Court Opinion

ID: 2756610
Source: CourtListenerOpinion
Date Created: 2014-12-02 19:09:16.471602+00
Date Added: 2024-06-11T10:21:23.146673
License: Public Domain

FILED
                                                                                COURT OF APPEALS
                                                                                       DIVISION Ii
                                                                               2014 DEC — 2 Alai 9: 01

                                                                               STATE OF WASHINGTON
                                                                               BY

      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                             DIVISION II

EDWIN D. COE        and   DONNA B. COE,                                   No. 44719 -3 -II
husband and wife,

                                   Respondents,

         v.

REID NOEL as Guardian ad Litem for                                   UNPUBLISHED OPINION
ROBERT M. NOEL and NANCY E. NOEL,
husband and wife, and their marital
community, and ERIC NOEL as Successor
Trustee for ROBERT M. NOEL and NANCY
E. NOEL, as Trustees of the Robert M. &
Nancy E. Noel Family Trust,

                                   Appellants.

        JOHANSON, C. J. —     Eric and Reid Noel (Noe1) 1 appeal the superior court' s grant of partial

summary judgment and its subsequent order for rescission of the real estate purchase and sale

agreement (   RESPA)    executed   by   their parents'   estate   and Edwin   and   Donna Coe ( Coe).   Noel

argues that ( 1) the trial court erred in refusing to strike Coe' s affidavit, (2) the trial court failed to

1 We use the pronoun " she" when referring to the parties because Nancy Noel speaks for the sellers
and   Donna Coe for the buyers throughout the       record.
No. 44719 -3 -II

consider   the   evidence      in   a   light   most   favorable to Noel, ( 3)      the trial court erroneously found that

Noel    owed     Coe    a   fiduciary duty, ( 4) Noel had no duty to disclose that she appealed a tax

assessment of      her property, ( 5) Coe breached her               duty   of   due diligence to   conduct   inspections, ( 6)

Noel is    exempt      from    liability      under    former RCW 64.06. 050 ( 1996), ( 7) the trial court erred in

ordering rescission as the remedy, and ( 8) alternatively, if the court allows rescission, Coe' s claims

for damages must be dismissed.

          Regarding the arguments that we reach on the merits, we hold that ( 1) the trial court did

not err   by   refusing to    strike     Coe'   s affidavit, (   2) Noel had a statutory duty to disclose damage from

flooding   and erosion, (       3) genuine issues of material fact exist regarding whether erosion damage

to the property could have been known to Coe had she utilized diligent attention and observation,

and (4) Noel is not exempt from liability. We further hold that the trial court abused its discretion

in granting equitable rescission because Coe ratified the contract and waived the right to rescind.

We reverse and remand.

                                                                 FACTS

                                                            I. THE SALE

          In 1992, Robert and Nancy Noel purchased a parcel of real property located on the

Columbia River in Wahkiakum                      County.      In 2006, the Wahkiakum County Assessor' s office

increased the tax           assessed     value    of   the Noels' property.         Noel disagreed and appealed to the

 Wahkiakum        County      Board      of   Equalization ( BOE). In support of her position, Noel relied on the

 loss   of portions     of    her beachfront due to               flooding   events     and   erosion.   Specifically, Noel

 complained that a significant flooding event in 1996 caused the loss of 100 feet of her riverfront

 access. The BOE agreed and reduced the proposed increase due to extreme erosion of the land.

                                                                     2
No. 44719 -3 -II

         The following spring, the Noels, who were elderly and in poor health, listed their home for
                                                                                   2
sale.   Coe   visited   the property   and offered     to   purchase   the home.       Noel   accepted   the $ 410, 000

cash offer. In May 2007, the parties executed a RESPA3 and the sale closed the following month.

In   conjunction with      the home'   s   listing   and pursuant      to former RCW 64. 06. 020 ( 2007), Noel

completed a seller' s     disclosure   statement ( Form      17). The form, which was delivered to Coe at the

time the parties executed the RESPA, contains numerous questions relating to various aspects of

the property and structures thereon. Noel' s answer to one of those questions became the crux of

this dispute. Noel responded in the negative to the following question:

         Is there any material damage to the property from fire, wind, floods, beach
         movements, earthquakes, expansive soils, or landslides?

