Sarwat Gad, M.D., Et Ux. v. Robert Ray Granberry

• Court: Louisiana Court of Appeal
• Decided: February 3, 2010
• Docket: CA-0009-0476
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

09-476

SARWAT GAD, M.D., ET UX.

VERSUS

ROBERT RAY GRANBERRY, ET AL.

************

APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 2002-1616 HONORABLE EDWARD D. RUBIN, DISTRICT JUDGE

DAVID E. CHATELAIN* JUDGE

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Oswald A. Decuir, Elizabeth A. Pickett, Shannon J. Gremillion, and David E. Chatelain, Judges.

Gremillion, J., dissents and assigns written reasons.

Thibodeaux, Chief Judge, dissents for the reasons expressed by Judge Gremillion.

REVERSED AND REMANDED.

William L. Melancon Elizabeth A. Macmurdo Melancon & Associates 900 South College Road, Suite 300 Lafayette, Louisiana 70503 (337) 233-8600 Counsel for Plaintiffs/Appellants: Melissa Gad Sarwat Gad, M.D.

* Honorable David E. Chatelain participated in this decision by appointment of the Louisiana Supreme Court as Judge Pro Tempore. C. Michael Fister, Jr. Joseph G. Glass Gissel M. Ferriol Duplass, Zwain & Bourgeois, Pfister & Weinstock 3838 N. Causeway Boulevard, Suite 2900 Metairie, Louisiana 70002 (504) 832-3700 Counsel for Defendants/Appellees: Melanie Lunn Van Eaton & Romero, Inc.

David Joseph Krebs Harvey Sylvanous Bartlett, III Krystil Borrouso Lawton Krebs, Farley & Pelleteri 400 Poydras Street, Suite 2500 New Orleans, Louisiana 70130 (504) 299-3570 Counsel for Defendant/Appellee: Dryvit Systems, Inc.

James Leslie Hilburn Sharon Baskin Kyle Nancy A. Richeaux Attorneys at Law 4960 Bluebonnet Boulevard, Suite A Baton Rouge, Louisiana 70809 (225) 293-8400 Counsel for Defendant/Appellee: Robert Ray Granberry

Leigh Haynie Attorney at Law 1009 Kidder Road Carencro, Louisiana 70520 (337) 886-9145 Counsel for Plaintiffs/Appellants: Sarwat Gad, M.D. Melissa Gad CHATELAIN, Judge Pro Tempore.

Plaintiffs appeal the trial court’s grant of summary judgment in favor of

defendant real estate agent and her broker. For the following reasons, we reverse.

Facts and Procedural History

This is a redhibition action concerning a residence sold by Ray Granberry to

Dr. and Ms. Sarwat Gad in May 1995. The Gads filed suit against Mr. Granberry and

other defendants, which included Defendants, Melanie Lunn and Van Eaton and

Romero, Inc., the real estate agent and firm that represented Mr. Granberry in the sale.

The facts and procedural history of this matter are set forth in our prior opinion, Gad

v. Granberry, 07-117 (La.App. 3 Cir. 5/30/07), 958 So.2d 125, writs denied, 07-1336,

07-1361 (La. 9/28/07), 964 So.2d 364, 365, where we reversed the trial court’s

dismissal of the Gads’ redhibition suit on exceptions of prescription filed by five

defendants and remanded the matter to the trial court for further proceedings.

After remand, Defendants filed a motion for summary judgment, alleging that

the Gads cannot prove Defendants are liable to them for negligent misrepresentation

or fraud. The motion was supported with deposition testimonies of Ms. Lunn,

Mr. Granberry, the Gads, and others and documentary evidence. Pertinent to the

motion for summary judgment is Ms. Lunn’s deposition testimony in which she

denied having seen any activity at the residence which indicated there were problems

with it and having any conversations or discussions with Mr. Granberry about any

moisture-related problems with the residence or the exterior finish which is at issue

herein. After a hearing, the trial court granted the motion and dismissed the Gads’

claims against Defendants. The Gads appealed.

1 Motion for Summary Judgment

Appellate courts review motions for summary judgments de novo to determine

whether any genuine issue of material fact exists and whether the mover is entitled

to judgment as a matter of law. La.Code Civ.P. art. 966(B). A motion for summary

judgment will be granted “if the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to material fact, and that mover is entitled to judgment as a matter

of law.” Id.

While the initial burden of proof is on the mover to show that no genuine issue

of material fact exists, if he will not bear the burden of proof at trial on the issue that

is presented by the motion for summary judgment, he is not required “to negate all

essential elements” of his opponent’s claim but need only point out that there is “an

absence of factual support for one or more elements essential” to his opponent’s

action. La.Code Civ.P. art. 966(C)(2). If the opponent “fails to produce factual

support sufficient to establish that he will be able to satisfy his evidentiary burden of

proof at trial, there is no genuine issue of material fact.” Id.

Issues Presented for Review

In their appeal, the Gads present four issues for our review: 1) is summary

judgment precluded because Ms. Lunn’s knowledge of the defects or problems with

the residence is an issue; 2) was the deposition testimony of Ms. Lunn submitted in

support of the motion for summary judgment sufficient to carry Defendants’ burden

of proof; 3) can they meet their burden of proof with regard to their fraud claim; and

4) did Ms. Lunn assume the risk that Mr. Granberry discovered/learned of the

redhibitory defects between the listing and the sale of the residence?

