Naramore v. Duckworth-Morris Realty Co.

Citations: 669 So. 2d 946; 1995 Ala. Civ. App. LEXIS 606; 1995 WL 619663Docket: 2940957

Court: Court of Civil Appeals of Alabama; October 20, 1995; Alabama; State Appellate Court

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The case involves Alvis E. Naramore, Jr. and Judith A. Naramore, who appealed a summary judgment favoring Duckworth-Morris Realty Company in their lawsuit for breach of contract, breach of warranty, and fraudulent concealment. The Naramores sought to buy a home in Tuscaloosa and engaged a Duckworth-Morris agent to assist them. After entering into a sales contract on July 3, 1992, inspections were arranged at the Naramores' request, which the agent indicated showed the house was "fine." However, a termite inspection revealed damage, and the Naramores were not informed of this until the closing on August 10, 1992. After moving into the house and discovering further problems, they filed a lawsuit on March 4, 1994, later amending the complaint to include White's Appliance Company.

Duckworth-Morris filed for summary judgment on August 22, 1994, supported by excerpts from the Naramores' depositions, which indicated uncertainty about the agent's knowledge of the termite inspection results prior to closing. The Naramores’ attorney requested continuances to complete discovery, including depositions of relevant parties, which the trial court granted. However, on April 13, 1995, the trial court ultimately granted summary judgment in favor of Duckworth-Morris, which the Naramores appealed. The appeal was directed to the Court of Civil Appeals of Alabama, focusing solely on the claims against Duckworth-Morris, as there was no summary judgment regarding White's Appliance. Summary judgment is appropriate when no genuine issue of material fact exists, shifting the burden to the nonmovant to provide substantial evidence to the contrary.

In **Bass v. SouthTrust Bank of Baldwin County**, the court addressed the standard for "substantial evidence," defining it as evidence that allows fair-minded individuals to infer the fact in question. It emphasized that, during appeals, the record must be viewed favorably towards the nonmovant. The Naramores challenged the summary judgment related to their breach of contract and fraud claims, asserting that deposition excerpts created a genuine issue of material fact, though they did not contest the summary judgment concerning their breach of warranty claim.

The court found the summary judgment appropriate for the fraudulent concealment claim. It established that an agent must truthfully disclose material facts revealed during an inspection, especially if they possess knowledge of defects unknown to the buyer. The Naramores’ evidence hinged solely on their depositions, where they acknowledged that the agent's information stemmed from inspection reports. They claimed the agent concealed termite inspection results but lacked knowledge of when the agent received this report, making their testimony insufficient to support their fraud claim. Their failure to provide substantial evidence of the agent's knowledge of the defect was crucial.

Regarding the breach of contract claim, the court ruled that claims stemming from the termite inspection were not precluded by the sales contract’s waiver clause, which only addressed household appliances and mechanical systems. It clarified that real estate agents do not have a duty to investigate property defects without a confidential relationship, as established in prior case law. However, unlike the precedent case, there was some evidence indicating a potential confidential relationship between the Naramores and the agent, as they sought assistance from Duckworth-Morris, a different agency, indicating a level of reliance on the agent's expertise.

An agent showed the Naramores a house, suggested inspections before closing, and offered to arrange them. However, the results of the termite inspection were not communicated to the Naramores prior to closing. Duckworth-Morris claims it is not liable due to an ambiguous agency disclosure in the sales contract, which the Naramores initialed. This provision indicates that Prichett-Moore, Inc. represents the seller, but the Naramores believed Duckworth-Morris was representing them. Their depositions imply an implied contract existed between them and Duckworth-Morris for inspection purposes, which would impose a fiduciary duty on Duckworth-Morris to act in the Naramores' best interests, including informing them of inspection results before closing. The agent, having taken on the responsibility of arranging inspections, created a "special relationship" that required diligence in ensuring inspections were conducted and results reported. If Duckworth-Morris had a fiduciary duty, it would not be released from claims by the acceptance of the deed. The court must view evidence favorably to the Naramores, suggesting that an implied contract could exist, thus making the summary judgment on the breach of contract claim improper. The Naramores' argument against summary judgment due to pending discovery was rejected, as the mere existence of pending discovery does not prevent such a judgment. A party must show that additional discovery is essential to their case, and failing to utilize discovery to acquire necessary evidence can lead to a summary judgment. The trial court has discretion in granting or denying continuance motions.

Duckworth-Morris's summary judgment motion was pending from August 22, 1994, to April 13, 1995. A hearing originally scheduled for November 16, 1994, was continued at the Naramores' request for additional discovery, as stated in their attorney's affidavit under Rule 56(f). On March 24, 1995, the court reset the hearing for April 13. The Naramores filed a motion opposing the summary judgment hearing, effectively seeking a continuance to allow for depositions to be scheduled. The trial court proceeded with the hearing on April 13, ruling that the Naramores had sufficient time for discovery and provided no valid reason for further delay. At the time of the hearing, no deposition notice had been filed, nor was there any pending discovery request. The court determined that it did not abuse its discretion in denying the continuance and in addressing the motion for summary judgment before discovery was completed. The summary judgment was affirmed regarding the fraud claim but reversed concerning the breach of contract claim. The decision was affirmed in part and reversed in part, with a remand. Judge Robertson dissented on the affirmance of the fraud claim, advocating for a complete reversal. Judge Yates concurred with Robertson's dissent.