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Can I Sue the Person Who Sold Me My House?

Understanding Ensuing Loss

Washington Is a Buyer Beware State, When Should I Sue the Person Who Sold Me My House?

Washington is a buyer beware state. The seminal case describing this concept is Douglas v. Visser. 173 Wn. App. 823 (2013).  In that case, the Douglases purchased a home from the Vissers.  Mr. Visser was a real estate agent.  The Vissers had begun a substantial remodel but when the costs became too much they stopped the work and listed the home for sale.  The Vissers provided incomplete responses to Form 17 and the Douglases asked several follow-up questions. However, despite receiving inadequate responses, the Douglases ceased further inquiry.  The Douglas’s pre-purchase inspection revealed a small area of rot near the roof indicating a prior leak as well as a small area of rot at the sill plate below the same area. The Douglases did not ask the Vissers any questions regarding these areas. After moving in, the Douglases discovered the entire structure was compromised by rot.  The Douglas’s experts also determined that the rot had been intentionally concealed by new siding and trim.  The Douglases sued the Vissers for fraudulent concealment, negligent misrepresentation, breach of real estate agent’s duties, breach of contract, and violation of the CPA. After a bench trial, the trial court made findings of fact and entered judgment for the Douglases. 

On appeal, the court of appeals opined:

Because the Douglases were on notice of the defect and had a duty to make further inquiry, it cannot be said that the defect was unknown to the Douglases, that it could not have been discovered by a reasonable inspection, that the Douglases justifiably relied on the Vissers’ misrepresentations, or that the Vissers committed an unfair or deceptive act that caused the Douglases’ injury.

Id. at 834, 295 P.3d 800. As to their non-CPA claims, the court reasoned the Douglases were on notice of defects and had a duty to make further inquiry because the inspector’s report identified rot and decay near the roofline, an area of the rotted sill plate, and sistered floor joists. Ultimately, the court of appeals held that “[o]nce a buyer discovers evidence of a defect, they are on notice and have a duty to make further inquiries. They cannot succeed when the extent of the defect is greater than anticipated, even when it is magnitudes greater.” Id. at 832, 295 P.3d 800.  The Court of Appeals reversed the trial court’s decision and awarded the Vissers their attorneys’ fees. Id., at 835 (citing Brown v. Johnson, 109 Wn. App. 56 (2001) (When an action in tort is based on contract containing an attorney fee provision, the prevailing party is entitled to attorney fees)).

The same court revisited its Douglas v. Visser holding in Deegan v. Windermere Real Estate/Center-Isle, Inc.  197 Wn. App. 875 (2017).  In Deegan, the Court of Appeals clarified that Douglas does not stand for the proposition that the CPA imposes a duty of inquiry.  Id. at 889.  The Court further clarified that, with respect to a CPA claim, “even accurate information may be deceptive if there is a representation, omission or practice that is likely to mislead.” Id. at 890 (Unlike Douglas, 173 Wn. App. at 833, 295 P.3d 800, where the predominant act or practice was an affirmative concealment, here the alleged deceptive act or practice was an omission of material facts, triggering the rebuttable presumption of reliance).  Thus, when the claim is based on omissions of material facts there is a rebuttable presumption of reliance, which was not the case in Douglas.

If you purchased a home with concealed defects, please feel free to contact us to investigate and assess your potential rights and remedies.