Date: 09-12-2008

Case Style: Doug and Samantha Moore v. Adrienna R. Williams, et al.

Case Number: 2008 OK CIV APP 76

Judge: Kenneth L. Buettner

Court: Oklahoma Court of Civil Appeals on appeal from the District Court of

Plaintiff's Attorney: Gregory W. Laird, GORDON & GORDON, Claremore, Oklahoma, for Plaintiffs/Appellants

Defendant's Attorney: W. Michael Hill, E. Anthony Mareshie, SECREST, HILL & BUTLER, Tulsa, Oklahoma, for Defendants/Appellees Adrienna R. Williams and OklaHomes Realty.

Description: ¶1 Plaintiffs/Appellants Doug and Samantha Moore (Buyers) bought a home in Rogers County from Defendants John and Nancy Goggins (Sellers) in March 2004. Defendant/Appellee Adrienna Williams (Real Estate Agent) was Sellers' real estate agent and Defendant/Appellee OklaHomes Realty was the real estate broker for Williams (collectively "Realtors"). The law with respect to pre-sale disclosure forms was amended effective November 1, 2003 and required different disclosures to be included in a new form to be established by the Oklahoma Real Estate Commission. The old form used by Sellers and signed November 22, 2003, included a "no" answer to Question 27: "Are you aware of existence of hazardous or regulated materials and other conditions having an environmental impact, including, but not limited to, residue from drug manufacturing?" The new form, which Realtors did not provide Sellers, included Question 28: "Are you aware of existence of prior manufacturing of methamphetamine?" About one month after moving into the house, Buyers learned that Sellers' daughter had resided in the house and was one of the people arrested when it was raided for being a methamphetamine laboratory (meth lab) in 2002.1 By October 2004, Buyers claim that the walls of the house were bleeding iodine and the countertops were burned. Buyers filed suit for damages. In the present case, they appeal the trial court's grant of summary judgment in favor of Realtors with respect to the allegation of violation of the Oklahoma Residential Property Condition Disclosure Act (Act). Buyers did not controvert the evidence submitted by Realtors that Realtors had no knowledge of a defect and had no other duties that would support Buyers' remaining claims. We affirm summary judgment in favor of Realtors.

¶2 Buyers filed their First Amended Petition July 20, 2006. In the petition, they alleged that they received a copy of the disclosure form regarding the property February 9, 2004, a day before the February 10, 2004 signing of the contract for sale, at which time Buyers, Sellers, and Williams were present. The closing occurred March 11, 2004 and Buyers took possession shortly thereafter. They further alleged that Sellers knew at the time they signed their disclosure form, but did not disclose, that the residence had been used as a methamphetamine lab. They also alleged that Realtors knew, at the time that the Sellers signed the disclosure form, that the residence had been used as a meth lab. They stated some of their damages and further stated that they would not have bought the house had they known of its meth lab history.

¶3 On October 26, 2007, the trial court granted a 12 O.S.2001 §994 final judgment with respect to Buyers' claims against Realtors, permitting Buyers to appeal the grant of summary judgment in favor of Realtors without delay. We review a grant of summary judgment de novo. Carmichael v. Beller, 1996 OK 48, 914 P.2d 1051.

¶4 Buyers filed a Motion for Summary Judgment February 20, 2007 claiming the defendants violated the Act. They claimed that Realtors violated the Act because, as licensed real estate agent/brokers, they were bound to furnish a new form to their sellers.2 The new disclosure form specifically required disclosure as to whether the house was used in the manufacture of methamphetamine. None of the Defendants responded to Buyers' Request for Admissions in which they asked them to admit that the disclosure form used did not comport with legal standards as reflected in 60 O.S. Supp. 2003 §833. On the ground that the admissions were therefore deemed admitted, Buyers requested summary judgment in their favor.3, 4

¶5 Realtors filed their Motion for Summary Judgment February 27, 2007. They claimed that they did not have knowledge that the home had been used as a meth lab. Pre-purchase inspection did not disclose such use. In a letter written to Sellers by Buyers June 1, 2004, Buyers stated that in November 2002, the house was being used as a meth lab and that court records show that a raid on the house revealed that their daughter was one of the people arrested at that time. Realtors submitted evidence that they did not know that the house had been used as a meth lab and Sellers did not reveal this information to them. Had they done so, Williams would have disclosed that information to Buyers.

¶6 In its May 17, 2007 Order, the trial court made findings of fact and conclusions of law which were incorporated in subsequent orders.5 With respect to Buyers' Motion for Summary Judgment on the claim that Realtors' violated the Act, the trial court stated:

The Court finds the failure to utilize the amended form to not be a violation of any duty by OklaHomes or Williams. The duty to amend is triggered by the seller's discovery of a defect.6 While the Court would acknowledge the information is requested in a different form, it is hard to see that Goggins would have answered any differently than on the form actually executed.

Plaintiffs have failed to show under 60 O.S. §831 et seq. wherein Defendants, OklaHomes and Williams failed to act in accordance with the ORPCDA. Specifically the Court would note that the Act provides that a real estate licensee has no duty to the seller or purchaser to conduct an independent inspection or to verify the accuracy or completeness of a disclosure statement. The motion of Plaintiff against Defendants, OklaHomes and Williams is denied.

Conversely, OklaHomes Realty and Williams' Motion for Summary Judgment as to said claims is sustained.

¶7 The law with respect to disclosure forms was amended effective November 1, 2003.7 A seller is now required to disclose whether he has actual knowledge of defects or information in relation to (h) existence of prior manufacturing of methamphetamine. Buyers did not submit evidence that Realtors had actual knowledge of a defect. Importantly for the case at bar, Buyers cannot recover on a mere showing that Sellers did not provide the current disclosure form. Buyers may only recover damages against a Real Estate Agent for violation of the Act pursuant to 60 O.S. 2001 §837 Remedies:

A. The purchaser may recover in a civil action only in the event of any of the following:
1. The failure of the seller to provide to the purchaser a disclaimer statement or a disclosure statement and any amendment prior to acceptance of an offer to purchase;
2. The failure of the seller to disclose in the disclosure statement or any amendment provided to the purchaser a defect which was actually known to the seller prior to acceptance of an offer to purchase, or
3. The failure of the real estate licensee to disclose to the purchaser any defects in the property actually known to the real estate licensee prior to acceptance of an offer to purchase and which were not included in the disclosure statement or any amendment provided to the purchaser. (emphasis added.)

B. The sole and exclusive civil remedy at common law or otherwise for a failure under subsection A of this section by the seller or the real estate licensee shall be an action for actual damages, including the cost of repairing the defect, suffered by the purchaser as a result of a defect existing in the property as the date of acceptance by the seller of an offer to purchase and shall not include the remedy of exemplary damages.

¶8 Although Realtors had a duty to provide Sellers with the disclosure form, the only remedy Buyers may pursue is when a real estate licensee has actual knowledge of a defect prior to acceptance of an offer, which was not included in the Seller's disclosure statement or amendment, and the real estate licensee does not reveal this defect to the Buyer. Summary Judgment was properly granted in favor of Realtors in the present case.

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Outcome: ¶9 AFFIRMED.

Plaintiff's Experts:

Defendant's Experts:

Comments: