Court Opinion

ID: 4436679
Source: CourtListenerOpinion
Date Created: 2019-09-09 19:15:00.077475+00
Date Added: 2024-06-11T14:51:19.718114
License: Public Domain

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

DONNA WOODCOCK, a single person,       )                                            No. 78166-9-I
                                       )                                            (consolidated with Nos.
      Appellant/Cross Respondent,      )                                            78561-3 & 78562-1)
                                       )
            v.                         )
                                       )
CATHERINE CONOVER (née JENKINS)        )                                            DIVISION ONE
and MIKE CONOVER, and the marital      )
community comprised thereof; and       )
SHERRY VOELKER-HORNSBY, all            )
Washington residents,                  )
                                       )
      Respondents/Cross Appellants,    )                                            UNPUBLISHED OPINION
                                       )
WINSTON MCCLANAHAN and “JANE           )
DOE” MCCLANAHAN, and the martial       )
community comprised thereof; and “JOHN )
DOE,” all Washington residents,        )
                                       )
      Defendants.                      )                                            FILED: September 9, 2019
                                       )
_________________________________________________________________________________

               ANDRUS, J.              —       Donna Woodcock challenges the summary judgment

  dismissal of her claims against Catherine and Mike Conover, from whom she

  purchased a home, and her claims against Sherry Voelker-Hornsby, her real estate

  agent in the transaction. Catherine1 cross-appeals the denial of her motion for

  attorney fees under the real estate purchase and sale agreement (REPSA).

  Sherry cross-appeals the denial of her motion for fees and costs under CR 11. We

           We refer to the parties by their first names for convenience only. By doing so, we mean
               1

  no disrespect.
No. 78166-9-1/2

reverse and remand for an award of attorney fees to Catherine, but otherwise

affirm the trial court’s rulings.

                                       FACTS

       In 2016, Donna hired Sherry as her real estate agent to assist in purchasing

Catherine’s 113-year-old home in West Seattle. Donna understood the home was

a “fixer-upper.” She described the home’s many problems:

       The retaining walls in the backyard were ready to cave in because
       the wood was rotting. The concrete below the wood wall was also
       leaning towards the back of the house. The walkway was slanted so
       the water was going under the house. The house needed all new
       electrical wiring in addition to putting the outside wires in PVC,
       installing the meter into a box and replacing the mast. [A] [g]utter
       was crushed because the wood wall behind the house was too high
       and the weight of the dirt pushed that wall against the house. There
       were over grown [sic] trees in the front yard that made a mess of the
       street and parked cars in addition to interfering with the wires coming
       from the street. One of the trees was about a foot from the house, it
       was top heavy and was a safety hazard due to high winds in that
       area. The stairs in the backyard were not up to code.

       During negotiations for the purchase, Donna received Catherine’s “Seller

Disclosure Statement, Form 17.” Catherine stated in the Form 17 that the house

was served by a public sewer system and connectedto the city’s sewer main. In

response to the question asking about any defects in the plumbing system,

Catherine responded “Don’t know.” She similarly responded that she did not know

of any other “existing material defects affecting the property that a prospective

buyer should know about.” The Form 17 advised Donna to obtain and pay for an

expert, including a plumber, to inspect the property to identify a more

comprehensive list of possible defects.

       As part of the purchase offer, Donna executed an acknowledgement in the

Form 17, in which she stated she understood she had “a duty to pay diligent
                                          -2-
No. 78166-9-1/3

attention to any material defects that are known to [her] or can be known to [her]

by utilizing diligent attention and observation.” She further acknowledged that the

disclosures in the Form 17 were “not intended to be a part of the written agreement

between [Catherine and her].”

       Donna and Catherine signed the REPSA on September 23, 2016. The

agreement, like the Form 17, “urged [Donna] to use due diligence to inspect the

Property to [her] satisfaction and to retain inspectors qualified to identify the

presence of defective materials and evaluate the condition of the Property as there

may be defects that may only be revealed by careful inspection.”

       In a separate inspection addendum to the REPSA, the parties agreed the

sale was conditioned on Donna’s subjective satisfaction with inspections of the

property.   One of the contemplated inspections explicitly identified was “an

inspection of the sewer system,” including “a sewer line video inspection and

assessment.” The addendum set up two inspection periods—the “Initial Inspection

Period,” during which Donna had six days to conduct whatever inspections she

deemed appropriate; and an “Additional Inspections” period, during which Donna

had an additional day to investigate the home’s condition in the event an inspector

recommended “further evaluation of any item by a specialist.”

       Under an optional clauses addendum, Catherine represented “[t]o the best

of [her] knowledge,” the property was connected to a public sewer main. Under

that same addendum, Donna had the right to reinspect the property within five

days of the closing date of November 22, 2016, to determine if any system—

including the plumbing system—had become inoperative or had malfunctioned

                                       -3-
No. 78166-9-1/4

since the Initial Inspection Period. Donna also had the right to require Catherine

to repair or replace any malfunctioning system.

       Sherry testified that she recommended that Donna obtain both a structural

and sewer inspection. Sherry suggested that both inspections could be set for

September 27, 2016. Donna, however, told Sherry that she did not want a sewer

inspection until after she had reviewed the results of the structural inspection.

