The plaintiffs Ron Brushwitz and Faye Brushwitz appeal a summary judgment entered in favor of the defendants Carl W. Ezell and Ezell, Ryberg & Associates, Inc. (together referred to as "Ezell").
On June 21, 1998, the Brushwitzes sued Ezell; Kinco Pest Control, Inc.; Edward
The complaint alleged that on September 12, 1997, however, evidence of termite infestation, termite damage, excessive moisture, wood-decaying fungus, and wood rot was discovered in various parts of the Brushwitzes' house, including the crawl space, the foundation, and the attic. The Brushwitzes' complaint alleged that the defendants had negligently or wantonly inspected their home for termite infestation and fungal growth; that they had suppressed the condition of the house; and that they had recklessly, willfully, and fraudulently misrepresented the condition of the residence and the presence of termite infestation, termite damage, and wood-decaying fungus.
Ron Brushwitz, a technical writer and editor of weapon-system manuals for the Army Aviation and Missile Command at Redstone Arsenal, testified by deposition that he and his wife, after looking at the house approximately two times, decided to purchase it. Norwest Mortgage, Inc. ("Norwest"), sent an appraisal notice to the Brushwitzes for their signature. The notice, which was signed by the Brushwitzes on March 27, 1997, included this disclaimer:
"You should note that:
Mr. Brushwitz testified that on April 2, 1997, Edward Collier, who was employed by Complete Residential Inspections, inspected the home. Mr. Brushwitz agreed that the inspection report stated that the property was reinspected on April 5, May 4, and May 22, 1997, to follow up on problems with the heat pump and the water heater. Mr. Brushwitz also testified that the appraisal and the termite inspections were performed before the closing occurred on June 9, 1997.
After purchasing the house, the Brushwitzes discovered "flying ants" on the patio. They telephoned Morgan Pest Control. Donald Morgan of Morgan Pest Control inspected the house and reported that the house had active termites, black fungus, and rotten lumber. Mr. Brushwitz contacted the State Department of Agriculture, which sent someone to inspect the property.
Mr. Brushwitz testified that, despite his reading and signing the disclaimer sent by Norwest, he did not obtain another appraisal for the property. However, Mr. Brushwitz was unable to recall exactly when he received and read the appraisal
At her deposition, Faye Brushwitz testified that she had worked as a licensed realtor in Trenton, Illinois, for five years. She stated that in her years as a realtor she was involved in making arrangements for termite and home inspections. She agreed that the home inspector, the termite inspector, and the appraiser had different and distinct jobs. She could not recall, however, whether she saw the real-estate appraisal for the home before the closing or saw it afterwards. Mrs. Brushwitz stated that she understood the disclaimers contained in the sales contract and the appraisal notice sent to the Brushwitzes from Norwest.
Carl Ezell, a licensed appraiser and owner of Ezell, Ryberg & Associates, Inc., testified by deposition that Norwest retained him to perform an appraisal in anticipation of the purchase of this piece of property. He had appraised this same residence in 1992, and he used some of the information from the prior appraisal to reach the conclusions for the 1997 appraisal.
Mr. Ezell testified that he was subject to the Uniform Standards of Professional Appraisal Practice ("USPAP").
(Deposition of Carl Ezell, pp. 35-36.)
The "Uniform Residential Appraisal Report" submitted by Mr. Ezell contained a "Statement of Limiting Conditions" and an "Appraiser's Certification." The report, in its "Statement of Limiting Conditions," carried the following paragraph:
(C. 99.) Under the heading "Appraiser's Certification," the report stated:
Mr. Ezell testified that during his inspection of the Brushwitzes' house, he did not go into the crawl space or onto the roof. He could not recall if he looked into the attic. He did, however, look at the exterior and the interior of the house. He also opened the crawl-space door and looked inside. He observed the roof by stepping away from the house and looking.
Mr. Ezell stated that his contract was exclusively between himself and Norwest and that the Brushwitzes had had no reason to rely on his appraisal. He noted that many borrowers never look at the appraisal performed for the mortgage company. Ezell also explained that the purpose of the appraisal is to express an opinion of value, not an opinion of condition. He stated that he formed an opinion of value based on observations, not based on factual information. In his affidavit, he described his job:
Mr. Ezell stated that termite infestation and damage are most likely an adverse condition as described in paragraph 6 of the appraisal's limiting conditions. According to Mr. Ezell, any evidence of termite infestation and dampness he observed would be listed as an adverse condition and would subject his appraisal to a qualified termite inspection. In fact, he testified
On April 17, 1998, Ezell moved for a summary judgment. Thereafter, the trial court entered an order stating:
(C. 338.) This appeal followed.
