Spies et al v. Deloach Brokerage, Inc., No. 2:2014cv00053 - Document 46 (S.D. Ga. 2016)
Court Description: ORDER granting Defendant's 18 Motion for Summary Judgment; and, directing the Clerk to enter judgment against Plaintiff and close this case. Signed by Judge J. Randal Hall on 03/03/2015. (jah)
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Spies et al v. Deloach Brokerage, Inc. Doc. 46 IN THE UNITED FOR THE STATES DISTRICT COURT SOUTHERN DISTRICT OF GEORGIA BRUNSWICK DIVISION JAMES SPIES and DARLENE SPIES, * * Plaintiffs, * v. * DELOACH BROKERAGE, DELOACH INC., d/b/a, SOTHERBY'S CV 214-053 * * INTERNATIONAL REALTY, * * Defendant. * ORDER Seeking to Spies ("Spies") retire to the Golden Isles of Georgia, purchased a retirement home on St. Simons Island after an admittedly cursory viewing of the home.1 Florida reviewed to run their documents that business, their Plaintiffs realtor sent Returning to rarely them. read their realtor would note any and all home. Upon the discovery of erosion assuming deficiencies on their or Plaintiffs never returned to Georgia to conduct any inspections, that Darlene in the property, 1 Hereinafter, any reference to "Spies" shall mean Mrs. Darlene Spies, unless otherwise noted, as it is undisputed that her husband, Mr. James Spies, was uninvolved in the purchase of the property at issue in this litigation. (Doc. 18, Ex. 1 at 26-27.) Dockets.Justia.com Plaintiffs now aver that their realtor, a St. Simons Island native, failed to adequately discharge his duties, arguing that he knew about the erosion on the property and that they relied on him to take care of everything for them. Plaintiffs suit against their realtor's brokerage company, breach of contract, and violation of a filed claiming fraud, state statute, while demanding punitive damages not less than $250,000. In response, argues that its Defendant Deloach Brokerage, realtor, independent contractor, for his acts. Lawrence Delaney Inc. ("Deloach") ("Delaney"), is an thus Deloach is precluded from liability Additionally, Deloach avers that since the parties were never in a xxconfidential relationship," Plaintiffs' fraud, breach-of-contract, a matter of law. and breach-of-statute claims (doc. 18) set forth below. I. Plaintiffs as In light of the undisputed facts of this case, the Court GRANTS Deloach's Motion for Summary Judgment for the reasons fail James FACTUAL and BACKGROUND Darlene Spies are a married couple whose primary place of residence is in West Palm Beach, Florida. (Doc. 1 at 5; Doc. 18, Ex. Spies has been a president 2 (xx Spies Dep.") at 9.) Darlene of her and her husband's company, Centerport, Inc., for at least the last ten years. at 9.) Aside from her position at Centerport, Spies' hobbies involves renovating houses. (Spies Dep. Inc., one (Id. at 12, 67.) of In total, Spies has renovated "probably four or five" houses, including one waterfront property on Hypoluxo Island in Lantana, Florida, and one property in Lake Worth, Florida. (Id. at 12, "natural" to the 22.) I. The Spies' Prior Experience Living on the Water Spies purchased two other homes that were water, but she xxnever had a problem living on the water." The property located on Hypoluxo Island did not require at 26.) the (Id. installation of a bulkhead because very far away from the water." house was the xxhouse (Id. at 22.) was laid back Additionally, situated on an area of elevated land, a the fair distance away from the water, and there was riprap2 surrounding the pool, forming a bulkhead. water, the acknowledges property that (Id. was at 22.) located Given its location on the in a flood she was at least aware zone, that and Spies flooding could happen at the home, even though the house was elevated. 109.) The Spies' home in Lake Worth, directly on the xxintercoastal." Florida, (Id. at 24.) was (Id. at situated While renovating the house, Spies tore down and repaired the existing bulkhead to "secure the wall," built a new dock, and xxbrought in dirt to build the house higher," so that the property xxsloped downward into the sea wall." (Id. at 24.) 2 Spies defined riprap as "big boulders" that are used to create a bulkhead. (Id. at 22.) II. Spies begins looking for a Retirement Home In early January 2012, purchase a retirement with a friend, home. decided that (Id. at 3 8.) it After was a time to discussion Spies remembered a prior vacation on St. Simons Island, Georgia. friend Spies (Id. at 38.) traveled to St. Simons Shortly thereafter, Island to find a Spies and a retirement home for the Spies. On or about advertisement Delaney, January for condominiums 2012, and as (Id. xxany at 42.) individual or Spies called a licensed Georgia realtor, to see the unit. defined 16, responded the listing to an agent, to schedule an appointment Delaney is entity a broker, issued a which is broker's real estate license by the Georgia Real Estate Commission pursuant to Chapter 40 of Title 43. affiliated licensees indicate." Deloach's except O.C.G.A. § affiliated Delaney's Aff.") The term 'broker' real f estate 3.) Brokerage, the license. (Doc. Deloach is (Deloach Aff. form contracts organization. Deloach does for (Doc. not the 18, control sale Ex. 3 of that No. 18, xxthe f 2.) otherwise operates Deloach Ex. broker 4 as holds (xxDeloach for Deloach Delaney is a member of (XXGAR"), real salary, and he has access estate (xxDelaney Delaney's would Delaney meaning the Georgia Association of Realtors to context 10-6A-3(2). licensee, Frank Inc." where includes the broker's Dep.") through at how many that 97-98.) hours he works, how he business. phones, performs his (Deloach Aff. office supplies, speaking duties, f 4.) on Delaney talked the phone, her did not about her give Delaney a second home; rather, she trio walked through Delaney he generates xxan office, the use of met budget of of that and (Id. at 43.) and would at 43.) know condominium unit that she wanted to purchase. (Id. After that the due issues, Delaney