Donna testified she made this decision because she was not sure she wanted to

buy the house—it was old, sat on stilts, needed a new roof, had landscaping

issues, and had water flowing underneath the crawl space.

       Sherry reached out to Catherine’s real estate agent to schedule a sewer

inspection for the day after the structural inspection. According to Sherry, Donna

then told her not to hire a sewer inspector, even after Sherry offered to reduce her

commission by the $250 it would cost to have this inspection completed.

       Donna testified that she wanted a sewer inspection because of her

concerns about the house’s age, but she did not recall Sherry scheduling this

inspection.    She admitted telling Sherry to hold off until after the structural

inspection. But by the time she received the structural inspection report, more than

six days had passed, and Sherry told her “it was too late to have the inspection”

because the inspection period had lapsed. This conversation occurred, to the best

of Donna’s recollection, on September 30, 2016. Donna testified that Sherry then

said that a sewer inspection was probably not necessary because Catherine’s

boyfriend, Mike,2 was a plumber.

       2  Catherine and Mike were engaged at the time of the purchase and had married before
Donna filed the lawsuit.
                                           -4-
No. 78166-9-115

       But Catherine presented evidence through an email in which Donna

explained why she decided to forgo a sewer inspection: “The inspector didn’t notice

anything strange with the plumbing because everything from the inside of the

house seemed to be working properly so I didn’t feel that I needed to do a sewer

inspection also.” Donna admitted it was she, and not Sherry, who chose to skip

the sewer inspection.

       As a result of the structural inspection, Donna requested and Catherine

agreed to repair a number of items, including moving soil away from particle board

and plywood paneling on the home, trimming vegetation, repairing a kitchen

window, repairing a rusted gas shut off valve, repairing duct work in the crawl

space, having a licensed contractor evaluate and repair posts and footings in the

crawl space, installing vapor barriers between concrete pier blocks and wood posts

in the crawl space, installing junction box cover plates, fixing loose wiring in the

crawl space, replacing the inoperable kitchen exhaust fan, updating kitchen

electrical and lighting outlets, and replacing broken outlets in the living room.

       The day before closing, Donna visited the house for a final walkthrough to

verify that Catherine had completed these negotiated repairs. Donna looked under

the crawl space and saw “a moisture problem” and “wet sand.” She took photos

and sent them to Sherry and her loan officer, Scott Rongey. Rongey indicated that

if the agreed-upon repairs had not been completed, and closing had to be

postponed, the parties would need to execute an addendum to the REPSA. He

further indicated that Donna’s loan rate lock expired later that week, and he would

have to verify that the bank would extend the loan rate if the parties pushed out

the closing date. He noted that since the work to be done by the seller was not
                                        -5-
No. 78166-9-1/6

called for in the bank’s appraisal, it would not jeopardize the loan, “[ajithough the

picture of the crawl space does not look good.” Rongey subsequently confirmed

that he could extend Donna’s rate lock until the following Monday if she wanted to

extend the closing date. Nevertheless, Donna emailed both Rongey and Sherry

to “proceed with the closing tomorrow, I will deal with the problems when I move

in.” Sherry testified that Donna took this step without speaking with her about other

options for investigating the crawl space condition. Donna closed on the home as

scheduled, on November 22, 2016.

         Shortly after closing, in December 2016, an electrician working in Donna’s

house called her to complain that a plumber was under her house and interfering

with his work. The electrician told her that he saw a man covered in mud and

wearing plumber’s overalls come out from under the crawl space. Donna, who

had not hired a plumber, called Sherry to ask why someone would be under the

house.     Donna knew that there were several items Catherine was still in the

process of fixing, including securing a beam underneath the house and installing

a vapor barrier. Donna learned that Mike had been there either to complete an

item remaining on the repair list or to verify that the work had been done.

         Mike, however, testified that he visited the home because he had received

a report of water intrusion in the crawl space. According to Mike, he told Donna’s

electrician why he was there, then entered the crawl space with a flashlight and

found a couple of shovels that did not belong to him. He saw no evidence of a

leak.

         A few days later, Donna noticed a stream of what she thought was rainwater

flowing into the crawl space from behind her house. She called a landscaper to
                                        -6-
No. 78166-9-1/7

look at the retaining wall in her backyard because she thought the water was

coming from behind that wall.      The landscaper confirmed that rainwater was

flowing onto her land from an adjacent greenbelt. The landscaper cleaned out and

replaced some gutters, dug out dirt behind the retaining wall and filled it with drain

rock, and installed a plastic vapor barrier to stop rainwater from flowing into the

crawl space.

       In March 2017, Donna noticed a plugged downspout and became

concerned that the overflowing rainwater was dripping through her patio and onto

her furnace, located in the crawl space.      Donna went into the crawl space to

investigate and found brown, frothy-looking water containing toilet paper and feces

on the ground underneath her bathroom.         Donna saw what she described as

“trenching” and an electric work light and tools, items she thought Mike had left

behind in December2016.

