Guerrette v. Dyer

• Court: Superior Court of Maine
• Decided: November 7, 2014
• Docket: YORcv-13-180
• Status: Unpublished

Opinion

£ f\1 T ~ PI= n NOV 1 9 7014

STATE OF MAINE SUPERIOR COURT YORK, SS. DOCKET NO. CV-13-180 :JON- 'fOR -ll-01-llt PAMELA I. GUERRETTE, ET AL.

Plaintiffs,

v. ORDER

ELLEN L. DYER and BEACON APPRAISAL CO:MP ANY, INC.;

Defendants.

I. Background

A. Procedural Posture

Before the court is the Plaintiffs' motion to reconsider. The Plaintiffs contend that

the court erroneously dismissed their claims for breach of contract (Count II) and under

the Unfair Trade Practices Act ("UTP A") (Count V). In granting summary judgment, this

court concluded the Plaintiffs were neither parties to the appraisal contract nor

established prima facie evidence showing they were intended third-party beneficiaries.

The Plaintiffs already conceded that the UTP A count fails as a matter of law. (Pl.'s Opp.

Summ. J. 13.) The court thus does not reconsider dismissal of that claim.

B. Facts

The Plaintiffs' contract claim arises out of an appraisal performed as part of the

sale of a home in Sanford, Maine. Material to the Plaintiffs' motion to reconsider are the

parties to that appraisal.

1 Lender X, a third party broker, hired Defendant Beacon Appraisal Company

("Beacon") to appraise the home. (Def.'s S.M.F. ~ 1.) The appraisal request identified

Mortgage Network of Danvers ("Mortgage Network") as the lender and Daniela and

Pamela Guerrette as the borrowers. (Def. 's S.M.F. ~ 2.) The request was forwarded to

Defendant Ellen Dyer ("Dyer"), an employee of Beacon. (Def.'s S.M.F. ~ 3.) Dyer

prepared and forwarded the appraisal to Beacon's client, Mortgage Network. (Def.' s

S.M.F. ~ 7.) The appraisal report stated:

INTENDED USE: The intended use of this Appraisal Report is for the Lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction.

INTENDED USER: The Intended user of this Appraisal Report is the Lender/client.

(Def.'s S.M.F. ~ 9.) The appraisal report also stated the report may be distributed or

disclosed to the borrower, Pl.'s S.M.F. ~ 15, and the borrower "may rely" on the report

"as part of any mortgage finance transaction that involves any one or more of these

parties." (Def.'s S.M.F. ~ 10.)

JI. Discussion

Motions for reconsideration are appropriate where "required to bring to the

court's attention an error, omission or new material that could not previously have been

presented." Shaw v. Shaw, 2003 ME 153, ~ 8, 839 A.2d 714, quoting M.R. Civ. P.

7(b )(5). Rule 7(b )(5) bars litigants from rearguing "points that were or could have been

presented to the court on the underlying motion." !d.

The Plaintiffs' grounds for the motion are that this court "misapprehended" the

law and facts surrounding their contractual theories regarding the real estate appraisal. In

particular, the Plaintiffs assert that they paid for the appraisal based on the breakdown of

2 settlement charges listing "Appraisal Fee to Beacon Appraisal Company" in the amount

of $520.00 "Paid From Borrower's Funds at Settlement." (Pl.'s Mot. Reconsid. Summ. J.

Ex. A.)

As this court previously decided, no express contract existed between the

Defendants and the Plaintiffs. While the settlement documents at the closing required the

Plaintiffs to pay $520.00 for the "Appraisal Fee to Beacon Appraisal Company," this was

a payment for Beacon's services to Mortgage Network, not a payment to Beacon by th'e

Plaintiffs. Beacon was not a party to the closing. The Defendants' only connection to the

Plaintiffs is that the Guerrettes, as listed borrowers, were contemplated by the appraisal

report. (Def.' s S.M.F. ~ 2.) Thus an enforceable right, if any, would be under a third-party

beneficiary theory.

Third-party beneficiaries have enforceable rights where the promisee intends for

the beneficiary to receive the benefit of performance and to enforce the contract. Martin

v. Scott Paper Co., 511 A.2d 1048, 1049-50 (Me. 1986). The Law Court has emphasized

the contracting parties must intend to confer contractual rights to the third party. Stull v.

First Am. Title Ins. Co., 2000 ME 21, ~ 17, 745 A.2d 975 (describing third party

beneficiary rights as "strictly limited").

It is not enough that he benefitted or could have benefitted from the performance of the contract. The intent must be clear and definite, whether it is expressed in the contract itself or in the circumstances surrounding its execution. ·

Devine v. Roche Biomedical Labs., 659 A.2d 868, 870 (Me. 1995) (citations omitted).