spent other available homes. the rest (Id. was of a poor the at 47-48; day Doc. for the The next morning, that unit her requirements she her Spies (Id. initially thought determining which at 42-43.) a second home. told him the Spies $350,000 laundry list perfect house when she saw it. the forms," (Spies Dep. intention to purchase the home as Spies how (Id. H 6.) friend in the bar at their hotel. and or Deloach provides and contract is at Delaney's discretion. After work fit showing No. 29, at to the Ex. Spies 47.) noise ladies 3 at 11- 12.) After failing to find a house that was acceptable to Spies, at the end of the day Spies retired to her hotel. (Id. at 48.) Spies asked Delaney to send her updates with new listings that she could (Id.) Florida, phone. review before The next morning, she her next to St. before Spies began the noticed a missed call (Id. at 49.) trip Simons Island. drive back to and voicemail on her cell Delaney left a message about the perfect house that he wanted her to see before she returned to 2012, Spies, her Simons Island, Florida. (Id.) III. The Property On Delaney (xxthe or about visited January 105 Property"). 17, Dudley Lane, (Id.) The St. Property, built 2,518 square foot home that sits on .46 acres. at 10.) in GA 31522 2000, (Doc. and is 18, Ex. a 10 The Property is bounded by a salt marsh to the west and Dunbar Creek to at 2.) friend, the east. (Doc. 18, An unfinished spa or pool, Ex. 11 (xxJackson Survey") in addition to a brick patio, can be found in the backyard, while oak and cedar trees encircle the Property's outer bounds. brick wall (Id. ; Doc. 18, Ex. 5 at 14.) in the backyard does not obstruct one The from walking directly from the house to the water: the water is accessible by walking through Spies Dep., shrubbery 53-54.) and trees. Survey at 2; The property along the water's edge is large enough to support a dock, find for her husband, (Jackson a feature that Spies wanted to who is an avid boater. 19; Delaney Dep. at 32.) (Doc. 18, Ex. 5 at If Spies purchased the home, Delaney told her that they would be neighbors, as he and his family live on Dunbar Lane. IV, (Delaney Dep. at 27.) The Tour of the Property Spies xxfell visited—she was in love with" the Property xxblown away with the view." when she first (Spies Dep. at 52; Delaney Dep. the trio at 53.) wandered outside, long because of rain. to the property line, the water. From the During but thirty-to-sixty minute they did not (Spies Dep. at 52.) at appearance, 53; Doc. observed the vegetation, of the particular. for too Instead of venturing Ex. noting 5 at 14, 19.) the boundaries (Spies Dep. at 29.) the palmettos, property, 18, Spies believed that of the Property were clearly marked. edge stay out tour, the trio stood on the balcony overlooking (Delaney Dep. land's the one Spies and the trees along the dead, leaning tree in (Id. at 53, 96; Delaney Dep. at 32.) Spies admitted that she did not xxinvestigate" the property she xxdidn't inspect it," but rather during her tour with Delaney. she xxjust glanced" (Spies Dep. at 54.) at Spies noted some areas in the garage where she saw water on the ground, she it but xxdid not think anything of it" because the area of concern xxwas right where a car sat." the home came to a close, (Id. at 55-56.) As the tour of Spies and Delaney began to talk about the Property in the driveway. (Id. at 74; Delaney Dep. at 56.) Spies was very excited about the house; she told Delaney that she would xxconsider making an offer" but she needed to speak to her husband first. V, (Spies Dep. at 58.) Spies and Delaney's Conversation About Delaney's Duties Prior to leaving, Spies sought reassurance from Delaney, stressing to him she would be unable to return to St. Simons Island for any inspections prior to closing on the home. at 74-75; that Delaney Dep. she needed inspection, Dep. at at 56-57.) Delaney's 75; Doc. 29 Delaney assured her Ex. that Spies specifically mentioned help the walk-through, he with and the 1 sales (xxSpies would the 2d xxbe survey, agreement. Dep.") more the at Spies' (Spies Dep. at 74.) expectations of discussion in writing. a. home (Spies 286-287.) than happy to care of all of that for her," telling her xxdon't worry [;] your back." (Id. take I got Although the parties discussed Delaney, they never memorialized their (Id. at 98.) The Survey During the conversation in the driveway, Delaney conveyed to Spies that a survey is not required in the State of Georgia. (Id. at 75; Delaney Dep. at 61.) Spies was xxsurprised" to learn that her would fact, secure but she financing Dep. at 21.) assumed and to that xxprotect bank their interest." to (Spies 2d care of procuring it (Spies 2d Dep. at 21.) Even though she never purchased a home without first procuring a survey, an it Spies' bank offered to obtain a survey for $375, and she assumed that her bank would take for her. require encroachment on her land and did she did not worry about not believe that it was necessary to obtain a survey at the time because the boundary lines appeared clearly marked. (Spies Dep. at 29.) Spies never followed up with the bank to determine if the survey had been 8 completed. the (Spies 2d Dep. at 21.) bank never obtained the closing on the Property. b. Spies did not discover that survey until six months after (Spies Dep. at 76.) The Home Inspection Prior to hired, a home After the closing, Delaney recommended, inspector on behalf of home inspector and subsequently the Spies. generated his (Id. report, at 78.) Spies, with Delaney's help, accessed the report and read it in its entirety. (Spies at 2d Dep. 281.) Following her review of the report, Spies requested that the seller correct several issues prior to closing. still (Spies Dep. at 101.) relied on Delaney's home". (Spies 2d Dep. condition of the developed in the days Even with her corrections, statement at 282.) property due that that She to [they] xxit took xxthe spent was his trust a she very clean word