Webb v. Leclair

• Decision Date: 12 July 2007
• Docket Number: No. 06-063.,06-063.
• Citation: 933 A.2d 177,2007 VT 65
• Parties: Ann R. WEBB v. John LECLAIR and John Leclair d/b/a Leclair Appraisal.
• Court: Vermont Supreme Court

933 A.2d 177

2007 VT 65

Ann R. WEBB v. John LECLAIR and John Leclair d/b/a Leclair Appraisal.

No. 06-063.

Supreme Court of Vermont.

July 12, 2007.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

ENTRY ORDER

¶ 1. Plaintiff Ann Webb appeals a summary judgment for defendant John Leclair on her claims of negligent misrepresentation, fraud, consumer fraud, and negligence arising from defendant's appraisal of a home she purchased. The appraisal was done on behalf of plaintiffs mortgage lender. Plaintiff argues that the superior court erred in both requiring privity between defendant and her before she could sue for damages caused by errors in the appraisal, and in dismissing her consumer fraud count. We hold that, on the facts before the superior court at summary judgment, plaintiff failed to show that defendant owed her a duty with respect to her common law claims, and that plaintiff's consumer fraud claim is in fact an assertion of malpractice that is outside the scope of our consumer fraud law. We therefore affirm.

¶ 2. Recitation of the facts in this case first requires resolution of plaintiff's cry of procedural foul. Vermont Rule of Civil Procedure 56(c)(2) requires a party moving for summary judgment to attach to its motion a "separate, short, and concise statement of the material facts as to which the moving party contends that there is no genuine issue to be tried." The rule provides that the party opposing summary judgment "shall":

include with [its] affidavits and memorandum ... a separate, short, and concise statement of the material facts as to which it is contended that there exists a genuine issue to be tried. All material facts set forth in the statement required to be served by the moving party will be deemed to be admitted unless controverted by the statement required to be served by the opposing party.

V.R.C.P. 56(c)(2) (emphasis added).

¶ 3. In this case, plaintiff failed to file a statement of contested facts in response to defendant's motion for summary judgment and statement of undisputed facts. Instead, she filed a forty-six-page memorandum of law with accompanying exhibits.

¶ 4. Discrete statements of undisputed and disputed facts have been required for more than ten years now. See Reporter's Notes to 1995 Amendment, V.R.C.P. 56. As the Reporter's Notes state, this provision was intended to focus summary judgment arguments and allow courts to more readily determine the material facts at issue. Id. Plaintiff recognizes in her appellate brief that we have consistently enforced the rule that a plaintiff's failure to controvert facts in a counter statement requires that the moving party's undisputed facts be taken as true. Gallipo v. City of Rutland, 2005 VT 83, ¶ 35, 178 Vt. 244, 882 A.2d 1177; see also Boulton v. CLD Consulting Eng'rs. Inc., 2003 VT 72, ¶ 29, 175 Vt. 413, 834 A.2d 37 (facts in moving party's statement deemed undisputed when supported by the record and not controverted by nonmoving party's statement); Richart v. Jackson, 171 Vt. 94, 97, 758 A.2d 319, 321 (2000) (same).

¶ 5. In Gallipo, Boulton, and Richart, both parties submitted at least some form of a factual statement; the error was in the opposing party's failure to respond completely. Gallipo, 2005 VT 83, ¶ 9, 178 Vt. 244, 882 A.2d 1177; Boulton, 2003 VT 72, ¶ 29, 175 Vt. 413, 834 A.2d 37; Richart, 171 Vt. at 97, 758 A.2d at 321. Here, plaintiff failed to submit any separate statement of facts at all. As the rule specifies, the superior court responded by admitting all of the facts that defendant proffered as undisputed. On appeal, plaintiff urges that her opposing memorandum contested many of defendant's proffered facts, and that she should not be faulted for her "stylistic decision" to present her facts in a strictly narrative form. She further claims that, unlike the plaintiff in Gallipo, she was not on clear notice from the trial court that it would refuse to consider her facts unless they were presented in a separate statement.

¶ 6. The requirements, and consequences, of Rule 56(c)(2) are plain from its text. Forcing courts to sift through nearly fifty pages of narrative in order to find contested and uncontested facts is precisely the type of "needle in a haystack" search the rule is meant to avoid. The trial court correctly took defendant's submitted facts which are supported in the record as true. We do as well.