       A plumber found that the three-inch plastic drain pipe running from the toilet

was set loosely in a four-inch clay pipe with no gasket to seal the joint between the

two pipes. He trenched approximately 15 feet to uncover the side sewer and found

pieces of newer PVC pipe loosely connected to pieces of older clay pipe. He found

several locations where the diameter of the PVC replacement pipe mismatched

the existing, cracked four-inch clay pipe.     He also found dirt and tree roots

obstructing the sewer pipe. These downstream obstructions caused sewage to

back up and leak through the unsealed joints in the pipes. According to Donna,

the plumber also told her that while he was digging in the dirt, he saw lime, a

substance often used to cover up the smell of raw sewage. The plumber advised

Donna she needed to replace the entire length of sewer pipe.
                                        -7-
No. 78166-9-1/8

       Donna hired Rescue Rooter to repair the sewer system. Rescue Rooter

was unable to get a camera through all of the pipes because they were full of dirt

and roots. A Rescue Rooter representative testified that he saw “piecemeal”

connections between newer plastic pipes and deteriorated clay pipes.              He

identified a two-foot section of the sewer line between the house and the city’s

main sewer line that was not connected at either end, allowing roots, dirt, and

debris to enter and plug the pipes. According to Donna, a Rescue Rooter

representative said that this sewer problem would have existed for some time and

that Catherine must have known about it. Rescue Rooter replaced or lined the

existing pipe, creating a new and watertight connection to the city sewer main.

       Donna presented evidence that Catherine was aware of plumbing problems

that she did not disclose on the Form 17. In June 2016, in preparation for listing

the home, Catherine hired North by West Inspections, LLC (NBWI) to inspect the

home. NBWI reported that the tub drained slowly and that the drain waste vent in

the crawl space had separated or had been severed, was leaking, and was causing

soil erosion. It recommended further evaluation by a licensed plumber. According

to Sherry, neither Catherine nor her real estate agent provided Donna with NBWI’s

inspection report. Mike testified that he hired one of his former employees, a

licensed plumber, to repair the pipe. Catherine stated, in discovery responses,

that before listing her home for sale, a plumber repaired the severed drain waste

vent pipe by connecting the pipe to the drain line from her kitchen sink, toilet,

shower, and bathroom lavatory.

      Also in discovery, Catherine reported having a sewer backup in 2004,

shortly after she bought the house, and having a tree root removed from her sewer
                                       -8-
No. 78166-9-1/9

line. She denied having any other problems with the sewer line thereafter. But in

July 2016, also before listing the house, Catherine hired a company, PipePix, to

conduct a video scope of the sewer line. Catherine testified that she never saw

the video and assumed her real estate agent had made it available to prospective

buyers. According to Donna’s plumbing expert, Chris Gemmer, the PipePix scope

revealed that the sewer line was plugged with roots and toilet paper. He was also

able to observe badly offset pipes and pipes filling up with water, indicating the

sewer line was clogged.

        Donna sued Catherine and Mike, alleging fraudulent concealment,

fraudulent misrepresentation, and conspiracy to commit fraud. She sued Sherry

for professional negligence.3           The trial court dismissed Donna’s claims on

summary judgment.          It denied Catherine’s request for attorney fees under the

REPSA and denied Sherry’s request for CR 11 sanctions against Donna’s counsel.

All parties appeal.

                                          ANALYSIS

A. Donna’s failure to conduct a sewer inspection precludes her claim of fraudulent
   concealment.

        Donna seeks reinstatement of her fraudulent concealment claim, arguing

she had no duty to conduct a sewer inspection. We review the order granting

summary judgment de novo, engaging in the same inquiry as the trial court. Beal

Bank, SSB v. Sarich, 161 Wash. 2d 544, 547, 167 P.3d 555 (2007). Dismissal of the

fraudulent concealment claim is appropriate only if there are no genuine issues of

        ~ Donna also asserted a claim against Sherry under Washington’s Consumer Protection
Act, chapter 19.86 RCW, but agreed to the dismissal of that claim. Thus, it is not on appeal.
                                               -9-
No. 78166-9-1110

material fact, entitling Catherine and Mike to judgment as a matter of law.

Jackowski v. Borchelt, 174 Wash. 2d 720, 729, 278 P.3d 1100 (2012); see also CR

56(c). Summary judgment is appropriate if a plaintiff fails to make a showing

sufficient to establish the existence of an element essential to a claim; failure of

proof on an essential element renders all other facts immaterial. Atherton Condo.

Apartment-OwnersAss’n Bd. of Dirs. v. Blume Dev. Co., 115 Wash. 2d 506, 516, 799
P.2d 250 (1990); Woody v. Stapp, 146 Wash. App. 16, 21, 189 P.3d 807 (2008).

       To establish a claim of fraudulent concealment, Donna must show

(1) that the house had a concealed defect, (2) that Catherine knew of the defect,

(3) that the defect presented a danger to Donna’s property, health, or life, (4) that

Donna did not know about the defect, and (5) that a “careful, reasonable

inspection” by Donna would not have disclosed the defect. Douglas v. Visser, 173
Wash. App. 823, 833, 295 P.3d 800 (2013). Donna bears the burden of showing all

five elements by clear, cogent, and convincing evidence. Stieneke v. Russi, 145
Wash. App. 544, 560-61, 190 P.3d 60 (2008). Parties disputed only the fifth element

at summary judgment.