Without such intent, a party is a mere incidental rather than intended beneficiary. "An

incidental beneficiary cannot sue to enforce third party beneficiary rights." F 0. Bailey

Co. v. Ledgewood, Inc., 603 A.2d 466,468 (Me. 1992).

3 Here, the Plaintiffs used and received the benefit of Beacon's performance

because the appraisal supported the mortgage finance transaction. Despite the fact the

report provided for the borrower to rely on the appraisal in connection with the loan,

there was no clear and definite intent to provide the borrower with a cause of action for

breach of warranty. To the contrary, the express terms of the appraisal report state that

the intended user is Mortgage Network for the intended use of issuing the loan. It follows

that the Plaintiffs were incidental rather than intended beneficiaries, and without any

rights under the contract. 1 Because the Plaintiffs fail to bring to the court's attention "an

error, omission or new material that could not previously have been presented" as

grounds for reconsideration, the motion must be denied. M.R. Civ. P. 7.

The court additionally notes that the affidavits submitted by the Plaintiffs on

summary judgment and on this motion to reconsider contain arguments appropriate for a

legal brief, not sworn testimony. The affidavits do not state facts, but argue the

application of facts and draw conclusions to support their contract and tort causes of

action. These affidavits plainly fail to comply with M.R. Civ. P. 56, and the court has the

discretion to disregard them for purposes of summary judgment. See Diversified Foods,

Inc. v. First Nat. Bank ofBoston, 605 A.2d 609, 612 (Me. 1992) (court properly excluded

legal arguments and conclusions contained in affidavit in ruling on summary judgment).

On this basis alone, summary judgment was within the court's discretion.

1 The Plaintiffs' arguments focus on the consequences of the appraisal and practices in the real estate industry, but this does not entitle the Plaintiffs to rights under the contract. Devine, 659 A.2d at 870 ("If consequences become the focus of the analysis, the distinction between an incidental beneficiary and an intended beneficiary becomes obscured.")

4 The clerk will make the following entry, by reference, on the docket:

The Plaintiff's Motion for Reconsideration is hereby DENIED.

SO ORDERED.

DATE:

John O'Neil, Jr. Justice, Superior Court

5 CV-13-180

ATTORNEY FOR PLAINTIFF: ROBERT NADEAU NADEAU LEGAL PLLC 311 ALFRED STREET BIDDEFORD ME 04005-3127

ATTORNEY FOR DEFENDANTS: JAMES M BOWIE THOMPSON & BOWIE POBOX4630 PORTLAND ME 04112-4630 EN T E RED AUG 2 2 201(

STATE OF MAINE SUPERIOR COURT YORK, SS. DOCKET NO. CV-13-180

PAM:ELAJ. GUERRETTE, ET AL. ) JOr'f.~OR- Dl-01-Jt+ ) Plaintiff, ) V. ) SUMMARY JUDGMENT ) ELLEN L. DYER and BEACON ) APPRAISAL COMPANY, INC., ) ) Defendant. )

Plaintiffs Pamela J. Guerrette and Daniel R. Guerrette are husband and wife. They

reside at 3 Overlook Drive in Sanford, York County, Maine, with Plaintiffs Graydon L.

Lockard and Dorothy E. Lockard, who are also husband and wife. On June 20, 2012,

Plaintiffs signed a purchase and sales agreement with the then-sellers of the real estate

located at 3 Overlook Drive for a total price of $239,900.00 subject to the "property

appraising at or above purchase price ... "

Defendants, Beacon Appraisal Company, Inc. and Ellen Dyer, were retained by the

Mortgage Lender acting through Lender X to perform an appraisal of the property.

Defendants provided an appraisal, certifying that the value of the premises was

$240,000.00. The Appraisal Report contained the following provisions:

• "the lender I client may disclose or distribute this appraisal report to: the

borrower ... "

• "The Borrower ... may rely on this appraisal report as part of any mortgage

finance transaction that involves any one or more of these parties ... "

• "Any intentional or negligent misrepresentation(s) contained in this appraisal

report may result in civil liability and/ or criminal penalties"

1 Plaintiffs purchased the property on August 17, 2012, for the contract price of

$239,900.00. Shortly thereafter, in September 2012, the individual Plaintiffs deeded the

premises to the Lockard Family Trust. Following the purchase, Plaintiffs allege to have

made repairs and improvements to the property totaling $26,526.56. After the repairs,

Plaintiffs got an appraisal of the property for refinancing purposes. The property was

appraised at $200,000. Plaintiffs assert that the pertinent market values had not

markedly changed between the time of Defendants' appraisal report and the time of

Plaintiffs' attempted refinancing. Plaintiffs bring claims of Negligence IN egligent

Misrepresentation, Breach of Contract/Warranty, Fraud/Deceit, Punitive Damages,

and Unfair Trade Practices. Defendants now move the court for Summary Judgment.