This Court's review of a summary judgment is de novo:
Hobson v. American Cast Iron Pipe Co., 690 So.2d 341, 344 (Ala.1997).
The Brushwitzes claim that Ezell misrepresented the condition of the house. The elements of fraud are: (1) a misrepresentation of a material fact, (2) made willfully to deceive, recklessly, without knowledge, or mistakenly, (3) that was reasonably relied on by the plaintiff under the circumstances, and (4) that caused damage as a proximate consequence. Foremost Ins. Co. v. Parham, 693 So.2d 409, 422 (Ala.1997). Before this Court decided Foremost Insurance, it had defined fraud to include an element of "justifiable" reliance, rather than the element of "reasonable" reliance. In Foremost Insurance, we substituted the reasonable-reliance standard for the justifiable-reliance standard for cases filed after March 14,
693 So.2d at 421. A person has a duty to read the documents related to a particular transaction. Id.
We must first determine whether the Brushwitzes presented substantial evidence indicating a misrepresentation of material fact by Ezell. We find no such evidence. Contrary to the Brushwitzes' assertions, Ezell did not guarantee the condition of the house; at most, Ezell simply placed a value on the home. The purpose of the appraisal was set forth in Norwest's disclaimer, which stated that the appraisal was not performed for the purchasers to use in determining the value of the house, but was performed for the lender. In addition, the disclaimer stated that the appraisal did not guarantee that the house was free of defects. According to Mr. Ezell's affidavit, he did not see any evidence of wood-destroying organisms or termites. The Brushwitzes offered no evidence indicating that the termites and wood-destroying organisms were present or visible at the time of Mr. Ezell's inspection. Therefore, a jury could not conclude from the evidence presented that Mr. Ezell misrepresented material facts.
The Brushwitzes also claim that Mr. Ezell did not inspect the interior and the exterior of the home and that Ezell misrepresented this fact. However, Ezell presented evidence indicating that Mr. Ezell followed his procedures for appraising a home. Mr. Ezell made a visual inspection of the roof and he stuck his head in the crawl space. The Brushwitzes argue that he should have inspected the attic, but Mr. Ezell testified that in making an appraisal inspection he normally did not go into the attic of a house. The Brushwitzes presented no evidence indicating that Mr. Ezell neglected to follow ordinary appraisal procedures.
The Brushwitzes also failed to present evidence from which a jury could find the "reliance" element of a fraud claim. Ron Brushwitz read government contracts for a living, and Faye Brushwitz had been a real-estate agent and was familiar with the process of buying and selling a home. The plaintiffs were fully capable of reading and understanding the document containing the disclaimer. Any reliance by them on the appraisal would have been unreasonable. See Foremost Insurance, 693 So.2d at 421.
The Brushwitzes argue that they relied on the appraisal and decided to purchase the house because the appraisal failed to indicate any defects in the house. However, the Brushwitzes could not say with certainty when they received and read the appraisal. Moreover, the appraisal report explicitly stated that it was not an evaluation of the condition of the house. The disclaimer signed by the Brushwitzes stated that the appraisal was not to be used by
In her deposition, Mrs. Brushwitz testified about the job of an appraiser:
(C. 219-20.) Mrs. Brushwitz's questioning continued:
(C. 222.) Based on the foregoing, we conclude that the Brushwitzes failed to present substantial evidence indicating a misrepresentation, be it innocent, willful, or reckless.
The Brushwitzes also claim that Ezell suppressed a material fact. The elements of suppression are: (1) a duty on the defendant to disclose a material fact; (2) the defendant's concealment or nondisclosure of that fact; (3) inducement of the plaintiff to act; and (4) action by the plaintiff to his injury. Foremost Insurance, 693 So.2d at 423. Silence on the part of the defendant regarding a material fact is not considered suppression unless the defendant has an obligation to communicate that fact. Id. "The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case." § 6-5-102, Ala. Code 1975.
