Thomson v. McGinnis

• Citation: 465 S.E.2d 922,195 W.Va. 465
• Decision Date: 15 December 1995
• Docket Number: No. 22872,22872
• Court: Supreme Court of West Virginia
• Parties: Rebecca A. THOMSON, Plaintiff Below, Appellant v. Erma McGINNIS; Robert R. Vitello; the Property Centre, Inc.; David R. Stephens; and D & R Builders, Defendants Below, Appellees.

Page 922

465 S.E.2d 922

195 W.Va. 465

Rebecca A. THOMSON, Plaintiff Below, Appellant v. Erma McGINNIS; Robert R. Vitello; the Property Centre,

Inc.; David R. Stephens; and D & R Builders,

Defendants Below, Appellees.

No. 22872.

Supreme Court of Appeals of

West Virginia.

Submitted Sept. 26, 1995.

Decided Dec. 15, 1995.

Syllabus by the Court

1. "A vendor's real estate broker may be liable to a purchaser if the broker makes material misrepresentations with regard to the fitness or habitability of residential property or fails to disclose defects or conditions in the property that substantially affect its value or habitability, of which the broker is aware or reasonably should be aware, but the purchaser is unaware and would not discover by a reasonably diligent inspection. It also must be shown that the misrepresentation or concealment was a substantial factor in inducing the purchaser to buy the property." Syl. Pt. 1, Teter v. Old Colony Co., 190 W.Va. 711, 441 S.E.2d 728 (1994).

2. "One of the essential elements of an agency relationship is the existence of some degree of control by the principal over the conduct and activities of the agent." Syl. Pt. 3, Teter v. Old Colony Co., 190 W.Va. 711, 441 S.E.2d 728 (1994).

3. " 'An agent in the restricted and proper sense is a representative of his principal in business or contractual relations with third persons; while a servant or employee is one engaged, not in creating contractual obligations, but in rendering service, chiefly with reference to things but sometimes with reference to persons when no contractual obligation is to result.' Syllabus Point 3, State ex rel. Key v. Bond, 94 W.Va. 255, 118 S.E. 276 (1923)." Syl. Pt. 2, Teter v. Old Colony Co., 190 W.Va. 711, 441 S.E.2d 728 (1994).

4. "Summary judgment is appropriate where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, such as where the nonmoving party has failed to make a sufficient showing on an essential element of the case that it has the burden to prove." Syl. Pt. 4, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

5. " 'The question to be decided on a motion for summary judgment is whether there is a genuine issue of fact and not how that issue should be determined.' Syl. pt. 5, Aetna Casualty & Surety Co. v. Federal Ins. Co. of N.Y., 148 W.Va. 160, 133 S.E.2d 770 (1963)." Syl. Pt. 4, Henderson v. Coombs, 192 W.Va. 581, 453 S.E.2d 415 (1994).

6. " 'One who would defend against tort liability by contending that the injuries were inflicted by an independent contractor has the burden of establishing that he neither controlled nor had the right to control the work, and if there is a conflict in the evidence and there is sufficient evidence to support a finding of the jury, the determination of whether an independent contractor relationship existed is a question for jury determination.' Syllabus Point 1, Sanders v. Georgia-Pacific Corp., 159 W.Va. 621, 225 S.E.2d 218 (1976)." Syl. Pt. 5, Pasquale v. Ohio Power Co., 187 W.Va. 292, 418 S.E.2d 738 (1992).

7. "The general rule is that where one person has contracted with a competent person to do work, not in itself unlawful or intrinsically dangerous in character, and who exercise no supervision or control over the work contracted for, such person is not liable for the negligence of such independent contractor or his servants in the performance of the work." Syl. Pt. 1, Chenoweth v. Settle Eng'rs, Inc., 151 W.Va. 830, 156 S.E.2d 297 (1967), overruled in part on other grounds by Sanders v. Georgia Pacific Corp., 159 W.Va. 621, 225 S.E.2d 218 (1976).

8. While a real estate broker bears no responsibility to conduct an independent investigation of a latent defect, when such broker volunteers to secure an inspection of the premises, or some part thereof, by retaining on behalf of the buyer a third party to conduct the inspection, then that real estate broker may be held liable to the buyer for civil damages if the broker in retaining said third party is negligent in the selection and retention of the third party and if such negligence proximately causes harm to the buyer.

Duane C. Rosenlieb, Jr., St. Albans, for Appellant.

Stephen R. Crislip and George A. Halkias, Jackson & Kelly, Charleston, for Appellees.