1 Clerk' s Papers ( CP) at 34. In closing the transaction, Coe had the home inspected, but did not

conduct a review of the property' s history, have it appraised, or have the land itself inspected. In

August 2007, Coe received a letter from the assessor' s office inquiring as to whether she knew

about Noel' s BOE appeal for 2007 tax purposes.

                                                II. THE LITIGATION

          Because of the alleged reduction in property value, Coe filed a complaint alleging breach

of contract, misrepresentation, and fraudulent concealment, seeking damages and rescission of the

RESPA.4 But the litigation soon languished. In 2010, the superior court clerk notified the parties

2 Noel and Coe were represented by real estate agents who are not parties to this dispute.

3 The RESPA was contingent on the buyer' s satisfaction with the condition of the property after
conducting inspections.

     Coe appears to have abandoned her claims for fraudulent concealment and misrepresentation
 after the trial court granted partial summary judgment.

                                                             3
No. 44719 -3 -II

that it   would   dismiss the       case   for   want of prosecution.         Coe did   not respond.       In early 2011, Coe

extensively remodeled and updated the home. In February 2012, Coe filed .a motion for dismissal

and voluntary nonsuit. But Coe withdrew the motion when she learned that Noel requested costs

and attorney fees.

          Subsequently, Coe moved for partial summary judgment regarding Noel' s duty to disclose

the   existence of     the   erosion and      her breach     of   that   duty by failing   to do   so.   Noel moved to strike

Coe' s supporting affidavit. The trial court denied the motion to strike and granted Coe' s motion

for partial summary judgment. The court determined that Coe was entitled to entry of judgment

and subsequently granted Coe' s motion for equitable rescission of the RESPA in addition to costs

and    attorney fees.         Noel simultaneously moved for reconsideration and again for summary

judgment in her favor.              The trial     court   denied both       motions.    Noel appeals the court' s orders

granting partial summary judgment, the order granting equitable rescission, and the order denying

reconsideration.

                                                           ANALYSIS

           We review summary judgment orders de novo, performing the same inquiry as the superior

court.    Hisle   v.   Todd Pac. Shipyards          Corp.,   151 Wn. 2d 853,. 860, 93 P. 3d 108 ( 2004).            Summary

judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any, show that there is no genuine issue of material fact and

that the moving party         is   entitled   to judgment    as a matter of     law. CR 56( c); Vallandigham v. Clover

ParkSch. Dist. No. 400, 154 Wn.2d 16, 26, 109 P. 3d 805 ( 2005).

           When reviewing a summary judgment, we consider all facts and reasonable inferences

from them in the light          most    favorable to the nonmoving party.               Vallandigham, 154 Wn.2d at 26;

                                                                    4
No. 44719 -3 - II

Magula   v.   Benton Franklin Title Co., 131 Wn.2d 171, 182, 930 P. 2d 307 ( 1997). But we will not

consider   inadmissible     evidence when      reviewing   a   summary judgment. CR 56( e);        see also Dunlap

v. Wayne, 105 Wn.2d 529, 535, 716 P. 2d 842 ( 1986).

        We     review a    trial   court' s reconsideration    decision for   an abuse of   discretion.     Rivers v.

Wash. State     Conf     of Mason Contrs., 145 Wn.2d 674, 685, 41 P. 3d 1175 ( 2002).                 A trial court

abuses its discretion when it bases its decision on untenable grounds or reasons. Salas v. Hi -Tech

Erectors, 168 Wn.2d 664, 669, 230 P. 3d 583 ( 2010) ( citing            State v. Steinson, 132 Wn.2d 668, 701,

940 P. 2d 1239 ( 1997).        Similarly, we review a trial court' s decision to rescind a contract for an

abuse of discretion. Hornback v. Wentworth, 132 Wn. App. 504, 513, 132 P. 3d 778 ( 2006).

                                     I. REFUSAL TO STRIKE COE' S AFFIDAVIT

         Initially, Noel contends that the trial court erred in refusing to strike Coe' s affidavit in

support of her motion for partial summary judgment because there was no showing that she was

competent to testify, her statements were not based on personal knowledge, and because it

contained speculative assertions and legal conclusions. We disagree.