for that together." the [they] (Id. at 283.) III. The Walk-Through During the walk-through, the Spies noticed several issues with house observe that (Spies Dep. failed to she did at 56-58.) observe not during her initial She noticed mold on the wall that she earlier because xxit is so dark down stairwell," and she did not xxthink that's anything that ever noticed attention." on a home (Id. at 56.) tour. before [,] so Similarly, it didn't come to that [she's] [her] Spies also did not notice rust stains going from the patio down to the front of because even xx [they] xxif she Property], weren't did [she] outside come around long," to and the didn't look at it." she explained bottom (Id. the house level at 57.) [of the Spies also failed to notice that the garage door frame was rotting. at 111.) that (Id. Although the rot was not visible to the naked eye, one could see that the garage door did not the frame was not intact. (Id.) close Spies only noticed the damage because of her discovery of water damage caused the mold on the wall. there were rusted, the outside of properly because (Id.) in the Finally, garage, Spies noticed that malfunctioning electrical outlets the house. (Id.) As which the Spies' located on realtor, Spies expected that Delaney would have noted some of these items that the (Id. home inspector clearly missed because he was her xxeyes." at 129-130.) d. The Purchase Agreement and Closing The sale of the Property proceeded as planned, Spies never returned from Florida to see it. 94.) Although Spies originally offered even though (Spies Dep. $475,000 for at the Property, Delaney advised her to increase her original offer by $25,000 to avoid the property bank's short-sale program. to the price increase, being listed in (Spies 2d Dep. at 64.) and Delaney sent her paperwork reflecting the new offer of $500,000. 10 the seller's Spies agreed the completed (Spies Dep. at 132.) When Delaney sent Spies the completed Purchase Agreement, he did not review the terms with Spies or her husband. 133.) Additionally, (Id. at he failed to provide the Spies with a copy of a Georgia Association of Realtors brochure entitled xxProtect Yourself When (xx Purchase Buying a Agreement") Home." at (Id. 7.) at 133; Pertinently, Doc. 18, Ex. 10 paragraph six of xxGefc a survey of the property. this brochure states, Buyers are encouraged to get surveys of the properties they are considering buying so that they know where the exact boundary lines of properties are located. Buyers should request that the survey identify . . . whether the property is in a flood plain." 1 at 9.) xxextremely busy" the Purchase Agreement. (Spies Dep. at 67, she involving realtor's (Doc. Spies did not realize that she did not receive this brochure because she was that the xxprobably her job never other read" real is to protect any estate of and she did not read 133.) her Spies admits prior transactions the buyer." at 67.) xxa Even read [she] was because 67.) Although Spies never told Delaney that she was not going to read the contract, she Spies because though she did not told to" the contract, (Id. contracts xxtrusted xxsigned it where [Delaney] ." (Id. 66- she lamented the fact that Delaney did not go over the contract with her, as her prior realtors have done. (Id. at 66.) 11 The sellers of statement, which property was the property included a property disclosure Spies xxmostly read," that stated: located in a special floodplain, (id. (1) 90; at 18, Ex. 13 (xxSeller's Property Disclosure") at 2); (2) be (Spies the Doc. Dep. dead trees located on the property, Seller's Property Disclosure at 1); accumulation (Seller's or dampness Property Disclosure at xxcontrol water leaks," (5) there was no some of soil Disclosure, but knowledge of (Spies Dep. certificate, before closing. VI. movement at 92.) basement (4) (Spies 91; xxwater leaks, crawl there were space," repairs Dep. in regarding that of the the the 91; and Seller's the seller's issue she of property line does not Property the seller would have As part of the closing, but at to Spies believes that the seller lied statements acknowledges the 3); movement, particularly movement, elevation the the there were at (Seller's Property Disclosure at 2); Property Disclosure at 1) . about within (3) there may soil had more than Delaney. Spies received an recall if she saw it (Spies 2d Dep. at 280-281.) Discovery of the Erosion Problem Spies did not learn of the erosion problem on the Property until she hired a contractor to build a spa, approximately six months after completion of the sale. 2d Dep. (Spies The contractor informed her that she had a her hands because he could not 12 install her at 206.) xxserious problem" requested spa, on for fear that it would be conversation, property. enlisted several (Id.) Following that surveyors to assess her (Id. at 191.) There Property: at Spies lost to erosion. are two areas where erosion can be area number one and area number two. 2.) Phillip Property after along Dunbar Jackson Spies (xxJackson") installed Creek. (Doc. a 18 Ex.7 at on the (Jackson Survey conducted a timber found survey of bulkhead 37.) in the the area Jackson admitted that he did not have information regarding whether the land was built up and filled in, and he could not give a precise estimate as to when the erosion occurred in area number one. 48.) caused in area number one, by storm. the (Id. Alfred Spies. two installation agreeing of the that it bulkhead could have or by a been tropical at 4 8.) Amos (xxAmos") completed an additional survey for Amos stated that a comparison between a survey completed 1994 and his occurred (Doc. one at 47- Jackson also admitted that he did not know when the change occurred in (Id. 18, has determine own prior Ex. to 6 at 47.) xxeroded how indicated or the date the of the Amos noted, substantially when that the May however, since" erosion erosion 1994, occurred. in 25, area 1994, number survey. that area number but he (Id. could at not 47-48.) Significant to note is the fact that Amos conducted his survey after Spies installed the bulkhead, 13 and he could not make any representations as to whether or not the land would have experienced even greater erosion due to the installation of the bulkhead. (Id. the Property, while back" (Spies Dep. that that some at 49.) When Spies installed the bulkhead on the construction company removed vegetation xxfor a to at of put 150.) the process. tie-backs into the bank of the Property. The construction company also told Spies trees would (Id.) fall Amos into the acknowledges water as that at a result least of some erosion appears to have occurred after March 2012, with at least two-and-a-half (Doc. 18, Ex. Right of in the land being eroded by November time mid-October, were driving (Spies Dep. the 2012. 