Opinion ID: 2569169
Heading Depth: 2
Heading Rank: 4

Heading: the district court erred in granting crg's summary judgment motion

Text: ¶ 22 The County next contends that genuine issues of material fact exist as to whether CRG satisfied its contractual duties. Specifically, the County argues that CRG, acting as the County's real estate agent, had an affirmative obligation to exercise utmost care, inquire about the subsurface conditions of the property, and disclose latent defects. In response, CRG claims (1) that the duty of utmost care referenced in the Agency Disclosure was qualified by other language in the agreement, (2) that as a result of this qualifying language it simply had to satisfy a duty of reasonable care, (3) that this duty of reasonable care established in the Agency Disclosure obligated it to reveal only latent defects of which it was aware, and (4) that no genuine issues of material fact exist as to whether that obligation was satisfied. ¶ 23 We do not reach the question of whether CRG was required to satisfy a duty of reasonable care or a duty of utmost care because we conclude that, under either standard, the district court erred in denying the County an opportunity to conduct further discovery, pursuant to rule 56(f) of the Utah Rules of Civil Procedure, and erroneously granted CRG's summary judgment motion. To begin with, we note that even if the duty imposed upon CRG amounted only to a duty of reasonable care, such a duty mandates that it disclose latent defects of which it was aware. Cf. Schafir v. Harrigan, 879 P.2d 1384, 1390 (Utah Ct.App.1994) (explaining that a real estate agent's duty to be honest and truthful would likely include an obligation to disclose to . . . buyers any latent . . . defects of which the agent is aware). Moreover, the duty of utmost care necessarily imposes this same obligation because it represents the highest degree of care possible. See Lambert v. Franklin Real Estate Co., 37 S.W.3d 770, 777 (Ky. Ct.App.2000) (stating that utmost care means the highest degree of care); Kuntz v. Stelmachuk, 136 N.W.2d 810, 821 (N.D.1965) (explaining that [t]he words `utmost care' are synonymous with `the highest degree of care'). Hence, regardless of the applicable standard of care, CRG had a duty to disclose latent defects of which it had knowledge. Accordingly, the County could have created a genuine issue of material fact, and thereby precluded summary judgment, by putting forth evidence that CRG knew of the latent subsurface conditions associated with the purchased property. ¶ 24 Whether CRG had knowledge of the latent subsurface conditions prior to the real estate purchase, however, is a question that the district court deprived the County of adequately exploring by improperly denying its rule 56(f) motion for a continuance. [6] The court exceeded its discretion in denying the County's rule 56(f) motion for the following reasons. First, we have held on numerous occasions that rule 56(f) motions opposing a summary judgment motion on the ground that discovery has not been completed should be granted liberally unless they are deemed dilatory or lacking in merit. Price Dev. Co. v. Orem City, 2000 UT 26, ¶ 30, 995 P.2d 1237; Crossland, 877 P.2d at 1243; Cox v. Winters, 678 P.2d 311, 312-13 (Utah 1984). Second, the County's motion for a continuance did not lack merit because it requested an opportunity to continue with factual exploration on an issue that could have defeated CRG's summary judgment motion (i.e., whether CRG knew of the latent subsurface conditions). Third, our case law firmly establishes that the County's rule 56(f) motion, which clearly requested an opportunity to complete discovery, was not dilatory. Indeed, precedent from this court regarding rule 56(f) motions demonstrates that a party who has initiated discovery proceedings in a timely fashion and seeks to obtain information that is in the sole control of the adverse party is not dilatory and should be given a reasonable opportunity to pursue the discovery that he or she seeks. ¶ 25 We addressed this precise issue in Cox. In that case, the plaintiffs had sent out interrogatories and requests for admission to the defendant but never received a response to their inquiries. 678 P.2d at 313-14. The defendant then moved for summary judgment. Id. at 312. In the midst of discovery, the plaintiffs sought additional time to `flush out evidence' [of their] claim by filing a rule 56(f) motion for a continuance. Id. at 314-15. The district court denied this request, however, and precluded the plaintiffs from using otherwise available discovery procedures. Id. at 315. On appeal, we concluded that the plaintiffs' rule 56(f) motion should have been granted in order to allow them to carry their already-begun discovery to completion. Id. ¶ 26 We reached a similar conclusion in Strand v. Associated Students of the University of Utah. 561 P.2d 191, 194 (Utah 1977). There, we reasoned that further discovery proceedings were required because there had not been sufficient time since the inception of the lawsuit for the plaintiff to utilize discovery procedures and the information sought by the plaintiff was in the sole possession and control of the defendant. Id. Consequently, we held that the plaintiff was denied a `reasonable opportunity' to take depositions and that a continuance should have been granted. Id. (quoting Toebelman v. Missouri-Kansas Pipe Line Co., 130 F.2d 1016, 1022 (3d Cir.1942)). ¶ 27 By comparison, in Crossland, we upheld the denial of a rule 56(f) motion for a continuance. 877 P.2d at 1244. That case is distinguishable from Cox and Strand, however. In contrast to Cox, the party seeking a continuance in Crossland (i.e., the defendant) did not ... attempt to initiate any discovery during the four months that elapsed between the filing of the plaintiff's lawsuit and the filing of the summary judgment order rendered by the district court. Further, unlike Strand, the defendant in Crossland had unlimited access to the information necessary to demonstrate a dispute regarding a genuine issue of material fact. Id. Accordingly, when viewed together, Cox, Strand, and Crossland all stand for the proposition that a party's rule 56(f) motion for a continuance is not dilatory if the party has already initiated discovery proceedings, diligently seeks access to information that is within the sole control of the adverse party, and is denied an adequate opportunity to conduct the desired discovery. ¶ 28 Applying this principle to the instant case, we conclude that the County was not dilatory in filing its rule 56(f) motion for a continuance. We reach this conclusion because, like the defendant in Cox, the County had already initiated the discovery process. In particular, it had propounded both interrogatories and document requests to CRG. Further, as with the defendant in Cox, the County intended to pursue additional factual exploration. In fact, the County explicitly stated in its rule 56(f) motion that a continuance was necessary to conduct discovery on... whether [CRG] knew of the subsurface conditions. Finally, as was the case in Strand, the information the County was seeking (i.e., whether CRG had knowledge of the subsurface defects) remained in the exclusive control of an adverse party: namely, CRG or WDCI. ¶ 29 Approximately two months after the County received a response to its first set of interrogatories and document production requests, however, the district court granted CRG's summary judgment motion. [7] While we have never established a bright-line rule for determining whether a party had sufficient time to conduct discovery, Crossland, 877 P.2d at 1244, we consider the passage of two months an inadequate period in which to require the County, who had diligently conducted some discovery, to complete its formal factual exploration and depose CRG's agents. Id. (holding that four months was a sufficient time period to complete discovery because of the simplicity of the case). Ample time was not allotted to the County because it had to read the responses to its interrogatories, analyze the documents it received, and then determine who should be deposed and what questions should be asked. Additionally, it had to schedule a date to take the depositions. [8] This required accommodating the schedules of not only the deponents but at least two attorneys as well. Accordingly, we hold that it was an abuse of discretion for the district court to deny the County's rule 56(f) motion for a continuance. We therefore reverse the court's summary judgment ruling in favor of CRG and order additional discovery to be permitted. Cf. Strand, 561 P.2d at 194.