Sarah Ferrell v. Earl Knighten

2013 WY 37, 298 P.3d 161, 2013 WL 1223642, 2013 Wyo. LEXIS 41
CourtWyoming Supreme Court
DecidedMarch 27, 2013
DocketS-12-0174
StatusPublished
Cited by4 cases

This text of 2013 WY 37 (Sarah Ferrell v. Earl Knighten) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sarah Ferrell v. Earl Knighten, 2013 WY 37, 298 P.3d 161, 2013 WL 1223642, 2013 Wyo. LEXIS 41 (Wyo. 2013).

Opinion

HILL, Justice.

[¶ 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.

ISSUE

[¶ 2] Ferrell presents one issue:

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

FACTS

[¶ 3] On January 31, 2001, Ferrell, along with her sister and brother-in-law, offered to purchase a commercial property in Thermop-olis, 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 re *162 vealed 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.

[¶ 7] 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 statement but nonetheless again held that dismissal was properly based upon the court’s previous ruling on the statute of limitations. This appeal followed.

DISCUSSION

[¶ 8] Ferrell argues on appeal that the district court erred in ruling that Knight-en had no duty to disclose or provide the property disclosure statement. She relies on Wyo. Stat. Ann. § 33-28-303(c), which provides that a seller’s agent owes no duty to a buyer “except that a licensee [Agent/Knight-en] shall disclose to any prospective buyer all adverse material facts actually known by the licensee.” She contends that Knighten’s withholding of the disclosure statement was a breach of his duty to the buyers and because of that, her claim against Fred C. Hanson Construction was not timely filed. Furthermore, she asserts that because Knighten conducted his business in the building immediately prior to her occupancy there are material issues of fact regarding what Knighten knew about the moisture problem notwithstanding the disclosure statement.

[¶ 9] Knighten responds that there was no breach of duty, but regardless, the statute of limitations has run on any failure to provide the sellers’ property disclosure statement to the buyers.

[¶ 10] Wyo. Stat. Ann. § 33-28-303(c) (LexisNexis 2011) states as follows:

A licensee acting as a seller’s agent owes no duty or obligation to the buyer, except that a licensee shall disclose to any prospective buyer all adverse material facts actually known by the licensee. The adverse material facts may include adverse material facts pertaining to the title and the physical condition of the property, any material defects in the property and any environmental hazards affecting the property which are required by law to be disclosed. The licensee acting as a seller’s agent shall not perpetuate a material misrepresentation of the seller which the licensee knows or should know is false.

After reconsideration and in light of the foregoing statute, the district court acknowledged that Knighten did in fact have a duty to Ferrell. In its November 2012 Order Reconsidering Dismissal with Prejudice, the court wrote that Knighten “had a duty to [Ferrell] to deliver ... Seller’s Disclosure Statement.” In light of the statutory language, coupled with the district court’s realization, Ferrell appears to be correct that Knighten owed Ferrell a duty.

[¶ 11] Unfortunately for Ferrell, the duty issue is not dispositive on appeal. Instead, this case turns on the two-year statute of limitations, which Ferrell does not chai- *163 lenge on appeal. 1 In Serda v. Dennis, 2004 WY 141, ¶¶ 5-6, 100 P.3d 860, 861 (Wyo.2004), we addressed this same issue:

Of more importance is what the Serdas do not challenge. They do not take issue with the jury’s finding that they did not suffer any damages. The jury finding on damages is thus conclusive. Rosics v. Heath, 746 P.2d 1284, 1287 (Wyo.1987) (“Appellant has never challenged this aspect of the Wyoming court’s findings, and therefore, we deem it conclusive.”). Because the jury determined that the Serdas suffered no damages, any issue regarding liability is moot.
The question of liability is irrelevant if there are no damages.

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2013 WY 37, 298 P.3d 161, 2013 WL 1223642, 2013 Wyo. LEXIS 41, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sarah-ferrell-v-earl-knighten-wyo-2013.