6 at 49.) around contractor, (xxChew"), feet at 139.) of Spies her discussion and a friend, with her Roger Chew in her car when her mobile phone rang. The Bluetooth device in Spies' car and phone allowed for everyone in the car to hear the conversation. (Id.) Delaney called Spies to invite her and her husband to the festivities revolving around a PGA golf tournament. (Id.) Spies informed Delaney that she was on the island to install a bulkhead on the Property. before Delaney responded (Id.) by There was asking, xxDon't telling you about that erosion problem?" a you xxbrief remember me (Spies Dep. at 139.) Spies immediately berated Delaney exclaiming, xxDid I ever come across when we met as a stupid fricking idiot . . . [?] 14 pause" If you had told me about the land erosion then I would have definitely made sure we looked into it." (Id. at 140.) by telephone recommending the name and Delaney responded number of a bulkhead builder, with whom Spies immediately met to discuss installing a bulkhead on the Property. Spies knows about (Id. at 143.) the principle of erosion, because there were bulkheads on her other waterfront properties, but it never occurred tidal to (Spies Dep. her that erosion at 95-96.) could occur on a creek. Spies admits that the erosion problem on the Property is not something that one could immediately observe merely by determined surveys. on St. walking by knowledge obtaining (Id. at Simons around 14 9.) Island, about a the Property—it survey and could comparing Because Delaney was it only to be previous xxborn and raised" Spies expected Delaney to have a general erosion due to his knowledge of St. Simons Island and the fact that he lived by Dunbar Creek for a number of years. think of (Id. at 149-150.) Spies admits any reason why Delaney would want that she could not to hurt her or run the risk of ruining their business relationship because she was unsatisfied with his service, particularly when he knew that he would stand to gain more business with his work. from her if she was (Id. at 98; Spies 2d Dep. at 71.) 15 pleased II. On suit or about against Georgia, Deloach of (Doc. Spies in 2014, the 1.) Superior damages fraud, on April 17, 2014. January 2, 2015. 24, punitive claims violations. BACKGROUND March seeking asserting PROCEDURAL less of of than movant Civ. no is P. Id. Grp. genuine 56(a). V. (quoting A the LEGAL $250,000 and and statutory STANDARD as to judgment as fact is xxthe movant any v. dispute 658 xxmaterial" F.3d Liberty over if 1282, Lobby, such material a matter suit under the governing Anderson A County, Deloach moved for summary judgment on dispute FindWhat. com, (1986) ). filed (Doc. 18.) entitled to outcome of Glynn contract, Summary judgment is required where is husband Deloach removed the action to this Court III. there her Court not breach and a it 1307 is fact law." xxmight law." Inc., fact of shows that and Fed. affect FindWhat (11th 477 the Cir. U.S. R. the Inv'r 2011) 242, xxgenuine" 248 if the xxevidence is such that a reasonable jury could return a verdict for the nonmoving party." the court favorable inferences is to in to view the that all Id. of nonmoving party's In making this determination, the evidence party favor. 16 and in draw Johnson the all v. light most reasonable Booker T. Washington Broad. Serv. , Inc. , 234 F.3d 501, 507 (11th Cir. 2000) . The party seeking summary judgment bears the initial burden of demonstrating fact. the Celotex Corp. absence v. satisfy this burden, of a Catrett, genuine 477 U.S. the movant must issue 317, of 323 material (1986). show the court that To there is an absence of evidence to support the nonmoving party's case. Id. at burden 325. If present moving party discharges to shifts the the nonmovant affirmative fact does exist. evidence Anderson, to to go show 477 U.S. satisfy this burden in two ways: beyond that First, burden, the pleadings the a at 257. this and genuine the nonmovant to withstand a directed verdict motion, which was ignored' thus initial burden of the 477 U.S. nonmovant sufficient 2 F.3d 1112, at xxmay 332 (Brennan, come to withstand a 1116 forward nonmovant attempts to 1993) this (quoting Id. at 1117. instead evidence trial based Where the with nothing more xxthan a repetition of his conclusional allegations, summary 17 burden Second, additional directed verdict motion at carry the Fitzpatrick dissenting)). with on the alleged evidentiary deficiency." sufficient failed to meet (11th Cir. J., xxmay show 'overlooked or showing an absence of evidence." v. City of Atlanta, Celotex, who has of The nonmovant may that the record in fact contains supporting evidence, by the moving party, issue judgment for the defendants Morris v. Ross, [is] 663 F.2d 1032, In this action, not only proper but required." 