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Throckmartin v. Century 21 Top Realty

March 3, 2010

BRYON THROCKMARTIN AND VANESSA THROCKMARTIN, APPELLANTS (PLAINTIFFS),
v.
CENTURY 21 TOP REALTY, A WYOMING CORPORATION; AND KATHIE HOVE, APPELLEES (DEFENDANTS).
BRYON THROCKMARTIN AND, VANESSA THROCKMARTIN, APPELLANTS (PLAINTIFFS),
v.
VICKI MEANS NELSON; AND REAL ESTATE PROFESSIONALS, INC., A WYOMING CORPORATION, D/B/A RE/MAX PROFESSIONALS, APPELLEES (DEFENDANTS).



Appeal from the District Court of Campbell County, The Honorable Michael N. Deegan, Judge.

The opinion of the court was delivered by: Hill, Justice

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

[¶1] In November of 2005, Bryon and Vanessa Throckmartin purchased a house in Gillette. In August of 2006, they discovered that the basement of the house leaked very badly during significant rainfall, that the foundation had crumbled, and that the house was becoming uninhabitable. Eventually it was condemned by the City of Gillette in mid-2007 -- a total loss for the Throckmartins. They filed suit naming two real estate firms (and their respective agents) as defendants, as well as the sellers of the home and the home inspection experts who inspected the home for the Throckmartins, prior to closing. The district court granted summary judgment in favor of the real estate firms and their agents in each of the captioned appeals. Other litigation remains pending in the district court with respect to the sellers and the inspection specialists.

[¶2] The Appellants in Case No. S-08-0250 are Bryon and Vanessa Throckmartin (Throckmartins). The Appellees are Century 21 TOP Realty (TOP) and Kathie Hove (Hove) (during proceedings below it was explained that Century 21 and TOP are no longer associated). TOP is a real estate brokerage firm and Hove is a sales representative and associate broker who worked for that firm. The Throckmartins claimed that Top Realty and Hove engaged in professional negligence, breached the contract between them, engaged in fraudulent concealment of defects in the home, and breached the duty of good faith and fair dealing implied in their contract and articulated in applicable statutes. Hove was a real estate agent who provided services to the Throckmartins in their endeavor to buy their first home.

[¶3] The Throckmartins are also the Appellants in Case No. S-08-0269. The Appellees are Vicki Means Nelson (Nelson) and Real Estate Professionals, Inc., d/b/a Re/Max Professionals (Re/Max). Nelson and Re/Max had listed for sale the home which is at issue in this case and another employee of Re/Max was the first to show the Throckmartins that home.

[¶4] We will affirm both of these cases.

ISSUES

[¶5] In Case No. S-08-0250 the Throckmartins raise this issue:

Did the district court erroneously grant summary judgment in favor of Hove and Century 21 TOP Realty on [Throckmartins'] claims against them for professional negligence, breach of contract, breach of duty of good faith and fair dealing, and fraudulent concealment?

TOP and Hove restate the issues like this:

1. Whether [Throckmartins] can now assert a claim for professional negligence not previously plead?

2. Did the district court correctly grant [TOP] and [Hove] summary judgment on [Throckmartins'] claim for breach of contract?

3. Did the district court correctly grant [TOP] and [Hove] summary judgment on [Throckmartins'] claim for breach of the duty of good faith and fair dealing?

4. Did the district court correctly grant [TOP] and [Hove] summary judgment on [Throckmartins'] claim for fraudulent concealment?

In their reply brief, the Throckmartins contend they did make a timely claim sounding in professional negligence, that real estate professionals must abide by professional standards other than those found in Wyo. Stat. Ann. §§ 33-28-301 through 33-28-311 (LexisNexis 2009), that the "intermediary" statute does not supersede the duty of care established in Hulse v. First American Title Co. (Hulse I), 2001 WY 95, 33 P.3d 122 (Wyo. 2001), and Hulse v. BHJ, Inc. (Hulse II), 2003 WY 75, ¶ 10, 71 P.3d 262, 268 (Wyo. 2003), and that a question of fact exists as to whether Hove breached the duties set forth in the Real Estate License Act.

