Court Opinion

ID: 4954504
Source: CourtListenerOpinion
Date Created: 2021-09-24 13:31:05.767124+00
Date Added: 2024-06-11T08:15:32.177818
License: Public Domain

JOHNSON, Judge,
dissenting.
While I agree with the Majority’s determination that J.J. Nolte and Suburban Settlement Services, Inc., are liable under a claim of fraudulent misrepresentation in this instance, I cannot agree that Coldwell Banker Real Estate, Inc., (Coldwell Banker), is liable under the facts of this case. I must therefore respectfully dissent.
The Pennsylvania Supreme Court has recently reiterated the elements needed to establish a cause of action for intentional misrepresentation or fraud: ■
(1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance.
Gibbs v. Ernst, 538 Pa. 193, 207, 647 A.2d 882, 889 (1994). A misrepresentation that serves as a basis for a fraud claim need not be in the form of a positive assertion, but may, in certain cases, be established by silence. Smith v. Renaut, 387 Pa.Super. 299, 564 A.2d 188 (1989). Nevertheless, mere silence cannot be sufficient to establish a cause of action in fraud in the absence of a duty to speak. Smith, supra, at 192, 564 *1320A.2d at 192; Sevin v. Kelshaw, 417 Pa.Super. 1, 611 A.2d 1232 (1992).
Here, a clear dye test was a requirement of the lender, not a condition contained in Coldwell Banker’s agreement of sale. The parties were all aware that the property failed the initial dye test. Coldwell Banker’s agent, Renee Valent, told the Bortzes about the failure, but indicated that the sellers would fix the problem before the closing. Therefore, when the repairman chosen by the sellers, Nolte, performed the second test, Nolte forwarded the test results to the lender. Adjudication, September 26, 1995, at ¶ 29. The lender then approved the mortgage and advised its agent, Mr. Abernathy, to proceed with the closing. Id. Mr. Abernathy informed the parties at the closing that a clear dye test result had been obtained by Nolte after his repair work. Id. at ¶ 22. A hard copy of Nolte’s report was delivered at the same time as the closing; closing was even delayed slightly while waiting for Nolte to arrive with the report. The report states that the dye did not show, then later states that one of the trenches was surfacing. Although these two results may be inconsistent, I submit that they are not inconsistent on their face; in other words, one would have to be familiar with the sewage repair business to understand that the two findings are inconsistent.
The Majority imposes liability because it concludes that Valent should have acted to ensure that Nolte’s report of a clear dye test was accurate. Maj. op. at 1315-1316. The Majority suggests that Valent should have contacted the health department to see if a certificate had been issued or contacted the contractor to receive a copy of the report. Id. I have found no case where this Court has imposed such an affirmative duty on a real estate agent.
In this case, the face of Nolte’s report indicates that the second dye test was clear. In addition, Abernathy stated at closing that the second test was clear. Valent did not tell the Bortzes that the second test was clear, they received this information from their lender. Here, it was the lender, Abernathy’s principal, who conditioned the mortgage upon a successful dye test. Valent is not an expert in sewage system maintenance and repair; she is a real estate salesperson. The lender stated that the second test was clear, and the face of the report that she was shown at the closing stated that the dye did not show; Valent should therefore not be held liable. Valent gave the Bortzes all the information that she knew about the dye tests. Under the circumstances, I would conclude that Valent did not make a false representation that the property had passed the second dye test.
The case cited by the Majority in support of its position that Valent had a duty to inquire into the accuracy of Nolte’s report is Glanski v. Ervine, 269 Pa.Super. 182, 409 A.2d 425 (1979). In that case, a real estate agent affirmatively misrepresented the extent of termite damage to a house. Initially, the agent told the buyers not to discuss anything with the seller concerning the house because he was an “odd fellow.” Id. at 186, 409 A.2d at 427. Then, when the buyers directly asked the agent about termites, he told them that there were no termites. Id. The house was sold in an “as is” condition, and, after moving in, the buyers discovered extensive termite damage that had been covered by furniture and paint. The buyers approached the seller, who was surprised that the agent had not informed them about the damage. Id. at 187, 409 A.2d at 428. The seller explained that he had discussed the termite problem with the agent, and the agent was supposed to have told the buyers. Id.
Glanski is distinguishable from the instant ease because of the affirmative misrepresentation that the agent perpetrated upon the buyers in that ease. When asked a direct question about termites, a problem that the agent had discussed with the seller, the agent lied and said there had been no termites. That situation is very different from what exists in the present case, where the agent made no false assurances that a defect did not exist. Valent was aware that the problem existed, told the Bortzes about it, and correctly stated that the problem was currently under repair. The face of the report of the second dye test indicates that the problem was repaired. Because I would not create a duty upon Valent to question the results of the second test, nor to question the *1321assurances that she had been given that the problem had been corrected, I would not find liability in this case.
Neither is this a case where I would impose liability based upon Valent’s silence about the dye tests. It is true that fraud may be established where there is a misrepresentation that is innocently made, if the representation relates to a material matter to the transaction. Boyle v. Odell, 413 Pa.Super. 562, 605 A.2d 1260 (1992). Again, however, I would not conclude that Valent has made any representation on this issue. Whether other individuals may have made false representations about the condition of the property is another issue. Valent did not.
Based upon the foregoing, I would conclude that Valent did not misrepresent the condition of the property, and, thus, would not hold Coldwell Banker liable under a theory of fraudulent misrepresentation. I therefore dissent.