1033-34 (11th Cir. 1981). the Clerk of the Court gave Plaintiffs notice of the motion for summary judgment and informed them of the summary judgment rules, and opposition, Therefore, the right to file affidavits or other materials in consequences of default. the notice requirements of Griffith v. F.2d 822, 825 time filing for the (11th Cir. 1985) materials (per curiam), in are opposition has (Doc. 21.) Wainwright, 772 satisfied. The expired, and the motion is now ripe for consideration. IV. I. Fraud and Violation of Statute The tort of xx(l) or (3) intention to refrain damages." App. fraud consists of (BRRETA) Claim Fails the following five elements: a false representation or omission of a material fact; (2) scienter; act DISCUSSION 2009) . from Lehman v. induce acting; Keller, (4) the party claiming justifiable 677 S.E.2d 415, reliance; 417-18 a willful misrepresentation, i.e., the seller tells a lie; upon active concealment where the does not discuss the defect but takes steps to prevent its discovery by the purchaser; and thirdly a passive concealment where the seller does nothing to prevent the discovery but simply keeps quiet about a defect which[,] though not readily discernible, is known to the seller. 18 (5) (Ga. In the context of real estate transactions, are three different types of fraud: seller fraud to Ct. there Hoffman v. (citation Fletcher, omitted) . whether the actions, of passive discusses will 535 S.E.2d The parties or distinction address the relationship between Spies (Ga. this below. case App. differ concealment. First, regarding The however, the and Delaney, lead to the disposal of Spies' Ct. 2000) as to in question constitute a case active conflict 851 in or inactions, concealment that 849, as nature its fraud claim, the Court Court of the resolution will in addition to the remaining claims. a. A is a The Parties Did Not Have a Confidential Relationship confidential fiduciary relationship interchangeably. Auth., 255 F. relationship, See, and e.g., Supp. 2d 1347, by virtue courts Harris 1375 that xx [u] nder Georgia tort law, have its definition, the terms Fulton-DeKalb v. (N.D. of used Hosp. Ga. 2002) (explaining a fiduciary duty is established where the parties enjoy a confidential relationship"); Georgia Law of xx [f]iduciary Torts § relationships xconfidential relationships' 58"). O.C.G.A. deemed confidential exercise a 33:8 § 23-2-58 xx where controlling (West are 2014) also see also (explaining that synonymous with as described in Code Section 23-2states that one influence 19 a relationship shall be party is so situated over the will, as conduct, to and interest of another, or where, from a similar relationship of mutual confidence, the law requires the utmost good faith." To establish a fiduciary or confidential relationship, party asserting it. O'Neal v. (Ga. Ct. its existence bears the burden of Home Town Bank of Villa Rica, App. 1999) . xxWhen a facts of relationship 673 (Ga. confidential patent, issue particular exists." Ct. therefore a fiduciary App. 2001) . generally unambiguous, of Williams a v. to Yarbrough v. relationship is case or a jury Dressur Indus., 120 F.3d if such S.E.2d existence a 670, of circumstances a and where the relationship 548 the the issue," and undisputed, confidential we must examine Kirkland, upon 675 confidential determine xxAlthough depends establishing 514 S.E.2d 669, relationship is not created by law or contract, the the the facts are Court may decide the as a 1163, matter 1168 of (11th law. Cir. 1997) . i. As an A Realtor and a Client Do Not Have Relationship Pursuant to the BRRETA initial matter, the relationship and a client is governed by O.C.G.A. the Brokerage (XXBRRETA"). Relationships O.C.G.A § 10-6A. in § 10-6A, Real Estate Pertinently, 20 a between Fiduciary a realtor otherwise known as Transactions the Act BRRETA clearly defines the relationship between a broker3 and a client,4 or customer,5 stating: A broker who performs brokerage services for a client or customer shall owe the client or customer only the duties and obligations set forth in this chapter, unless the parties expressly agree otherwise in a writing signed by the parties. A broker shall not be deemed to have a fiduciary relationship with any party or fiduciary obligation to any party but shall only be responsible for exercising reasonable care in the discharge of its specified duties as provided in this chapter and, in the case of a client, as specified in the brokerage agreement. O.C.G.A. § pursuant to fiduciary 10-6A-4(a) the (emphasis BRRETA, relationship that with a added). a realtor It is does customer—here, thus not clear, enjoy Spies—unless a the parties agree otherwise in a signed writing. It is undisputed that the parties never created a separate contract, in writing, of Delaney. has that of the expressly delineating Spies' (Spies Dep. existence of Delaney told her at 98.) The only evidence the such an agreement xxdon't expectations worry [;] is I got Spies' Court assertion your back," with 3 A "broker" is defined by the BRRETA as "any individual or entity issued a broker's real estate license by the Georgia Real Estate Commission pursuant to Chapter 40 of Title 43. The term 'broker' includes the broker's affiliated licensees except where the context would otherwise indicate." O.C.G.A. § 10-6A-3 (2) 4 A "client" is defined by the BRRETA as "a person who is being represented by a real estate broker in an agency capacity pursuant to a brokerage engagement." O.C.G.A. § 10-6A-3(6). 5 A "customer" is defined by the BRRETA as "a person who is not being represented by a real estate broker in an agency capacity pursuant to a brokerage engagement but for whom a broker may perform ministerial acts in a real estate transaction pursuant to either a verbal or written agreement." O.C.G.A. § 10-6A-3 (8) . 21 regard to coordinating the home inspection, agreement, this and the walk-through. fact writing, in the are most 74.) favorable to the sale Even construing Spies, without a Delaney's only duties to Spies are those that are set forth in O.C.G.A. duties light (Id. at the survey, § 10-6A-14. O.C.G.A. "which can be performed by the relevant to this discussion. § 10-6A-14 lists several transaction broker" First is § that 10-6A-14 (a) (5) , which states that a transaction broker may provide assistance by "locating architects, insurance agents, § surveyors, inspectors, attorneys and other professionals." 