THIS
OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS
PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
THE
STATE OF SOUTH CAROLINA
In
The Court of Appeals
Alpha Contracting
Services, Inc., Appellant,
v.
Household Finance Corp.,
II; John W. Harris, d/b/a S.C. Corporate Real Estate Service; and S.C.
Corporate Real Estate Service, Respondents.
Appeal
From Richland County
Benjamin
H. Culbertson, Circuit Court Judge
Unpublished
Opinion No. 2011-UP-289
Submitted
May 4, 2011 Filed June 13, 2011
AFFIRMED
Donald
E. Jonas, of Columbia, for Appellant.
Thad
H. Westbrook and Candace C. Jackson, both of Columbia, for Respondent Household
Finance Corporation, II.
Kevin A. Hall and Matthew Todd Carroll, both of Columbia, for Respondent John W. Harris, d/b/a SC Corporate Real Estate Service.
PER CURIAM: Alpha
Contracting Services, Inc. (Alpha) brought this negligent misrepresentation action
against Household Finance Corp., II (Household) and John W. Harris, d/b/a S.C.
Corporate Real Estate Service, (Harris) (collectively Respondents) after
discovering that a residence it purchased had approximately 1,000 square feet less
than the amount represented in a multiple listing service (MLS). Alpha seeks
review of the circuit court's order granting summary judgment to Respondents. We affirm.
FACTS/PROCEDURAL
HISTORY
On June 7, 2005,
Harris, a real estate broker, entered into an Exclusive Right to Sell Agreement
with Household concerning one of its foreclosure properties at 6 Rice Mill
Ferry Road in Richland County. Unbeknownst to Harris, sometime in June 2005,
Household received a copy of a private appraisal it had commissioned. The
appraisal indicated that the house contained 3,043 square feet of heated living
space. Household did not provide a copy of the appraisal to Harris.
Harris advertised
the property in an MLS listing, which stated that the property contained
approximately 3,916 heated square feet of living space and the information in
the listing was "Deemed Reliable, but Not Guaranteed." Harris had
obtained the information regarding square footage from the Richland County tax
assessor's office. The amount indicated was consistent with the square footage
noted in the 2005 Richland County tax appraisal for the property.
In November
2005, Alpha was incorporated for the purpose of renovating and reselling homes.
In January 2006, Alpha entered into a contract of sale for Household's
property on an "as is where is" basis. The contract included the
following provision regarding inspection of the property:
The
Listing and Selling Broker(s) recommend that Purchaser obtain a home inspection.
Purchaser has the right within ten (10) business days after acceptance of
contract, to have home inspected by qualified professional inspectors of his
choice . . . Purchaser's failure to notify Seller or Seller's Agent in writing
of any defect found by the home inspection within the time limits herein
provided, or Purchaser's acceptance of the deed at closing, shall constitute
Purchaser's full acceptance of the condition of the property and a waiver of
Purchaser's right to object to any defects found by the home inspection(s).
The contract
also contained the following disclaimers: "The parties acknowledge that
the Listing and Selling Broker(s) and their Agent(s): (A) Give no warranty of
any kind, express or implied, as to the physical condition of the property or
as to [the] condition of or existence of improvements, services or systems
thereto . . . ; (B) Give no warranty, express or implied, concerning . . . the
accuracy of the square footage[,] heated or unheated . . . (D) Give no
warranty, express or implied, as to the fitness for a particular purpose of the
property or improvements thereto . . . ." An addendum to the contract
included the following language: "Buyer acknowledges . . . that Buyer has
been given a reasonable opportunity to inspect and investigate the property and
all improvements thereon . . . and that in purchasing the property[,] Buyer is
not relying on Seller, or its agents, as to the condition or safety of the
property and/or any improvements thereon . . . ."
Alpha does not
dispute the fact that it did not measure the home before closing on the
purchase for $205,000. After purchasing the home, Alpha renovated it and
placed it on the market. Alpha then commissioned an appraisal of the property,
which indicated that it had 2,942 square feet of heated living space instead of
3,916 square feet as indicated by the MLS listing. Alpha later sold the
property for $280,000.
Alpha then filed
this action against Respondents, asserting claims for negligence, negligent
misrepresentation, breach of contract, and breach of implied warranty. The
circuit court granted Respondents' summary judgment motions, and this appeal
followed.
ISSUES ON APPEAL
1. Did the circuit
court properly grant summary judgment to Respondents when they were entitled to
judgment as a matter of law on each of Alpha's claims?
