Gross v. Sussex Inc.

• Decision Date: 01 September 1992
• Docket Number: No. 72,72
• Citation: 630 A.2d 1156,332 Md. 247
• Parties: Thomas S. GROSS et ux. v. SUSSEX INCORPORATED et al. ,
• Court: Maryland Court of Appeals

Page 247

332 Md. 247

630 A.2d 1156

Thomas S. GROSS et ux. v. SUSSEX INCORPORATED et al.

No. 72, Sept. Term, 1992.

Court of Appeals of Maryland.

Sept. 21, 1993.

David P. Sutton, Baltimore, and Ralph W. Powers, Jr., Upper Marlboro, on brief, for petitioner.

Gary R. Alexander (Todd K. Pounds and Denise M. Smithwick, Alexander & Cleaver, P.A., of Fort Washington, on

brief), and Joseph A. De Paul (Patricia Ann Johnson, Goldstein, and Baron, Chartered of College Park, all on brief), for respondent.

Argued before ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI, and ROBERT M. BELL, JJ., and CHARLES E. ORTH, Jr., Judge of the Court of Appeals (retired), Specially Assigned.

ROBERT M. BELL, Judge.

We granted certiorari to consider whether purchasers of real property may recover against the builder-seller and its agent, a real estate agency, in an action for deceit and negligent misrepresentation based on false statements, the accuracy of which the purchasers did not immediately investigate. In an unreported opinion, the Court of Special Appeals affirmed the trial court's grant of summary judgment in favor of the defendants, thus, holding that they may not.

I.

In April, 1987, the petitioners, Thomas and Ann Louise Gross ("the Grosses"), and the respondent, Sussex, Inc. ("Sussex"), a closely-held corporation specializing in building new single family residential homes in St. Mary's County, executed a contract for Sussex to build the petitioners a home in the Carroll Manor subdivision. The petitioners became aware of the property through Tim Brubaker, a sales associate for the respondent, Nyman Realty, Inc. ("Nyman"), a licensed real estate agency handling the listing for the subdivision. After Brubaker showed them a plat and house design proposed by Sussex, the petitioners submitted a standard new home form contract, which Brubaker completed and Sussex ratified, through its sole owner, respondent James Thomas, on April 6, 1987. The contract, which did not include a "time is of the essence" clause, provided that Thomas Gross, a full-time Prince George's County police detective, who also had a Maryland real estate sales license, would receive one-half of the sales commission.

The petitioners alleged in their complaint that, prior to the execution of the contract, Brubaker represented that Sussex had the permits to start building the house, that the site had been staked off, and, although the date of settlement was August 1, 1987, that construction could be completed by June 30, 1987. On April 10, 1987, shortly after the contract was executed, the petitioners met with Brubaker and respondent William Thomas, Sussex's construction supervisor, at the construction site. Thomas confirmed Brubaker's earlier representations: that the building permits had been obtained; that construction could begin immediately; and that, although it could be completed as early as June 30, 1987, the home would be completed by the settlement date. Based on these representations, the Grosses listed their Charles County residence for sale. It was sold on April 17, 1987, with settlement to occur 120 days thereafter.

Completion of the house was delayed beyond the August 1, 1987 settlement date. Construction having yet to commence as of July 1, 1987, the petitioners met with William Thomas in mid-July. They informed him that it was necessary for them to have a firm completion date in order to decide where to enroll their children in school for the upcoming school year. They were told that the house would be finished by the third or fourth week in September. Based on what they thought was a firm completion date, the petitioners enrolled their three children in St. Mary's County schools. In further reliance on that representation, the petitioners attempted to rent a house in St. Mary's County. When that effort proved unsuccessful, they rented a temporary residence in Charles County. The September completion date was not met. The petitioners alleged that they were, therefore, required to transport their children to and from Charles County, a distance of more than 100 miles per day, every school day for the entire school year.

The petitioners discovered, in October 1987, that the subdivision had neither been approved nor recorded in the county record office until October 2, 1987. Building permits for the construction of their home were not issued until October 20 1987. Sussex promised that the house would be completed within two months of the issuance of building permits. It was not. At a meeting of the parties in December, 1987, Sussex promised to have the house under roof by December 28, 1987 and completed forty-five to sixty days later. As it turned out, the house was not habitable until September, 1988. Settlement on the property occurred September 29, 1988.

A year after settlement, the petitioners filed suit in the Circuit Court for Prince George's County, naming as defendants Sussex, its officers, James Thomas and William Thomas, and Nyman. Sussex ¹ was sued for breach of contract, fraud, and negligent misrepresentation, while Nyman was sued only for fraud and negligent misrepresentation. The respondents answered the complaint, cross-claimed against each other, and subsequently moved for summary judgment.

