Rubin v. Century 21 Peterman Real Estate Inc., 14693-2-II
| Decision Date | 30 August 1993 |
| Docket Number | No. 14693-2-II,14693-2-II |
| Citation | 71 Wn.App. 189,857 P.2d 1059 |
| Parties | Arthur RUBIN and Jennifer Sue Hennessey, husband and wife, Appellants and Cross-Respondents, v. CENTURY 21 PETERMAN REAL ESTATE INC., Evelyn Miller and John Doe Miller, Norman Sprague and Jane Doe Sprague, Deane L. Leetham and Jane Doe Leetham, Defendants, Deane L. Leetham, Respondent and Cross-Appellant. Division 2 |
| Court | Washington Court of Appeals |
John Dore Schumacher, Aberdeen, for appellants.
Joan F. Trivison, Trivison Law Office, Montesano, for respondent.
Arthur and Jennifer Rubin 1 appeal a summary judgment holding Deane Leetham not liable for negligent misrepresentation. We reverse and remand.
At the times pertinent to this case, two related but different entities were using the name Century 21. Century 21 Peterson Real Estate (Century 21 Peterson) was a company in the real estate business. Century 21 Mortgage Co. (Century 21 Mortgage) was a company in the mortgage business.
Deane Leetham was a self-employed independent appraiser. He was not employed by the Federal Housing Administration (FHA), but he was on a list of appraisers whose reports FHA would accept. He had spent 3 days in a federal training program for appraisers, and FHA may have monitored some of his work thereafter.
In early 1988, Evelyn Miller was a salesperson for Century 21 Peterson. She was trying to sell a house located at 7108 Sunset Boulevard, Aberdeen, Washington. The house was then owned by people named McPherson.
Miller explained to the McPhersons that the sale of their home might be expedited if an FHA appraisal were obtained prior to a buyer being found. The McPhersons agreed and wrote a check to cover the appraisal fee. Miller sent the check to Century 21 Mortgage, asking that it retain an appraiser acceptable to the FHA. Century 21 Mortgage retained Leetham.
Leetham appraised the house and rendered his report on April 22, 1988. The report was prepared on a standard form entitled "Uniform Residential Appraisal Report". It said, among other things, that the house had a forced air heating system, fueled by gas, in average condition and of average adequacy.
Leetham sent his report to Century 21 Mortgage, which sent a copy on to Century 21 Peterson. There, Miller placed the report in the file relating to 7108 Sunset.
In April, 1988, the Rubins were in the market for a house. They were being assisted by Norm Sprague, another salesperson with Century 21 Peterson. They saw 7108 Sunset advertised in the newspaper and went to look at it by themselves. After deciding they were interested, they called Sprague and looked at it a second time in his presence. On this second visit, Sprague gave them a copy of Leetham's report.
On April 30, 1988, the Rubins signed an earnest money agreement for the house. At closing, they may have reimbursed the McPhersons for Leetham's appraisal fee.
After the Rubins moved in, they discovered the furnace did not work and, in any event, could not be legally operated through the chimney to which it was connected. 2 They also discovered that the furnace and associated duct work contained asbestos tape. Ultimately, they replaced the furnace.
About a year later, on May 23, 1989, the Rubins sued Leetham and others. 3 They alleged that Leetham had negligently misrepresented the condition of the home and violated the Consumer Protection Act (CPA).
The Rubins were required to submit their claim to arbitration, and the arbitrator dismissed it. 4 The Rubins then sought trial de novo in superior court. In October, 1989, the Rubins and Leetham filed cross motions for summary judgment. The judge denied Rubins' motion and granted Leetham's. He also denied the reasonable attorney fees sought by Leetham. 5
On appeal, the first issue is whether Leetham was clothed with federal immunity because he was employed by Century 21 Mortgage to do an appraisal that would be acceptable to the FHA. The federal government's sovereign immunity extends to its agencies and employees, but not to its independent contractors. United States v. Orleans, 425 U.S. 807, 814, 96 S.Ct. 1971, 1976, 48 L.Ed.2d 390 (1976); United States v. Neustadt, 366 U.S. 696, 702, 81 S.Ct. 1294, 1298, 6 L.Ed.2d 614 (1961); Leone v. United States, 910 F.2d 46, 48-49 (2d Cir.1990); Berghoff v. United States, 737 F.Supp. 199, 201 (S.D.N.Y.1989). Leetham was an independent contractor of Century 21 Mortgage. He had no relationship whatever with the federal government, not even as an independent contractor. It follows that he cannot claim sovereign immunity.
The second issue is whether Leetham owed a duty of care only to the FHA. 6 Without so holding, we assume that an appraiser who is an employee of the FHA has a duty of care only to the federal government. Baker v. Surman, 361 N.W.2d 108, 111 (Minn.App.1985). Without so holding, we further assume that a fee appraiser hired by the FHA as an independent contractor owes no duty of care to a purchaser. Gay v. Broder, 109 Cal.App.3d 66, 167 Cal.Rptr. 123, 127 (1980). As we have already noted, however, Leetham had no contractual relationship with the FHA, not even as an independent contractor. Thus, even if these cases were persuasive, they would not apply. Leetham's duty of care is defined by the common law of this state, and that duty was not necessarily owed only to the FHA. Cf. Barnes v. Cornerstone Inv., Inc., 54 Wash.App. 474, 477-78, 773 P.2d 884, review denied, 113 Wash.2d 1012, 779 P.2d 730 (1989). 7
At oral argument, both parties expressly asked that we not consider Leetham's common law liability except as we have already done. Honoring that request, we leave the common law at this point.
Leetham claims the trial court erred by refusing to award him reasonable attorney fees. The only theory he advances is that Rubins committed a wrongful act that involved him in litigation with third partie...
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Schaaf v. Highfield
...justifiably relied on the appraisal report, precluding liability. Barnes, at 477-78, 773 P.2d 884. In Rubin v. Century 21 Peterman Real Estate, Inc., 71 Wash.App. 189, 857 P.2d 1059 (1993), pursuant to a request by the parties, the court expressly declined to rule on the liability of an app......
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