[¶6] In Case No. S-08-0269, the Throckmartins challenge the district court's order granting summary judgment in favor of Nelson and Re/Max. Nelson was the listing/selling agent for the parcel of real estate at issue in this appeal. She worked for Re/Max. In the initial pleadings another Re/Max agent was also named as a defendant, Val Elliot. Elliot was eventually dismissed by stipulation of the parties, but her testimony affected the claims against Nelson and Re/Max, and we will recite portions of her testimony in our rendition of the circumstances that must be considered in resolving this case. The home the Throckmartins purchased was listed with Re/Max, by the sellers. The issue raised in this appeal is simply stated to be:

Did the district court erroneously grant summary judgment in favor of [Nelson] and [Re/Max] on [Throckmartins'] claims against them for professional negligence, breach of contract, breach of the duty of good faith and fair dealing, and fraudulent concealment?

In response, Nelson and Re/Max provide this statement of the issues:

The district court properly granted summary judgment in favor of [Nelson] and [Re/Max] because there were no genuine issues of material fact and [Nelson] and [Re/Max] were entitled to judgment as a matter of law.

[A.] Issue regarding contract:

The district court properly found that there were no genuine issues of material fact and there was no contract between Throckmartins and [Nelson] as a matter of law.

[B.] Issue regarding disclosure:

The district court properly found that there were no genuine issues of material fact and there was no violation of Wyo. Stat. Ann. § 33-28-111 as a matter of law.

[C.] Issue regarding malpractice:

Throckmartins improperly raised on appeal for the first time a claim for real estate malpractice/negligence.

[D.] Issue regarding breach of covenant:

The district court properly found that there were no genuine issues of material fact and as a matter of law, there was no contract and because there was no contract there could be no breach of the covenant of good faith and fair dealing.

The Throckmartins assert in their reply brief that they did make a timely claim for professional negligence against Nelson and Re/Max, that there are genuine issues of material fact as to whether Nelson and Re/Max breached their duties to the Throckmartins, and that the provisions of § 33-28-303 are only the minimal standards by which realtors must abide.

FACTS AND PROCEEDINGS

[¶7] The Throckmartins were referred to Hove by a real estate finance company employee when they first began looking to buy a home in the late summer of 2005. Hove showed the Throckmartins several new construction homes that qualified for the sort of Wyoming Community Development Authority (WCDA) loan the Throckmartins were seeking at that time. Those houses were under construction but not yet finished. Later, when Mrs. Throckmartin became employed, they qualified for different sorts of financing (other than WCDA first-time home owner loans), as well as for a larger loan (up to $175,000.00, which was the selling price of the home they eventually purchased).

[¶8] The Throckmartins spotted a home they fancied which was offered for sale through Re/Max. They sought out a different real estate agent who worked for Re/Max, not realizing that that was not the usual way of utilizing the services of a real estate agent. However, no problems arose from the inclusion of that secondary real estate professional, other than that Hove did not show the Throckmartins the home that they were intent on buying. Instead it was shown to them by a Re/Max agent. Hove first saw the house on October 24, 2005, when she went over to that house (at the Throckmartins' request) to admit the home inspectors engaged by the Throckmartins. A property condition statement covering that property had been provided to Hove, and in turn to the Throckmartins. That condition statement revealed that there were problems with basement walls, but Mr. Throckmartin had discussed that directly with the seller and was apparently satisfied with the explanation provided. The Throckmartins asked Hove to find a home inspector for them (because they did not have the time to do so themselves), and Hove proceeded to seek out a suitable inspector. Hove contacted inspectors until she found one who was able to do the inspection in a manner that satisfied the Throckmartins' time lines. A copy of the property condition statement was not provided to the inspector by Hove or by the Throckmartins. The Throckmartins were very excited about the house and wanted to buy it very quickly.

