Case Name: Judy Barrie, wife of/and Michael H. BARRIE v. V.P. EXTERMINATORS, INC., et al.
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1993-02-11
Citations: 614 So. 2d 295
Docket Number: No. 92-CA-0389
Parties: Judy Barrie, wife of/and Michael H. BARRIE v. V.P. EXTERMINATORS, INC., et al.
Judges: SCHOTT, C.J., and PLOTKIN and LANDRIEU, JJ.
Reporter: Southern Reporter, Second Series
Volume: 614
Pages: 295–300

Head Matter:
Judy Barrie, wife of/and Michael H. BARRIE v. V.P. EXTERMINATORS, INC., et al.
No. 92-CA-0389.
Court of Appeal of Louisiana, Fourth Circuit.
Feb. 11, 1993.
Writ Granted May 7, 1993.
John A.E. Davidson, Metairie, for appellants.
John W. Waters, Sr., Bienvenu, Foster, Ryan & O’Bannon, New Orleans, for appel-lees.
SCHOTT, C.J., and PLOTKIN and LANDRIEU, JJ.

Opinion:
SCHOTT, Chief Judge.
Plaintiffs filed suit against Secor Bank to rescind the sale of a house in Metairie and against V.P. Exterminators, Inc. and its insurer, Scottsdale Insurance Company, for damages based upon plaintiffs' discovery of terminate damage in the house after they took title. V.P. and Scottsdale filed exceptions of no cause of action and motions for summary judgment. From a judgment sustaining the exceptions and granting summary judgments, plaintiffs have appealed. The issue is whether plaintiffs have a cause of action against a termite inspector with whom they had no direct relationship and who was employed by the seller to make an inspection and issued a certificate to the bank before the sale.
Plaintiffs alleged as follows: On August 30, 1990, they confected an agreement to purchase a house from Secor Bank. The agreement provided, "Seller to provide termite certificate showing free and clear". Secor employed V.P. to make a termite inspection of the house. On September 11, V.P. issued a "wood destroying insect report" indicating that there was no physical evidence of active and/or old infestation from subterranean termites. Based upon this representation, plaintiffs purchased the property from Secor on September 14 and on September 16 they discovered extensive old and active damage from termite infestation. V.P. was negligent in misrepresenting the condition of the premises to the plaintiffs. Plaintiffs did not file the termite certificate with their petition.
V.P. responded with exception of no cause of action and motion for summary judgment to which it attached the termite certificate issued by V.P. to Secor prior to the act of sale as alleged by plaintiffs in their petition.
Plaintiff have no cause of action against V.P. in contract because they were not parties to the contract between Secor and V.P. and had no privity of contract otherwise. Neither do they have a contractual cause of action based upon detrimental reliance because this extends only to contracting parties, but not to third parties. LSA-C.C. art. 1967.
The remaining question is whether plaintiffs have a cause of action for negligent misrepresentation under these facts where they had no direct relationship with V.P. whatsoever. In this connection plaintiffs rely primarily on Payne v. Quinn, 565 So.2d 1049 (La.App. 3rd Cir.1990). That case is distinguishable on its facts because the termite inspector was employed by a real estate broker who represented both the seller and the buyer. Consequently, the buyer was privy to the agreement with the termite inspector. In addition, the Payne court erroneously extended the doctrine of negligent misrepresentation to a third party by misinterpreting that circuit's earlier case of Cypress Oilfield Contractors v. McGoldrick, 525 So.2d 1157 (La. App. 3rd Cir.1988), writ denied, 530 So.2d 570 (La.1988).
In Payne the court, in discussing the doctrine of negligent misrepresentation, stated that all previous cases until Cypress which applied the doctrine did so in the context of an existing fiduciary relationship between the plaintiff and the defendant. However, the Payne court stated that Cypress for the first time held that the legal duty which must exist to support negligent misrepresentation extends to a third party. The fallacy of this statement is that it fails to recognize that in Cypress there was a direct relationship between the obligee and the obligor which made the misrepresentation.
In Cypress there was a contractor who did some work for McGoldrick. The contractor sub-contracted the work to Cypress. About the time the job was finished, McGoldrick received a notice from the First Acadiana Bank that the contractor had assigned to the bank its invoice for the work. The bank told McGoldrick in a letter that the contractor was financially sound and directed McGoldrick to remit payment to the bank. McGoldrick did so and a few days later the contractor went bankrupt and Cypress filed a lien against McGol-drick. It filed a third party demand against the bank which the Third Circuit approved under the doctrine of negligent misrepresentation. It cannot be gainsaid that there was a direct relationship between McGoldrick and the bank. The Third Circuit in Payne erred in saying McGoldrick was a third party with respect to the bank.
In Devore v. Hobart Mfg. Co., 367 So.2d 836 (La.1979), the court recognized the doctrine of attorney negligence for a misrepresentation, but there was a direct relationship between the parties. The attorney for the school employee who was injured because of a defective kitchen appliance wrote the School Board and asked who was the manufacturer of the appliance. The Board gave the wrong information and by the time the attorney sued the right entity her claim had prescribed.
In Young v. Oberhelman, 607 So.2d 719 (La.App. 4th Cir.1992) involving facts similar to those of the instant case, the court held that the purchasers had a cause of action against the termite inspector for negligent misrepresentation. However, there was a major distinction in the facts of that case. The plaintiffs stated that the termite inspector told them the house was "bug free". In other words, there was a direct connection and communication of the misrepresentation between the inspector and the plaintiffs as in Cypress and De-vore. This element is missing in the present case, so that the doctrine of misrepresentation does not apply.
Accordingly, the judgment appealed from is affirmed.
AFFIRMED.
PLOTKIN, J., dissents with reasons.