      We agree with the trial court that Donna cannot prove that the sewer defects

would not have been discovered during a pre-purchase sewer inspection. Donna

argues that the reasonableness of her decision to forgo a pre-purchase sewer

inspection presents an issue of fact for the jury. But the inquiry in a fraudulent

concealment claim is not whether Donna acted reasonably; the issue is whether a

reasonable inspection would have uncovered the alleged defect. ~ Alejandre v.

Bui~ 159 Wash. 2d 674, 690, 153 P.3d 864 (2007) (homebuyers failed to meet burden

of showing that defect would not have been discovered through a reasonably
                                       -10-
No. 78166-9-I/il

diligent inspection); Atherton, 115 Wash. 2d at 525 (alleged violations were not

apparent and would not have been revealed through a reasonably careful

inspection); Stieneke, 145 Wash. App. at 561-62 (history of roof leaks would only be

apparent after a multi-day, invasive inspection costing approximately $1 0,000.00).

       The undisputed evidence shows that a reasonable, low-cost sewer

inspection would have revealed the sewer defect.        Donna’s own expert, Chris

Gemmer, testified that he conducted a video camera inspection of the sewer pipes

in March 2017 and discovered the pipes were in such bad condition that Donna

had to replace nearly all of them.

       Donna relies on Sloan v. Thompson, 128 Wash. App. 776, 115 P.3d 1009

(2005), to argue that she had no duty to conduct a sewer inspection because she

had no notice of the possibility of a defective sewer.         But Sloan is clearly

distinguishable.   In that case, after two earthquakes damaged a home Sloan

purchased from Thompson, Sloan discovered structural defects in the foundation

and framing, defects in the plumbing and electrical systems, and a non-functioning

septic drain field. jçj~ at 782. Thompson had personally built, plumbed, and wired

the house and had the septic system installed without a permit. ki.

       Sloan sued, alleging fraudulent concealment. Id. The trial court found for

Thompson at trial because Sloan had not conducted an inspection of the house

before purchasing it. Id. at 783. This court reversed, holding that “a fraudulent

concealment claim may exist even though the purchaser makes no inquiries which

would lead him to ascertain the concealed defect.” ki. at 789 (quoting Atherton,
115 Wash. 2d at 525). But Sloan clearly dealt with defects that would “not have been

noticeable to a trained eye.” ki. at 789-91. This court noted that “undisputed expert
                                       -11-
No. 78166-9-1/12

testimony established that a careful, reasonable inspection would not have

disclosed the defect[s].” ki. at 791.

       This case is more analogous to Alejandre v. Bull, in which our Supreme

Court affirmed the dismissal of a fraudulent concealment claim against the seller

of a home with a defective septic system. 159 Wash. 2d at 678, 689-90. In that case,

the buyer accepted the septic system even though an inspection report disclosed

that the inspection was incomplete because a back baffle had not been inspected.

ki. at 690.   This part of the septic system was relatively shallow and easily

accessible for inspection. ki. Because a careful examination would have led to

the discovery of the defective baffle and to further investigation, the buyer’s

fraudulent concealment claim failed. ki. at 689-90.

       In this case, the REPSA advised Donna to hire an inspector to determine if

there were any problems with the plumbing system. The inspection addendum

gave her six days to conduct an initial inspection and an additional day for a

specialist to conduct a more in-depth investigation if necessary. The optional

clauses addendum gave Donna the right to conduct an inspection within five days

of closing to verify that no defects had developed with the plumbing system, and

Donna had the right to demand that Catherine repair any malfunctioning system

discovered during that final walk-through.

       Donna was aware her structural inspector had looked at the crawl space

during his inspection. But she knew this inspector was not going to inspect the

sewer. And she also had notice of possible plumbing defects before the sale

closed. When she was in the crawl space the day before the scheduled closing,

she took photos of the “wet sand” she discovered and testified that the condition
                                        -   12-
No. 78166-9-1/13

she found then looked similar to the conditions she found in the crawl space in

March 2017. Donna clearly became aware of some water problem in the crawl

space under the home before the sale became final.            Where there is some

indication of the defect, purchasers are required to make further inquiries.

Douplas, 173 Wash. App. at 832; Puqet Sound Serv. Corp. v. Dalarna Mqmt. Corp.,

51 Wash. App. 209, 215, 752 P.2d 1353 (1988). Donna emailed her photos to Sherry

and her loan officer, and they discussed the possibility of pushing the closing date

to make further inquiries. Donna, however, chose not to do so and instructed

Sherry to proceed with the closing. Donna’s argument that the moisture problems

did not necessarily indicate a sewer problem is unavailing.         ~ Miebach v.

Colasurdo, 102 Wash. 2d 170, 176, 685 P.2d 1074 (1984) (“[K]nowledge of facts

sufficient to excite inquiry is constructive notice of all that the inquiry would have

disclosed.”).

