White v. Mock

• Citation: 104 P.3d 356,140 Idaho 882
• Decision Date: 07 July 2004
• Docket Number: No. 29319.,29319.
• Parties: Gary A. WHITE, Plaintiff-Appellant-Cross Respondent, v. Dale L. MOCK and Karen Mock, husband and wife, Defendants-Respondents-Cross Appellants.
• Court: United States State Supreme Court of Idaho

104 P.3d 356

140 Idaho 882

Gary A. WHITE, Plaintiff-Appellant-Cross Respondent, v. Dale L. MOCK and Karen Mock, husband and wife, Defendants-Respondents-Cross Appellants.

No. 29319.

Supreme Court of Idaho, Boise, May, 2004 Term.

July 7, 2004.

Neal & Uhl, PLLC, Boise, for appellant. Gary L. Neal argued.

Stoppello & Kiser, Boise, for respondents. Frank W. Stoppello argued.

BURDICK, Justice.

This is an appeal from a judgment entered following a jury verdict awarding no damages to Gary White on his statutory claims related to the Mocks' sale of their property located on West Jefferson Street in Boise. The Mocks cross-appeal, challenging several rulings by the district court and the order granting White's post-trial motion for a new trial. We affirm the judgment of the district court in favor of the Mocks on the fraud and misrepresentation claims and in favor of White on the statutory claims. We also affirm the district court's decision on White's post-trial motions; however, we reverse the denial of the j.n.o.v. as to the Idaho Consumer Protection Act under which White is entitled to an award of damages.

FACTUAL AND PROCEDURAL BACKGROUND

Dale L. and Karen Mock owned property located at 2616 and 2618 West Jefferson Street in Boise. They entered into a purchase and sale agreement with Gary White on November 19, 1998. White received the Mocks' Real Property Disclosure Statement Form on December 7, 1998, and the parties closed the transaction on December 23, 1998. White did not obtain an independent inspection of the property although he inspected the property himself and waived the inspection on the disclosure statement form.

Within a month of the closing, White incurred expenses on the property to treat a termite problem, which had not been disclosed in the Real Property Disclosure Statement submitted by the Mocks. White began remodeling the rear unit at 2618 early in 1999 and uncovered evidence of earlier water damage and non-toxic mold in 2616. He expended funds for lumber, drywall, fixtures and hardware, among other items.

White's complaint against the Mocks was filed April 26, 1999, alleging violations of the Idaho Property Disclosure Act, fraud, and violation of the Idaho Consumer Protection Act, seeking to recover damages. White filed an amended complaint two years later in May of 2001, adding a request for relief in the form of rescission of the sale. The Mocks moved for summary judgment as to the remedy of rescission and for a ruling that the Idaho Consumer Protection Act did not apply to them.

By order of June 28, 2002, the district court determined that White was not entitled to rescind the sale of the property because of his failure to timely comply with the Idaho Property Condition Disclosure Act and because White had substantially altered the condition of the property from its condition at the time of the sale. The district court denied the Mocks' motion with respect to the Idaho Consumer Protection Act.

Following an eight-day trial, a jury found the Mocks did not commit fraud in the transaction. In completing the special verdict form No. 1, the jury determined that White was not damaged as a proximate cause of the Mocks' failure to disclose a material matter on the Property Condition Disclosure form. There was a violation of the Idaho Consumer Protection Act although they also found no damages which were proximately caused by the violation. The district court entered judgment in favor of the Mocks on December 24, 2002. White filed a notice of appeal on January 31, 2003.

The district court heard White's post-trial motions and issued its decision on May 1, 2003. The order denied White's motion for judgment notwithstanding the verdict but granted White a new trial only on the issue of out-of-pocket damages in connection with the remodeling of the rear unit at 2618, which evidence the district court had previously barred. The district court denied the motion for new trial on the other grounds asserted, including insufficient evidence to support a no damage verdict, the court's holding that the Psychologically Impacted Property Statute eliminates all stigma damages, and the exclusion of Dr. Beaulieu's testimony. The Mocks filed a notice of cross-appeal.