         Ordinarily, we review a trial court' s evidentiary rulings for abuse of discretion, but we

review such rulings made            in   conjunction with a    summary judgment     motion    de    novo.   Davis v.

Baugh Indus. Contractors, Inc., 159 Wn.2d 413, 416, 150 P. 3d 545 ( 2007) (                        citing Folsom v.

Burger King, 135 Wn.2d 658, 663, 958 P. 2d 301 ( 1998)).

         CR 56( e) governs the form of affidavits for purposes of summary judgment. The rule states

that an affidavit in support of summary judgment shall ( 1) be made on personal knowledge, (2) set

 forth such facts as would be admissible in evidence, and ( 3) show affirmatively that the affiant is

 competent     to   testify. CR 56( e); Hill v. Sacred Heart Med. Ctr., 143 Wn. App. 438, 449, 177 P. 3d

                                                           5
No. 44719 -3 -II

1152 ( 2008). But "` evidence     may be presented in affidavits by reference to other sworn statements

in the   record   such as   depositions   and other affidavits. "'     Hill, 143 Wn. App. at 449 ( quoting

Mostrom v. Pettibon, 25 Wn. App. 158, 162, 607 P. 2d 864 ( 1980)).

         In her affidavit supporting partial summary judgment, Coe made a number of statements

that Noel alleges were not based on personal knowledge because they amounted to legal

conclusion,   inadmissible    hearsay,    or speculation.    For example, Coe states that Noel' s appeal to

the BOE " should have been made known to us" and that the " material fact that there had been a

sudden erosion event ...        was not    disclosed."   1 CP    at   119, 121.   But notwithstanding Noel' s

contention that the presence of these legal conclusions renders the affidavit inadmissible, our

Supreme Court has said that while conclusions of law contained in an affidavit are improper, the

trial court must be presumed to have ignored these conclusions. Orion Corp. v. State, 103 Wn.2d

441, 462, 693 P. 2d 1369 ( 1985).            The Orion court further stated that an affidavit is to be

disregarded only to the extent it contains such conclusions and that the remainder can properly be

considered.   103 Wn.2d at 462.

         Noel' s argument that statements in the affidavit constitute inadmissible hearsay is equally

unavailing because the       challenged statements were not       necessary to the    outcome.   For instance,

Coe' s statement that Noel deliberately withheld information, though perhaps hearsay, did not

create a material fact that did not otherwise exist because the court also considered Noel' s own

affidavit in ruling on the motion. In her affidavit, Noel stated explicitly that she did not disclose

information about the erosion because she was not required to according to her understanding of

the   question.    Our Supreme Court in Guntheroth v. Rodaway found that portions of Rodaway' s

affidavit were not based on personal knowledge and therefore did not satisfy the requirements of

                                                         6
No. 44719 -3 -II

CR 56( e).      107 Wn.2d 170, 178, 727 P. 2d 982 ( 1986).             Notwithstanding Guntheroth' s argument

that the trial court should have stricken these portions, the court concluded it was unnecessary to

do so because the statements had no material effect on the determination of the issues where other

evidence provided similar information. Guntheroth, 107 Wn.2d at 179.

         Here, Noel' s contention that Coe failed to demonstrate her competence to testify lacks

merit. Noel appears to argue that CR 56( e) requires a showing of competence in the form of a

statement.      She cites no authority for this proposition aside from the rule itself which contains no

language indicating that the required showing must be an express statement.5 Noel has advanced

no support for her contention that Coe was not competent to testify regarding an arms- length real

estate transaction to which she was a party. Accordingly, the trial court did not err in refusing to

strike Coe' s supporting affidavit.6
                                              II. DUTY TO DISCLOSE

         Noel next argues that there is no legal basis to conclude that Noel owed Coe a fiduciary

duty when the parties were involved in an arms -length transaction. Noel asserts further that she

had no duty to disclose the BOE 2006 tax appeal or that the appeal was based on damage from

erosion. To the extent that Noel contends that there was no duty to disclose damage from flooding

or erosion, we disagree. Former RCW 64. 06. 020 imposes such a duty.

5                                                                                                                 See
    The third   requirement   is   met   if the   contents of   the   affidavit show   the   affiant competent.

Bernal   v.   Am. Honda Motor Co., 87 Wn.2d 406, 412, 553 P. 2d 107 ( 1976).