       Furthermore, Donna knew she should have a sewer scope done because

the house was so old. Sherry recommended that Donna undertake this inspection

simultaneously with the structural inspection, but Donna intentionally chose to

reject this recommendation. Donna did not ask Catherine for more time to conduct

the sewer scope, either after the expiration of the Initial Inspection Period or when

she discovered water in the crawl space immediately before closing. When Donna

hired a plumber to investigate her sewer pipes, he was able to quickly discover the

defects in the system. Under these undisputed facts, Donna cannot establish that

a careful, reasonable inspection would not have uncovered the sewer defect. We

affirm the dismissal of her fraudulent concealment claim.

                                        -13-
No. 78166-9-1/14

B. Donna presented no evidence that she relied on any representations in the
   Form 17.

          Next, Donna seeks reinstatement of her fraudulent misrepresentation claim,

arguing that Catherine’s statement on the Form 17 that the side sewer was

connected to the city sewer was false.

       To establish fraudulent misrepresentation, Donna must prove (1) Catherine

made a representation of an existing fact, (2) the representation was material to

the transaction, (3) the representation was false, (4) Catherine knew the

representation was false, (5) Catherine intended that Donna rely on the false

representation, (6) Donna was ignorant of its falsity, (7) Donna relied on the false

representation, (8) Donna had a right to rely on the representation, and (9) Donna

suffered damages in reliance on the false representation. Steineke, 145 Wash. App.

at 563.     Donna must prove every element by clear, cogent, and convincing

evidence. j.4~ On summary judgment, Catherine contended, and the trial court

concluded, that Donna failed to establish the seventh (actual reliance) and eighth

elements (right to rely).

       Generally, ‘[a] party to whom a positive, distinct and definite representation

has been made is entitled to rely on that representation and need not make further

inquiry concerning the particular facts involved.” Douglas Nw., Inc. v. Bill O’Brien

& Sons Constr., Inc., 64 Wash. App. 661, 679, 828 P.2d 565 (1992). Purchasers of

property generally have a right to rely on a seller’s written representations.

Jackowski, 174 Wash. 2d at 738 (purchaser had right to rely on representation in

Form 17 that property did not contain fill material); see also McRae v. Bolstad, 32
Wash. App. 173, 177, 646 P.2d 771 (1982).             But reliance on a fraudulent

                                        -   14-
No. 78166-9-1/15

misrepresentation must be reasonable under the circumstances.           Williams v.

Joslin, 65 Wash. 2d 696, 698, 399 P.2d 308 (1965). While justifiable reliance is

normally a question of fact, summary judgment is appropriate if reasonable minds

could reach but one conclusion. Cornerstone Equip. Leasing, Inc. v. MacLeod,

159 Wash. App. 899, 905, 247 P.3d 790 (2011).

       On appeal, Donna argues that Catherine, in the Form 17, misrepresented

that the house was “connected” to the city sewer main. She contends the evidence

establishes that Catherine knew that this connection had been severed by

deteriorated, misaligned, or blocked sewer pipes. Even if a jury were to accept

this evidence as true, however, there remains a lack of evidence that Donna

reasonably relied on the “connection” misrepresentation. First, when Donna was

asked on which representations she relied in the Form 17, the only statements she

identified were in section 3, paragraphs E and F. Paragraph E provided:

       Are all plumbing fixtures, including laundry drain,              YES
       connected to the sewer/on-site sewage system?               x

And paragraph F provided:

       Have there been any changes or repairs to the                    YES
       on-site sewage system?                                      x

      As to paragraph E, Donna acknowledged that Catherine also indicated, in

section 5, paragraph A of the same form, that she did not know if the plumbing

system had any defects. Donna recognized this statement was a “red flag” to her

that ‘there might be some issues with this plumbing.” As a result, Donna testified

she wanted to have a sewer inspection performed and knew it was important to do

so because of the age of the house.        “The ‘right to rely’ element of fraud is

intrinsically linked to the duty of the one to whom the representations are made to
                                       -   15-
No. 78166-9-1/16

exercise due diligence with regard to those representations.” Alejandre, 159
Wash. 2d at 690. Given Donna’s admission that she knew there could be issues and

yet chose not to conduct a sewer inspection, she failed to present evidence that

she had a right to rely on the representation in paragraph E.

       Even if Donna had a right to rely, she stated she did not actually rely on any

statement in the Form 17. She stated in an email that she decided to forgo the

sewer inspection because she did not feel it was necessary. She later testified

that she relied on Sherry’s comment that the sewer line should be “fine because

the seller’s husband is a plumber.”        No reasonable jury could find from this

undisputed evidence that, in deciding to forgo the sewer inspection, Donna relied

on Catherine’s representation that all of the plumbing fixtures were connected to

the city sewer.

       As to paragraph F, that question by its terms related only to properties with

an on-site sewage system. It is undisputed that Catherine’s home was not served

by a septic system but was instead served by a public sewer system. Even if

Donna had interpreted this question to apply to Catherine’s home, Catherine

disclosed that there had been “changes or repairs” made to the system. This

disclosure does not meet Douglas Northwest’s requirement of a “positive, distinct

and definite representation” of a specific condition or lack of defect. Catherine

made no representation as to what specific changes or repairs had been made to

the sewer, and Donna did not request more details. Thus, no jury could find that

she justifiably relied on any representation in paragraph F in making this

                                       -   16-
No. 78166-9-1/17                                                             /

purchase.4 For these reasons, the trial court did not err in dismissing Donna’s

fraudulent misrepresentation claim.