2. Did the circuit
court properly grant summary judgment to Respondents without first
requiring Household to comply with Alpha's discovery requests?
STANDARD
OF REVIEW
On appeal from
the grant of a summary judgment motion, this court applies the same standard as
that required for the circuit court under Rule 56(c), SCRCP. Brockbank v. Best Capital Corp.,
341 S.C. 372, 379, 534 S.E.2d 688, 692 (2000). Summary judgment is proper
when there is no genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law. Rule 56(c), SCRCP; Adamson v. Richland Cnty. Sch. Dist. One,
332 S.C. 121, 124, 503 S.E.2d 752, 753 (Ct. App. 1998). "To
determine if any genuine issues of fact exist, the evidence and all reasonable
inferences must be viewed in the light most favorable to the non-moving party." Sauner v. Pub. Serv. Auth. of S.C., 354 S.C. 397, 404, 581 S.E.2d 161,
165 (2003). Further, "in cases applying the
preponderance of the evidence burden of proof, the non-moving party is only
required to submit a mere scintilla of evidence in order to withstand a motion
for summary judgment." Hancock
v. Mid-South Mgmt., Inc., 381 S.C. 326, 330, 673 S.E.2d
801, 803 (2009).
"The
purpose of summary judgment is to expedite disposition of cases [that] do not
require the services of a fact finder." George v. Fabri, 345 S.C. 440,
452, 548 S.E.2d 868, 874 (2001). "Summary
judgment is appropriate in those cases in which plain, palpable and
undisputable facts exist on which reasonable minds cannot differ." Priest
v. Brown, 302 S.C. 405, 408, 396 S.E.2d 638, 639 (Ct. App. 1990).
"It is not sufficient that one create an inference [that] is not
reasonable or an issue of fact that is not genuine." Id. Once the
moving party meets the initial burden of showing an absence of evidentiary
support for the opponent's case, the opponent cannot simply rest on mere
allegations or denials contained in the pleadings but must come forward with
specific facts showing there is a genuine issue for trial. Rule 56(e),
SCRCP; Boone v. Sunbelt Newspapers, Inc., 347 S.C. 571, 579, 556 S.E.2d 732, 736 (Ct.
App. 2001).
LAW/ANALYSIS
I. Judgment
as a Matter of Law
Alpha maintains
that the circuit court erred in granting summary judgment to Respondents
because Alpha presented more than a scintilla of evidence showing that
Respondents grossly misstated the square footage of the house Alpha purchased
and intentionally withheld information as to the actual square footage. We
believe the circuit court correctly granted summary judgment to Respondents
regardless of any evidence of Respondents' intent to withhold information
because the contract of sale expressly disclaimed any warranty as to the home's
square footage and because Alpha failed to measure the square footage before closing
on the purchase. We will address each of Alpha's causes of action in turn.
A. Negligent
Misrepresentation
To
establish a claim for negligent misrepresentation, a plaintiff must show:
(1) the defendant made a false representation to the plaintiff;
(2) the defendant had a pecuniary interest in
making the statement; (3) the defendant owed a duty of care to communicate
truthful information to the plaintiff; (4) the defendant breached that duty;
(5) the plaintiff justifiably relied on the representation; and (6) the
plaintiff suffered a pecuniary loss as a result of such reliance.
Schnellmann
v. Roettger, 368 S.C. 17, 20-21, 627 S.E.2d 742, 744 (Ct. App. 2006), aff'd as modified on other grounds, 373 S.C. 379, 645 S.E.2d
239 (2007).
In Schnellmann,
two home purchasers asserted a negligent misrepresentation claim against a real
estate listing agent based on the discrepancy between the square
footage indicated in an MLS listing and the actual square footage. Id. at 20, 627 S.E.2d at 744. This court noted:
The Schnellmanns could have discovered the misstatement by simply
requesting a copy of the appraisal or by having someone come in to measure the
property. They were informed via the MLS listing that the measurements were not
precise. The Schnellmanns viewed the house, and proceeded with the purchase
without finally determining the exact square footage. In light of the evidence
presented, we agree with the trial court's conclusion that if the Schnellmanns
relied on the approximation of the square footage contained in the listing, such
reliance was unreasonable as a matter of law.
Id. at
21, 627 S.E.2d at 745 (emphasis added).
