Fletcher v. Lyles, No. 2007-CA-00949-SCT.
| Citation | 999 So.2d 1271 |
| Decision Date | 29 January 2009 |
| Docket Number | No. 2007-CA-00949-SCT. |
| Parties | Monty C. FLETCHER and Sandra L. Fletcher v. Jimmie L. LYLES, Leoneze C. Lyles and Kelly Dabbs Realty, Inc. |
| Court | Mississippi Supreme Court |
K.F. Boackle, Rigland, Attorney for Appellants.
Eddie J. Abdeen, Julie P. Ratliff, G. Todd Burwell, Ridgeland, Attorneys for Appellees.
EN BANC.
LAMAR, Justice, for the Court.
¶1. This case arises from a real-estate transaction involving a residence located at 136 Bridge Water Drive, Madison, Mississippi. After the closing, the buyers, Monty C. Fletcher and Sandra L. Fletcher ("the Fletchers"), sued the sellers, Jimmie L. Lyles and Leoneze C. Lyles ("the Lyleses"), and the real estate firm, Kelly Dabbs Realty, Inc. ("Dabbs"), alleging various fraud, negligence, and breach-of-contract claims. The circuit court granted summary judgment to the Lyleses and Dabbs, finding that the statute of limitations barred all claims. We must determine whether the claims are time-barred and also whether the trial court acted within its discretion in denying the Fletchers' motion to amend the complaint to add additional claims.
BACKGROUND
¶2. The allegations of the complaint arise from the failure to disclose various alleged defects in the home. The Fletchers allege that both the Lyleses and Dabbs were aware of defects in the home that were not disclosed. Some background information is helpful to an understanding of this dispute.
¶3. Prior to the Lyleses, Kenny Simmons owned the home located at 136 Bridge Water Drive. Simmons decided to sell his home, using Dabbs as the brokerage firm.1 Simmons entered into a real-estate contract with Dr. Alfredo and Mrs. Mary Rodriguez ("the Rodriguezes") for the purchase of the home.
¶4. The Rodriguezes hired Don Walker with Building Inspection Service to inspect the home, and Walker conducted an inspection on June 8, 1999. Walker prepared an inspection report in which he noted a possible foundation problem. Both the Rodriguezes and Simmons received a copy of the Walker report.
¶5. Because the Walker report noted a possible foundation problem, the Rodriguezes commissioned Jerry L. Jones, P.E., with Advanced Engineering Resources, Inc., to inspect the foundation. Jones inspected the foundation on July 13, 1999, and he prepared a foundation inspection report. Jones found the slab was not level and concluded "[p]ossible causes of the difference in elevation could be (1) differential settlement due to unconsolidated fill or natural soil or (2) the structure could have been constructed out of level."
¶6. Because of the two inspection reports, the Rodriguezes decided to cancel the real-estate contract with Simmons. The Rodriguezes could not remember whether their agent or Simmons's agent received a copy of the two reports. Likewise, Simmons could not remember if he gave his agent a copy of the Walker report.
¶7. After the Rodriguezes cancelled the real-estate contract, the Lyleses eventually bought the home from Simmons. At the time of purchase, the Lyleses had "knowledge of a report prepared by Don Walker" and required Simmons to make minor repairs to the home based on the Walker report.
PROCEDURAL HISTORY
¶8. The Lyleses decided to sell their home and entered into a real-estate contract with the Fletchers on September 16, 2000. An employee of Dabbs acted as dual agent for the Lyleses and the Fletchers.2 The real-estate contract contained a provision entitled "Property Conditions, Inspection and Acceptance of Property." The provision provided, in relevant part, the following:
Seller agrees to deliver to Buyer the plumbing, heating, electrical, air conditioning, all appliances, and if one exists, the swimming pool, its equipment and accessories, in normal working condition, and the roof with no leaks, at the time of closing .... Seller furthermore specifically covenants and represents that he has no actual knowledge of any defects in the condition of property or of the appliances and systems referred to above. Seller agrees to provide a completed Seller's Disclosure Statement to Buyer. Buyer reserves the right to inspect property or to engage a qualified home inspector of Buyer's choice....
(Emphasis added).
