Court Opinion

ID: 4760507
Source: CourtListenerOpinion
Date Created: 2021-08-12 17:55:52.553426+00
Date Added: 2024-06-11T08:08:56.813004
License: Public Domain

Van Deren, J.
¶21 (dissenting) — I respectfully dissent. Based on our Supreme Court’s recent holdings analyzing claims of negligent misrepresentation in real estate transactions,12 I believe we are compelled to reverse the trial court’s dismissal and remand for further proceedings based on the slim record here.
*94I. Standard of Review
¶22 The majority holds that Austin does not adequately plead sufficient facts to sustain a negligent misrepresentation or unjust enrichment claim. We review de novo a trial court’s CR 12(b)(6) dismissal of a cause of action. San Juan County v. No New Gas Tax, 160 Wn.2d 141, 164, 157 P.3d 831 (2007). To prevail, the moving party in a CR 12(b)(6) motion bears the burden to establish “beyond doubt that the claimant can prove no set of facts [ ] consistent with the complaint” that would justify recovery. No New Gas Tax, 160 Wn.2d at 164. “Such motions should be granted ‘sparingly and with care’ and only in the unusual case in which the plaintiff’s allegations show on the face of the complaint an insuperable bar to relief.”No New Gas Tax, 160 Wn.2d at 164 (quoting Tenore v. AT&T Wireless Servs., 136 Wn.2d 322, 330, 962 P.2d 104 (1998)). “When an area of the law involved is in the process of development, courts are reluctant to dismiss an action on the pleadings alone by way of a CR 12(b)(6) motion.” Haberman v. Wash. Pub. Power Supp. Sys., 109 Wn.2d 107, 120, 744 P.2d 1032, 750 P.2d 254 (1987).
¶23 In reviewing a motion to dismiss under CR 12(b)(6), we accept the complaint’s factual allegations as true. Haberman, 109 Wn.2d at 120. But we need not accept the complaint’s legal conclusions as correct. Haberman, 109 Wn.2d at 120. Whether a duty exists in the negligence context is a question of law. Aba Sheikh v. Choe, 156 Wn.2d 441, 448, 128 P.3d 574 (2006).
II. Real Estate Transaction Duties
¶24 Austin argues that the trial court erred in granting the Ettls’ motion to dismiss because the independent duty doctrine imposed duties beyond those arising under the REPSA (real estate purchase and sales agreement) and the applicable statutes. Austin alleges in his complaint that the Ettls misrepresented “an existing material fact that [they] *95knew may [have] justifiably induce [d Austin] to refrain from purchasing the property” and, “before the purchase consummated,” they failed to disclose the proposed LIDs (local improvement districts) and the cost of the LID assessments, “information which was not readily obtainable by [Austin].”13 Clerk’s Papers at 13.
¶25 The issue here is whether the facts alleged show, as a matter of law, that the Ettls owed Austin a duty independent of the REPSA or the applicable statutes that would entitle Austin to recover alleged damages through tort remedies. I would hold that on the pleadings the trial court considered, Austin stated a claim for negligent misrepresentation in the context of the REPSA and controlling statutes according to our Supreme Court’s recent decisions, despite the fact that the Ettls revealed the LIDs’ existence at a time when Austin had the statutory right to continue the closing or to later rescind the purchase, and, in doing so, the Ettls met their statutory obligation to reveal the existence of possible liens on “Form 17.”14 Accordingly, I would reverse the dismissal and remand for further proceedings.
A. The Independent Duty Doctrine
¶26 Austin claims negligent misrepresentation by the Ettls. Generally, Washington law recognizes the tort of negligent misrepresentation. Haberman, 109 Wn.2d at 161-*9662. Washington law also recognizes negligent misrepresentation claims based on a complete failure to disclose and partial, ambiguous, and misleading disclosures. Van Dinter v. Orr, 157 Wn.2d 329, 333-34, 138 P.3d 608 (2006); Colonial Imps. v. Carlton Nw., Inc., 121 Wn.2d 726, 731-33, 853 P.2d 913 (1993). And, in Eastwood, our Supreme Court retroactively analyzed the independent duty doctrine as applied to the negligent misrepresentation claim in Alejandre. 170 Wn.2d at 389-90, 415-16 (Chambers, J., concurring). Accordingly, addressing the applicability of the independent duty doctrine to this tort claim arising in the real estate context does not conflict with our Supreme Court’s recent directives in Elcon Construction, Inc. v. Eastern Washington University, 174 Wn.2d 157, 165, 273 P.3d 965 (2012).15
¶27 Because the parties and the trial court assumed that either the economic loss rule or the independent duty rule automatically applied in this case, I briefly discuss some of our Supreme Court’s recent statements of the law relating to these rules. The law in this regard appears to be *97developing and, because I would hold that in this case the matter should return to the trial court for further proceedings, I only briefly address these recent opinions.
¶28 Our Supreme Court has reformulated the former “economic loss rule,” a phrase it perceived to be a “misnomer,” and renamed it the “independent duty doctrine.” Eastwood, 170 Wn.2d at 387; Elcon, 174 Wn.2d at 165. Overall, cases explaining the independent duty doctrine seem to indicate that claims and alleged damages arising from a contractual relationship, even those executed at arm’s length, are subject to a tort sieve. In applying the independent duty doctrine to a leasehold interest, the Eastwood lead opinion16 explained:
An injury is remediable in tort if it traces back to the breach of a tort duty arising independently of the terms of the contract. The court determines whether there is an independent tort duty of care, and “[t]he existence of a duty is a question of law and depends on mixed considerations of logic, common sense, justice, policy, and precedent.” . . . When no independent tort duty exists, tort does not provide a remedy.
Eastwood, 170 Wn.2d at 389 (internal quotation marks omitted) (quoting Snyder v. Med. Serv. Corp. of E. Wash., 145 Wn.2d 233, 243, 35 P.3d 1158 (2001)). But at the same time, our Supreme Court has said, “ ‘[Biased upon policy *98considerations unique to [the real estate and construction] industries [, w]e have never applied the doctrine as a rule of general application outside of these limited circumstances.’ ” Elcon, 174 Wn.2d at 165 (quoting Eastwood, 170 Wn.2d at 416 (Chambers, J., concurring)). Accordingly, I view our Supreme Court’s application of the independent duty doctrine in dealing with a negligent misrepresentation claim in the contractual real estate purchase context as applicable here.
B. Alejandre
