Svendsen v. Stock

23 P.3d 455
CourtWashington Supreme Court
DecidedMay 17, 2001
Docket69283-1
StatusPublished
Cited by51 cases

This text of 23 P.3d 455 (Svendsen v. Stock) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Svendsen v. Stock, 23 P.3d 455 (Wash. 2001).

Opinion

23 P.3d 455 (2001)
143 Wash.2d 546

David E. SVENDSEN, Petitioner,
v.
Gregg N. STOCK and Randi R. Stock, husband and wife, and their marital community, Defendants,
Connie Edwards; John L. Scott, Inc., Respondents,
Greenwood Point Homeowners Association; Seattle/Eastside Building Inspections, Inc.; and David M. Irvine, Defendants.

No. 69283-1.

Supreme Court of Washington, En Banc.

Argued November 16, 2000.
Decided May 17, 2001.

*456 Wiggins Law Office, Charles Kenneth Wiggins, Bainbridge Island, Simburg, Ketter Sheppard & Purdy, George Alfred Purdy, Seattle, for Petitioner.

Douglas S. Tingvall, Bellevue, for Respondents.

ALEXANDER, C.J.

We granted David Svendsen's petition to review a Court of Appeals' decision (1) affirming a judgment, based on a jury verdict, for damages in favor of Svendsen and against John L. Scott, Inc. and one of its agents, Connie Edwards, for Edwards' fraudulent concealment of a defect, but (2) reversing an award to Svendsen of additional damages and attorney fees under the Consumer Protection Act (CPA), chapter 19.86 RCW. The primary issue before us is whether a provision in chapter 64.06 RCW (the "seller disclosure statute") exempts a real estate agent or broker from liability to a home buyer under the CPA for fraudulently concealing matters that are to be disclosed in a seller's disclosure statement. We conclude that the Court of Appeals correctly determined that the *457 statute precludes an action against a real estate agent or broker in cases where the claim for fraudulent concealment arises directly from the completion of the disclosure statement. We hold, however, that it incorrectly held that the fraudulent concealment verdict was not separable from the seller disclosure statute violation. Because the fraudulent concealment by the real estate agent was separate and apart from the seller's completion of the disclosure statement, we conclude that Svendsen established the elements of an independent cause of action against Scott and Edwards under the CPA. Accordingly, we reverse the Court of Appeals and reinstate the trial court's award of damages under the CPA and remand for a recalculation of attorney fees.

I. Facts

In August 1995, Gregg and Randi Stock listed their Lake Sammamish home for sale with real estate agent Connie Edwards of John L. Scott, Inc. In listing their home, the Stocks were required to prepare a statutorily required real property transfer disclosure statement (seller disclosure form), the purpose of which is to disclose to buyers of real estate certain matters relating to the property which are known to the seller. See RCW 64.06.020. One of the matters that is to be disclosed is whether the seller's property has any "standing water[ ] or drainage problems on the property." RCW 64.06.020(1) ("SELLER'S DISCLOSURES" at *A of section "7. GENERAL").

The Stocks were aware as early as 1991 that their property had water problems. In that year and the succeeding year, water flowed onto their property when a storm drain on an adjoining uphill property became blocked. In April 1994, the drain on the adjoining property again became blocked and caused water to back up. The water did not, however, come onto the Stocks' property on that occasion. On all three occasions, King County workers cleared the storm drain in response to complaints from the Stocks and other neighbors.[1] Between November 1994 and August 1995, no additional work was undertaken by the county to assure that the water problem would not reoccur.

While completing the seller disclosure form, the Stocks were confronted with the question of whether the property had any "standing water, or drainage problems." Ex. 6, at 4. Mr. Stock testified that he initially answered "yes" to this question, but changed his answer to "no" based on instructions from Edwards.[2] The change was made after Mr. Stock told Edwards about the past flooding problems and the activities of employees of King County. Mr. Stock said that Edwards told him that he could change his answer because he was not required to disclose a past defect that had been corrected. Specifically, Edwards told him not to disclose the history of the flooding because it "is not happening right now." Verbatim Report of Proceedings (RP) (Sept. 18-19, 1997) at 146. Although Mr. Stock deferred to Edwards in filling out the form, he asked Edwards to disclose the prior instances of flooding to any prospective buyers, and to tell them that "if the drain in the neighbor's yard plugged up to call the county." RP (Sept. 18-19, 1997) at 254-55.

The seller disclosure form was given to Svendsen after he made an offer to purchase the Stock's home. Despite Mr. Stock's request that Edwards disclose the prior flooding problems to prospective buyers, Edwards failed to make any such disclosures to Svendsen or his agent. Although Svendsen had the home inspected, the inspector failed to note any potential flooding problems. Consequently, in October 1995, Svendsen purchased the Stocks' home.

In November 1995 and February 1996, the storm drain on the neighboring property again became clogged and, as a consequence, water flowed onto Svendsen's property.

*458 This flooding caused substantial damage to the property. Although King County workers again cleared the drain, a county engineer testified that the drainpipe could again become blocked by "sticks, logs, basketballs, just about anything." RP (Sept. 17, 1997) at 335.

Svendsen sued John L. Scott, Inc. and Edwards, together with the Stocks, a homeowners association, and a King County building inspector. At the time of trial, only Edwards and Scott (collectively referred to as "Scott") remained as defendants. Svendsen's claims against them were for liability for fraudulent concealment, liability for negligent misrepresentation, and violation of Washington's CPA, chapter 19.86 RCW.

Testimony was presented at trial that Edwards had independent knowledge of the water drainage problems on the neighboring property on which the storm drain was located. This testimony revealed that Edwards learned about these problems in 1994 when she represented buyers of that property. Mr. Stock testified that when he discussed the instances of prior flooding with Edwards, she told him that she had "seen it." RP (Sept. 17, 1997) at 259, 285. In addition, Edwards conceded that she had witnessed "water standing in the [uphill neighbor's] back yard" from a clogged storm drain. RP (Sept. 17, 1997) at 374. Edwards also testified that the buyers of that property later told her that they had called officials at King County who sent workers to the property to clear an obstruction from the drain pipe on the property. She went on to say that she relied on those buyers' assurances in forming her belief that the county had remedied the problem.

A jury found that although Scott fraudulently concealed the existence of water and drainage problems and violated the CPA, it did not engage in negligent misrepresentation. The jury assessed damages at $38,298, finding Scott 95 percent at fault and the Stocks 5 percent at fault.

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Bluebook (online)
23 P.3d 455, Counsel Stack Legal Research, https://law.counselstack.com/opinion/svendsen-v-stock-wash-2001.