¶ 7. Accordingly, the undisputed facts are as follows. In July 2003, plaintiff, with the help of her real estate broker, entered into a purchase and sale agreement for a home in Essex, Vermont for $310,000. The purchase and sale agreement contained the following appraisal contingency:

If the property fails to appraise at or above purchase price, Purchaser shall have the right to terminate the agreement. Appraisal to be arranged and paid for by Purchaser on or before September 10, 2003. If this contract is subject to financing . . . such appraisal must be acceptable to Purchaser's mortgage lender.

The record, however, contains no evidence that the sellers ever signed this contingency agreement.

¶ 8. To finance a portion of the purchase price, plaintiff applied for a loan from Spruce Mortgage ("Spruce") for $110,000. Spruce hired defendant, a licensed Vermont appraiser, to appraise the property in order to determine whether there was sufficient equity to cover the loan. A loan officer at Spruce faxed defendant the request for the appraisal and included plaintiff's purchase and sale agreement, a copy of the "Multiple Listing Service" (MLS) sheet for the property, and a copy of the deed for the property. Plaintiff did not make arrangements to have any other appraisal done before the closing.

¶ 9. In the course of his appraisal, defendant inspected the property, reviewed the listers' files for the Town of Essex, which contained evidence that the home was built in 1978, and reviewed sales data for other properties in the Essex-area market. Based on his "research, education and experience," defendant valued the house at $310,200 on August 28, 2003. He was not encouraged by employees of Spruce or anyone else to appraise the house at a value equal to or greater than the contract price.

¶ 10. Defendant's appraisal report stated that "[t]he function of the appraisal is to assist the above-named Lender in evaluating the subject property for lending purposes." Defendant submitted his report to Spruce, which subsequently sent it on to the underwriter of the loan. Defendant had no agreement with plaintiff or her real estate broker with respect to the appraisal. His client was Spruce, and he had no conversations with plaintiff or her broker until plaintiff called him several weeks after the closing date of September 30, 2003.

¶ 11. At an unknown date between September 23, 2003 and the closing on September 30, 2003, plaintiff allegedly had a conversation with the Spruce loan officer in which the loan officer stated that the appraisal "numbers had been met" and that it was "clear sailing." The loan officer did not recall this conversation. At the closing, plaintiff reimbursed Spruce for a portion of the costs of defendant's appraisal. She did not receive or review a copy of defendant's appraisal report until it was sent to her by Spruce weeks later. Plaintiff conceded in her deposition that the first time she became aware that defendant had estimated that the house was twenty-five years old was after the closing when she first read his report.

¶ 12. This suit arose months after the closing when the house was appraised by different appraisers who valued it at considerably less than defendant had. Specifically, plaintiff alleged in her complaint that one appraiser valued the house at $255,000, while another valued it at $252,000 despite an appreciating real estate market and improvements made by plaintiff. Plaintiff further asserted that the Essex land records show that the house was constructed in 1966, and that despite being marketed as a twenty-six year old home, it was in fact thirty-seven years old. Based on the discrepancy in appraisals, plaintiff sued defendant for: (1) negligent misrepresentation, (2) fraud, (3) consumer fraud, (4) negligence, and (5) fraudulent concealment.

¶ 13. Defendant successfully moved for summary judgment on all counts. The trial judge concluded that defendant owed no common law or statutory duty to plaintiff. Regarding the negligent misrepresentation claim specifically, the court relied on Hedges v. Durrance, 2003 VT 63, ¶ 10, 175 Vt. 588, 834 A.2d 1 (mem.), and found that such claims made by a third party, such as plaintiff, require evidence that the defendant "intended to induce reliance by a third party or invited a third party's reliance." The court found no evidence that defendant ever induced plaintiff to rely on his appraisal. As for the consumer fraud count, the court found insufficient evidence that defendant made any false or deceptive misrepresentation of fact to plaintiff or that he concealed a material fact from her. The remainder of her claims, fraud and fraudulent concealment, were dismissed for lack of intent. On appeal, plaintiff contests the dismissal of only her negligent misrepresentation, negligence, and consumer fraud claims.

¶ 14. This Court reviews an award of summary judgment using the same standard as the trial court; the familiar inquiry is whether there are any genuine issues of material fact and whether any party is entitled to judgment as a matter of law. Kremer v. Lawyers Title Ins. Corp., 2004 VT 91, ¶ 7, 177 Vt. 553, 861 A.2d 1103 (mem.); V.R.C.P. 56(c)(3). "Summary judgment is mandated where, after an adequate time for discovery, a party fails to make a showing sufficient to establish the existence of an element essential to [its] case and on which [it] has the burden of proof at trial." Kremer, 2004 VT 91, ¶ 7, 177 Vt. 553, 861 A.2d 1103 (quotations and ellipses omitted). "We give the opposing party the benefit of...