6 Noel also contends that the trial court erred in granting partial summary judgment in favor of Coe
by failing to construe the evidence in a light most favorable to Noel as the nonmoving party. But
whether the trial court considered the evidence appropriately is immaterial because our review is
de novo and we perform the same inquiry as the superior court. Hisle, 151 Wn.2d at 860.

                                                           7
No. 44719 -3 - II

           Our Supreme Court has held that a duty to disclose exists where a special relationship of

confidence and trust had developed between the parties, where a party relies on the " specialized

and superior knowledge of the other party, where a party has a statutory duty to disclose, or where

a seller   knows   a material   fact that is   not   easily discoverable       by the   buyer."    Van Dinter v. Orr, 157

Wn.2d 329, 334, 138 P. 3d 608 ( 2006) ( emphasis             added).         Here, in the absence of a buyer' s waiver,

former RCW 64. 06. 020          mandates certain        disclosures     of   improved     real   property.   Former RCW

64. 06. 020( 1) provides,

           In a transaction for the sale of improved residential real property, the seller shall,
           unless the buyer has expressly waived the right to receive the disclosure statement
           under RCW 64. 06. 010, or unless the transfer is otherwise exempt under RCW
           64. 06. 010, deliver to the buyer a completed seller disclosure statement in the
           following format and that contains, at a minimum, the following information.

Included among the many disclosures mandated by the statute is a requirement that a seller disclose

whether the property had been subject to material damage by fire, wind, floods, beach movements,

earthquakes, expansive soils, or landslides. Here, there had been damage associated with erosion

and flooding. Accordingly, Noel had a duty to disclose damage to and loss of beachfront on the

property.

           The parties extensively argue as to whether the operative facts were peculiarly within the

seller' s knowledge, whether partial or ambiguous statements of fact were made, or whether Noel

had a duty specifically to disclose the fact that her BOE appeal was based on the erosion damage.

But the parties misinterpret the law. These are merely other circumstances which give rise to the

same duty that is created in this case by former RCW 64.06. 020. As explained, a duty to disclose

in   a   business transaction   exists when      any   one of   these   aforementioned circumstances           apply.   Van

                                                              8
No. 44719 -3 -II

Dinter, 157 Wn.2d      at   334.   Here, we conclude Noel had a statutory duty to disclose the flood

erosion.

        Further, Noel contends that no duty to disclose the beachfront erosion can exist because

Coe   never   inquired. But   again,   Noel   misapprehends   the   applicable   law.   The duty of a buyer to

inquire further applies to a claim for fraudulent concealment. Sloan v. Thompson, 128 Wn. App.

776, 789, 115 P. 3d 1009 ( 2005),        review   denied, 157 Wn.2d 1003 ( 2006).          Only when a buyer

becomes aware of a potential defect and, thus, the defect is apparent, does a duty to inquire further

arise. Sloan, 128 Wn. App at 789. Here, there is nothing in the record that demonstrates Coe had

any such knowledge. Moreover, the trial court did not find that Coe had satisfied the elements to

establish a claim for fraudulent concealment. Thus, because Noel had a statutory duty to disclose

defects and she failed to disclose the defects, we conclude that she breached that duty.

                                       III. COE' S DUTY TO INVESTIGATE

        Noel asserts that Coe' s reservation of contractual rights to verify lot size, encroachments,

soil stability inspections, and other inspections by specialists created a duty of due diligence on

behalf of Coe to obtain the reserved inspections upon notice that the property was in a flood plain,

contained fill material, and the existence of permits attached to the property for dredging and

erosion control. Noel further contends that the visible action of waves, tides, and currents render

any erosion visible such that Noel was not required to disclose the damage absent a buyer' s inquiry.

We hold that a genuine issue of material fact exists regarding whether Coe could have known of

the erosion damage by utilizing diligent attention and observation.

