act is to "protect the public" against "unfair or deceptive acts or practices." 9 V.S.A. § 2451. Its purpose is remedial, and as such we apply the Act liberally to accomplish its purposes. See State v. Therrien, 161 Vt. 26, 31, 633 A.2d 272, 275 (1993); Fancher v. Benson, 154 Vt. 583, 586, 580 A.2d 51, 53 (1990). In construing the Act, we look to the interpretations accorded similar terms and provisions of the Federal Trade Commission Act and other state consumer protection laws. See 9 V.S.A. § 2453(b); Bisson v. Ward, 160 Vt. 343, 350, 628 A.2d 1256, 1261 (1993); Fancher, 154 Vt. at 587, 580 A.2d at 53; Poulin v. Ford Motor Co., 147 Vt. 120, 124, 513 A.2d 1168, 1171 (1986).

The Act provides a remedy for any consumer who contracts for goods or services and, in reliance upon false or fraudulent representations or promises, sustains damages or injury at the hands of "the seller, solicitor or other violator." 9 V.S.A. § 2461(b). Smith Bell contends that it fits within none of these categories; it did not, it asserts, "sell" property to Carter, but merely assisted the homeowners in the sale, nor did it directly and actively "solicit" Carter to purchase the property. Furthermore, Smith Bell notes that the Act prohibits only deceptive acts or practices "in commerce," id. § 2453(a), and asserts that the sale of a home between non-merchants is "strictly private in nature" (citing Lantner v. Carson, 374 Mass. 606, 373 N.E.2d 973, 977 (1978)) and does not occur "in commerce."

We have not previously considered whether a real estate broker constitutes a "seller, solicitor or other violator" within the meaning of the Act. The Act defines a "seller" as one who is "regularly and principally engaged in a business of selling goods or services to consumers." 9 V.S.A. § 2451a(c). The Act does not, however, state what it means to "sell" goods or services, nor does it define "solicitor or other violator." We are not, however, lacking for guidance as to the Act's meaning and intent. We note, initially, that the Act expressly includes "real estate" within the meaning of goods and services, id. § 2451a(b), and applies the prohibition against deceptive acts and practices specifically to "real estate transactions." Id. § 2453(e). Furthermore, although Smith Bell argues that only the title-holder can "sell" real estate, nothing in the Act compels such a narrow construction. We...