10-6A-14(a)(5). 14(b)(3)(A), engineers, The second pertinent provision is lenders, O.C.G.A. § 10-6A- which states that a broker must: timely disclose the following to all buyers and tenants with whom the broker is working: (A) all adverse material facts pertaining to the physical condition located thereon including but not limited to material defects in the property, environmental contamination, and facts required by statute or regulation to be disclosed which are actually known by the broker which could not be discovered by a reasonably diligent inspection of the property by the buyer. O.C.G.A. A(4) § 10-6A-14(b)(3)(A). Pertinently, O.C.G.A. § 10-6A- only states that a realtor must "exercise reasonable care" in the discharge of his duties. Here, his duties Delaney when he followed Spies' (1) (Spies Dep. at 78) ; (2) located instructions and hired directed Spies' 22 a and discharged home inspector, attention to the home inspector's report, deemed necessary, which she reviewed and made changes as she (id. at 101) ; (3) is not required in Georgia, sales contract, and a final $500,000 (id. at 75) ; and time when the parties (Spies Dep. of his (4) completed the both initially when the offer was for $475,000, at 64). "ministerial closed on Significantly, states that a realtor's duty is to part informed her that a survey the Property for the BRRETA clearly "locate" a home inspector as acts." O.C.G.A. § 10-6A-14 (a) (5) . "Locating" a home inspector does not involve evaluating the home inspector's work, otherwise. to mean unless the parties signed an agreement stating See O.C.G.A. "those acts § 10-6A-12(defining a "ministerial act" described in Code Section 10-6A-14 other acts which do not require the exercise of and such the broker's or broker's affiliated licensee's professional judgment or skill"); (Spies Dep. the record discharge Spies' of at 98) . his Spies thus cannot point to any evidence in suggesting duties that Delaney pursuant to did the not BRRETA. successfully Accordingly, claim that Delaney violated the BRRETA fails as a matter law. ii. Even Without the BRRETA, the Parties Do Not Have A Confidential Relationship Notwithstanding the BRRETA, entered into a "relationship even assuming that the parties confidence," the undisputed facts do not merit the consideration of a jury. See 23 of mutual O.C.G.A. trust § 23-2-58. and Notably, confidence relationship. in xIn the "[t]he mere fact that one reposes another majority does of not create business a confidential dealings, opposite parties have trust and confidence in each other's integrity, but there is no confidential relationship by this alone.'" Alderman, 162 S.E.2d 440, v. 196 S.E. Burns, courts have "confidential siblings. a See ties length in will); 597 real that executing Ct. estate App. reliance); (Ga. (Ga. as between Hancock, parties, facts App. 1938)). relationship the Ct. find, v. the and the On the one hand, a matter business 156 who were showed that of by 1979) to inform brothers, virtue Maio, 494 law, a or even 357 (Ga. did not of their their deceased mother's a lender could not describe Parello v. 354, some they operated at arms- (no confidential failed of persons S.E.2d merely provisions 1968) (quoting Dover Real Estate Comm'n v. Brown, licensee bounced when the 1998) Hancock see also Ga. (Ga. to relationship" confidential familial 786 declined 1967) (explaining have 785, 441 Lewis v. 262 S.E.2d 596, relationship where a lender that a the detriment S.E.2d 331, 333 (Ga. check of his Ct. App. (declining to find a confidential relationship where the defendant was in charge of the plaintiff's day to day business operations for more than five years). On the other hand, some courts have submitted the issue of a confidential relationship to a jury where it was clear 24 that one party operated at representations Props t, to the defrauding 345 S.E.2d 880, determine if condemnation, her of a disadvantage and clearly relied on the home (Ga. assets 1986) fair S.E.2d market 245, value) ; 249 falsifying causing the fees to a sales (Ga. rectify see Ct. also App. owner the v. 2005) (explaining expend action—was selling Bienert determine if to v. imminent into the broker's agreement—which placed business Pope (asking a jury defrauded a mentally disabled woman 624 attorney's e.g., using threats of that it was a matter for the jury to action of See, Ct. App. a housing inspector, below Dickerson, 883 party. a a lien on $12,888.44 clear in form of misconduct and a breach of her fiduciary duty). In the case at hand, it is clear that a confidential relationship did not exist between Spies and Delaney. This is not a situation in which Delaney took advantage of Spies, in Pope. 345 S.E. 2d at 880. On the contrary, Spies like is a sophisticated business woman who has prior experience purchasing property. of (Spies Dep. at 9, imminent Cf. Pope, harm to force 12.) Spies 345 S.E. 2d at 880. Nor did Delaney use threats into purchasing The Court cannot the Property. find, nor has Spies provided evidence of, any benefit to Delaney by committing this allegedly Spies was happy, told him that fraudulent act. Indeed, Delaney knew that if he would only stand to benefit because Spies she enjoys renovating 25 houses and she would consider using his services again in the purchase and renovation of other homes. (Spies 2d Dep. See Ga. Real Estate Comm'n, 262 S.E. 2d at 597; at 71.) Furthermore, Spies admits reason why Delaney would want that she could not to hurt her or think of run the any risk of ruining their business relationship because she was unsatisfied with his service. declined to (Spies Dep. find a at 98.) "confidential businessmen who worked together for more S.E. 2d at 333. If five confidential relationship, years is In Parello, relationship" case at to Court between than five years. insufficient then the the 