C. Without proof of fraud, Donna cannot establish a conspiracy to commit fraud.

         Donna next contends the trial court erred in dismissing her conspiracy

claim. Donna alleges that Catherine conspired with her husband and her real

estate agent to hide the sewer defects.

        A civil conspiracy is a combination of two or more persons agreeing to

commit an unlawful act—in this case, fraud. O’Brien v. Larson, 11 Wash. App. 52,

55, 521 P.2d 228 (1974); see also Woody, 146 Wash. App. at 22. There must be

evidence that a tortious act was committed in carrying out the alleged conspiracy.

See   RESTATEMENT (SECOND) OF TORTS           § 876 cmt. b (AM. LAW INST. 1966). Because
Donna had insufficient evidence to establish that Catherine engaged in fraud, she

could not establish that Catherine conspired with others to commit fraud. The trial

court did not err in dismissing this claim.

D. Donna failed to present evidence that Sherry breached the standard of care
   applicable to real estate agents or that she proximately caused Donna’s
   damages.

        Lastly, Donna contends Sherry committed professional malpractice by

violating RCW 18.86.050(1)(c). This statute provides that real estate agents must

advise clients “to seek expert advice on matters relating to the transaction that are

         ~ Donna argues that upholding the trial court’s decision will lead to sellers feigning
ignorance of material defects, rendering the Form 17 at best, useless, and at worst, misleading and
counterproductive. But Donna did not raise this argument below. An argument not made to the
trial court, especially on a summary judgment motion, will not be considered for the first time on
appeal. RAP 9.12; see also Vernon v. Aacres Allvest, LLC, 183 Wash. App. 422, 436, 333 P.3d 534
(2014). We will thus not address it here.
                                              -17-
No. 78166-9-1/18

beyond the agent’s expertise.” But Donna had no evidence to establish Sherry

breached this statutory provision.

       Donna alleged below that Sherry failed to recommend a sewer inspection.

There is no evidence to support this allegation. Sherry testified she told Donna

she should obtain a sewer inspection and produced an email in which she asked

Catherine’s real estate agent if she could schedule the inspection on September

28, 2016.

      Donna’s deposition testimony further undermines her claim that Sherry

failed to recommend a sewer inspection.        On the first day of her deposition,

October 12, 2017, Donna initially testified that Sherry did not recommend a sewer

inspection. But during the second day of her deposition on November 20, 2017,

Donna admitted that she and Sherry discussed getting a sewer inspection:

      Q: You don’t know what you’re alleging in this case against [Sherry]?
      A: I discussed several times the sewer inspection. I didn’t know that
      she had scheduled an appointment to have one done, so I whether
                                                                 —

      she failed or not, I I didn’t have one done, so she she may have
                          —                                —

      failed me by not pushing harder to have one done.

      Q: Your testimony is that [Sherry] never talked to you about trying to
      get a sewer inspection; is that correct?

      A: Not during this time, no, I don’t recall her scheduling an
      appointment for a sewer inspection.

      Q: Did you ever send [Sherry] an e-mail asking her why do I not have
      a sewer inspection?

      A: I don’t recall sending her an e-mail like that.

      Q: Do you ever remember having a telephone call like that with her?

      A: We may have had a phone conversation about it.
                                       -18-
No. 78166-9-1/19

       Q: What do you mean you may have? Did you or did you not, do
       you recall or do you not recall?

       A: I know I talked to [Sherry] about getting the sewer inspection done
       and I didn’t want to have one done until I saw the structural
       inspection.

       Q: Okay. This e-mail exchange with [Sherry], trying to set a sewer
       inspection is also on September 2 8th, correct?

       A: Yes, I saw that.

       Q: So what were you waiting for?

       A: To go through the [structural] inspection report.
In light of this admission, no reasonable jury could conclude from this evidence

that Sherry breached RCW 18.86.050 by failing to advise Donna to obtain a sewer

inspection.

       On appeal, Donna contends that despite her admitted conversations with

Sherry about the advisability of a sewer inspection, Sherry did not document her

advice or Donna’s refusal to take this advice. But Donna cites no authority for the

proposition that a real estate broker breaches the standard of care by failing to

document either her advice to a client or a client’s refusal to follow that advice,

particularly when the client admits she refused to do so.

       Even if documentation were required to meet a standard of care, Donna

was advised in writing in the Form 17 to obtain expert advice regarding the home:

      The following are disclosures made by seller and are not the
      representations of any real estate licensee or other party. .   .

      For a more comprehensive examination of the specific condition of
      this property you are advised to obtain and pay for the services of

                                       -   19-
No. 78166-9-1/20

       qualified experts to inspect the property, which may include, without
       limitation, . plumbers
                       .   .

And when Donna signed the Form 17, she acknowledged the following:

       Buyer hereby acknowledges receipt of a copy of this disclosure
       statement and acknowledges that the disclosures made herein are
       those of the seller only, and not of any real estate licensee or other
       party.