           Just as the disclosure statement creates a seller' s mandatory duty to disclose, it similarly

creates a buyer' s duty to " pay diligent attention to any material defects that are known to Buyer or

                                                        9
No. 44719 -3 -1I

can    be known to Buyer             by    utilizing     diligent       attention   and    observation."     Former RCW

64. 06. 020( 1).     Our Supreme Court recognized this fact in Alejandre v. Bull where the court stated

that by reviewing and signing the disclosure form, the buyer thus acknowledged its duty to utilize

diligent   attention and observation as           expressly    explained      in the disclosure      statement.   159 Wn.2d

674, 679, 153 P. 3d 864 ( 2007).           Here, as in Alejandre, Coe signed the seller' s disclosure directly

below the " BUYER' S ACKNOWLEDGEMENT"                                   portion of the    form. 1 CP at 35.

          Noel argues that Coe' s duty of due diligence was augmented by the fact that she reserved

the    right   to   conduct   additional    inspections       of   the property      at   her   option.   In support of this

proposition,        Noel   relies   exclusively     on    a   concurring      opinion      in Alejandre.      There, Justice

Chambers concluded that when fairly read, an inspection addendum to the RESPA created an

additional duty of due diligence on the buyer to take steps to protect themselves and to anticipate

that the seller might not have complete knowledge as to the representations made. Alejandre, 159

Wn.2d at 698 ( Chambers, J., concurring in result).

           Our Supreme Court recently examined the concomitant duties of buyers and sellers in real

estate   transactions.      In Jackowski     v.   Borchelt, 174 Wn.2d 720, 278 P. 3d 1100 ( 2012), the parties

to a real estate transaction executed a RESPA that included an inspection addendum providing the

buyers the right to inspect the property within 15 days. The buyers inspected the house, but opted

not to inspect the property for soil stability. Jackowski, 174 Wn.2d at 725. On the disclosure form,

the seller indicated that the property was located within a landslide hazard area, but claimed that

the property did not contain fill material despite knowledge to the contrary. Jackowski, 174 Wn.2d

at    725, 740.     Jackowski brought suit when the home was damaged by landslides, arguing that the

fill material should have been disclosed. Jackowski, 174 Wn.2d at 726. Borchelt contended that

                                                                   10
No. 44719 -3 -II

despite her negative response to the question of fill, her disclosure regarding the landslide area and

shoreline    instability    was       adequate.   Jackowski, 174 Wn.2d             at    739.    Experts testified that the

presence of fill would have been obvious to any qualified geologist had it been inspected.

Jackowski, 174 Wn.2d at 739. Our Supreme Court held that genuine issues of material fact existed

as to whether the fill could have been discovered. Jackowski, 174 Wn.2d at 740.

          Although the court' s analysis in Jackowski involved one specific element of the buyer' s

fraudulent    concealment claim, we            find its reasoning      persuasive.        Here, the trial court found that

the "   material   facts   of   the   extreme erosion ...   w[   as]   not   readily    available   to the buyers."   4 CP at

693.    But like Jackowski, the buyers conducted only a home inspection, opting not to conduct an

inspection of the land. Moreover, Coe did not review the property' s history nor did she have the

property surveyed or appraised despite her admission that it would have been reasonable to do so.

The property' s title report, which Coe claimed to have examined, revealed the existence of an

easement for dredge disposal and right of entry permit. Had Coe inquired further, she would have

discovered that the easement exists for the purpose of "preserv[ ing] the property from loss due to

erosion    from Columbia River             water."   1 CP   at    153.   Noel also disclosed that the property was

located in a flood plain.

          Additionally, Noel' s 2006 appeal to the BOE was at all times a matter of public record and

Coe     admits awareness of           this fact. Toni Robinson, a realtor and longtime Puget Island resident,

declared that      evidence of erosion would          have been        visible even      to   a " casual observer."   4 CP at

  In the cited portion of Jackowski, the court analyzed whether a reasonable inspection would have
revealed the fill material issue. Here, the buyer' s statutory duty seems to require a similar inquiry
to determine whether the defects could have been made known to a buyer by " utilizing diligent
attention and observation."              Former RCW 64. 06. 020( 1).

                                                                 11
No. 44719 -3 - II

720. This is enough evidence to create a genuine issue of material fact as to whether the defect' s

presence was available and whether Coe breached her own duty to utilize diligent attention and

observation. Accordingly, we hold that summary judgment was improper for this reason. In light

of this conclusion, we hold further that the trial court' s denial of Noel' s motion for reconsideration

was based on untenable grounds and was therefore an abuse of its discretion.8

                                    IV. WAIVER AND RATIFICATION

        Noel asserts that the trial court erred in granting equitable rescission in favor of Coe

because Coe' s procrastination and vacillation in pursuing this remedy, combined with the decision

to remodel the home, constitutes a ratification of the RESPA and a waiver of the right to rescission.