[¶9] Val Elliot worked with Nelson at Re/Max. She recalled the Throckmartins coming into her office and asking to view the house they ultimately purchased. She related that at that time the real estate market in Gillette was very fast-paced and properties, especially those in that price range, did not stay on the market very long and there were not very many of them available for sale. She showed the Throckmartins only that one property and the owners of the house happened to be present at the time of that showing. Elliot felt that the Throckmartins made an "impulse" decision to purchase the house on the spot. Although Elliot had not seen the sellers' disclosure statement, she had some concerns about the house because the roof looked "worn." Since the sellers were present when they looked at the house, Mr. Throckmartin talked with one of the owners, Nathan Neether, about the condition of the house. The sellers were there because they were in the process of moving out and cleaning/fixing up the house. Elliot did not talk to the owners of the house. The Throckmartins followed Elliot's advice to the extent that they did not make an offer that same day. Once Elliot found out that Hove was the Throckmartins' agent, she did not continue to participate in the sales process, although she did share in the commission for the sale.

[¶10] Mr. Throckmartin's deposition reveals that they first took note of the disputed property in July of 2005, and looked at it for the first time in late July or early August. He contacted Re/Max directly rather than working with Hove. Once he understood that he needed to work with Hove, who would in turn work with Re/Max, that's what was done. The Throckmartins decided immediately that they wanted the house, but they had to wait for the processing of the paperwork before an actual offer was made. A few weeks after the Throckmartins took their initial look at the house, they went back and looked again after the owners had moved out. They arranged for an inspection of the house before making their purchase. The Throckmartins made their offer to purchase the disputed house on October 14, 2005. The seller's property condition disclosure statement was made available to the Throckmartins. They closed on the property on November 30, 2005, and moved in shortly thereafter. Mr. Throckmartin's testimony was to the effect that both Hove and Nelson should have known about the poor condition of the house, but based that only on the circumstance that they were in the real estate business and they should know about the condition of houses they are selling. He eventually conceded he had no personal information or knowledge that either Hove or Nelson actually knew about the defects in the house at issue. Mr. Throckmartin then enumerated the problems that came to light beginning in August of 2006, and ending with the condemnation of the house in 2007.

[¶11] Testimony from Hove indicated that the builder of the home lived in it in the period of approximately 1969-70, and from this it was deduced that it was built in the 1960's. The home's basement walls were constructed of non-reinforced cement blocks and showed considerable signs of bowing. Similar homes constructed by the same builder and located in the same neighborhood had experienced some similar foundation problems. The house the Throckmartins purchased had been inspected in 2002 and that inspection resulted in a report that some of the basement walls were not structurally stable, although the condition of most of the basement walls could not be determined because they were covered with paneling. That report also concluded that the house was not suitable for occupation as a residence. The owners from whom the Throckmartins' made their purchase had bought the home "as is" and without having inspections done. An inspector who was familiar with the area where the Throckmartins' home was located indicated that he had inspected about 25 homes in that area that had problems similar to those experienced by the Throckmartins.

STANDARD OF REVIEW

[¶12] Both cases were resolved by summary judgment pursuant to W.R.C.P. 56. In Loredo v. Solvay America, Inc., 2009 WY 93, ¶ 10, 212 P.3d 614, 618-19 (Wyo. 2009) (quoting Hatton v. Energy Elec. Co., 2006 WY 151, ¶¶ 8-9, 148 P.3d 8, 12-13 (Wyo.2006)), we summarized the generally applicable standard of review:

We evaluate the propriety of a summary judgment by employing the same standards and using the same materials as the district court. Cook v. Shoshone First Bank, 2006 WY 13, ¶ 11, 126 P.3d 886, 889 (Wyo.2006). Thus, our review is plenary. Birt v. Wells Fargo Home Mortg., Inc., 2003 WY 102, ¶ 7, 75 P.3d 640, 647 (Wyo.2003).

Wyo. R. Civ. P. 56 governs summary judgments. A summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c). When reviewing a summary judgment, we consider the record in the perspective most favorable to the party opposing the motion and give that party the benefit of all favorable inferences which may be fairly drawn from the record. We review questions of law de novo without giving any deference to the district court's determinations.

Cathcart v. State Farm Mut. Auto. Ins. Co., 2005 WY 154, ¶ 11, 123 P.3d 579, 586 (Wyo.2005), quoting Baker v. Ayres and Baker Pole and Post, Inc., 2005 WY 97, ¶ 14, 117 P.3d 1234, 1239 (Wyo.2005).

