Opinion ID: 2581014
Heading Depth: 1
Heading Rank: 5

Heading: characterizing the cause of action

Text: Another issue appealed by the Sumpters is the district judge's determination that their cause of action sounded in tort, not in contract, as the Sumpters had claimed. The district judge found the Sumpters' claims alleging breach of duties on the part of Holland to exercise reasonable skill and care, promote the best interests of the Sumpters, disclose adverse material facts, and advise the Sumpters to seek appropriate professional advice or counsel, were claims for professional malpractice and not contractual in substance. The district judge found that where there was a duty imposed on Holland by statute requiring the same degree of care contracted for by the parties, the breach of such duties amounted to a tort, not a breach of contract. The district judge in her decision relied on Taylor v. Herbold, 94 Idaho 133, 138, 483 P.2d 664, 669 (1971) which states: The law governing the ability to obtain remedies for breach of contract, as well as tortious behavior, is confusing, with few, if any, court decisions on the subject. Ordinarily, a breach of contract is not a tort. A contract may, however, create a state of things that furnishes the occasion for a tort. 38 Am.Jur. 662, Negligence § 20. If the relation of the plaintiff and the defendants is such that a duty to take due care arises therefrom irrespective of contract and the defendant is negligent, then the action is one of tort. To found an action in tort, there must be a breach of duty apart from the nonperformance of a contract. 52 Am.Jur. 379, Torts, § 26. As the district court noted, the Sumpters allege that Holland violated specific duties it contracted with the Sumpters to perform. The duties of Holland as prescribed by the contract entered into between Holland and the Sumpters include: 1) to exercise reasonable skill and care, 2) to promote the best interests of the client in good faith, honesty, and fair dealing, 3) to disclose any adverse material facts the agent actually knows or reasonably should have known, 4) to conduct a reasonable investigation of the property and material representations about the property made by the seller or seller's agent, and 5) when appropriate, to advise the client to obtain professional inspections of the property or to seek appropriate tax, legal, and other professional advice or counsel. The Sumpters complaint alleges that Holland failed to perform these duties when Wettstein failed to inform the Sumpters of Pond's financial instabilities, when she advised the Sumpters they could not purchase title insurance to protect themselves against liens, and when she failed to advise them to consult an attorney regarding title insurance and lien protection. Of the duties listed above, all but two are specifically enumerated in I.C. § 54-2087 as being statutory duties of real estate agents towards clients. The only duties listed in the contract that are not statutorily mandated are the duty to conduct a reasonable investigation of the property and to investigate material representations about the property made by the seller or seller's agent. Since the Sumpters made no claim pertaining to these duties, they are irrelevant to our consideration. As Taylor states above, [i]f the relation of the plaintiff and the defendants is such that a duty to take due care arises therefrom irrespective of contract and the defendant is negligent, then the action is one of tort. Citing the United States Supreme Court, this Court further held: The distinction is that: If the cause of complaint be for an act of omission or nonfeasance, which, without proof of a contract to do what has been left undone, would not give rise to any cause of action (because no duty apart from contract to do what is complained of exists), then the action is founded upon contract, and not upon tort. 94 Idaho at 138, 483 P.2d at 669, quoting Atlantic & P. Railway Co. v. Laird, 164 U.S. 393, 399, 17 S.Ct. 120, 122, 41 L.Ed. 485, 487 (1896). See also Hudson v. Cobbs, 118 Idaho 474, 477-78, 797 P.2d 1322, 1325-26 (1990). It can also be said that if a cause of action for breach of a duty based on a contractual promise could also be maintained without the contract by virtue of a statutory or common law duty, then the action is founded upon tort, not contract. Because the duties owed by Holland were clearly statutory, the Sumpters must deal with these breaches in tort, not contract. As such, we affirm the district judge's determination that the four-year statute of limitations period of I.C. § 5-224 applies in this case ( see Jones v. Runft, Leroy, Coffin & Matthews, Chtd., 125 Idaho 607, 613, 873 P.2d 861, 867 (1994) (holding [b]ecause there is no statute of limitations specifically governing negligence actions that do not involve personal injury or malpractice, we apply the four-year statute of limitations found in I.C. § 5-224)).