Rosenlof v. Sullivan

676 P.2d 372, 1983 Utah LEXIS 1232
CourtUtah Supreme Court
DecidedDecember 12, 1983
Docket18408
StatusPublished
Cited by7 cases

This text of 676 P.2d 372 (Rosenlof v. Sullivan) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rosenlof v. Sullivan, 676 P.2d 372, 1983 Utah LEXIS 1232 (Utah 1983).

Opinion

STEWART, Justice:

This is an appeal and cross appeal from a jury verdict in a case involving a real estate transaction. We affirm the jury verdict and remand to the district court for a determination of reasonable attorney’s fees on this appeal.

Ned Sullivan, the defendant and the seller of the real estate in dispute, purchased property in St. George, Utah, and obtained a building permit for the construction of a single family dwelling. He commenced construction of a duplex even though he knew that the size of the property was too small for a duplex under the zoning laws. During the construction, Kent Frei, a real estate agent and a third-party defendant and respondent on this appeal, talked with the defendant about obtaining a listing on the property. The defendant refused to list the property but stated that he would consider a one-party listing if Mr. Frei had a specific buyer. When the duplex was finished, the defendant’s two married sons rented the separate units.

A year after Frei’s conversation with the defendant, Frei talked with the Rosenlofs, his aunt and uncle, about finding them some income property in St. George. The Rosenlofs are the plaintiffs. Frei then contacted the defendant and obtained a one-party listing. The defendant claims that during this time he told Frei that the property could not be represented as a duplex, even though he later signed a document, written by Frei, which referred to the property as a duplex. Frei denies the assertion that he was told the property could not be represented as a duplex. Nevertheless, Frei knew that the property was too small for a duplex, but he assumed, without checking, that the defendant had obtained a variance. Subsequently, the plaintiffs inspected the property. At that time the duplex was occupied and there was no stairway from the top unit to the lower unit.

The plaintiffs signed an earnest money receipt and offer to purchase, and the defendant accepted the offer. Frei acted as an intermediary during the negotiations, and thus the plaintiffs never actually met the defendant. Neither the earnest money receipt nor the listing indicated that the property was a duplex.

After purchasing the property, the plaintiffs continued to rent to the defendant’s sons. Five months later one of the sons moved out. When the new tenant went to the city utility department to change the billing, the city informed the plaintiffs that the property could not be used as a duplex. The plaintiffs immediately applied for a variance, but the application was denied. Furthermore, it was impossible to purchase more land to bring the property into compliance with the zoning.

After failing to obtain a variance, the plaintiffs brought this action against the defendant claiming that the defendant had misrepresented the property as a duplex. The plaintiffs asked for the difference in the value of the property as a duplex and the value as a single dwelling home and for attorney’s fees, as provided for in the earnest money agreement.

The defendant cross-claimed against the real estate agent Frei and his broker Ben Stout. The defendant claimed that Frei had exceeded his authority in representing the property as a duplex and that he had breached his obligation to the plaintiffs by not checking the records to make sure the property could be lawfully used as a duplex, when Frei knew the property was too small for such use.

*374 The jury returned a verdict against the defendant for $18,000, the difference between the value of the property as a single family dwelling rental home and the value of the property as a two family rental home. Plaintiffs were also awarded $4,000 attorney’s fees.

On appeal, the defendant argues that a new trial should be granted because the evidence and law do not support a finding that the plaintiffs reasonably relied on the representation that the property was a duplex. The defendant argues that the plaintiffs could not reasonably have relied upon the false representation because (1) Frei knew the lot was too small for a duplex; (2) Frei was actually the plaintiffs’ agent, not the defendant’s (or Frei was a dual agent for both the plaintiffs and defendant); (3) Frei should not have assumed a variance had been obtained; (4) as plaintiffs’ agent, Frei had a duty to investigate the matter himself and disclose to the plaintiffs the smallness of the lot and the results of his investigation; (5) the plaintiffs are bound by Frei’s knowledge, omissions and negligence because of Frei’s failure to do so; and (6) plaintiffs had no right to rely on the false representations because Frei’s knowledge was imputed to the plaintiffs.

Key to all these contentions is the defendant’s theory that Frei was an agent of the buyers (the plaintiffs), even if he were also an agent of the seller (the defendant). Although there was some evidence to support the theory that Frei was an agent for the buyers, the defendant did not propose an instruction on that theory. The defendant objected only to three instructions which focused solely on an agency relationship between Frei and the seller.

The failure of the defendant to raise in the trial court the issue of whether Frei might also have been an agent of the buyers precludes us from addressing that issue on appeal. E.g., Park City Utah Corp. v. Ensign Co., Utah, 586 P.2d 446 (1978); In re Estate of Ekker, 19 Utah 2d 414, 432 P.2d 45 (1967).

The defendant next argues that the trial court erred by instructing the jury that

[i]f you find that the existing violation of the St. George City Zoning Ordinance renders the title to the property unmarketable as a duplex, and if you also find that the property was represented as a duplex, then the Seller has breached his agreement in the Earnest Money to convey marketable title and [is] answerable in damages, including attorney’s fees.

He contends that the instruction is erroneous because the plaintiffs only alleged fraud in their complaint and not breach of contract.

Under Utah R.Civ.P. 8(a), “ ‘a pleader is required only to make a short and plain statement of his claim.’ ” Blackham v. Snelgrove, 3 Utah 2d 157, 160, 280 P.2d 453, 454 (1955), quoting Burr v. Childs, 1 Utah 2d 199, 204, 265 P.2d 383, 387 (1953). “[A] complaint is required only to ‘ * * * give the opposing party fair notice of the nature and basis or grounds of the claim and a general indication of the type of litigation involved.’ ” Id. 3 Utah 2d at 160, 280 P.2d at 455, quoting 1 Barron & Holtzoff, Federal Practice and Procedure § 255 at 431-34 (1960). The parties are “entitled to ... notice of the issues raised and an opportunity to meet them.” Cheney v. Rucker, 14 Utah 2d 205, 211, 381 P.2d 86, 91 (1963). See also Williams v. State Farm Insurance Co., Utah, 656 P.2d 966, 970-71 (1982), which discusses Blackham, Burr,

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Bluebook (online)
676 P.2d 372, 1983 Utah LEXIS 1232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rosenlof-v-sullivan-utah-1983.