ISSUES ON APPEAL

1. Did the district court err in denying stigma damages?

2. Did the district court err in holding that rescission was not an available remedy to White?

3. Was it error to preclude White from calling the defense's expert, who was not going to testify, in his case in chief?

4. Did the district court err in not granting White's motion for judgment notwithstanding the verdict?

ISSUES ON CROSS-APPEAL

5. Did the district court err in holding that individuals selling real property are subject to the Idaho Consumer Protection Act?

6. Did the district court err in admitting testimony, photographs and other evidence presented by White?

7. Was it error for the district court to grant White a new trial on the issue of damages?

DISCUSSION

1. The district court properly ruled that stigma damages are not available under the circumstances of this case.

At trial, White argued that he was entitled to recover damages from the Mocks for failure to disclose water intrusion that led to mold growth, which White asserts is within the Psychologically Impacted Property Statute, I.C. § 55-2701(formerly § 55-2801). Without offering any proof that there was mold on the property at the time of sale, White claimed as an element of damages the stigma created by facts and/or speculation of the existence of mold. White asserts that the district court erred in ruling that stigma damages are not allowed in Idaho, thus precluding White from calling his expert witness to testify that the existence of mold on the property creates a stigma that would negatively impact a future sale of the property.

Idaho Code, Section 55-2701 defines "psychologically impacted" as:

the effect of certain circumstances surrounding real property which include, but are not limited to, the fact or suspicion that real property might be or is impacted as a result of facts or suspicions including, but not limited to the following:

(1) That an occupant or prior occupant of the real property is or was at any time suspected of being infected or has been infected with a disease which has been determined by medical evidence to be highly unlikely to be transmitted through the occupancy of a dwelling place;

(2) That the real property was at any time suspected of being the site of suicide, homicide or the commission of a felony which had no effect on the physical condition of the property or its environment or the structures located thereon; or

(3) That a registered or suspected sex offender occupied or resides near the property.

The only cases cited by White were cases from other jurisdictions supporting stigma damages in property damage cases, not in failure to disclose cases. Notably, however, I.C. § 55-2702 expressly states that no cause of action shall arise against an owner of real property for a failure to disclose to the transferee that the real property was psychologically impacted. Recognizing that the statute had yet to be interpreted by Idaho courts, the district court reasoned that the clear intent of the statute is "to limit damages for purely psychological reactions to conditions in property" and that "it is not the purpose of Idaho law to provide remedies for those types of purely psychological impacts on real property."

The statute is unambiguous and cannot be read to authorize the award of damages sought by White. There is no room for construction of a statute whose terms have a plain, obvious and rational meaning. Roeder Holdings, L.L.C. v. Board of Equalization of Ada County, 136 Idaho 809, 41 P.3d 237 (2001); State v. McCoy, 128 Idaho 362, 913 P.2d 578 (1996). The facts or suspicions that the real property might be or is impacted is limited to the occupancy by a person infected with a disease which is not easily communicable, a person who died on the premises as a result of suicide or homicide, or a registered or suspected sex offender. I.C. § 55-2701. The words "but shall not be limited to" imply that the listing is not exclusive and may include occupants with other, similar limited personal characteristics; but the words were not intended to encompass individualized reactions to conditions of the property, such as non-toxic mold. Accordingly, we hold the statute inapplicable under the circumstances of this case, and we affirm the ruling of the district court denying recovery of stigma damages.

2. The remedy of rescission was properly denied to White.

The district court ruled in its memorandum decision and order on summary judgment that White was not entitled to the equitable remedy of rescission on his asserted claims of a violation of the Idaho Property Disclosure Act, I.C. § 55-2501 et seq., and fraud. The district court concluded that White did not timely seek rescission in accordance with I.C. § 55-2515 or in his amended complaint that was filed three years after the sale. Having determined that White had not rescinded within three days of receiving the disclosure form as defined in the statute and that he had substantially altered the property such that it could not be restored to the Mocks as it was when purchased, the district court ruled that rescission was not an available remedy in this case.

The sale of the property took place on December 23, 1998. In February of 1999, counsel hired by White directed a demand letter to the Mocks, advising that suit would be brought unless the Mocks paid White the sums expended on the property, which White claimed were required because of the Mocks' failure to disclose the true condition of the property. Alternatively, counsel proposed rescission of the sale, provided White would also be reimbursed for materials and labor expended on the property to that point. The action was filed on April 26, 1999, alleging several...