¶29 The Alejandres purchased a home from Bull. Alejandre, 159 Wn.2d at 677-78. They later sued Bull for negligent misrepresentation, claiming that Bull failed to disclose a defective septic system. Alejandre, 159 Wn.2d at 677, 686. In reinterpreting Alejandre, the Eastwood court stated that the issue was “whether Bull owed [the Alejandres] a ‘duty of care under the Restatement (Second) of Torts § 552 (1977),’ which is the duty to use ordinary care in obtaining or communicating information during a transaction.” 170 Wn.2d at 389 (quoting Alejandre, 159 Wn.2d at 686).
¶30 Recasting this question in terms of the independent duty doctrine, the Eastwood court’s lead opinion further stated, “[T]he core issue was whether Bull, as the home seller, was under a tort duty independent of the contract’s terms.” 170 Wn.2d at 389-90. It reasoned:
The contract between Bull and the Alejandres contained ample disclosures about the home; the Alejandres agreed that “[a] 11 inspection(s) must be satisfactory to the Buyer, in the Buyer’s sole discretion,” [Alejandre, 159 Wn.2d] at 678 (alteration in original) [(internal quotation marks omitted)]; the Alejandres acknowledged “their duty to pay diligent attention to any material defects which are known to Buyer or can be known to Buyer by utilizing diligent attention and observation,” [Alejandre, 159 Wn.2d] at 679 [(internal quotation marks omitted)], and the Alejandres had their own inspection done.
*99With significant information communicated about the home in the course of contractual negotiations, Bull had no independent tort duty to obtain or communicate even more information during a transaction. The contract sufficed, and the Alejandres’ negligent misrepresentation claim did not survive.
Eastwood, 170 Wn.2d at 390 (emphasis added); see also Eastwood, 170 Wn.2d at 415-16 (Chambers, J., concurring) (“In Alejandre, the parties had, in essence, by agreement, modified the duty to disclose imposed by law. This court relied upon the independent duty doctrine as an analytical tool to support its conclusion that given the detailed contractual terms covering the sale of the house and the duties of the buyer to inspect, the seller did not have an independent duty-to the buyer under the tort theory of negligent misrepresentation.”17 (emphasis added)).
*100¶31 The Alejandres also sued for fraudulent concealment. Alejandre, 159 Wn.2d at 689. Our Supreme Court held that such a claim could go forward under either the independent duty doctrine or the former economic loss rule, although the Alejandres failed to present sufficient evidence supporting a fraudulent concealment claim. Eastwood, 170 Wn.2d at 390 (independent duty doctrine); Alejandre, 159 Wn.2d at 689 (economic loss rule). Here, similar to the facts in Alejandre, Austin may proceed under the independent duty doctrine, with the success or failure of his claim depending on the sufficiency of his evidence to show the existence of an independent duty in light of the controlling contract language — Form 17’s contents — and the controlling statutes.
C. Jackowski v. Borchelt
¶32 Our Supreme Court recently decided Jackowski v. Borchelt, 174 Wn.2d 720, 724, 278 P.3d 1100 (2012), dealing with a real estate purchase and sale involving property that suffered a landslide following the sale. The purchaser sued multiple parties, including the seller, and the trial court entered summary judgment on several claims for differing parties. Jackowski, 174 Wn.2d at 724. In discussing whether summary judgment was properly granted on both fraud and fraudulent concealment claims, the court stated:
After our decision in Eastwood, the Court of Appeals’ reliance on the economic loss rule is in error. Because the duty to not commit fraud is independent of the contract, the independent duty doctrine permits a party to pursue a fraud claim regardless of whether a contract exists. See Eastwood, 170 Wn.2d at 390. The same is true for a claim of negligent misrepresentation, but only to the extent the duty to not commit negligent misrepresentation is independent of the contract.
Jackowski, 174 Wn.2d at 738 (emphasis added).
*101¶33 It appears the phrase “the same is true” applies to the existence of an independent claim for negligent misrepresentation in the contract setting once a duty is established. See Jackowski, 174 Wn.2d at 738. Thus, the trial court must examine the facts in each case and determine whether a tort duty exists in addition to the contractual and statutory requirements, making such a CR 12(b)(6) dismissal motion rarely appropriate because of the breadth and intensity of the required factual inquiry by the trial court.
¶34 Here, the record on appeal does not contain Form 17, the disclosure form, making it a matter outside the pleadings, and Austin claims that the Ettls had a duty independent of the REPSA to disclose the possible lien amounts. This allegation is grounded in facts that are outside the pleadings and await development and cannot serve as a basis for dismissing claims under CR 12(b)(6).
¶35 Accordingly, I would hold that the trial court erred in dismissing Austin’s negligent misrepresentation claim under CR 12(b)(6).18
III. Unjust Enrichment
¶36 Austin also argues that the trial court erred in dismissing his unjust enrichment claim because he alleged facts sufficient to state a claim for relief. Again, I would agree.
¶37 “Unjust enrichment is the method of recovery for the value of the benefit retained absent any contractual relationship because notions of fairness and justice require it.” Young v. Young, 164 Wn.2d 477, 484, 191 P.3d 1258 (2008). A party claiming unjust enrichment must prove three elements: “(1) the defendant receive[d] a benefit, (2) the received benefit is at the plaintiff’s expense, and (3) the *102circumstances ma[d]e it unjust for the defendant to retain the benefit without payment.” Young, 164 Wn.2d at 484-85.
¶38 Here, Austin alleged that the Ettls failed to timely inform him of the known potential LIDs and LID assessments against his property, the benefit to the Ettls retained at his expense equals the subsequent assessments against his property, and the Ettls’ retention of this benefit was unjust. Whether evidence supporting these allegations of an unjust benefit to the Ettls exists remains an issue of fact that could not be resolved on a CR 12(b)(6) motion. Whether Austin can show sufficient evidence of the elements of unjust enrichment could be decided on remand.
¶39 Because our Supreme Court has directed that the independent duty doctrine applies in real estate transactions, I would reverse dismissal of Austin’s claims and remand for further proceedings.