494 establish a bar—in which Spies and Delaney were in each other's presence for approximately oneand-one-half days and in communication during the approximately six weeks it took to close on the house—is certainly not enough for Spies to prevail. foregoing, (Spies Dep. at 47-48.) In light of the the Court cannot find as a matter of law that Spies and Delaney entered into a confidential relationship. b. Since Spies Failed to Conduct Her Own Due Diligence, Her Fraud Claim Fails Spies' as a Matter of Law claim of fraud fails as a matter of law because she cannot prove any of the elements of fraud. Spies argues that the fraud perpetrated by Delaney constitutes active concealment. Deloach argues that the matter of fraud should be dismissed on 26 the basis that Spies failed to required in a passive-concealment under a theory of active conduct the due fraud case. concealment, diligence To prove Spies must fraud prove that Delaney did not discuss the defect—here, the erosion—but instead took Hudson steps to S.E.2d 811, In prevent 814 the attempted to its discovery. (Ga. Ct. App. case at hand, v. it is hide the condition of and he point in any way. did not 598 2004). clear that Delaney the Property. attempt (Spies Dep. to at 75.) hide never Delaney told Spies that a survey was not required in Georgia: law for her, Pollock, he the stated the ball on this Spies learned that her bank would do a survey for $375, but she never followed up with the bank to determine if it had been insisted that Delaney locate a surveyor. completed and never (Spies 2d Dep. at 21.) That the Property sat on land without a bulkhead was an open and obvious condition that who an is Property, Delaney in no way obscured. experienced home buyer, wanted a If Spies, survey of the she had every right, during the inspection period, to demand whatever inspection she desired prior to closing. See Purchase Agreement at 3 (explaining that the purpose of the due diligence period is for the buyer to "conduct at buyer's sole expense whatever evaluations, inspections, appraisals, examinations, surveys, website and reviews, and testing, if any, 27 [b]uyer deems appropriate to determine whether to terminate th[e] [a]greement should be exercised"). Spies admitted that it was impossible, the land, (Spies to determine Dep. [b]uyer's option at that an issue Notwithstanding 149.) there was merely by observing that professional surveyors could not determine, 48; should own, of Doc. be 18 Ex held 7 at liable 48.) for merely because he Spies' erosion on fact, (Doc. expectation her erosion. two with certainty, or when the erosion occurred in area number one. at of land 18 Ex. that that how he 6 Delaney did not lived down the street and had knowledge the waterways around Dunbar Creek, when she knew that there were dead, leaning trees on the Property, strains credulity. Passive-concealment fraud occurs "where the seller does nothing to prevent the discovery [of the issue] but simply keeps quiet about known a defect to the omitted). To which seller." though not readily discernible, Hudson, 598 S.E. 2d constitute passive-concealment at 814 fraud, is (citation Spies must prove, "as a factor of justifiable reliance, that they could not have discovered diligence." the Lehman, alleged defect in 677 S.E.2d at 417. the exercise "While of due [j]ustifiable reliance, more often than not, is a jury issue, summary judgment may be appropriate if the means of ascertaining facts are equally available to all parties." the relevant Isbell v. Credit Nation Lending Serv., LLC, 735 S.E.2d 46, 54 (Ga. Ct. App. 2012) 28 (citing Ades v. Werther, 567 S.E.2d 340, 344 (Ga. Ct. App. 872 (Ga. 2002)). The law will not excuse [a plaintiff] for failing to read the instrument because of her confidence in the defendant, upon whom she had no legal right to rely, and who the allegations show employed no trick or artifice that caused her to fail to do her duty in reading before signing. No one can truthfully claim to have been defrauded in a matter about which that one has full knowledge and opportunity to exercise his free choice. The law will protect the innocent against fraud . . . but it demands of everyone that he make use of his own facilities to avoid being defrauded. Legacy Acad., Ct. App. 2015) Inc. v. Buggay, does not Inc. Mamilove, LLC, 771 S.E.2d (citation omitted); see 469 S.E.2d 242, 245 (Ga. Ct. App. afford ordinary means v. relief of to one information, indifference or credulity. who also Real Estate Int'1, suffers whether 868, by the 1996)("The law not neglect When the means of using is due the to knowledge are at hand and equally available to both parties, and the subject of the purchase is alike open to their inspection, if the purchaser does not avail himself of say, in impeachment of these means, the contract he will not be heard to of sale, that he was deceived by the vendor's representations or lack thereof.") As is set forth above, with the Property. "eyes," Spies knew that there were issues Although Spies relied on Delaney to be her the law imparts on everyone a duty to read. 29 Legacy Acad., Inc., 771 offers a myriad of contract—that S.E. 2d at excuses she was 872; (Spies Dep. at 130.) regarding why she did not "extremely busy" (Spies Dep. at Spies read her 67) , and that she expected Delaney to go through it with her (id. at 66), but there is simply no excuse contract when she had ample Acad. , Inc. , 771 S.E. 2d at for her failure opportunity to do 872. Delaney her attention to she the immediately id. ; (Spies confused made Dep. clarification. inspector's changes that 101.) at Spies, elucidate home If she could the point is clear; she deemed evidence would of be quagmire of 1977). fails as a and See the contract Delaney, seeking but she cannot renege and The law on this of by taking ten minutes the willful above, misconduct to since or grant the fraud Spies' Court out fails on Delaney's demand See Youngblood v. Mock, 238 S.E. 2d 250, App. it