We hold that the trial court abused its discretion .in ordering rescission because Coe waived the

right to that remedy.

        Our standard of review is whether the trial court abused its discretion in rescinding the

contract.   Hornback, 132 Wn.      App.   at   513.   When a misrepresentation is made to a purchaser

concerning land, the purchaser may either rescind the contract or enforce the contract and sue for

damages. Johnson v. Brado, 56 Wn. App. 163, 166, 783 P.2d 92 ( 1989), review denied, 114 Wn.2d

1022 ( 1990).   Contract rescission is an equitable remedy in which the court attempts to restore the

parties to the positions they would have occupied had they not entered into the contract. Hornback,

8 Noel also argues that former RCW 64.06. 050( 1) exempts her from liability for her failure to
disclose defects    on   the property.   Former RCW 64. 06. 050( 1)    operates to shield sellers from
liability for failing to disclose defects when they lack " actual knowledge" of any error or omission
in the disclosure statement. But less than one year before the parties entered into the RESPA, Noel
appealed to the BOE requesting an adjustment to the property' s value based on erosion damage
caused by flooding. Noel specifically cited the loss of 100 feet of beachfront property as support
for her position and admitted that she had to move outbuildings to prevent potential loss from
future flooding. Therefore, we reject Noel' s claim that she is exempt from liability.

                                                       12
No. 44719 -3 -II

132 Wn.     App.    at   513.    A court sitting in equity has broad discretion to shape relief. Hough v.

Stockbridge, 150 Wn.2d 234, 236, 76 P. 3d 216 ( 2003).                But the rule in this jurisdiction is that one

who seeks    to    rescind must act    promptly    after   discovery. 9   Johnson, 56 Wn. App. at 166.
          Furthermore, "[       a] party ratifies an otherwise voidable contract if, after discovering facts

that   warrant rescission, [      the party] remains silent or continues to accept the contract' s benefits."

Snohomish     County       v.   Hawkins, 121 Wn.     App.    505, 510 -11, 89 P. 3d 713 ( 2004), review denied,

153 Wn.2d 1009 ( 2005).           The party must act voluntarily and with full knowledge of the facts. Ebel

v. Fairwood Park II Homeowners' Ass 'n, 136 Wn. App. 787, 794, 150 P.3d 1163 ( 2007).

          Here, Noel asserts that Coe waived her right to rescind by failing to move for rescission

within the 15 -day period specified in the RESPA. Noel does not indicate where in the record the

parties    agree   to    such   a period.     But our courts have held that common law rescission is not

foreclosed because the statutory rescission period elapses, and still others have granted rescission

based on a complaint filed months after closing. Jackowski, 174 Wn.2d at 737; Bloor v. Fritz, 143

Wn. App. 718, 740, 180 P. 3d 805 ( 2008). Coe' s right to rescission is not waived on these grounds.

          Noel further asserts that Coe waived her right to pursue equitable rescission because of her

failure to actively pursue the remedy and because she ratified the contract by undertaking the

home'     s remodel.      Coe filed her complaint seeking rescission approximately seven months after

purchasing the home.             It is now more than seven years since the parties closed their transaction.

Over two years after filing suit, the trial court attempted to dismiss the action on its own initiative

9 The United States Supreme Court has endorsed a similar rule for over 100 years. See Shappirio
v.   Goldberg,     192 U.S. 232, 242, 24 S. Ct. 259, 48 L. Ed. 419 ( 1904) (           stating that if one chooses
rescission,   he   must " announce      his   purpose and adhere    to it," and not by acts of ownership continue
to assert right and title over the property as though it belonged to him).
                                                              13
No. 44719 -3 - II

based   on   inaction      of   the   parties.   Coe filed nothing in response. Then, with the litigation revived,

Coe   opted   to    conduct a remodel             that   changed    the home'     s   layout substantially.     Over four years

after the suit commenced, Coe moved to dismiss the suit, only withdrawing the motion upon

learning     that   she    was        responsible    for attorney fees.          In her own deposition, Coe expressed

uncertainty as to whether she still desired rescission.

