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Sarah Ferrell v. Earl Knighten

March 27, 2013


Appeal from the District Court of Hot Springs County The Honorable Robert E. Skar, Judge

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


NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.

[¶1] Appellant Sarah Ferrell challenges an order dismissing her professional negligence claim against a real estate agent who represented the sellers in Ferrell's 2001 purchase of a commercial property. On appeal, Ferrell claims that the agent was negligent in failing to provide a property disclosure statement. We dismiss and explain hereinafter.


[¶2] Ferrell presents one issue:

Whether a realtor acting as seller's agent has a duty of care to the buyer.


[¶3] On January 31, 2001, Ferrell, along with her sister and brother-in-law, offered to purchase a commercial property in Thermopolis, Wyoming. Appellee Earl Knighten was the real estate agent who prepared the offer and represented himself as the "Broker working with the Buyer as [Seller's Agent]." The sellers (Jerry and Nancy Slagle) accepted the offer to purchase. Knighten was also the tenant of the building at issue.

[¶4] On February 5, 2001, the sellers prepared a property disclosure statement in compliance with the contract requirement. Opinions diverge about what happened next. Knighten claims that he provided the buyers with the property disclosure statement prior to closing, but Ferrell argues that she did not receive a copy of the disclosure statement until June of 2010, during litigation in a separate case. In any event, the disclosure states: "Foundation wall on west side moist when it rains for prolonged periods." Ferrell claims that she hired a housing inspector to examine the building prior to closing, but the inspector did not detect a moisture problem with the foundation and closing was held on April 5, 2001.

[¶5] In 2003, Ferrell opened a health food store on the property and in 2004 she became the sole owner of the property. Two years later, in October of 2006, Ferrell discovered three inches of water in the basement of the building. The water had leaked through the west wall of the foundation of the building. A resulting investigation revealed an irrigation pipe on an adjacent property had ruptured and was the source of the water leak. Also, the investigation revealed that the west wall of the property was originally built as an interior wall shared with another building which was demolished in 1991 after a fire. That demolition converted the interior wall of Ferrell's building into an exterior wall.

[¶6] Nearly four years passed and in January of 2010 Ferrell filed suit against Fred C. Hanson Construction, the company that demolished the adjoining building. Ferrell claimed that Hanson had not properly protected and sealed the west wall of her building against moisture during the conversion, and now claims that it was during discovery in that case when she first received a copy of the property disclosure statement. However, during that case the sellers' son, Steve Slagle, executed an affidavit stating that the buyers were in fact provided a copy of the property disclosure statement and, prior to closing, they were verbally advised of the basement water issues. That case was resolved in summary judgment in favor of Hanson. The court ruled that the statute of limitations began to run on February 5, 2001, when the sellers completed the property disclosure statement.

[ΒΆ7] In January of 2012, Ferrell filed a complaint against Knighten, alleging that he was negligent in failing to provide the property disclosure statement. A hearing was held, whereafter the district court found that Ferrell's causes of action should be dismissed with prejudice on account of the two-year statute of limitations having expired. In a final attempt to save her lawsuit Ferrell filed a motion to set aside the dismissal. A second hearing was held and Ferrell's motion was denied. In its subsequent order the district court acknowledged that Knighten had a duty to deliver the disclosure ...

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