Perrothers v. Ellison Realty, Inc.

40 Fla. Supp. 2d 178
CourtFlorida County Courts
DecidedMarch 30, 1990
DocketCase No. 89-734 CC-H
StatusPublished

This text of 40 Fla. Supp. 2d 178 (Perrothers v. Ellison Realty, Inc.) is published on Counsel Stack Legal Research, covering Florida County Courts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Perrothers v. Ellison Realty, Inc., 40 Fla. Supp. 2d 178 (Fla. Super. Ct. 1990).

Opinion

OPINION OF THE COURT

HALE R. STANCIL, County Judge.

FINAL JUDGMENT

THIS CAUSE came on to be heard the 15th day of February, 1990, on the complaint of the plaintiff RUTH MARION PERROTHERS for [179]*179damages against the defendant ELLISON REALTY, INC., a licensed real estate broker, and ELLEN WILLIAMS, a licensed real estate agent working under the license of ELLISON REALTY, INC. The essential facts not in dispute are that: (1) On October 17, 1988 defendant ELLEN WILLIAMS listed HENRY FARRAR’S and his wife, PATRICIA FARRAR’S home for sale and caused a multiple listing statement to be executed indicating the subject property had city water and sewer. (2) On November 19, 1988, the plaintiff through defendant ELLEN WILLIAMS entered into a real estate sales contract for the purchase of the FARRAR’S home and lot situated at 3815 NE 4th Street, Ocala, Florida.

From the evidence it is clear that the plaintiff prior to purchase and while inspecting the property and looking over the pool were advised by ELLEN WILLIAMS that the property had city water and sewer to which the plaintiff’s brother made remarks to the effect that it was nice that the house was on sewer, especially with a pool. Plaintiff testified she would not have purchased the property had it not been on city water and sewer. It is undisputed the seller HENRY FARRAR who is not a party to this law suit executed the Multiple Listing Service fact sheet giving listing information to the sale person and broker indicating the property was on city sewer. It is also undisputed that Multiple Listing Service fact sheet was shown to the plaintiff prior to the contract being signed. There were no apparent characteristics on the property indicating a septic tank or that the property was not connected to city sewer. City sewer is available in the area and no one expressed any doubt the property was not connected to the city sewer.

After the real estate closing defendant ELLISON REALTY, INC. managed the property for plaintiff and within a few months a problem with the sewer system became apparent. Upon closer examination it was discovered that although city sewer and water was available the property was not connected to the city sewer, but rather to a septic tank. The impact cost alone of hooking up to city sewer is $934.00. The sellers have long since departed Florida, reported to be somewhere in the northeastern part of the United States. No attempt has been made to make them a party to this action and neither party requested leave of court to do so.

Plaintiff in seeking to hold the defendants liable present two theories of liability: (1) Negligence, that is the defendants’ were negligent in failing to ascertain the truth or falsity of the representation regarding city sewer; and (2) Innocent misrepresentation.

The elements of fraud are: (1) A misrepresentation of material fact; [180]*180(2)[a] knowledge of the representor of misrepresentation, or [b] representations made by the representor without knowledge as to truth or falsity, or [c] representations made under circumstances which the representor ought to have known, if he did not know, of the falsity thereof; (3) an intention that the representor induced another to act on it; (4) resulting injury to the party acting in justifiable reliance on the representation.

The Court finds no evidence of fraudulent or negligent misrepresentation and plaintiff if she is to prevail must do so on the theory of innocent misrepresentation.

The issue thus presented is: SHOULD LIABILITY FOR INNOCENT MISREPRESENTATION EXTEND TO A REAL ESTATE AGENT, WHO ACTED IN GOOD FAITH AND SERVED ONLY AS A CONDUIT FOR THE OWNER’S MISREPRESENTATION?

Restatement (Second) of Torts (1977) section 552C(1) define the tort of innocent misrepresentation as follows:

One who, in a sale, rental or exchange transaction with another, makes a misrepresentation of a material fact for the purpose of inducing the other to act or to refrain from acting in reliance upon it, is subject to liability to the other for pecuniary loss caused to him by his justifiable reliance upon the misrepresentation, even though it is not made fraudulently or negligently.

In Langley v Irons Land & Development Co., 94 Fla. 1010, 114 So. 769 (1927) the Supreme Court in discussing innocent misrepresentation, held:

According to the weight of authority, misrepresentation of material facts, although innocently made, if acted on by the other party to his detriment, will constitute a sufficient ground for rescission and cancellation in equity. The real inquiry is not whether the party making the representation knew it to be false, but whether the other party believed it to be true and was misled by it in making the contract; and, whether the misrepresentation is made innocently or knowingly, the effect is the same. It is as conclusive a ground of relief in equity as a willful and false assertion, for it operates as a surprise and imposition on the other party; and in such case the party must be held to his representations.

In Held v Trafford Realty Co., 414 So.2d 631 (Fla. 5th DCA 1982) the Court in discussing a false representation that was an innocent misrepresentation held that, “Whether made innocently or knowingly, misrepresentation of a material fact acted on by the other party to his [181]*181detriment is a ground for rescission of a contract.” The Court has no argument with the facts and the law applied in Held, supra which permitted rescission. Plaintiff is not seeking rescission against the seller, plaintiff is seeking damages from the broker and sales agent. Likewise should the contract be executory the Court would have no difficulty in it being declared null and void.

In the facts before this Court defendant ELLEN WILLIAMS, showed the plaintiff the Multiple Listing Service fact sheet as completed and signed by the seller, HENRY FARRAR. The defendant, ELLEN WILLIAMS did not expand or go beyond what was contained within this sheet. She only reiterated what the plaintiff had already been shown and what she in good faith believed. There was nothing either unusual or out of the ordinary to indicate or even suggest that the property might not in fact be on the city sewer.

Plaintiff primarily relies upon the case of Bevins v Ballard, 655 P. 2d 757 (Alaska 1982) wherein the Alaska Supreme Court was confronted with the question:

[W]hether or not liability for innocent misrepresentation should extend to the owner’s agent, the real estate broker, where that party serves a conduit for the owner’s misinformation?

In answering said question in the affirmative the Alaska Supreme Court held,

A purchaser who relies on a material misrepresentation, even though innocently made, has a cause of action against the broker originating or communicating the misrepresentation.

In adopting this ruling the Alaska Court makes no distinction between a broker “originating” or “communicating” the misrepresentation. The Court went on to say:

In our view, the consequences of recognizing a cause of action in this situation are entirely beneficial. The presence of a cause of action against the broker would tend to lessen the likelihood of transactions tainted by misinformation and confusion.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bevins v. Ballard
655 P.2d 757 (Alaska Supreme Court, 1982)
Held v. Trafford Realty Co.
414 So. 2d 631 (District Court of Appeal of Florida, 1982)
Miller v. Sullivan
475 So. 2d 1010 (District Court of Appeal of Florida, 1985)
Lyons v. Christ Episcopal Church
389 N.E.2d 623 (Appellate Court of Illinois, 1979)
Langley v. Irons Land & Development Co.
114 So. 769 (Supreme Court of Florida, 1927)
Demuth v. Old Town Bank
37 A. 266 (Court of Appeals of Maryland, 1897)

Cite This Page — Counsel Stack

Bluebook (online)
40 Fla. Supp. 2d 178, Counsel Stack Legal Research, https://law.counselstack.com/opinion/perrothers-v-ellison-realty-inc-flactyct-1990.