Wallace v. Heath, 010621 IDSCCI, 47460

Docket Nº:47460
Opinion Judge:BURDICK, JUSTICE.
Party Name:WALTER S. WALLACE and WILMA G. WALLACE, husband and wife, Plaintiffs-Counterdefendants, v. JANET L. HEATH and BRUCE STILL, Defendants-Counterclaimants. JANET L. HEATH, Third Party Plaintiff-Appellant, v. JED TAYLOR dba TAYLOR REAL ESTATE, an Idaho real estate brokerage; and ANGELA PALMER, an individual, Third Party Defendants-Respondents.
Attorney:Petersen Moss Hall & Olsen, Idaho Falls, for Appellants. Nathan M. Olsen argued. Anderson, Julian & Hull, LLP, Boise, for Respondents. Phillip J. Collaer argued.
Judge Panel:Chief Justice BEVAN, and Justices BRODY, STEGNER, and MOELLER CONCUR.
Case Date:January 06, 2021
Court:Supreme Court of Idaho

WALTER S. WALLACE and WILMA G. WALLACE, husband and wife, Plaintiffs-Counterdefendants,

v.

JANET L. HEATH and BRUCE STILL, Defendants-Counterclaimants.

JANET L. HEATH, Third Party Plaintiff-Appellant,

v.

JED TAYLOR dba TAYLOR REAL ESTATE, an Idaho real estate brokerage; and ANGELA PALMER, an individual, Third Party Defendants-Respondents.

No. 47460

Supreme Court of Idaho

January 6, 2021

Appeal from the District Court of the Seventh Judicial District, State of Idaho, Bingham County. Darren B. Simpson, District Judge.

The decision of the district court in affirmed in part, reversed in part, and remanded for further proceedings.

Petersen Moss Hall & Olsen, Idaho Falls, for Appellants. Nathan M. Olsen argued.

Anderson, Julian & Hull, LLP, Boise, for Respondents. Phillip J. Collaer argued.

BURDICK, JUSTICE.

This case addresses the statutory duties a real estate agent owes to a buyer or seller in a real estate transaction. Janet L. Heath appeals an order and judgment of the Bingham County district court granting Angela Palmer and Taylor Real Estate's motion for summary judgment and dismissing her claims for negligence and breach of contract. The district court granted the motion for summary judgment after determining that Heath had not raised a genuine issue of material fact regarding whether statutory duties owed to her by Palmer and Taylor Real Estate were breached and that Palmer and Taylor Real Estate were entitled to judgment as a matter of law on both of Heath's claims. On appeal, Heath argues the district court erred in granting summary judgment against her because Palmer and Taylor Real Estate breached statutory duties owed to her as a part of their brokerage relationship.

I.

FACTUAL AND PROCEDURAL BACKGROUND

The events that brought about this case began in the fall of 2017 when Heath began looking to buy a house in Bingham County, Idaho. On November 20, 2017, she sent a text message to her cousin, Angela Palmer, who was a local real estate agent, stating, "I might want to look into buying a house. But I have no idea where to start. And like no down payment. And a first time buyer. Can you help me out? Be my realtor please if I decide to go this way." Palmer's response was "Abso-freakin'lutely [sic] my cousin!" Heath and Palmer communicated back and forth via emails and text messages, arranging financing through a lender, and discussing property listings. Four days after Heath's initial text message to Palmer, they met to view several of the listings together, including a property owned by Donald and Shirley Ciccone.

That same day, Heath decided to make a written offer on the Ciccone property. The written offer-titled "RE-21 Real Estate Purchase and Sale Agreement"-indicated that Palmer and Taylor Real Estate were acting as "nonagents" for Heath. Heath also signed an Agency Disclosure Brochure indicating that she was a "customer" of Palmer and Taylor Real Estate. The brochure further stated that Heath would remain a "customer" unless she entered into a written representation agreement. Heath and Palmer never signed such an agreement.

After another four days, the Ciccones made a written counter-offer, dated November 28, 2017, which Heath accepted by signing it that same day. After Heath and the Ciccones entered into a purchase contract, the Ciccones gave Palmer a property condition disclosure, and she forwarded a copy to Heath. The disclosure revealed the existence of a shared driveway agreement with a neighboring property owned by Walter and Wilma Wallace.

Palmer obtained a copy of the driveway agreement, which was recorded in 1998 (hereinafter "1998 Driveway Agreement"), and forwarded it to Heath via email on December 6, 2017. The 1998 Driveway Agreement described a shared driveway between the Ciccones' and the Wallaces' properties, measuring 21 feet wide and 127 feet deep from the edge of the highway fronting the properties.