of her (Spies Dep. at 67.) inappropriate damages. read the Court will not reward Spies when she could this light her necessary. language called when she wanted to, "busy" day to read. In prevent It is clear that Spies had the savvy to read and issues avoided the when he directed claim ignorance now that it suits her purposes. have read See Legacy not report, she have so. did from reading the contract in any way—in fact, to Accordingly, matter of Spies' law. 30 claim for to find part, it for punitive 252 (Ga. punitive Ct. damages II. The Remaining Claims Against Deloach Lack Merit a. Delaney is Deloach's Independent Contractor Deloach is not liable independent contractors. for the tortious With regard to real acts of its estate brokerage firms, the law is well settled; such firms generally are not responsible for torts committed by [their] employees when the latter exercises an independent business, and in it is not subject to the immediate direction and control of the employer. In determining whether the relationship of parties under a contract for performance of labor is that of employer and servant or that of employer and independent contractor, the chief test lies in whether the contract gives, or the employer assumes, the right to control the time, manner, and method of executing the work as distinguished from the right merely to require certain definite results in conforming to the contract. O'Dell v. Mahoney, 750 (quoting Walker v. 2006)). Johnson, 693-94 (Ga. 630 S.E. 2d 70, Ct. 76-7 App. (Ga. 2013) Ct. App. Although Plaintiffs argue that Defendant's reliance on O'Dell is instant buyer S.E.2d 689, misplaced, case pattern between very much the failed agent to find and any a involved a the home See id. O'Dell listing O'Dell and asserting claims for negligence and misrepresentation. in the same. O'Dell company, Court sued fact brokerage The who are the misrepresentation or negligence on the part of the realtor or the brokerage company because the purchaser did not exercise due diligence in his purchase-namely, he did not demand an inspection. 31 See id. Like in O'Dell, misrepresentation faults Spies on for Moreover, it (Deloach Aff. this the part failing is to undisputed f 4); Court of failed Delaney; find the her own due diligence. Delaney: that set his own on a commission his own business (id.) The mere Court hours basis exercised his personal initiative to obtain listings generated any instead, conduct worked to fact (id.); (id.); that and Delaney used Deloach's letterhead and office space is inconsequential to proving that Delaney acted as form contracts, for by the requirement (quoting Realty, facts, telephones, salesperson that Mark or they be Six Inc. , 463 an agent "[i]terns such as and office supplies are either paid provided used." Realty since as O'Dell, Assocs., S.E.2d 917 a (Ga. convenience 750 Inc., Ct. App. with S.E.2d at v. Drake 1995)). no 693-94 Northside Given the it is thus clear that Delaney operated as an independent contractor, and, as such, Deloach cannot be held responsible for his actions. b. Plaintiffs' Plaintiffs' Breach-of-Contract Claim Fails breach-of-contract claim the basis for the argument is debunked. of-contract claim, lacks merit because To prevail on a breach- a plaintiff must establish: "(1) breach [;] and the (2) resultant damages (3) to the party who has the right to complain about the contract being broken." Rent a Car Sys. , Inc. , 705 S.E.2d 32 305, 306 Norton v. Budget (Ga. Ct. App. 2010) (citing Kuritzky v. Emory Univ., Ct. App. breach-of-contract claim is founded on the 2008)). basis Spies' that concealed the Delaney issue of Property. (Doc. above, the undisputed commit fraud. committed erosion, 30 at 23.) S.E.2d 179, fraud among when other he 181 (Ga. actively issues, at the As has been discussed extensively facts demonstrate that Having debunked the basis contract claim, Delaney for Spies' did not breach-of- and recognizing that he successfully discharged his duties pursuant to the BRRETA, Notwithstanding signed by Spies, the above, her husband, (Purchase Agreement at 1-16.) disclaimer, 669 Spies' the claim now lacks merit. Purchase Agreement and the sellers of was the Property. The Purchase Agreement contains a which states: In this Agreement, the term "Broker" shall mean a licensed Georgia real estate broker or brokerage firm and, where the context would indicate, licensees. shall owe No any the broker duty broker's in to this affiliated transaction Buyer or Seller greater than what is set forth in their brokerage engagements and [BRRETA], O.C.G.A. § 10-6A-1. (Purchase Agreement at 4, § 13A. By signing the contract, Spies provided her consent to this section. at 46 it, he See Cochran, 489 S.E.2d ("Where one who can read signs a contract without reading is bound by its terms, unless he can show that an emergency existed at the time of signing that would excuse his failure to read it, or that the opposite party misled him by an 33 artifice or device which prevented him from reading it, or that a fiduciary parties Here, upon the or confidential which Court he failed relationship relied to in not find misconduct on Delaney's part, existed reading evidence of the fraud between the contract."). or willful and the Court also failed to find the existence of a confidential relationship between Delaney and Spies. Accordingly, Agreement, limit she is Deloach's even though Spies did not read the Purchase bound by the liability terms to of the the disclaimer, duties that which Delaney successfully discharged pursuant to the BRRETA. V, For the reasons CONCLUSION stated above, motion for summary judgment (doc. the 18). Court GRANTS Defendant's The Clerk is directed to ENTER JUDGMENT against Plaintiff and CLOSE this case. ORDER ENTERED at Augusta, Georgia this J~^__ day of March, 2016. HONORABLE J. RANDAL HALL UNITED STATES DISTRICT JUDGE JUTHERN DISTRICT OF GEORGIA 34
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