Like the
purchasers in Schnellmann, Alpha failed to take its own
measurements of the home's square footage. Therefore, Alpha's reliance on the
square footage indicated in the MLS listing was unreasonable as a matter of
law. Alpha cannot obtain compensation from Respondents if it has not exercised
its own due diligence. See Schnellmann, id. at
21, 627 S.E.2d at 745 ("[T]here can be no liability for casual statements,
representations as to matters of law, or matters which plaintiff could
ascertain on his own in the exercise of due diligence.") (citation and internal
quotation marks omitted).
Alpha argues
that the determination of the right to rely on a defendant's representation
necessarily requires weighing the evidence of whether the representation was
material and intentional or insubstantial and inadvertent. However, Alpha
cites no authority for this proposition. Therefore, Alpha has abandoned this
argument. See Rule
208(b)(1)(D), SCACR (requiring the citation of authority in the argument portion of an appellant's brief); First
Sav. Bank v. McLean, 314 S.C. 361, 363, 444 S.E.2d 513, 514 (1994) (noting that when a party fails to cite authority or when
the argument is simply a conclusory statement, the party is deemed to have
abandoned the issue on appeal).
Alpha
cites the following language from section 40-57-137(F) of the South Carolina
Code (2011) in support of its argument that the evidence of Respondents' intent
precluded summary judgment:
A seller's agent, the company, and the broker-in-charge are not
liable to a buyer for providing the buyer with false or misleading
information if that information was provided to the licensee by his
client and the licensee did not know or have reasonable cause to suspect the
information was false or incomplete.
(emphasis added).[1]
Admittedly, this statute creates a duty of care on the part of a real estate
broker toward a purchaser to avoid burying his head in the sand with regard to
the condition of the property.[2]
This would establish the third element of the negligent misrepresentation
claim. However, section 40-57-137(F) does not suggest that a plaintiff has
established all of the elements of a negligent misrepresentation claim if
the plaintiff merely presents evidence that the broker had reasonable cause to
suspect information provided to him by his client was false or incomplete. The
language in subsection (G) of the statute lends support to this conservative
interpretation of subsection (F): "Nothing in this chapter limits the
obligation of the buyer to inspect the physical condition of the property which
the buyer may purchase."[3]
Here, Alpha relied
on an MLS listing that expressly stated that the information was not
guaranteed. Further, the parties' contract expressly disclaimed any warranty
as to square footage. Alpha, therefore, cannot show even a scintilla of
evidence as to the fourth element of the negligent misrepresentation claima
breach of the duty of care.
Moreover, Alpha
failed to take its own measurements of the home, and, thus, its reliance on the
MLS listing was unreasonable as a matter of law. This precluded showing even a
scintilla of evidence on the justifiable reliance element, the fifth element,
of its negligent misrepresentation claim.
Based on the
foregoing, Respondents
were entitled to judgment as a matter of law on Alpha's negligent
misrepresentation claim.
B. Negligence
Alpha's
negligence claim and its negligent misrepresentation claim should have been
treated as solely one claim for negligent misrepresentation. See Rule 220(c),
SCACR (stating that this court may affirm the circuit court's ruling upon
any ground appearing in the record); Quail Hill, L.L.C. v. Cnty.
of Richland, 387 S.C. 223, 240, 692 S.E.2d 499, 508 (2010) (holding
that a plaintiff's negligence claim against a county for its employee's mistake
in advising the plaintiff's agent regarding a zoning classification was
subsumed in its negligent misrepresentation claim); id. ("We agree
with County that Quail Hill's claims of negligence and negligent misrepresentation should be treated as solely
one for negligent misrepresentation."). Because Respondents were entitled to
judgment as a matter of law on Alpha's negligent misrepresentation claim, they
were likewise entitled to judgment as a matter of law on Alpha's negligence
claim.
Even if we were
to examine the negligence claim independently, Respondents were entitled to
judgment as a matter of law on this claim because they expressly disclaimed any
warranty as to square footage and thus did not breach any duty to give truthful
information to Alpha.
C. Breach
of Contract
Alpha's
complaint states that Respondents' representation regarding square footage
constituted a condition of the contract of sale. The complaint further states
that despite this condition, the house contained only approximately 75% of the
stated square footage, and, therefore, Respondents breached the contract of
sale.
When the terms
of a contract
are clear, the interpretation of the contract is a question of law for the
court. Stribling v. Stribling, 369 S.C. 400, 404, 632 S.E.2d 291, 293 (Ct. App. 2006).
Here, the contract of sale has no provision stating the amount of the home's square
footage. In fact, it has a provision clearly stating that the listing and
selling brokers give no warranty concerning the accuracy of the square footage.