Here, Mr. Ezell did not have a duty to disclose, because no confidential relationship existed between him and the Brushwitzes. Although the Brushwitzes claim that under the USPAP appraisers have a fiduciary duty to "intended users," this claim must fail. A fiduciary relationship is a confidential relationship in which one person is obligated to act in another person's best interests. See, e.g., K & C Dev. Corp. v. AmSouth Bank, N.A., 597 So.2d 671 (Ala.1992) (quoting Bank of Red Bay v. King, 482 So.2d 274, 284 (Ala.
The Brushwitzes' personal experience in purchasing and selling real estate, in reading and setting up appraisals for those properties, and particularly Mrs. Brushwitz's background as a real-estate agent provided them with an understanding of appraisal reports. Ezell did not have a fiduciary duty to them. See Foremost Insurance, 693 So.2d at 424.
As with the misrepresentation claim, there arises with the suppression claim a question whether the statements in the appraisal were material, given that appraisals are considered statements of opinion, rather than statements of fact. Kaye v. Pawnee Constr. Co., 680 F.2d 1360, 1368 (11th Cir.1982). Mr. Ezell does not claim to be an expert at termite inspections or at home inspections. Mrs. Brushwitz testified that she understood the distinct jobs that a home inspector, a termite inspector, and an appraiser were to perform.
In addition, the Brushwitzes presented no evidence indicating that the termite infestation and damage and the fungus were present at the time of Ezell's appraisal or indicating that any of the infestation or damage, if it was present, was visible. "One can be liable for suppression only of a fact of which one has knowledge." Dodd v. Nelda Stephenson Chevrolet, Inc., 626 So.2d 1288, 1292 (Ala. 1993). The only evidence the Brushwitzes provided that suggests termites and fungus were present when Mr. Ezell made the appraisal appears in the deposition testimony of Donald Morgan:
(Deposition of Donald Morgan, pp. 24-25.) Morgan's testimony did not provide substantial evidence indicating that Ezell knew that the termite and fungus problem existed or indicating that the problem was or should have been evident to Mr. Ezell at the time of the appraisal. Evidence supporting nothing more than speculation, conjecture, or a guess does not rise to the level of substantial evidence. Smoyer v. Birmingham Area Chamber of Commerce, 517 So.2d 585, 588 (Ala.1987).
The Brushwitzes also claim that Ezell negligently or wantonly inspected their home. This Court has stated:
Martin v. Arnold, 643 So.2d 564, 567 (Ala. 1994). The existence of a duty to the Brushwitzes is questionable because 1) they signed the disclaimer from Norwest and 2) the appraisal contained limiting conditions. At most, Mr. Ezell had a duty not to mislead in his appraisal report. UPAP, Rule 2-1. Rule 2-1 provides:
The Comments to Rule 2-1 state that persons expected to receive or rely on a "Summary Appraisal Report," which appears to be the appraisal at issue in this case, are the client and intended users. "Intended users," according to the definition section of the USPAP (1997 ed.), are "the client and any other party as identified, by name or type, as users of the appraisal, consulting, or review report, by the appraiser based on communication with the client at the time of assignment."
Here, the "client" was Norwest. The Brushwitzes could be considered intended users because they were listed on the appraisal as the borrowers. However, the relationship between Ezell, the Brushwitzes, and Norwest was altered by the disclaimer. Thus, Ezell had no duty to the Brushwitzes. If no duty exists, there can be no breach of duty. However, even assuming Ezell had a duty to the Brushwitzes, we note that the Brushwitzes presented no evidence indicating that Mr. Ezell misled the Brushwitzes. The purpose of his appraisal was to provide an estimate of the fair market value of the house. The fair market value provided would have been the same if Mr. Ezell had made the appraisal subject to a termite inspection, given that the termite inspection failed to indicate any problems. The Brushwitzes presented no evidence of negligence and no evidence of wantonness, on the part of Ezell.
The evidence presented in this case "affords nothing more than mere speculation, conjecture, or guess [and] is completely insufficient to warrant the submission of [the] case to the jury." Smoyer v. Birmingham Area Chamber of Commerce, 517 So.2d at 588. The Brushwitzes failed to present substantial evidence indicating misrepresentation, suppression, negligence, or wantonness on the part of Ezell. Therefore, the trial court properly entered the summary judgment in favor of Ezell.
HOOPER, C.J., and MADDOX, HOUSTON, COOK, SEE, LYONS, JOHNSTONE, and ENGLAND, JJ., concur.