II. Standard of Review

Summary judgment is appropriate where no genuine issue of material fact exists

and the moving party is entitled to judgment as a matter of law. Beal v. Allstate Ins. Co.,

2010 ME 20,

14, 951 A.2d 821. When reviewing a motion for summary judgment, the court reviews

the parties' statements of material facts and the cited record evidence in the light most

favorable to the non-moving party. Id.

A genuine issue of material fact exists where the fact finder must make a

determination between differing versions of the truth. Reliance National Indemnity v.

Knowles Industrial Services Corp., 2005 ME 29, <][7, 868 A.2d 220; citing Univ. of Me.

Found. v. Fleet Bank of Me., 2003 ME 20, <][20, 817 A.2d 871. Furthermore, "a fact is

material if it could potentially affect the outcome of the case;" Id.

III. Discussion

Plaintiffs concede to Defendants' Motion for Summary Judgment on the counts of

Punitive Damages and Unfair Trade Practices, therefore the court grants Defendants'

2 motion as to those two counts without further discussion. The court discusses the

remaining counts in turn.

a. Negligence IN egligen t Misrepresentation

Plaintiffs bring a claim of negligence/ negligent misrepresentation. "One who, in the

course of his business, profession or employment, or in any other transaction in which

he has a pecuniary interest, supplies false information for the guidance of others in their

business transactions, is subject to liability for pecuniary loss caused to them by their

justifiable reliance upon the information, if he fails to exercise reasonable care or

competence in obtaining or communicating the information." Langevin v. Allstate Ins.

Co., 2013 ME 55, 9[ 11, 66 A.3d 585 (citations omitted). A claim of negligence requires a

showing that the defendant owes the plaintiff a duty that was breached causing

damages. Baker v. Farrand, 2011 ME 91, 9I 11, 26 A.3d 806. Plaintiffs allege Defendant

owed a duty of care to provide reasonable appraisal services to those who foreseeably

would use the appraisal. Plaintiffs argue that Defendants could have reasonably

foreseen that Plaintiffs would rely on the appraisal. Plaintiffs argue that they did in fact

rely upon the appraisal and that they were damaged as a result of their reliance.

Plaintiffs also argue that Defendants' appraisal report contained material

misrepresentations.

Defendants argue that Plaintiffs are barred from bringing all tort claims by the

economic loss doctrine. The economic loss doctrine prohibits tort recovery in cases in

which the damages are entirely economic. Oceanside at Pine Point Condo. Owners

Ass'n v. Peachtree Doors, Inc., 659 A.2d 267, 270 (Me. 1995). Persuasively, the Superior

Court has found that the economic loss "doctrine is applicable to service contracts, such

as the winterization contract ... , as well as to purchases of allegedly defective goods."

Maine-ly Marine Sales & Serv., Inc. v. Worrey, 2006 WL 1668039 (Me. Super. Apr. 10,

3 2006). Plaintiffs bring a claim for economic damages as a result of the appraisal

performed by Defendant. They do not claim damages beyond economic damages. For

that reason, Defendant argues that the economic loss doctrine applies and bars

Plaintiffs' tort claims. The court finds that the economic loss doctrine does apply to the

Plaintiff's claim of negligent misrepresentation/ negligence. Under Maine law, claims of

negligence and negligent misrepresentation are not available where a plaintiff seeks

compensation for a purely economic loss in the context of a service contract, as Plaintiff

does in this case.

Defendant argues, in the alternative, that Plaintiffs have not set out a prima facie case

for negligent misrepresentation. Defendants contend that Plaintiffs could not have met

the element of reliance required of a claim of negligent misrepresentation because

Defendants allege that Plaintiffs did not see the Appraisal Report prior to the sale and

therefore could not have relied on it. The court does not reach this argument. The court

grants Defendants' Motion for Summary Judgment on Plaintiff's claim of

Negligence I Negligent Misrepresentation.

b. Fraud

Similar to the above claim for Negligence/Negligent Misrepresentation, Defendant

claims that Plaintiffs' claim of fraud is barred by the economic loss doctrine. As above,

the court finds that economic losses based upon a contract must be pursued through a

contract claim. The court grants Defendants' Motion for Summary Judgment on

Plaintiffs' claim of fraud.

c. Breach of Contract

Plaintiffs bring a claim of breach of contract. Plaintiff cites to two different

documents. Plaintiff cites to the Purchase and Sales Agreement between the Lockards

and the Lockard Family Trust as "Buyer", and Melvin & Joanne Dussault and Edward

4 & Virginia Bourque as "Seller". Plaintrlf also cited to the Appraisal Report, which was

commissioned by The Mortgage Network, acting through Lender X, and created by

Defendant Ellen Dyer as an employee of Beacon Appraisal. Neither of these documents

is an agreement between Plaintiffs and Defendants. Defendants move the court for

Summary Judgment arguing that Plaintiffs and Defendants were not in privity of

contract and therefore Plaintiffs do not have standing to bring a claim for breach of

contract.

