Hoffman v. Connall

• Decision Date: 29 April 1986
• Docket Number: No. 6999-1-III,6999-1-III
• Citation: 718 P.2d 814,43 Wn.App. 532
• Parties: James HOFFMAN and Verna Hoffman, husband and wife, Appellants, v. Bryan G. CONNALL and Connie J. Connall, husband and wife; Cardinal Realty, Inc., a Washington corporation; Charles Huggins and Jane Doe Huggins, husband and wife, Respondents. Panel One
• Court: Washington Court of Appeals

Page 532

43 Wn.App. 532

718 P.2d 814

James HOFFMAN and Verna Hoffman, husband and wife, Appellants, v. Bryan G. CONNALL and Connie J. Connall, husband and wife Cardinal Realty, Inc., a Washington corporation Charles Huggins and Jane Doe Huggins husband and wife, Respondents.

No. 6999-1-III.

Court of Appeals of Washington, Division 3,

Panel One.

April 29, 1986.

Review Granted July 8, 1986.

Richard C. Agman, Spokane, for appellants.

Carl Diana, Spokane, for Connie Connall.

Terence R. Whitten, Erika Balazs, Lukins & Annis, Spokane, for Cardinal Realty & Huggins.

MUNSON, Judge.

James and Verna Hoffman, husband and wife, appeal the dismissal of their claims against Bryan G. and Connie J. Connall, their real estate broker, Charles Huggins, and Cardinal Realty, Inc. (Cardinal Realty), for their alleged innocent misrepresentation of the boundaries of rural property they purchased from the Connalls. They argue: (1) the evidence is undisputed as to the misrepresentation; (2) the realtor breached his duty to take reasonable steps to avoid disseminating false information to them; (3) certain testimony of Mr. Huggins constituted inadmissible hearsay; (4) a default judgment should have been entered against Mr. Connall when he failed to appear at trial or otherwise defend against the action; (5) they were entitled to attorney fees at trial; and (6) the trial court erred in refusing to grant their motion for a new trial. We affirm the dismissal as to Mr. Connall, but reverse and remand for determinations on the Hoffmans' damages and the respective liabilities of the remaining defendants for those damages.

The Hoffmans were interested in purchasing land where they could keep their horse; they learned of the Connalls' property through a newspaper advertisement. They were shown the property by Mr. Huggins, an associate broker with Cardinal Realty. Mr. Huggins pointed out the boundaries of the property. He stated the Connalls had built a fence sometime after they purchased the property in 1979, approximately 6 inches west of the eastern boundary line of the property. He later testified he had no reason to doubt Mr. Connall's representations concerning the boundary lines of the premises; he inspected the property when obtaining the listing agreement and everything appeared consistent with Mr. Connall's representations.

On February 28, 1983, the Hoffmans purchased the approximate 5 acres of land, including a mobile home, horse arena and stall, and barn and fences. Later, the Hoffmans were advised by their neighbor that the fence along their eastern boundary encroached approximately 18 feet upon his land. The neighbor had purchased his property shortly before the Hoffmans' purchase and had it surveyed. The neighbor threatened to remove the fence; he plowed down the eastern boundary where he believed the true property line was located; he also parked a tractor on the Hoffmans' side of the fence.

The Hoffmans had their property surveyed, which confirmed their neighbor's assertion. The survey also indicated the fence along the Hoffmans' western boundary encroached approximately 18 feet onto their land. The north and south fence lines were similarly misplaced; the fence on the north encroached approximately 21 feet onto the county's right-of-way. However, the Hoffmans gained land to the south, offsetting what they lost to the north.

On September 18, 1984, the Hoffmans brought this action for damages, alleging, inter alia, the defendants had negligently misrepresented the boundaries of the land. All defendants appeared and answered, except Mr. Connall who had refused postal service of process. In their answer, Mr. Huggins and Cardinal Realty filed a cross claim against the Connalls for indemnification and contribution in the event they were found liable for the alleged misrepresentations.

At trial, the Hoffmans presented evidence of their survey and the boundary lines represented by Mr. Huggins. Mr. Hoffman testified Mr. Huggins seemed certain as to the location of the boundary lines when he showed him the property and convinced him the representations were correct. Mr. Huggins made no suggestion the property should be surveyed prior to their purchase. Mr. Hoffman also stated he and his wife had no contact with the Connalls until the sale was closed.

