Stebbins v. Wells

• Decision Date: 27 March 2003
• Docket Number: No. 2001-620-Appeal.,2001-620-Appeal.
• Citation: 818 A.2d 711
• Parties: Theodore E. STEBBINS, Jr. v. Melinda Blauvelt WELLS, et al.
• Court: Rhode Island Supreme Court

818 A.2d 711

Theodore E. STEBBINS, Jr. v. Melinda Blauvelt WELLS, et al.

No. 2001-620-Appeal.

Supreme Court of Rhode Island.

March 27, 2003.

Present: WILLIAMS, C.J., FLANDERS, and GOLDBERG, JJ.

Justin T. Shay, for Plaintiff. William R. Grimm, Anthony R. Leone, Dennis E. Carley, Mark P. Dolan, Providence, for Defendant.

OPINION

PER CURIAM.

In Stebbins v. Wells, 766 A.2d 369, 374 (R.I.2001) (per curiam) (Stebbins I), we reversed the Superior Court's entry of summary judgment in favor of a seller of waterfront real estate and in favor of the real-estate agents who worked on the sale. In doing so, we vacated the judgment and remanded the case "for trial" "on the disclosure issue," concluding that "there does exist a genuine issue of material fact regarding whether the severity of the erosion amounts to a disclosable defect that should have precluded the grant of summary judgment." Id. We also denied the buyer's appeal, however, "on the issue of fraud and misrepresentation," id. at 373, thereby affirming the motion justice's entry of summary judgment for all the defendants on count 1 of the complaint that pled this cause of action.

In Stebbins I, we spoke in terms of triable issues instead of causes of action, claims, and parties. Apparently, this misled the motion justice to believe that the only cause of action remaining for the Superior Court to consider on remand was count 10 of plaintiff's amended complaint, which sought damages from defendant seller and defendant real-estate agents (agents) for violating the real-estate sales disclosure act, G.L. 1956 chapter 20.8 of title 5 (the act). Consequently, he granted summary judgment in favor of the agents, concluding that, as a matter of law, they owed no duty of disclosure under the act to plaintiff-buyer, Theodore E. Stebbins, Jr. (buyer). Because we respectfully disagree with this no-duty-of-disclosure conclusion and with the motion justice's belief that Stebbins I affirmed summary judgment on all counts of the amended complaint, except count 10 (seeking damages for alleged violations of the act), we reverse and again remand this case for trial.

On this appeal, the buyer challenges the summary judgments that entered after the remand in Stebbins I in favor of the agents: defendants Miriam Scott, individually, and Miriam Scott Limited n/k/a Miriam Scott Productions, Limited (collectively, the buyer's agent), and defendants, Deborah L. Kubik and Country and Coastal Properties, Ltd. (collectively, the seller's agent). Pursuant to Rule 54(b) of the Superior Court Rules of Civil Procedure, the Superior Court entered separate final judgments for these agents. The buyer's claim for damages under the act against defendant seller, Melinda Blauvelt Wells (seller), was still pending when the Superior Court entered these judgments.

Facts and Travel

As noted in Stebbins I, the complaint in this case challenged the alleged failure of the agents and the seller to disclose to the buyer that the seller's waterfront property at 71 Indian Hill Road in Little Compton was susceptible to a severe erosion problem. In Stebbins I, we affirmed the Superior Court's summary judgment in favor of all defendants with respect to the claim accusing them of fraud and misrepresentations. But we reversed and remanded for trial on any remaining, unwaived claims because we concluded that the erosion problem could constitute a disclosable deficient condition within the meaning of the act, chapter 20.8 of title 5. Stebbins I, 766 A.2d at 373-74. Generally, erosion on waterfront properties is not a defect for purposes of the act, we stated, because it occurs naturally. Id. at 373. But in this case it could have been "far more severe than ordinary erosion" so "as to constitute a disclosable defect or unsound condition for purposes of the disclosure statute." Id. at 373-74. Consequently, we vacated the order granting summary judgment in favor of the seller and agents, and remanded the case "for trial to determine whether the erosion was so severe that it constituted a disclosable defect under the statute." Id. at 374. (Emphasis added.) In doing so, however, we did not expressly address the viability of the negligence and breach-of-fiduciary-duty claims that the buyer had alleged against the agents, but which the motion justice dismissed when he first granted summary judgment in favor of all defendants.