 Jackowski v. Borchelt, 174 Wn.2d 720, 278 P.3d 1100 (2012); Elcon Constr., Inc. v. E. Wash. Univ., 174 Wn.2d 157, 273 P.3d 965 (2012); Eastwood v. Horse Harbor Found., Inc., 170 Wn.2d 380, 241 P.3d 1256 (2010) (plurality opinion); Alejandre v. Bull, 159 Wn.2d 674, 153 P.3d 864 (2007).

 I find it troubling that Austin alleged that the Ettls did not reveal the LIDs’ existence when it is undisputed that the Ettls revealed the LIDs’ existence on the day of closing.

 Whether, when Form 17 is a part of real estate transactions by statute and when allegations of negligent misrepresentation and unjust enrichment are based on under-inclusion of information on Form 17, the form is part of the contract and/or subject to the independent duty doctrine is not resolved. The majority holds that it is not. My reading of our Supreme Court’s recent decisions relating to real estate transactions causes me to conclude that it is.
The cost associated with LIDs imposed by local taxing districts is calculated based on the taxing district’s analysis of the benefit to the property and property owner, thus it is not apparent that Austin could show that he suffered damages arising from the lien imposed for the LIDs here. ROW 35.44.010. But we cannot weigh the evidence when reviewing a CR 12(b)(6) motion. No New Gas Tax, 160 Wn.2d at 164.