In response, Mrs. Connall testified she never made any representations to the Hoffmans or Mr. Huggins concerning the boundaries of the property; that any information Mr. Huggins received came from her ex-husband, Mr. Connall. She further testified she and Mr. Connall were under the impression when they purchased the land in 1979 that the property had been surveyed; an unidentified real estate company had placed wooden stakes with orange fluorescent flags at the corners of the property. Mrs. Connall did not know if any of these stakes were in place when the property was listed. Mrs. Connall also testified there were remnants of an old barbed wire fence along the eastern boundary of the property when she and Mr. Connall purchased it. They later built the existing fence approximately 6 inches west of the barbed wire fence. The Connalls were divorced between the time of the sale and the commencement of this action.

Over the Hoffmans' objection Mr. Huggins testified to information Mr. Connall provided him regarding boundaries. Mr. Connall had pointed out certain corner markers to Mr. Huggins; he also was shown the remnants of an old barbed wire fence along the eastern boundary where the Connalls constructed a new fence. Mr. Huggins further stated Mr. Connall was very adamant about the location of boundary lines; he testified he merely passed on this information to the Hoffmans.

Although Mr. Connall advised Mr. Huggins the property had been surveyed prior to their purchase, Mr. Huggins did nothing to verify this representation. Mr. Huggins also testified he intended the Hoffmans to rely upon his information about the boundary lines; he admitted he was holding himself out as an expert in real estate.

The court entered judgment in favor of the defendants, after determining Mr. Huggins had not breached a duty of care owed to the Hoffmans; the Connalls were not liable since they were unaware of any problem with the boundaries as represented. The Hoffmans' motion for a new trial based upon certain newly discovered evidence was denied; this appeal followed.

Preliminarily, we address the Hoffmans' contention the trial court erred in declining to enter a default judgment against Mr. Connall when he failed to appear and answer the complaint. Apparently, no reason was given for the denial. The record leads us to conclude, service of process was ineffective in obtaining personal jurisdiction over Mr. Connall.

A return of service filed September 18, 1984, indicates Mrs. Connall had been served with summons and complaint on August 3; however, Mr. Connall could not be found. He was no longer living with Mrs. Connall. Mrs. Connall indicated he had moved to Spokane; the post office listed a forwarding address for him in Hermiston, Oregon. Later, plaintiffs' counsel spoke with Mr. Connall's father in Mead, Washington; although unable to obtain Mr. Connall's exact address, the elder Connall indicated mail addressed to his address "would or could be forwarded or given to defendant Bryan Connall."

Thereafter, an ex parte order was obtained, authorizing service pursuant to CR 4(d)(4). ¹ On September 18, 1984, "one copy of Summons and Complaint by certified mail-return receipt requested, and one copy of Summons and Complaint by regular mail" were sent to both Mr. Connall's father's address in Mead and the Hermiston, Oregon, address provided by the post office. The latter address contained both a route number and post office box number. Both certified letters were returned "refused" rather than "unclaimed."

These facts are similar to those in Kennedy v. Korth, 35 Wash.App. 622, 668 P.2d 614, review denied, 100 Wash.2d 1026 (1983), in which the court determined service by mail under CR 4(d)(4) was ineffectual because: (1) no attempt had been made to personally serve the defendant at a known address outside the state; and (2) the plaintiff failed to comply with the provisions of RCW 4.28.100, governing service by publication.

Generally, personal service is required to obtain personal jurisdiction over an individual defendant. Kennedy, at 625, 668 P.2d 614. Here, personal service upon Mr. Connall was not attempted at his forwarding address in Oregon. Personal service outside the state is authorized under RCW 4.28.180. See CR 4(e)(2). Assuming service pursuant to the court's order would have satisfied due process requirements as stated in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), the Hoffmans, nevertheless, failed to comply with the provisions of RCW 4.28.100. None of the situations listed in that statute, justifying service by publication, were asserted by the Hoffmans when obtaining the order permitting service by mail; nor did the trial court make any such finding. Hence, we affirm the denial of the Hoffmans' motion for default because Mr. Connall was never effectively served with process. See Kennedy v. Korth, supra.

The Hoffmans next contend they were entitled to recover damages against the sellers and their agents, even though the boundary lines may have been innocently misrepresented by the defendants. Restatement (Second) of Torts § 552C(1) (1977) defines the tort of innocent misrepresentation as follows:

One who, in a sale, rental or exchange transaction with another, makes a misrepresentation of a material fact for the purpose of inducing the other to act or to refrain from acting in reliance upon it, is subject to liability to the other for pecuniary loss caused to him by his justifiable reliance upon the misrepresentation, even though it is not made fraudulently or negligently.

Consistent with the Restatement, Washington...