       Donna was also advised in writing in the REPSA that Sherry, identified as

the “Selling Broker,” lacked the expertise to identify defects in the home:

       Brokers do not have the expertise to identify or assess defective
       products, materials, or conditions. Buyer is urged to use due
       diligence to inspect the Property to Buyer’s satisfaction and to retain
       inspectors qualified to identify the presence of defective materials
       and evaluate the condition of the Property as there may be defects
       that may only be revealed by careful inspection.

Donna was adequately advised that she needed to inspect the home to identify

any defects, and her argument that Sherry failed to document their inspection

discussions is insufficient to revive her professional malpractice claim.

       Donna next argues that Sherry breached the standard of care by telling her

that a sewer inspection probably was not necessary because Mike was a plumber.

But Donna admits that this statement, if made, occurred after Donna had already

allowed the six-day Initial Inspection Period to lapse. She testified that “[Sherry]

advised me that we didn’t need such an inspection because ‘the seller’s boyfriend

was a plumber.’ That was after the inspection period.” To demonstrate that a real

estate broker’s breach of the standard of care was the proximate cause of the

plaintiff’s injury, the plaintiff must demonstrate both cause in fact and legal

causation. Beaureciard v. Riley,      Wn. App. 2d   ~,   443 P.3d 827, 831 (2019).

Cause in fact is established by showing that “but for” the defendant’s breach, the

                                       -   20   -
No. 78166-9-1/21

plaintiff’s alleged injury would not have occurred. ki. Because Donna waited until

after the inspection period lapsed to discuss scheduling the sewer scope, she

cannot establish that Sherry’s comment on the necessity of having this inspection

completed was the “but for” cause of her damages.

       Indeed, when asked why she did not request more time to conduct a sewer

inspection, Donna simply answered, “I don’t know why I didn’t ask that.” Had

Donna followed Sherry’s advice and paid for simultaneous structural and sewer

inspections, Donna would have discovered the problems she encountered months

later. This record does not create a genuine issue of material fact on either breach

of the standard of care or proximate cause. Thus, the trial court did not err in

dismissing Donna’s malpractice claim against Sherry.

E. The trial court erred in denying Catherine’s motion for attorney fees.

       On her cross-appeal, Catherine contends the trial court erred in denying her

motion for attorney fees under the REPSA. We agree.

       Whether a party is entitled to attorney fees is an issue of law reviewed de

novo. Boguch v. Landover Corp., 153 Wash. App. 595, 615, 224 P.3d 795 (2009).

If an action in tort is “based on a contract” containing an attorney fee provision, the

prevailing party is entitled to attorney fees. Brown v. Johnson, 109 Wash. App. 56,

58, 34 P.3d 1233 (2001). An action is “on a contract” if the action arose out of the

contract, and if the contract is central to the dispute. kL

       Paragraph “q” of the REPSA provided:

              [ljf Buyer or Seller institutes suit against the other concerning
       this Agreement[,] the prevailing party is entitled to reasonable
       attorneys’ fees and expenses.

                                        -   21   -
No. 78166-9-1/22

The trial court denied Catherine’s request for fees, concluding that Donna’s tort

claims did not “concern the agreement.” The trial court reasoned that the phrase

“concerning this Agreement” was narrower than provisions allowing for fees in

disputes “related to” an agreement, and expressly distinguished Aleiandre and

Hudson v. Condon, 101 Wash. App. 866, 6 P.3d 615 (2000).

       We see no distinction, however, between the phrase “concerning this

agreement” and “relating to this agreement.” “Concern” is defined as “to relate or

refer to.”   WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY                  470 (2002).                           The

provision here is just as broad as the provision in Aleiandre, in which the Supreme

Court awarded attorney fees, 159 Wash. 2d at 691-92, and the provision in Hudson,

in which Division Three of this court awarded attorney fees, 1 01 Wn. App. at 877-

78.

       Moreover, Brown is dispositive of the issue. In that case, the purchase and

sale agreement provided (as here) that “[i]f Buyer [or] Seller                 .       .       .       institutes suit

concerning this Agreement,   .   .   .   the prevailing party is entitled to       .       .       .   a reasonable

attorney’s fee.” 109 Wash. App. at 59. This court remanded for an award of attorney

fees because Brown’s misrepresentation claims arose out of the agreement to sell

Johnson’s home to Brown. ki. at 59-60; see also Douglas, 173 Wash. App. at 835

(citing to Brown and awarding attorney fees to sellers because the action in tort

was based on a contract containing an attorney fee provision).

       As in Brown, Donna’s claims of misrepresentation arose out of the REPSA

because Catherine’s defenses to liability focused on Donna’s right to inspect the

home under the inspection addendum and Donna’s decision to forgo the inspection

she was contractually entitled to undertake. See Edmonds v. John L. Scott Real
                                               -   22
No. 78166-9-1/23

Estate, Inc., 87 Wash. App. 834, 855-56, 942 P.2d 1072 (1997) (buyer’s breach of

fiduciary duty claim arose out of earnest money agreement because defense to

claim rested on language of that agreement).