"A genuine issue of material fact exists when a disputed fact, if it were proven, would establish or refute an essential element of a cause of action or a defense that the parties have asserted." Christensen v. Carbon County, 2004 WY 135, ¶ 8, 100 P.3d 411, 413 (Wyo.2004) (quoting Metz Beverage Co. v. Wyoming Beverages, Inc., 2002 WY 21, ¶ 9, 39 P.3d 1051, 1055 (Wyo.2002)). The party requesting a summary judgment bears the initial burden of establishing a prima facie case for summary judgment. If he carries his burden, "the party who is opposing the motion for summary judgment must present specific facts to demonstrate that a genuine issue of material fact exists." Id. We have explained the duties of the party opposing a motion for summary judgment as follows:

"After a movant has adequately supported the motion for summary judgment, the opposing party must come forward with competent evidence admissible at trial showing there are genuine issues of material fact. The opposing party must affirmatively set forth material, specific facts in opposition to a motion for summary judgment, and cannot rely only upon allegations and pleadings ..., and conclusory statements or mere opinions are insufficient to satisfy the opposing party's burden."

The evidence opposing a prima facie case on a motion for summary judgment "must be competent and admissible, lest the rule permitting summary judgments be entirely eviscerated by plaintiffs proceeding to trial on the basis of mere conjecture or wishful speculation." Speculation, conjecture, the suggestion of a possibility, guesses, or even probability, are insufficient to establish an issue of material fact. Cook, ¶ 12, 126 P.3d at 890, quoting Jones v. Schabron, 2005 WY 65, pp 9-11, 113 P.3d 34, 37 (Wyo.2005).

DISCUSSION

[¶13] In the circumstances presented here, the applicable law is quite difficult to parse. Mr. Neether and Ms. Neether-Oedekoven were trying to sell a house. The applicable statute has this to say about "seller:" ""Seller' means a person who is attempting to sell or exchange real property and includes landlords as that term is commonly used in the rental, leasing or management of real property[.]" § 33-28-301(a)(vi). ""Seller's agent' means a licensee who is authorized to represent and act for the seller in a real estate transaction[.]" § 33-28-301(a)(vii).

[¶14] Wyo. Stat. Ann. § 33-28-302 describes the relationships between licensees and the public:

(a) A broker shall not be required to offer or engage in more than one (1) of the brokerage relationships. When engaged in any of the activities enumerated in W.S. 33-28-102(a)(iii), a licensee may act in any real estate transaction as an agent or intermediary or may work with the seller or buyer as a customer. The licensee's duties and obligations arising from that relationship shall be disclosed to the seller or buyer pursuant to this article.

(b) When engaged in any of the activities enumerated in W.S. 33-28-102(a)(iii), a licensee may act as an agent only pursuant to a written agreement with the seller or buyer which discloses the duties and responsibilities set forth in W.S. 33-28-303 or 33-28-304.

(c) When engaged in any of the activities enumerated in W.S. 33-28-102(a)(iii), a licensee may act as a subagent with the duties and responsibilities set forth in W.S. 33-28-303(g), only pursuant to a written agreement between the seller and the seller's agent authorizing an offer of subagency to other brokers, or as an intermediary with the seller or buyer, which written agreement discloses the duties and responsibilities set forth in W.S. 33-28-305.

(d) Repealed by Laws 2009, ch. 20, § 3.

(e) A licensee may work with a single party in separate transactions pursuant to different relationships, including selling one (1) property as a seller's agent and working with that seller in buying another property as an intermediary or buyer's agent or subagent, if the licensee complies with this article in establishing a separate relationship in writing for each transaction.

(f) A licensee may complete real estate forms and shall explain to the parties the effects thereof if the licensee is performing the activities enumerated or referred to in W.S. 33-28-102(a)(iii) in the transaction in which the forms are to be used.

(g) Every contract, duty or relationship within this article, including intermediary or customer relationships, imposes an obligation of good faith and fair dealing in its performance or enforcement.

(h) If a real estate brokerage firm has more than one

(1) licensee, the responsible broker and any licensee associated with or engaged by that responsible broker may be designated to work with the seller or the buyer as a designated agent. For an in-house ...


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