 Our Supreme Court has directed Washington courts “not to apply the [independent duty] doctrine to tort remedies ‘unless and until this court has . . . decided otherwise.’ ” Elcon, 174 Wn.2d at 165 (quoting Eastwood, 170 Wn.2d at 417 (Chambers, J., concurring)). The court has also stated that the lower courts should not reexamine public policy reasons for recognizing every tort duty of care when the independent duty doctrine is asserted; instead, the courts should inquire about duty only where our Supreme Court “has never explicitly held before that [the alleged] duty exists.'' Affiliated FM Ins. Co. v. LTK Consulting Servs., Inc., 170 Wn.2d 442, 454 n.4, 243 P.3d 521 (2010) (plurality opinion); see also Affiliated FM, 170 Wn.2d at 461, 463 (Chambers, J., concurring) (generally stating that Washington courts should not reexamine the policy justifications for recognizing a duty when our Supreme Court has already established the alleged duty’s existence).
The independent duty doctrine seems to fail its intended purpose of assisting practitioners and trial courts in determining whether a tort claim may exist when the parties have executed a contract or where statutes exist establishing duties and remedies with regard to the subject of the lawsuit. The economic loss rule was of some utility in this analysis in saying that where the losses claimed are solely economic, the contract likely controls. Under the independent duty doctrine, whether a tort exists paralleling or supplementing a contract has to be decided on a case by case basis after examining the facts of the case. If an independent tort duty does exist and the Supreme Court has not ruled on the fact situation, the trial court and parties are no closer to determining whether the contract or statutes prevail with regard to the duties owed. In these cases, forbidding the trial courts and intermediate appellate courts from developing answers unnecessarily delays clarification of the law with regard to tort claims in the contract context.

 Three justices signed the Eastwood lead opinion. 170 Wn.2d at 402. Four justices concurred and agreed with the lead opinion on most points except, perhaps, its discussion of proximate cause. Eastwood, 170 Wn.2d at 417-18 (Chambers, J., concurring). Thus, we treat the Eastwood lead opinion, except possibly its discussion of proximate cause, as binding law in this state. Two other justices concurred in the result, criticizing the lead opinion’s independent duty doctrine analysis as “incorrectly stat[ing] a general rule of law that does not accord with our cases on the economic loss rule.” Eastwood, 170 Wn.2d at 406 (Madsen, J., concurring). These justices would have held only that “[t]he economic loss rule should not be applied to bar a statutory cause of action, here the statutory cause of action for waste.” Eastwood, 170 Wn.2d at 406 (Madsen, J., concurring).
Austin’s case does not conflict with the concurrence’s concern in Eastwood regarding the availability of statutory remedies. Although RCW 64.06.030 and former RCW 64.06.040(3) (2009) provide rescission as a remedy for the conduct complained of by Austin, former RCW 64.06.070 (1996) provides, “[N]othing in this chapter shall extinguish or impair any rights or remedies of a buyer of real estate against the seller . . . existing pursuant to common law.”

 Justice Chambers’s concurrence in Alejandre also examined the contract’s terms:
While negligent misrepresentation may sound in tort, in this case, the claim falls under the contract these parties signed. The remedies available to the parties are controlled by the contract between the parties.
Turning briefly to whether there is potential relief in contract, under the inspection addendum to the contract, the Alejandres were authorized to inspect the septic system and required to notify Bull if they found it unsatisfactory within 10 days. Fairly read, that contractual language put a duty of due diligence on the Alejandres to take steps to protect themselves and to anticipate that Bull might not have complete knowledge of the workings of an underground system. Cf. ex. 5 (“Buyer acknowledges the duty to pay diligent attention to any material defects which are known to Buyer or can be known to Buyer by utilizing diligent attention and observation.”). Thus, it was the Alejandres’ duty, under the [REPSA], to exercise due diligence and to satisfy themselves that the septic system was acceptable. If, upon a reasonably diligent inspection, they discovered the septic system was not in good working order, their remedy under the [REPSA] was to rescind the contract or seek other contract remedies.
159 Wn.2d at 697-98 (most emphasis added) (citation omitted). Thus, the lead opinion and Justice Chambers’s concurrence in Eastwood rely on the Alejandre concurrence’s analysis of whether the Alejandres had contractual remedies under the contract’s terms in order to explain the absence of tort remedies independent of the contract. This explanation seems inherently contrary to the independent duty doctrine explanations elsewhere in the opinions addressing this doctrine: “An injury is remediable in tort if it traces back to the breach of a tort duty arising independently of the terms of the contract. The court determines whether there is an independent tort duty of care.” Eastwood, 170 Wn.2d at 389 (emphasis added). *100Nonetheless, our Supreme court’s position is that Alejandre was decided correctly and remains good law.

 This holding would not foreclose a CR 56 motion for summary judgment during further proceedings before the trial court. Singleton v. Naegeli Reporting Corp., 142 Wn. App. 598, 602 n.2, 175 P.3d 594 (2008).