After the remand, the agents again separately moved for summary judgment on the issue of whether a real-estate agent could be held liable for a failure to disclose under the act. In so moving, the agents argued that our holding and mandate in Stebbins I left only count 10 of the buyer's amended complaint for the Superior Court to address on remand. Count 10 alleged a private cause of action for damages against all defendants under the act. Accepting this argument, the motion justice ultimately granted summary judgment once again in favor of the agents. In doing so, he issued two written decisions in which he concluded that only sellers of real estate are required to provide the buyer with the written disclosures required under the act. He also ruled that the act did not require the agents to disclose to the buyer defective conditions relating to the property, nor did the act impose on them any responsibility for a seller's failure to disclose a material defect concerning the property in question.

On appeal, the buyer argues that the motion justice erred in concluding that the only count in his amended complaint that survived Stebbins I was count 10, seeking damages for defendants' alleged violations of the act. The buyer also challenges the motion justice's summary-judgment rulings dismissing his claims under this count, contending that the court's interpretation of the act was wrong in light of the clear language therein that refers to the potential for an action against either the seller or the agents who participated in the sale.

A single justice of this Court ordered the parties to show cause why we should not decide the appeal summarily. After reviewing the parties' legal memoranda and considering their oral arguments, we conclude that they have not done so and proceed to decide the appeal at this time.

Analysis

In Stebbins I, after affirming the motion justice's grant of summary judgment on the buyer's fraud and misrepresentation claims, we identified an issue of material fact concerning the act and its applicability to the remaining claims alleged in this case. Specifically, we remanded the case for trial, directing the court to ascertain whether the erosion averred in the buyer's complaint was severe enough to be a "disclosable defect or unsound condition for purposes of the disclosure statute." Stebbins I, 766 A.2d at 374. Because this case has yet to proceed to trial, we still do not know whether the erosion was severe enough to constitute a disclosable defect under the act.

In his amended complaint, the buyer alleged numerous other causes of action against the seller and agents, including negligent omission, negligence, breach of fiduciary duty, and a private cause of action for damages under chapter 20.8 of title 5 for their averred failure to disclose to him a materially defective condition concerning the subject property. All these different claims stem from the same set of operative facts: defendants' alleged failure to disclose severe erosion present on the Indian Hill Road property. In Stebbins I, we did not specifically address the viability of any of these claims, remanding the case for a factual determination on an issue common to all of them. Stebbins I, 766 A.2d at 374.

As a result, we respectfully disagree with the motion justice's conclusion that our holding in Stebbins I limited the claims remaining on remand to the buyer's attempt to prevail on a private cause of action against defendants for damages under the act. On the contrary, we hold that the buyer's claims for negligence, negligent omission, and breach of fiduciary duty should not have been dismissed on summary judgment. In Stebbins I, we agreed with the buyers' contention that "there is evidence that both Ms. Wells [seller] and Ms. Scott [buyer's agent] were aware of this severe erosion but, nevertheless, failed to disclose its existence." Stebbins I, 766 A.2d at 373. There is also evidence in the record suggesting that the seller's agent was likewise aware of the existence of erosion on the property. We are of the opinion that a trial is required to determine the severity of the erosion and the extent to which these agents were aware of it. If the erosion was severe and the agents were aware of it, then they may have been required to disclose this information to the seller. See id. The trier of fact should also determine whether the agents were negligent in failing to disclose this condition and, in the case of the buyer's agent, who formerly owned the property, whether that agent breached a fiduciary duty to disclose the erosion problem to the buyer.

Standard of Review

In Stebbins I, we did not address whether the act's disclosure obligations apply to real-estate agents, nor did we rule on the availability of a private right of action for damages under its provisions. Whether the act requires buyer's or seller's real-estate agents to disclose material defects to the purchaser of property, and, if it does, whether the act creates a private right of action for damages against those who violate that duty are questions of statutory interpretation. Questions of statutory construction are reviewed de novo by this Court, and our "ultimate goal is to give effect to the purpose of the act as intended by the Legislature." See Mottola v. Cirello, 789 A.2d 421, 423 (R.I.2002) (quoting Webster v. Perrotta, 774 A.2d 68, 75 (R.I.2001)). If the language of the statute is clear and unambiguous, we must interpret it literally, giving the words of the statute their plain and ordinary meanings. Id. at 423 (citing...