The respondents' first motions for summary judgment were denied. Their subsequent motions were granted as to the fraud and negligent misrepresentation counts, the circuit court ruling:

The bottom line, my observation is that clearly the [petitioners] establish a lie, establish a false statement. But just as clearly the law requires more than just a false statement, or a lie. In other words, a lie is not actionable. In this case particularly there is no evidence from which a rational reasonable finder of facts, that is a jury, could conclude that the [respondents] made the lie with the intent to take something illegally or unlawfully from the [petitioners]. So I am compelled by my interpretation of the law to render a judgment on those counts in favor of the [respondents].

The Court of Special Appeals affirmed. Judgment for costs were eventually entered in favor of each respondent and the petitioners appealed. ²

Like the trial court, the intermediate appellate court concluded that the petitioners did not generate an issue of fact as to the respondents' intent to defraud the petitioners. Alternatively, ³ and equally applicable to the negligent misrepresentation counts, the Court of Special Appeals opined that, "[e]ven if intent is an issue which should be submitted to a jury ...," the petitioners did not establish that they had the right to rely on the respondents' representations. The court asserted, "Appellants had the opportunity to weigh the statements [made by representatives of Nyman and Sussex] and Thomas Gross's 12 years of experience as a real estate agent gave him special knowledge and competence." It observed:

It appears that appellants were aware, or should have been aware, of the actual status of construction, including the delays. Appellants were not merely at the mercy of Sussex and Nyman because Thomas Gross was in as good position as they to understand the prerequisites of new housing construction.

The court concluded that the petitioners did not justifiably rely to their detriment on the information the respondents gave them. In addition, the court held that, for purposes of the negligent misrepresentation claims, Nyman was in a different position than Sussex. There being no agency relationship between them, Nyman owed no duty of care to the petitioners, the court asserted.

We granted the petitioners' Petition for Writ of Certiorari.

II.

The review of the grant of summary judgment involves the determination whether a dispute of material fact exists, Beatty v. Trailmaster, 330 Md. 726, 737, 625 A.2d 1005, 1011 (1992); Heat & Power Corp. v. Air Prod. & Chem., Inc., 320 Md. 584, 591, 578 A.2d 1202, 1206 (1990); Arnold Dev., Inc. v. Collins, 318 Md. 259, 262, 567 A.2d 949, 951 (1990); Bachmann v. Glazer & Glazer, Inc., 316 Md. 405, 408, 559 A.2d 365, 366 (1989); King v. Bankerd, 303 Md. 98, 111, 492 A.2d 608, 614 (1985), and "whether the trial court was legally correct." Heat & Power Corp., 320 Md. at 592, 578 A.2d at 1206 (1990) (citations omitted). In accordance with Maryland Rule 2-501(e), if the motion and response show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law, the trial court shall enter summary judgment for the moving party forthwith. The purpose of the summary judgment procedure is not to try the case or to resolve factual disputes; rather it is to decide whether there is an issue of fact sufficiently material to be tried. See Coffey v. Derby Steel Co., 291 Md. 241, 247, 434 A.2d 564, 568 (1981); Berkey v. Delia, 287 Md. 302, 304, 413 A.2d 170, 171 (1980). When the moving party has provided the court with sufficient grounds for summary judgment, the opposing party must demonstrate that there is a genuine dispute of material fact by presenting facts that would be admissible in evidence. Beatty, 330 Md. at 737, 625 A.2d at 1011. That showing requires more than general allegations that do not show facts in detail and with precision. Id. at 738, 625 A.2d at 1011. See Lynx, Inc v. Ordnance Products, 273 Md. 1, 7-8, 327 A.2d 502, 504 (1974); Brown v. Suburban Cadillac, Inc., 260 Md. 251, 255, 272 A.2d 42, 44 (1971).

In determining whether a genuine dispute of material fact exists and, if not, what the ruling of law should be, the court examines the pleadings, admissions, and affidavits, etc., Leonhart v. Atkinson, 265 Md. 219, 220 289 A.2d 1, 2 (1972), resolving all inferences to be drawn therefrom against the moving party. Honaker v. W.C. & A.N. Miller Dev. Co., 285 Md. 216, 231, 401 A.2d 1013, 1021 (1979); Merchants' Mtg. Co. v. Lubow, 275 Md. 208, 217, 339 A.2d 664, 670 (1975). In other words, all inferences must be...