2 Discussion

In Waddles v. LaCour, 06-1245, p. 5 (La.App. 3 Cir. 2/7/07), 950 So.2d 937,

942, writs denied, 07-827, 07-882 (La. 6/22/07), 959 So.2d 496, 498 (citations

omitted) (quoting Osborne v. Ladner, 96-863, p. 16 (La.App. 1 Cir. 2/14/97), 691

So.2d 1245, 1257), this court discussed the duties of a real estate broker or agent:

A purchaser’s remedy against a real estate broker is limited to damages for fraud under LSA-C.C. art. 1953 et seq. or for negligent misrepresentation under LSA-C.C. art. 2315. The action for negligent misrepresentation arises ex delicto, rather than from contract. In order for a plaintiff to recover for negligent misrepresentation, there must be a legal duty on the part of the defendant to supply correct information, a breach of that duty, and damage to the plaintiff caused by the breach. A real estate broker or agent owes a specific duty to communicate accurate information to the seller and the purchaser and may be held liable for negligent misrepresentation. However, the duty to disclose any material defects extends only to those defects of which the broker or agent is aware.

Negligent Misrepresentation

The Gads’ first complaint is that the trial court erred in dismissing their claim

for negligent misrepresentation. Defendants assert they are entitled to summary

judgment because no evidence establishes that Ms. Lunn knew or should have known

of the existence of the defects at issue herein. The Gads argue that an issue of

material fact exists because Ms. Lunn’s deposition testimony does not establish that

she did not have knowledge of any defects with the residence and Defendants did not

submit an affidavit in which she denied such knowledge.

Ms. Lunn had a duty to relay accurate information to the Gads about the

Granberry residence. Accordingly, whether she had knowledge of any defect is a

material issue of fact. Ms. Lunn testified that she never saw any activity or repairs

at the Granberry residence and that she never had any conversations or discussions

with Mr. Granberry about the moisture-related problems with the residence or the

3 exterior finish which caused and/or contributed to those moisture-related problems.

Defendants assert that her testimony is sufficient to establish that the Gads do not

have the evidence required to establish one criteria of their claim, i.e., she was aware

of a defect.

The Gads argue that Ms. Lunn’s testimony is not a denial of knowledge and

does not establish that she did not have knowledge of any repairs or activities at the

residence which indicated there were defects or moisture-related problems with the

residence. They claim the following circumstantial evidence defeats Defendants’

motion for summary judgment: 1) extensive repairs performed on the residence in

1995, including the replacement of a large banque of windows and a large beam in

the attic, were such that it is likely Ms. Lunn learned of the repairs; 2) Ms. Lunn

would not have shown the residence when such repairs were being made and

probably learned of the repairs when she called to make an appointment for that

purpose; 3) a maid or the Granberry children may have mentioned the repairs to

Ms. Lunn; and 4) Defendants “lost” a list of potential purchasers they normally

maintain for listed properties they are contracted to sell.

Defendants argue that because it took experts to determine the source of the

problems with the residence and that determination required removal of exterior

walls, Ms. Lunn could not have had the requisite knowledge to defeat summary

judgment.

Generally, summary judgment is not appropriate if issues regarding subjective

facts, such as intent or knowledge, are present. Murphy’s Lease & Welding Serv., Inc.

v. Bayou Concessions Salvage, Inc., 00-978, 00-979 (La.App. 3 Cir. 3/8/01), 780

So.2d 1284, writ denied, 01-1005 (La. 6/1/01), 793 So.2d 195. However, “summary

4 judgment may be granted on subjective intent issues when no issue of material fact

exists concerning the pertinent intent.” Smith v. Our Lady of the Lake Hosp., Inc., 93-

2512 (La. 7/5/94), 639 So.2d 730, 751 (citing Simoneaux v. E.I. du Pont de Nemours

& Co., Inc., 483 So.2d 908, 912 (La.1986), where the supreme court held that

summary judgment is an appropriate method for disposing of a case in which intent

is a critical question if conclusory statements of a plaintiff are insufficient to support

a finding of intent by reasonable minds). A fact is material if it “would matter at trial

on the merits. Any doubt as to a dispute regarding a material issue of fact must be

resolved against granting the motion and in favor of a trial on the merits.” Suire v.

Lafayette City-Parish Consol. Gov’t., 04-1459, 04-1460, 04-1466, p. 11 (La.

4/12/05), 907 So.2d 37, 48.

Defendants will not bear the burden of proof at trial; therefore, they are not

required “to negate all essential elements” of the Gads’ claim. However, neither

Ms. Lunn’s testimony nor the other evidence submitted in support of the motion for

summary judgment establishes that she did not have knowledge of any repairs or

activities at the residence which indicated there were defects or moisture-related

problems with the residence. Furthermore, the circumstantial evidence regarding the

extent of the repairs performed by Mr. Granberry may be such that a jury would

determine the required repairs indicated the residence had a defect, regardless of its

source, and that Ms. Lunn learned of the extensive repairs from someone other than

Mr. Granberry. Accordingly, summary judgment is inappropriate.