Further, the
parties' contract included an integration clause,
stating "[t]he parties agree that this written contract expresses the
entire agreement between the parties, and that there is no other agreement,
oral or otherwise, modifying the terms hereunder . . . ." Thus, the
square footage representation in the MLS listing is not a part of the contract. See Gilliland v. Elmwood Props., 301 S.C. 295, 302, 391 S.E.2d
577, 581 (1990) ("The parol evidence rule prevents the introduction
of extrinsic evidence of agreements or understandings contemporaneous with or
prior to execution of a written instrument when the extrinsic evidence is to be
used to contradict, vary, or explain the written instrument."); id. ("This is especially true when the written instrument contains a merger or
integration clause.").
Because
the alleged breach is not based on any provision in the parties' contract, Respondents were
entitled to judgment as a matter of law on Alpha's breach of contract claim.
D. Breach of Implied
Warranty
Alpha's
complaint states that Respondents' representation regarding square footage
constituted an implied warranty that the house would be fit for its intended
use and the normal expectations of a purchaser. The complaint further states
"[d]espite such implied warranty of fitness and habitability, the
Plaintiff's home was not as represented and actually contained only
approximately 75% of the . . . heated living area represented."
Here,
Alpha conceded in its complaint that it purchased a used home from
Respondents. "[N]o warranty attaches to sales of used homes." Arvai v.
Shaw, 289 S.C. 161, 164, 345 S.E.2d 715, 717 (1986). Further, the
contract of sale expressly disclaimed any warranties as to the accuracy of
square footage, the property's physical condition, or its fitness for a
particular purpose.
Based on the
foregoing, Respondents
were entitled to judgment as a matter of law on Alpha's breach of implied
warranty claim.
II. Discovery
Finally, Alpha
asserts that the circuit court erred in granting summary judgment to Respondents
without first requiring Household to comply with Alpha's discovery requests. We disagree.
"A
complete failure of proof concerning an essential element of the non-moving
party's case necessarily renders all other facts immaterial." Gauld
v. O'Shaugnessy Realty Co., 380 S.C. 548, 559, 671 S.E.2d 79,
85 (Ct. App. 2008) (citation and internal quotation marks omitted). Therefore,
"the nonmoving party must demonstrate the likelihood that further
discovery will uncover additional relevant evidence and that the party
is not merely engaged in a fishing expedition." Dawkins
v. Fields, 354 S.C. 58, 69, 580 S.E.2d 433, 439 (2003) (citations
and internal quotation marks omitted) (emphasis added).
Here,
the facts relevant to Alpha's claims are undisputed and are clearly reflected
in the record. Alpha closed on the sale of a used home without first measuring
the home's heated square footage, despite the disclaimer in the MLS listing and
despite the provisions of the contract disclaiming the accuracy of the square
footage or any warranty of fitness for a particular purpose. Therefore,
further discovery will not uncover additional relevant evidence, as
required by Dawkins.
Based
on the foregoing, the circuit court properly granted summary judgment to
Respondents despite the fact that discovery had not yet been completed.
CONCLUSION
Accordingly, the
judgment of the circuit court is
AFFIRMED.
SHORT, KONDUROS,
and GEATHERS, JJ., concur.
[1] Subsection
(F) also states: "A licensee who represents a seller shall treat all prospective
buyers honestly and may not knowingly give them false or misleading information
about the condition of the property which is known to the licensee or, when
acting in a reasonable manner, should have been known to the licensee."
The "condition of the property" includes square footage.
[2] See Rayfield
v. S.C. Dep't of Corr., 297 S.C. 95, 103, 374 S.E.2d 910, 914 (Ct.
App. 1988) ("In order to show that the defendant owes him a duty of care
arising from a statute, the plaintiff must show two things: (1) that the
essential purpose of the statute is to protect from the kind of harm the
plaintiff has suffered; and (2) that he is a member of the class of persons the
statute is intended to protect."); id. ("If
the plaintiff makes this showing, he has proven the first element of a claim
for negligence: viz., that the defendant owes him a duty of care.").
[3] Also noteworthy
is subsection (Q) of the statute, which states that the
provisions of section 40-57-137 that are inconsistent with common law supersede
common law and the common law may be used to aid in interpreting or clarifying
the duties described in the statute. The court's opinion in Schnellmann is
consistent with section 40-57-137 and clarifies the scope of the buyer's duty
to inspect to include measuring square footage.