The closing date was set for January 19, 2018. At some point before the closing date, the title company contacted Palmer and informed her that the 1998 Driveway Agreement needed to be modified to "run with the land" before it would insure the title. Palmer contacted Mr. Wallace and informed him that Heath was trying to buy the Ciccone property but could not do so without a driveway agreement. Mr. Wallace measured the paved portion of the driveway that "provides access to both properties" and recorded the measurements as "43 feet by 20 feet." He provided those measurements to Palmer. Palmer stated in her declaration that she had "no involvement with drafting those modifications" and did not know who drafted them, but that she was under the impression they were prepared by Ciccone, working with the Wallaces.

On January 9, 2018, ten days before closing, Palmer received a copy of the revised driveway agreement (hereinafter "2018 Driveway Agreement") from the title company and forwarded it to Heath as an attachment to the following email: I found out that the driveway agreement that was in place that I sent you previously was just between the neighbor and the seller. I had seller work with title to create an agreement like we have for the well so that it moves forward with the next buyers on the property. That way it'll make it easier for you to sell and you won't have to work through that when you sell the property:-) we will be signing this at closing. Just wanted to give you a copy of it for your record.

Angela Palmer

Associate Broker/REALTOR

Taylor Real Estate

Palmer admits that she did not read the 2018 Driveway Agreement before forwarding it to Heath. Heath acknowledged Palmer's email, responding "Thank you!" by email, but concedes that she did not read the attached copy of the agreement either.

On January 12, 2018, the Wallaces and the Ciccones signed the 2018 Driveway Agreement, which was essentially the same as the 1998 Driveway Agreement except that it was "a covenant running with the land" and redefined the shared portion of the driveway as "21 feet wide and run[ing] to a depth of approximately 43 feet from the edge of Highway 26 between the two properties." The title company forwarded a signed copy of the 2018 Driveway Agreement to Palmer that same day.

Heath and the Ciccones closed the deal on the property the morning of January 19, 2018, and the warranty deed and the 2018 Driveway Agreement were recorded with the Bingham County Recorder that afternoon. Heath stated in her declaration that she would not have gone through with the sale if she had known that the driveway easement had been shortened by approximately two-thirds of its original length, effectively cutting off access to the garages on her property and significantly reducing the property's value.

The proceedings in this case began in June 2018 when the Wallaces filed a petition to quiet title against Heath and another individual living in her home, Bruce Still. The Wallaces filed their petition after a dispute with Heath and Still regarding the dimensions and use of the shared driveway. After filing an answer and counterclaim and conducting some discovery, Heath filed a third-party claim against Palmer and Jed Taylor d/b/a Taylor Real Estate. Heath's third-party claims against Palmer and Taylor Real Estate were for negligence and breach of contract.

After Palmer and Taylor Real Estate filed an answer, Heath moved for partial summary judgment, arguing that there was no dispute of material fact that she was either a "client" or "customer" of Palmer and Taylor Real Estate and that they breached statutory duties owed to her. Shortly thereafter, Palmer and Taylor Real Estate filed their own motion for summary judgment. Palmer and Taylor Real Estate argued they were entitled to judgment on Heath's breach of contract claim as a matter of law because they had not entered into a written contract for representation with Heath. Palmer and Taylor Real Estate also argued that Heath was not entitled to the equitable indemnification or damages based on reliance requested in her complaint.

The district court held a hearing on the motions for summary judgment and both parties argued. On August 20, 2019, the district court entered an order denying Heath's motion for partial summary judgment and granting Palmer and Taylor Real Estate's motion for summary judgment. Nine days later, the district court entered a judgment dismissing Heath's third-party claims against Palmer and Taylor Real Estate.

Heath timely appealed.

II.

ISSUES ON APPEAL

1. Did the district court err in determining that Heath was a "customer" and not a "client" under Idaho Code sections 54-2086 and 54-2087 and subsequently dismissing her breach of contract claim?

2. Did the district court err in concluding that Heath failed to show there was a genuine dispute of material fact regarding whether Palmer and Taylor Real Estate violated the statutory duties owed to her as a "customer" under Idaho Code section 54-2086?

3. Should this Court uphold the district court's order granting summary judgment in favor of Palmer and Taylor Real Estate on Heath's negligence claim because it is barred by the economic loss rule?

4. Did the district court err in determining that the remedies of indemnification and damages based upon reliance were unavailable to Heath?

III.

STANDARD OF REVIEW

"This Court reviews a summary judgment order under the same standard the district court used in ruling on the motion." Mitchell v. State, 160 Idaho 81, 84, 369 P.3d 299, 302 (2016) (citing Kolln v. Saint Luke's Reg'l Med. Ctr., 130 Idaho 323, 327, 940 P.2d 1142, 1146 (1997)). That is, summary judgment is appropriate if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of...

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