          The REPSA was similarly central to the dispute between Donna and

Catherine.     The due diligence requirement of paragraph “x” of the REPSA’s

general terms, the inspection provision in the financing addendum, the pre-closing

reinspection provision in the optional clauses addendum, and the inspection

protocol in the inspection addendum, were all relevant to analyzing Donna’s fraud

claims.

          Finally, we note that Donna’s misrepresentation claim was based on a

statement in the Form 17 that the home was “connected” to the public sewer. Yet,

this same representation is contained in the REPSA. Paragraph 5 of the optional

clauses addendum provided that “{t]o the best of Seller’s knowledge, Seller

represents that the Property is connected to a:      .   .   .   public sewer main;   .   .

Although the Form 17 did not become a part of the REPSA, the representation

regarding the connection to the sewer main explicitly did because it appears in the

optional clauses addendum.

       For these reasons, we conclude the trial court erred in denying Catherine’s

motion for an award of attorney fees under paragraph “q” of the REPSA.

F. The trial court did not abuse its discretion in denying Sherry’s motion for CR 11
   sanctions.

       Finally, Sherry appeals the trial court’s order denying her request for fees

and costs under CR 11. She contends that once Donna was deposed on October

12, 2017, it was clear that any claim that Sherry failed to advise Donna to obtain a

                                       -   23   -
No. 78166-9-1/24

sewer inspection was factually unfounded and thus frivolous. Sherry contends

Donna’s decision to file a second amended complaint, after the deposition

occurred, was sanctionable under CR 11.

       We review a decision on CR 11 sanctions for an abuse of discretion, asking

whether the trial court’s decision was manifestly unreasonable or based on

untenable grounds. MacDonald v. Korum Ford, 80 Wash. App. 877, 884, 912 P.2d
1052 (1996). A trial court may award fees under CR 11 against an attorney or a

party for filing a pleading that is not grounded in fact or warranted by law or is filed

in bad faith for an improper purpose. Loc Thien Truong v. Allstate Prop. & Cas.

Ins. Co., 151 Wash. App. 195, 207, 211 P.3d 430 (2009). Because CR11 sanctions

have a potentially chilling effect, the trial court should impose sanctions only when

it is patently clear that a claim has absolutely no chance of success. ki. at 208.

Just because a case is factually weak and an order for summary judgment is

affirmed, “does not mean that the case was entirely groundless or advanced for an

improper purpose.” ki.

       The purpose behind CR 11 is to deter baseless filings and to curb abuses

of the judicial system. Bryant v. Joseph Tree, Inc., 119 Wash. 2d 210, 219, 829 P.2d
1099 (1992). CR 11 sanctions may not be awarded unless a trial court finds that

the attorney who signed and filed the complaint failed to conduct a reasonable

inquiry into the factual and legal basis of the claim.   ~ at 220. The reasonableness
of the inquiry is evaluated under an objective standard. ki. Thus, the courts should

not employ the “wisdom of hindsight” to evaluate a CR 11 claim. ki.

       We find no abuse of discretion in denying Sherry’s motion for CR 11

sanctions. Donna alleged in her second amended complaint, filed on December
                                         -   24   -
No. 78166-9-1125

13, 2017, that Sherry was negligent in failing to recommend that a sewer inspection

be conducted before the purchase and that Sherry was negligent in recommending

against a sewer inspection. These allegations were based on testimony Donna

provided on two days of deposition, October 12, 2017, and November 20, 2017.

As indicated above, Donna testified in the October 12 deposition that Sherry did

not recommend a sewer inspection. That testimony changed on November 20,

2017, when she stated that Sherry had initially recommended this inspection, but

Donna wanted to wait until after she saw the results of the structural inspection,

and that by the time she received that report, the inspection period had lapsed.

       First, when Donna filed her second amended complaint, Sherry had not yet

been deposed. It is understandable for an attorney to choose to wait to evaluate

the factual strength of a claim until both parties to a particular conversation have

been deposed.

       Second, in opposing Sherry’s CR 11 motion, Donna argued her claim was

based on a “later discussion, after the close of the inspection period, where

[Sherry] advised that a sewer inspection was not needed.” Sherry argued in reply

that Donna’s reliance on such a comment was not credible given that she “could

have requested the [sewer] inspection even up until closing but directed closing

regardless.” Given Sherry’s argument, counsel argued that Sherry’s comment

dissuaded Donna from requesting an inspection after the inspection period had

lapsed. Although we conclude that Donna’s claim was appropriately dismissed on

summary judgment, we understand why the trial court did not deem the claim to

be completely baseless. The trial court did not abuse its discretion in denying

Sherry’s CR 11 motion.
                                       -   25   -
No. 78166-9-1/26

       We affirm the dismissal of Donna’s claims against Catherine and Mike

Conover and against Sherry Voelker-Hornsby. We affirm the denial of Sherry’s

CR 11 motion. We reverse the order denying Catherine’s motion for attorney fees

and remand for further proceedings consistent with this opinion.

       Catherine, as prevailing party in this court, is entitled to an award of attorney

fees and costs in this appeal, subject to compliance with RAP 18.1. Because

neither Donna nor Sherry have prevailed on their claims, we deny their requests

for attorney fees and costs on appeal.

WE CONCUR:

             4C-Z1~                                                /

                                         -   26   -