Fraud

The Gads next urge that the trial court erred in dismissing their claim for fraud.

Fraud is defined as “a misrepresentation or a suppression of the truth made with the

5 intention either to obtain an unjust advantage for one party or to cause a loss or

inconvenience to the other.” La.Civ.Code art. 1953. Silence and inaction are also

elements of fraud. Id.

If Ms. Lunn knew of problems with the residence and she did not tell the Gads,

she created an unjust advantage for herself, Van Eaton, and Mr. Granberry and caused

a loss to the Gads. Her knowledge, or lack thereof, is subjective and, under the

circumstances present here, not appropriate for summary judgment.

Assumption of the Risk

The Gads’ last argument is that the trial court erred in granting summary

judgment because Ms. Lunn assumed the risk that the disclosure sheet prepared by

Mr. Granberry in 1991 was inaccurate when she refused Ms. Gad’s request prior to

closing in 1995 to have it updated by Mr. Granberry. Defendants argue that

Ms. Lunn’s duty to the Gads was that she disclose only defects of which she had

knowledge, citing jurisprudence which holds that a purchaser’s claims against real

estate agents are for fraud and negligent misrepresentation.

The legal premise stated above is correct; however, it may not be the only

remedy available to the Gads. There is no legal duty to provide purchasers with a

disclosure form like the one Ms. Lunn had Mr. Granberry complete. Waddles, 950

So.2d 937. However, if Defendants undertook a duty to provide the disclosure form

to the Gads, they were obligated “to perform the task in a reasonable and prudent

manner.” Schulker v. Roberson, 91-1228, p. 5 (La.App. 3 Cir. 6/5/96), 676 So.2d

684, 688 (quoting Crane v. Exxon Corp., U.S.A., 613 So.2d 214, 221 (La.App. 1 Cir.

1992)). Whether they assumed a duty by providing the disclosure form to the Gads

6 is a question of fact to be determined by the trier of fact. Bujol v. Entergy Serv., Inc.,

03-492, 03-502 (La. 5/25/04), 922 So.2d 1113.

The only evidence on this issue is the testimonies of Ms. Gad and Ms. Lunn.

Ms. Gad testified that prior to closing in 1995, Ms. Lunn presented her with the

disclosure sheet which had been completed by Mr. Granberry in 1991, that she

requested it be updated, but Ms. Lunn refused to comply with the request. Ms. Lunn

testified that Ms. Gad did not ask her to have Mr. Granberry update the disclosure

form. This evidence does not establish that Defendants are entitled to summary

judgment on this issue.

Disposition

Genuine issues of material fact exist with regard to the Gads’ claims against

Ms. Lunn and Van Eaton and Romero, Inc. Accordingly, the trial court’s judgment

is reversed, and the matter is remanded for further proceedings. All costs are assessed

to Defendants.

7 09-476

SARWAT GAD, M.D. ET UX.

GREMILLION, Judge, dissenting.

The appellants purchased this home in 1995, with Lunn acting as the realtor.

In 2001, the appellants discovered moisture damage to the home resulting from

defective simulated stucco, and undertook repairs. They filed suit in 2002.

Appellants press their claims against Lunn on two fronts.

First, appellants argue that the seller had undertaken extensive repairs of this

type of damage before the sale. They claim these repairs were undertaken after Lunn

was hired as a listing agent.

Second, appellants submit that prior to the sale, Lunn presented a 1991

disclosure form signed by the seller. Appellants say they requested an updated form,

and Lunn indicated that since no changes had been made to the property, no update

was required.

However, neither the form nor the repairs are important. What is of critical

importance is that there is no evidence that the agent knew the damage existed. The

fact that it took six years and four experts for the appellants to find this damage in

their own home clearly suggests that the damage was quite hidden.

The majority asserts that there is an issue of fact regarding whether the

appellants asked the seller in 1995 to update a 1991 disclosure form. However, this

only suggests a genuine issue as to that form. It does not suggest a genuine issue as

to the alleged damage, which remained hidden for another six years.

Appellants contend that repairs were made to the home in 1995. The majority

1 cites four pieces of circumstantial evidence regarding these repairs that they find

preponderates against the motion for summary judgment. I submit that none of the

circumstantial evidence is sufficient to create a material issue of fact regarding

Lunn’s knowledge of the alleged repairs, much less Lunn’s knowledge of the damage.

In my opinion, the “evidence” is pure conjecture and serves to support the fact that

appellants will be unable to meet their burden at trial regarding Lunn’s knowledge.

The trial court was not concerned with whether there was a factual dispute as

to a 1991 disclosure form, nor with whether there was a factual dispute as to Lunn’s

knowledge of the 1995 repairs. Rather, the trial court was properly concerned only

with whether there was a factual dispute as to Lunn’s knowledge of some very well-

hidden damage that was not discovered until 2001, six years after the appellants

bought and occupied this home. The trial court found that there was no evidence

establishing that Lunn knew of the damages. I agree, and thus would affirm the trial

court.