WORKMAN, Justice:

This is an appeal by Rebecca A. Thomson (hereinafter "the Appellant"), from a final order of the Circuit Court of Kanawha County granting summary judgment to the Appellees, Erma McGinnis, Robert R. Vitello, and The Property Centre, Inc., in an action instituted by the Appellant alleging negligence and fraud in connection with her purchase of a home. The Appellant contends that genuine issues of material fact existed which should have precluded the lower court from granting summary judgment. We agree with the contentions of the Appellant, reverse the decision of the lower court, and remand this matter for consideration on the merits.

I.

On April 20, 1992, the Appellant contracted to purchase a home located in Charleston, West Virginia. The Appellant was represented by Ms. Pam Grey of Home Finders Associates, Inc., and the seller was represented by Appellee Erma McGinnis, a real estate agent employed by Appellee The Property Centre, Inc. ¹ At the request of the Appellant, the Appellees agreed to have the furnace inspected and to certify the working condition of the heating system. ² The approval of the mortgage loan was also conditioned upon this inspection.

David Stephens, owner of Appellee D & R Builders, was retained by Ms. McGinnis and The Property Centre, Inc., to inspect the residence for termites and to install smoke detectors. During his performance of these duties on June 4, 1992, he was contacted by Ms. McGinnis ³ and asked to inspect the heating system. Mr. Stephens testified that he had previously been employed by Ms. McGinnis and The Property Centre, Inc., to inspect heating systems and that his performance of the inspection upon the home in question consisted of listening to the furnace running while he was in the home. He was later provided with a Heating Certification form by Ms. McGinnis upon which he certified that the furnace was in proper working condition. Having received certification of the condition of the furnace, the Appellant purchased the home.

On October 7, 1992, upon discovering that the furnace was not functioning, the Appellant telephoned Kerstein's Heating and Air-Conditioning. A representative of that business went to the Appellant's home and informed the Appellant that it would be dangerous to light the pilot light because the furnace had no safety shut-off switch. The Property Centre, Inc., was thereafter informed of the furnace problems, and Mr. Stephens and an associate went to the Appellant's residence to service the furnace. When the Appellant asked whether the associate was certified in heating and air-conditioning, it is the Appellant's testimony that Mr. Stephens informed her that neither Mr. Stephens nor his associate was certified in heating and air-conditioning. According to the testimony of both Mr. Stephens and the Appellant, Mr. Stephens also advised the Appellant that he never should have signed the certification and that he did so only at the direction of Ms. McGinnis. The Appellant thereafter obtained three estimates for a new furnace and accepted the bid of $1450. All three companies inspecting the furnace emphasized that the heating pipes connected to the furnace were wrapped in asbestos. The Appellant was informed by these companies that the asbestos could not be removed from the pipes due to the danger of asbestos fibers. The only recommendation they offered the Appellant was to wrap the pipes with tape to encase the asbestos insulation.

The Appellant filed a civil action alleging fraudulent misrepresentation and negligence on October 13, 1993. On September 22, 1994, the lower court granted the Appellees' motion for summary judgment. It is from that order that the Appellant appeals.

II.

In syllabus point one of Teter v. Old Colony Co., 190 W.Va. 711, 441 S.E.2d 728 (1994), we explained as follows:

A vendor's real estate broker may be liable to a purchaser if the broker makes material misrepresentations with regard to the fitness or habitability of residential property or fails to disclose defects or conditions in the property that substantially affect its value or habitability, of which the broker is aware or reasonably should be aware, but the purchaser is unaware and would not discover by a reasonably diligent inspection. It also must be shown that the misrepresentation or concealment was a substantial factor in inducing the purchaser to buy the property.

Id. at 713, 441 S.E.2d at 730. In Teter, the prospective purchasers had expressed concern about a crack in a retaining wall, and the real estate agent agreed to secure the services of an engineer to examine the wall. 190 W.Va. at 715, 441 S.E.2d at 732. Based upon a written report indicating that the wall was in good condition, the Teters purchased the property. Id. Upon the collapse of the retaining wall, the Teters sought to establish liability of the real estate company on the theories that it had failed to make a reasonably diligent inspection and that the engineering firm negligently inspecting the wall was an agent of the real estate company. Id. We held that a broker has no "independent duty to inspect and uncover latent defects on residential premises." 190 W.Va. at 719, 441 S.E.2d at 736.

We also concluded in Teter that the real estate company, by hiring an engineering firm to conduct an investigation, did not create an agency relationship whereby the real estate company could become liable for negligent acts of the engineering firm. Id. We based this latter determination upon the absence of any "evidence demonstrating that the broker retained any control over the manner in which the engineering firm performed its inspection of the...