¶9. The contract also contained a provision entitled "Termite Inspection," and that provision provided:
Seller agrees to furnish a letter or report from a ... termite control operator, stating that the property is free from active termite or other wood destroying insects, and structural insecurities therefrom ... Seller shall have such treated and/or repaired if termites and/or structural insecurities ... are found. The cost of any necessary treatment and/or repairs ... will be paid by Seller.
¶10. The contract also provided that (Emphasis added). Each party further agreed that
¶11. Prior to executing the real-estate contract, the Lyleses provided a seller's disclosure statement to the Fletchers. Under the category "Structural Items," the Lyleses reported that they were not aware of any past foundation repairs, and no repairs were "currently needed." The Lyleses also indicated that they had never experienced problems with the roof. Under a "Miscellaneous" section of the disclosure statement, the Lyleses noted that they were not aware of any defects or needed repairs.
¶12. Pursuant to the terms of the real-estate contract, the Fletchers engaged William E. Bates with AmeriSpec Home Inspection Service to inspect the home. Bates inspected the home on September 28, 2000, and the Fletchers received a copy of his report on September 29, 2000. Relevant to these proceedings, the report did not disclose any of the problems that the Fletchers assert in their complaint. The Fletchers also inspected the property on three separate occasions prior to closing, and they did not discover any problems of which they now complain. However, the Fletchers were told the home had active termites, and the property was treated for such prior to closing. The Fletchers also received a termite inspection report at closing; the report did not disclose any termite damage. The closing occurred on October 30, 2000.
¶13. After closing, the Fletchers allege they discovered various defects with the home, including termite damage, "foundation problems, roof leaks and flooding of the garage." The Fletchers also discovered that the property surrounding their home could be improved, and they allege the Lyleses (through agent Alice Smith) represented the contrary to them. The Fletchers filed suit against the Lyleses and Dabbs on October 29, 2003.
¶14. In their complaint, the Fletchers allege the Lyleses breached the covenant of good faith and fair dealing and the express terms of the real-estate contract. They also assert claims of fraudulent inducement and fraud/intentional misrepresentation against the Lyleses. The Fletchers further allege the Lyleses breached Mississippi Code Section 89-1-501, et seq., which requires the seller's disclosure statement. As for claims against Dabbs, the Fletchers aver the broker is liable for negligent nondisclosure of material facts, breach of fiduciary duties, and breach of the covenant of good faith and fair dealing.
¶15. On January 26, 2006, the Fletchers filed a motion to amend their complaint to assert additional claims against the Lyleses and Dabbs. The Fletchers wanted to add claims of negligent misrepresentation and negligent inducement against the Lyleses. The Fletchers also wanted to add two claims against Dabbs: (1) breach of Section 73-35-21(1)(a) of the Mississippi Code, which prohibits the real-estate agent from "[m]aking any substantial misrepresentation in connection with a real estate transaction"; and (2) breach of Rule IV. B.7 of the rules and regulations of the Mississippi Real Estate Commission for failure to keep the Walker and engineering reports on file for three years. Furthermore, the Fletchers wanted to assert damages against Dabbs pursuant to Section 73-35-31(2) of the Mississippi Code.3
¶16. On July 7, 2006, Dabbs filed a motion for summary judgment asserting that the Lyleses' claims were barred by the three-year statute of limitations set forth in Section 15-1-49 of the Mississippi Code. Dabbs argued the statute of limitations for all claims began to run September 16, 2000, the date the real-estate contract was signed. Alternatively, Dabbs argued that the statute of limitations began to run at the latest on September 29, 2000, the date the Fletchers received the AmeriSpec report.
¶17. The Lyleses filed a joinder to Dabbs's motion for summary judgment. Additionally, the Lyleses argued the alleged breach regarding the seller's disclosure statement accrued August 8, 2000, the date the Fletchers received the disclosure statement. The Lyleses also assert that the claims for fraudulent and/or negligent inducement to enter the real-estate contract accrued on the execution date of the contract, September 16, 2000. Because the Fletchers filed their complaint on October 29, 2003, the Lyleses argue that all claims are time-barred. In response, the Fletchers assert that the statute of limitations began to run on the closing date, October 30, 2000.
¶18. The trial court denied the Fletchers' motion to amend due to futility. The trial court found that as a matter of law the "plaintiffs could not have been negligently induced to enter into the September 16, 2000 Purchase Contract by the Lyles." The trial court also found that as a matter of law, Dabbs was not...
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