Court Opinion

ID: 5111658
Source: CourtListenerOpinion
Date Created: 2021-10-02 15:41:53.639933+00
Date Added: 2024-06-11T08:21:36.118898
License: Public Domain

MOORE, Judge,
dissenting:
Respectfully, I must dissent. I find no evidentiary support for a claim of fraudulent misrepresentation. To maintain an action for fraudulent misrepresentation, a party must prove that some material representation was made. United Parcel Service Co. v. Rickert, 996 S.W.2d 464, 468 (Ky.1999).
“[M]ere silence does not constitute fraud where it relates to facts open to common observation or discoverable by the exercise of ordinary diligence, or where means of information are as accessible to one party as to the other.” Bryant v. Troutman, 287 S.W.2d 918, 920-21 (Ky.1956). The Waldridges do not allege any affirmative misrepresentation by Rector-Hayden or Hopkins. Furthermore, a duty of disclosure must exist before an action for fraud by omission can be maintained. River-mont Inn, Inc. v. Bass Hotels & Resorts, Inc., 118 S.W.3d 636, 641 (Ky.App.2003).
The Kentucky General Assembly has unequivocally addressed the disclosure requirements with respect to the real estate profession in 201 KAR5 11:121.6 I do not believe that 201 KAR 11:121 imposes a duty to disclose upon an agent where no contractual relationship exists. Counsel for the Waldridges conceded at oral argument that Hopkins acted only as the seller’s agent. Pursuant to the Kentucky Administrative Regulations, an agent’s duty is clearly limited to his client. 201 KAR 11:121 Section 1(4). Additionally, imposing a duty in instances where no contractual relationship exists creates inconsistent obligations for the agent. For example, an agent cannot owe a duty of confidentiality *176to his client, 201 KAR 11:121 Section l(4)(d), while owing a duty of disclosure, 201 KAR 11:121 Section l(4)(c), to a third party. The majority has created a new cause of action by holding that such a duty exists.
Furthermore, the disclosure requirements with respect to the sale of a single-family home are clearly outlined in KRS 324.360. The statute requires homeowners who enlist an agent to sell their home to complete a disclosure form regarding known conditions of the property, KRS 324.360, but the disclosure is not intended as a substitute for an inspection or home warranty. Yeager v. McLellan, 177 S.W.3d 807, 808 (Ky.2005).
Moreover, the agent’s only statutory duty with regard to the disclosure is to provide potential buyers with a copy, of the disclosure or, alternatively, to disclose the seller’s refusal to complete the disclosure. KRS 324.360(4) & (8). The statute imposes no duty on the agent to ensure that the disclosure is complete or accurate or to disclose any knowledge to the contrary. It merely requires that the agent act as an intermediary in conveying the seller’s information to potential buyers. Where the disclosure contains omissions or errors, the buyer’s cause of action is against the seller. See Ross v. Powell, 206 S.W.3d 327, 329 (Ky.2006); Yeager, 177 S.W.3d at 809-10. The majority creates a new cause of action not contemplated by KRS 324.360 by finding that an agent has an affirmative duty to make disclosures to the buyer.
In this case, the Waldridges were put on notice that the home had prior water damage issues. They were afforded an opportunity to obtain an inspection, which they did, and which disclosed potential issues concerning the grading of the property and the possibility of water trapped around the home. Also, a cursory inspection of the public property records would have alerted them to the fact that the property had changed hands numerous times. Clearly, the Waldridges had ample opportunity to inquire into the history and condition of the home and that information was equally accessible to all parties. Therefore, no genuine issue of material fact existed regarding the alleged claims of fraud, and summary judgment was appropriate.
Also, the Waldridges have failed to present evidence of damages. While the Wal-dridges indicate that they are unable to sell the property, they do not support this allegation with affirmative evidence. Moreover, they ignore any number of other factors that might be responsible for the unsuccessful sale, including, but not limited to, the recent downturn in the real estate market.
The Waldridges have further failed to present affirmative evidence that prior incidents of flooding affected the value of the property, and they have ignored the fact that since December 1991, the home has sold seven times. The purchase contract the Waldridges entered into was contingent upon the property appraising at the contract price. Thus, it is fair to assume that the home appraised at $253,500, the amount they paid for it. This amount is actually over $42,000 more than the prior owners paid for it only two years before the Waldridges purchased it. The Wal-dridges attached a chart to their brief which reflected an appreciation in the value of the property of approximately $85,000 since the flooding occurred in 2001. Accordingly, based on these facts, it is impossible to formulate what damages they have actually suffered.
Therefore, I respectfully dissent.

. Kentucky Administrative Regulation.

. The majority opinion cites authority from Wyoming and Utah to support its assertion that real estate agents owe a duty of disclosure to the public, which at best could be considered as persuasive authority. However, even if this could be considered persuasive authority, it does not usurp our duty to enforce the law as enacted by the Kentucky General Assembly.