Plaintiffs argue that Defendants are bound by the Purchase and Sales Agreement

because Defendants had notice that Plaintiffs purchase of the property depended upon

the outcome of the appraisal. Defendants could not have breached the Purchase and

Sales Agreement because they were not a party to the Agreement and they did not

promise to abide by its terms. "It goes without saying that a contract cannot bind a

nonparty." E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 294, 122 S. Ct. 754, 764, 151 L.

Ed. 2d 755 (2002). Whether or not Defendants had notice that Plaintiffs intended to rely

upon the Appraisal Report by the terms of the Purchase and Sales Agreement is not

relevant to Plaintrlfs ability to enforce against Defendant the terms of an agreement to

which Defendant was not a party.

Plaintiffs argue that because the Appraisal Report authorized the Defendants' client

to distribute the Appraisal Report to Plaintrlfs, Defendants had notice that Plaintiffs

would rely upon the Appraisal Report. Defendants were a party to the Appraisal

Report, however, Plaintiffs were not. A third party does not have standing to enforce a

contract unless the parties to the contract intended the contract to benefit the third

party. "In order to proceed as third party beneficiaries on a contract theory, plaintiffs

must generate a genuine issue of material fact on the issue of ... intent that they receive

an enforceable benefit under the contracts. The intent must be clear and definite." F.O.

5 Bailey Co., Inc. v. Ledgewood, Inc., 603 A.2d 466, 468 (Me. 1992) (citing Ball Corp. v.

Bohlin Building Corp., 187 ill;App.3d 175, 134 ill.Dec. 823, 824, 543 N.E.2d 106, 107

(1989)). The Appraisal Report does not provide any language suggesting that Defendant

and The Mortgage Network/ Lender X intended to provide Plaintiffs with an

enforceable benefit.

Plaintiffs contend that Defendant Beacon Appraisal Company, Inc.'s express

permission to distribute the Appraisal Report to Plaintiffs amounts to intent to provide

Plaintiffs the ability to enforce. The court finds that permission to distribute the

Appraisal Report to Plaintiffs as plainly read in 9[ 21 of the Appraisal Report does not

show any level of intent to provide Plaintiffs with the ability to enforce. The court finds

that Plaintiffs have not made a prima facie showing of intent. Because Plaintiffs are

neither a party to the contract, nor an intended beneficiary under the terms of the

contract, Plaintiffs do not have the right to enforce the contract or standing to bring a

claim for breach of contract. The court grants Defendants' Motion for Summary

Judgment on Plaintiffs' claim of breach of contract.

d. Unfair Trade Practices Act

Defendants move the court for summary judgment on Plaintiffs' claim pursuant to

the Unfair Trade Practices Act (UTPA) arguing that because Plaintiffs did not

commission the Appraisal Report, they do not have standing to bring a UTP A claim.

Any person who purchases or leases goods, services or property, real or personal, primarily for personal, family or household purposes and thereby suffers any loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful ... may bring an action either in the Superior Court or District Court for actual damages, restitution and for such other equitable relief, including an injunction, as the court determines to be necessary .and proper.

6 5 M.R.S. § 213(1) (2013). Plaintiffs did not purchase the services of Beacon Appraisal.

Therefore Plaintiffs are not consumers for the purposes of the UTP A, and do not have

standing to bring suit pursuant to the UTP A. Defendants' Motion for Summary

Judgment on Plaintiff's claim of Unfair Trade Practices is granted.

IV. Conclusion

The court GRANTS Defendant's Motion for Summary Judgment in all respects.

Clerk is directed to enter Judgment for the Defendants on each count.

DATE: John O'Neil, Jr. Justice, Superior Court

7 ATTORNEY FOR PLAINTIFFS: ROBERT NADEAU NADEAU LEGAL PPLC 311 ALFRED STREET BIDDEFORD ME 04005-3127

ATTORNEY FOR DEFENDANT: JAMES M BOWIE THOMPSON & BOWIE POBOX4630 PORTLAND ME 04112-4630