Security First Federal Sav. & Loan Ass'n v. Broom, Cantrell, Moody & Johnson, 89-01814

• Decision Date: 18 April 1990
• Docket Number: No. 89-01814,89-01814
• Court: Florida District Court of Appeals
• Parties: 15 Fla. L. Weekly D1027 SECURITY FIRST FEDERAL SAVINGS & LOAN ASSOCIATION, Appellant, v. BROOM, CANTRELL, MOODY & JOHNSON, a Florida partnership; Phillip M. Johnson; Farley J. Grainger; Harry B. Broom; Heyward Cantrell; and Ronald K. Moody, Appellees.

Page 304

560 So.2d 304

15 Fla. L. Weekly D1027

SECURITY FIRST FEDERAL SAVINGS & LOAN ASSOCIATION, Appellant, v. BROOM, CANTRELL, MOODY & JOHNSON, a Florida partnership; Phillip M. Johnson; Farley J. Grainger; Harry B. Broom; Heyward Cantrell; and Ronald K. Moody, Appellees.

No. 89-01814.

District Court of Appeal of Florida,

First District.

April 18, 1990.

Rehearing Denied May 15, 1990.

Leslie King O'Neal of Markel, McDonough & O'Neal, Orlando, for appellant.

John A. DeVault, III, and Timothy J. Corrigan of Bedell, Dittmar, DeVault & Pillans, Jacksonville, for appellees.

BOOTH, Judge.

This cause is before us on appeal from an order of the trial court granting summary judgment for appraiser appellees, who submitted an appraisal on which the appellant bank relied in making a loan.

Appellant Security First Federal Savings & Loan Association (Security First) is a federally-chartered savings and loan association. In 1984, Ellis Neder, on behalf of a limited partnership called Southern Grove, Ltd., applied for a loan from Security First to purchase and develop 14.7 acres of raw land in Jacksonville called the "Southern Grove" property. As part of the loan application, appellant required an appraisal performed by an appraiser holding an MAI (member of the American Institute of Real Estate Appraisers) designation.

Neder provided Security First with an appraisal report prepared by appraisers Philip M. Johnson and Farley J. Grainger ¹ from the real estate appraisal firm of Broom, Cantrell, Moody & Johnson. Johnson and Grainger sent a letter dated November 26, 1984, to Robert White of Security First, summarizing their appraisal report along with a copy of the appraisal report. The letter and the appraisal report showed the fair market value of the property to be $1,175,000 as of October 14, 1984.

In January 1985, in reliance on the November 1984 appraisal report, Security First made a loan to Southern Grove, Ltd. in the amount of $822,500, which was secured in part by a mortgage of the Southern Grove property. In addition, appellant made a construction loan to Southern Grove, Ltd. in the amount of $5,400,000, which was also secured in part by a mortgage on that property. Southern Grove, Ltd. defaulted on the loans, and Security First filed suit to foreclose its mortgages.

On December 28, 1987, Earl B. Miller and Robert D. Crenshaw, real estate appraisers with the firm of Miller, Hoolis, Wilson, Inc., gave an appraisal of $385,000 for seven of the 14.7 acres of the Southern Grove property. Security First subsequently filed suit against Johnson, Grainger, and the Broom, Cantrell appraisal firm and its individual partners (appellees). Security First's amended complaint sought damages under four theories: (1) breach of contract as a third-party beneficiary; (2) breach of implied contract; (3) negligence; and (4) negligent misrepresentation. The court granted appellees' motion to dismiss as to the breach of contract count.

In their answer, appellees asserted nine affirmative defenses, one of which was the two-year statute of limitations for professional malpractice. Security First filed a motion to strike, on which the court did not rule, and a motion for partial summary judgment alleging the two-year statute of limitations did not apply to appraisers. Appellees, in turn, filed a motion for summary judgment alleging: (1) the subject appraisal is within generally-recognized professional standards; (2) the action is barred by the two-year statute of limitations for professional malpractice actions; (3) Security First's claims for negligence and negligent misrepresentation are barred by the rule that there can be no recovery in tort for economic losses; (4) the count sounding in implied contract is barred based on lack of privity; and (5) the claims are premature.

After a hearing on the motions for summary judgment and a review of the memoranda, affidavits, and depositions submitted in support thereof, the trial judge entered a final summary judgment for appellees, holding that: (1) MAI real estate appraisers are "professionals," and actions against them are governed by the two-year professional malpractice statute of limitations; (2) there was no evidence that appellees committed errors of fact as opposed to errors of judgment, and therefore, Security First had no cause of action against them; and (3) there was no credible evidence that the subject appraisal was negligently performed.

Security First raised three issues on appeal: (1) whether the trial court erred in granting summary judgment based on the existence of genuine issues of material fact; (2) whether the trial court erred in granting summary judgment on the error-of-judgment defense since that issue was not raised in the motion for summary judgment; and (3) whether the trial court erred in holding the two-year statute of limitations applied to real estate appraisers.

We find the trial court erred as to all three issues. First, the trial court erred in entering final summary judgment for appellees where genuine issues of material fact existed. As our sister court noted in Aagaard-Juergensen, Inc. v. Lettelier, 540 So.2d 224, 225 (Fla. 5th DCA 1989):

The party moving for summary judgment has the burden of proving the complete absence of a triable issue of material fact, and the proof must be such as to overcome all reasonable inferences which could be drawn in favor of the opposing party. All doubts regarding the existence of an issue in a motion for summary judgment are resolved against the moving party, and all evidence before the court, plus favorable inferences reasonably justified thereby are to be liberally construed in favor of the opponent. [citations omitted]

In the instant case, construing all evidence in the light most favorable to the nonmoving party, Security First established a genuine issue of material fact with the affidavit of William C. Weaver. In his affidavit, Weaver testified in part:

7. I have reviewed the appraisal of Broom, Moody, Cantrell and Johnson for the Southern Grove property, which was prepared in October of 1984 and is the subject of this litigation, and have concluded that the appraisal does not comply with the minimum requirements of the principles, guidelines and standards for real estate appraisals which were developed by the American Institute of Real Estate Appraisers (AIREA) or the Society of Real Estate Appraisers, or those which were generally recognized and accepted in the field of real estate practiced within Duval County, Florida as acceptable, in the year 1984.

8. Particularly, I have examined the subject property, the appraisal and all of the comparable properties utilized in the report, as well as other comparable properties available at...