Case Title: Carter v. Gugliuzzi

Citation: 168 Vt. 48, 716 A.2d 17

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1998-05-22T00:00:00Z

Document:
Carter v. Gugliuzzi  (97-094); 168 Vt. 48; 716 A.2d 17

[Filed 22-May-1998]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                            No. 97-094

Diana Carter                                 Supreme Court

                                             On Appeal from
    v.                                       Chittenden Superior Court

Flavia Gugliuzzi, et al.                     December Term, 1997
Synergy Group, Inc.

Linda Levitt, J.

       James A. Dumont of Keiner & Dumont, P.C., Middlebury, for
  Plaintiffs-Appellant.

       John D. Monahan, Jr., Shepleigh Smith, Jr., and Craig S. Nolan of
  Dinse, Knapp & McAndrew, P.C., Burlington, for Defendant-Appellee.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       JOHNSON, J.   Defendant Synergy Group, Inc., doing business as Smith
  Bell Real Estate, appeals from a superior court judgment in favor of
  plaintiff Diana Carter.  Carter's suit alleged that Smith Bell, through its
  agents, had made a number of misrepresentations and omissions in connection
  with her purchase of a house.  Smith Bell contends the court erred in
  ruling: (1) that the Vermont Consumer Fraud Act, 9 V.S.A. §§ 2451-2480g,
  applied to deceptive acts or practices of real estate brokers with respect
  to home buyers; and (2) that the knowledge of its agent concerning wind
  conditions on the property could be imputed to Smith Bell.  Carter also
  appeals, contending that the court erred in determining damages.  We affirm
  the judgment imposing liability on Smith Bell, and reverse and remand on
  the issue of damages.

       The material facts are largely undisputed:  In 1990, Flavia Gugliuzzi
  and Ana Barreto (sellers) asked Ruth Bennett, a licensed real estate
  salesperson, to list their house for sale. Sellers had owned the house
  since 1987, and had originally purchased it through Bennett, who worked for
  Smith Bell.  Bennett worked under the supervision of David Crane, a
  licensed real

 

  estate broker and an officer, director, and shareholder of the company.  In
  response to sellers' call, Bennett went to the house, located in the
  Pleasant Valley area of Underhill, to fill out a sales authorization,
  Multiple Listing Service (MLS) sheet, and a fact sheet highlighting special
  features of the house.  Sellers told Bennett that they had installed new
  hardwood floors in the downstairs and had replaced some windows, and that
  the window boxes would stay with the house.  They pointed out the
  boundaries of the property.  Bennett measured the interior dimensions of
  the rooms and the exterior dimensions of the house.  She prepared an MLS
  listing sheet and a fact sheet and showed them to sellers, who confirmed
  that they were accurate.  The listing sheet stated that the house contained
  1880 square feet above grade, was heated by electric/wood, and was "in
  pristine condition.  New pegged floors throughout first floor."  The Smith
  Bell fact sheet, under the heading "Further Features," stated: "New
  oak-pegged floors throughout first floor," "[w]indow quilts at all windows
  with new valances," and "[c]ustom made flower boxes at all windows."  Under
  the heading "Location," the fact sheet stated, "400 to 600 planted pine
  trees around borders of property" and "[v]acant beaver pond."

       The sheets, in fact, contained a number of errors and omissions. The
  downstairs hardwood floor did not run "throughout" the house but covered
  only about half the downstairs and was a simulated rather than a real
  pegged floor; the rest of the floor was carpeted.  The wood floor was not
  in "pristine" condition, but had buckled or "cupped" due to the lack of an
  underlying vapor barrier.  The listing sheet did not indicate that the den
  and upstairs bathroom were unheated.  The fact sheet stated that "all"
  windows had quilts and valances, although only about half had these
  features.  In addition, the fact sheet failed to disclose that half of the
  advertised "beaver pond" was on a neighbor's property, and misstated the
  number of trees as 400 to 600 when, in fact, there were only about 250.

       The court further found that Crane knew, but did not disclose to
  Bennett or Carter, that the house was subject to frequent and severe winds,
  that one of the windows in the house had blown in years earlier, and that
  other houses in the area had suffered wind damage.  Crane had

 

  lived in the Pleasant Valley area for seven years, had sold a number of
  nearby properties, and had been Underhill's zoning administrator.  He was
  aware that Pleasant Valley occasionally experienced winds of over 80
  miles-per-hour and often had winds in the 40 to 50 mile-per-hour range, and
  that many Valley residents, including Crane, had wind gauges on their homes
  to measure and compare wind speeds with their neighbors.

       Diana Carter, a lawyer living in California, had been looking for a
  house to buy in Vermont since mid-1990.  She contacted several realtors,
  including Liz Merrill, an agent from Lang Associates, who provided her with
  information on a number of houses, including the listing and fact sheets
  relating to the Underhill property.  Carter was attracted by the size of
  the house, the acreage, and the fact that it was listed as being in
  "pristine" condition.  Merrill, acting as a sub-agent for the seller,
  showed Carter the house twice.  Carter did not note the lack of heat in the
  upstairs rooms, the condition or extent of the wood floor downstairs, or
  the number of trees on the property.  She later asked Merrill to provide
  additional information about the neighborhood and the condition of the
  house.  Bennett informed Merrill that a storm had washed out the beaver
  pond since Carter's last visit, but that it could be reestablished with
  minimal cost and effort.  Apart from the pond, Bennett assured Carter and
  Merrill that there had been full disclosure.

       Carter's offer of $200,000 for the house was accepted in August 1990. 
  After moving in, Carter discovered that the den and bathroom were unheated,
  the downstairs wood floor was in poor condition and covered only a portion
  of the floor, several hundred tree, the window flower boxes, and cabinets
  in the garage were missing, half of the beaver pond was on a neighbor's
  property, and expensive engineering studies and permits would be required
  to reestablish the pond.  Several months later, a series of high winds
  toppled several trees on the property, blew in a number of windows, tore
  shingles off the house and garage, and blew gutters off the house.

       Carter sued sellers and Smith Bell for fraud, negligent
  misrepresentation, and breach of

 

  contract, and Smith Bell for violation of the Consumer Fraud Act. 
  Following a court trial, the court ruled, inter alia, that Crane's
  knowledge of the presence of high winds was imputable to Smith Bell, and
  that the company, through its agents, was liable in tort for a number of
  misrepresentations and omissions, and for violations of the Act.  The court
  found both Smith Bell and sellers liable for the wind damage, future
  replacement of windows, the cost of additional trees to create a wind
  break, additional window quilts, and replacement of the downstairs carpet
  with an oak pegged floor.  The total judgment was for $30,624 plus interest
  and costs.  The court found sellers additionally liable for the missing
  window flower boxes, replacement of the cupped floors, and reestablishment
  of the pond for an additional judgment of $19,700.  The court declined to
  impose liability on Smith Bell for misrepresenting the total above-grade
  square footage of the house and the number of trees on the property,
  failing to disclose that a portion of the house was unheated, repairing the
  cupped flooring, reestablishing the pond, replacing the missing flower
  boxes and garage cabinet, and certain prospective wind repairs.

                                     I.

       Smith Bell first contends the court erred in ruling that the Consumer
  Fraud Act applied to the deceptive acts of real estate brokers against home
  buyers.  The express statutory purpose of the Act is to "protect the
  public" against "unfair or deceptive acts or practices."  9 V.S.A. § 2451. 
  Its purpose is remedial, and as such we apply the Act liberally to
  accomplish its purposes.  See State v. Therrien, 161 Vt. 26, 31,