         This vacillation and uncertainty is inconsistent with the doctrine of equitable rescission.

Coe has not acted with sufficient promptness. Johnson, 56 Wn. App. at 167. The court in Johnson

held that the buyers of a home waived the right to pursue rescission when, with knowledge of the

defect, they nevertheless moved into the home. 56 Wn. App. at 166. Similarly, here, Coe had full

knowledge      of    the    alleged      defects    when she        opted   to   remodel    the home.       Moreover, Coe has

voluntarily continued to accept the contract' s benefits after discovering facts which rendered it

voidable.     Hawkins, 121 Wn.              App.    at   510 -11.   She has now owned the home for seven years and

remodeled it to her liking. The result is a ratification and affirmation of the contract and a waiver

of the right to seek rescission.

         Courts grant rescission in an attempt to restore the parties to the positions they would have

occupied had they not entered into the contract. Hornback, 132 Wn. App. at 513. This is no longer

practicable.        Of the      original   four   parties,   only   one remains        legally   competent.    The home is not

physically the       same and cannot             realistically be    returned    to its   former   state.   The court' s decision

                                                                     14
No. 44719 -3 -II

was   based   on   manifestly   unreasonable grounds.   We hold that the trial court abused its discretion

in granting rescission and should remand to allow the parties to seek applicable damages, if any.

                                         V. ELECTION OF REMEDIES

        Last, Noel argues that because Coe sought to pursue equitable rescission, the doctrine of

 election of remedies" operates to bar Coe' s claims for damages and requires dismissal. We hold

that election of remedies does not bar Coe' s claim for damages.

        Three elements must be present before a party will be held bound by an election of

remedies.     Two or more remedies must exist at the time of the election, the remedies must be

repugnant and inconsistent with each other, and the party to be bound must have chosen one of

them. Birchler      v.   Castello Land Co., 133 Wn.2d 106, 112, 942 P .2d 968 ( 1997). In her complaint,

Coe   sought   both damages        and rescission.   After the superior court granted partial summary

judgment in her favor, Coe elected to pursue rescission. But as explained, equitable rescission of

the RESPA was no longer available as a remedy at the time Coe elected to pursue it. The superior

court granted rescission after Coe, through her dilatory conduct and decision to remodel the home,

ratified the RESPA and waived the right to seek that remedy. Consequently, two or more remedies

did not exist at the time ofthe election. Our courts have, however, specifically held that affirmance

of a contract does not bar the right to recover damages; it merely bars a subsequent rescission.

Johnson, 56 Wn. App. at 167.

                                                        15
No. 44719 -3 - II

           Accordingly, we hold that the doctrine of election of remedies does not require dismissal

of Coe' s case because Coe is not barred from seeking damages by way of her original claims. -We

reverse and remand.

                                                 VI. ATTORNEY FEES

           Noel   and     Coe   each request   attorney fees   on appeal pursuant     to RAP 18. 1.        The RESPA

contains a provision for an award of attorney fees to the party who prevails in a dispute concerning

the' transaction. See RCW 4. 84. 330. But the prevailing party remains unknown. For this reason,

neither party is entitled to attorney fees.

                                                   CONCLUSION

           We hold that ( 1) the trial court did                                            Coe'   s affidavit, ( 2)   Noel
                                                      not err   by refusing   to   strike

                                           damage from              and erosion, ( 3)   genuine issues of material
had   a   statutory     duty to disclose                 flooding

fact exist regarding whether erosion damage to the property could have been known to Coe had

she utilized diligent attention and observation, and (4) Noel is not exempt from liability for failing

to disclose the flood damage.              Because a genuine issue of material fact exists as to whether the

defects caused by erosion could have been discovered upon diligent attention and observation,

summary judgment was improper and, accordingly, the trial court abused its discretion in denying

the   motion      for   reconsideration.     Similarly, we hold that because Coe ratified the contract and

                                                           16
No. 44719 -3 - II

waived her right to pursue rescission, the trial court abused its discretion in granting that remedy.

We reverse and remand for further proceedings consistent with this opinion.

        A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW 2. 06. 040,

it is so ordered.

 We concur:

                                                  17