Mikkelson v. Quail Valley Realty, 17285

• Decision Date: 21 January 1982
• Docket Number: No. 17285,17285
• Citation: 641 P.2d 124
• Parties: John MIKKELSON, et ux., Plaintiff and Respondent, v. QUAIL VALLEY REALTY, Don Watkins, Jack Watkins, and Bryan Flanders, et ux., Defendants and Appellants.
• Court: Utah Supreme Court

Page 124

641 P.2d 124

John MIKKELSON, et ux., Plaintiff and Respondent, v. QUAIL VALLEY REALTY, Don Watkins, Jack Watkins, and Bryan Flanders, et ux., Defendants and Appellants.

No. 17285.

Supreme Court of Utah.

Jan. 21, 1982.

Gary L. Gregerson, Provo, for Quail Valley etc.

Thomas W. Seiler of Grow, Watson, & Seiler, Orem, for Mikkelson.

HOWE, Justice:

Plaintiff, John Mikkelson, brought this action against the defendants, Quail Valley Realty, Don Watkins, a real estate agent, and Jack Watkins, his broker, for misrepresentation of the square footage of a house purchased by the plaintiff. The jury returned a verdict awarding $7,206.50 to the plaintiff. Defendants appeal.

Defendant Don Watkins took a real estate listing from Bryan Flanders who wished to sell his house in American Fork. Flanders told Watkins that the square footage in the two level house was 1400 square feet per level, or a total of 2800 square feet. Watkins prepared the listing agreement containing this information which he subsequently sent to the Utah County Multiple Listing Board for publication in a multiple listing book distributed to all realtors. Sometime thereafter the plaintiff was shown through the house during an open house by his own realtor who disclosed to him the information on the listing agreement.

After some negotiation, Bryan Flanders accepted plaintiff's offer to purchase the house for $60,000. Plaintiff thereafter applied for an FHA loan through Mason-McDuffy. An FHA appraisal which was required was made fixing the value of the house at $59,500. Included in the appraisal documents was a form indicating that there were 1197 square feet per floor. Plaintiff thereafter signed the closing documents after having acknowledged receipt of the FHA appraisal information.

About a year later, preparatory to listing it for sale, the plaintiff measured the house and found that it contained 1190-1198 square feet per floor or a total of approximately 2394 square feet. Based on that information he brought this action for misrepresentation against the defendants. During the course of the trial an expert witness testified that the difference in value between a house with 2800 square feet and a house of like quality with 2394 square feet was $7,206.50. Upon return of the verdict, judgment was rendered in favor of plaintiff in that amount.

Defendants contend that the evidence when viewed in its most favorable light for the plaintiff is insufficient to support a judgment for misrepresentation. Defendants point out that the plaintiff knew, or should have known, the correct square footage since he personally inspected the property and the correct figure was disclosed in the appraisal documents which he received.

To maintain a cause of action for fraud the plaintiff must prove by clear and convincing evidence the existence of each of the following elements:

(1) That a representation was made; (2) concerning a presently existing material fact; (3) which was false; (4) which the representor either (a) knew to be false, or (b) made recklessly, knowing that he had insufficient knowledge upon which to base such representation; (5) for the purpose of inducing the other party to act upon it; (6) that the other party, acting reasonably and in ignorance of its falsity; (7) did in fact rely upon it; (8) and was thereby induced to act; (9) to his injury and damage.

Pace v. Parrish, 122 Utah 141, 247 P.2d 273 (1952). The undisputed evidence shows that the plaintiff could not have reasonably relied on his belief that the house contained 2800 square feet since he not only inspected the property but also signed, prior to closing, loan documents acknowledging receipt of the FHA appraisal...