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Beauregard v. Riley

Court of Appeals of Washington, Division 1

June 24, 2019

LINCOLN BEAUREGARD and LESLIE BEAUREGARD, a marital couple, Appellants/Cross-Respondents,
v.
ANNA RILEY, an individual, Respondent/Cross-Appellant.

          MANN, A.C.J.

         Lincoln and Leslie Beauregard appeal the summary judgment dismissal of their claims against their former real estate agent, Anna Riley, for negligence, breach of statutory real estate broker duties, and violations of the Washington Consumer Protection Act (CPA).[1] The Beauregards are unable to establish that Riley's actions were the proximate cause of their claimed injuries. Accordingly, we affirm dismissal of their claims.

         Riley cross-appeals the trial court's determination that Riley owed and breached a statutory duty to communicate a rental inquiry to the Beauregards. Riley did not have a duty to communicate rental inquiries under RCW 18.86.030(1)(c). Therefore, we reverse the trial court's conclusion to the contrary.

         I.

         The Beauregards retained Riley to list and sell their property in Bellevue, Washington. Riley is a realtor with Windermere Real Estate/East, Inc. in Bellevue. During Riley's initial meeting with the Beauregards at their Bellevue home, the Beauregards mentioned they were also considering another real estate broker. Ultimately the Beauregards chose Riley because she estimated the property could be listed at $2, 488, 000, higher than the other agent's estimate. Riley recalls merely "shar[ing] with them that other clients . . . were buying a similar sized home one block over that was listed at $2, 488, 000" and offered that amount as an example, only after the Beauregards insisted on her opinion. The Beauregards maintain that Riley inflated the price to induce them to enter the Exclusive Sale and Listing Agreement (the Listing Agreement).

         Ms. Beauregard told Riley that, if they did not get offers within their desired price range, they were also interested in renting their property. Riley concedes this alternative was discussed, but the Listing Agreement contracts Riley to "sell" the property, and specifically indicates that the "[f]irm need not submit to Seller any offers to lease, rent, execute an option to purchase, or enter into any agreement other than for immediate sale of the Property."

         The parties signed the Listing Agreement on November 11, 2015. The Listing Agreement did not include a list price, but listed the property as viewable by "Appointment," "Call Listing Office," and through the "Multiple Listing Service (MLS) Keybox." Riley also listed the property as owner-occupied despite it being vacant because for "premier properties," Riley prefers to go to the property before a showing, turn on the lights and heat, discuss key features of the home with the buyer's broker, and ensure the doors are locked after the showing. Additionally, Riley maintains that the property was not truly vacant because some of the Beauregards' furniture was present, and a vacant property is more susceptible to theft. The Beauregards maintain that Riley never fully explained to them that the property was listed as owner-occupied or as viewable by appointment, and had they known, the Beauregards would have never agreed to those terms. Those terms, however, were clearly listed in the Listing Agreement signed by the Beauregards.

         On December 4, 2015, Riley e-mailed the Beauregards, recommending a list price between $1, 950, 000 and $2, 150, 000. Ms. Beauregard replied that she thought they had discussed a higher starting price range. Riley arrived at the suggested list price after conducting market research, which included two comparable properties in the same neighborhood. The first was listed for $2, 488, 000, but sold for $2, 285, 000. The second was listed for $2, 249, 000, but sold for $2, 175, 000. The property is a stacked three level floorplan, lacking an open floorplan, and with recent market preference trending towards open floorplans, Riley suggested a lower list price to compensate for the market trends. The Beauregards disagreed with Riley's recommendation and the property was listed for $2, 288, 000 with a $5, 000 "paint/deck stain credit" and went active on December 9, 2015.

         The parties characterize the discussions about listing the property over the holiday period differently. The Beauregards maintain they contacted Riley about delisting the property over the holiday season, but Riley never responded because she was vacationing in France. Riley maintains that there was less inventory on the market, and listing over the holiday period would capitalize on buyers trying to relocate before the New Year.

         During the months following the initial listing, Riley's office hosted at least 18 open houses at the property. No prospective buyers submitted offers during that period. The Beauregards contend that the lack of offers was because Riley failed to follow-up with prospective buyers and used old photographs in the listing. At several points during her representation, Riley recommended that the Beauregards drop the list price because other nearby properties had recently lowered their prices and attracted buyers. On February 3, 2016, the Beauregards agreed to reduce the price to $2, 173, 000, stating "[w]e had always felt the 2.28 was ambitious, but wanted to try it." Riley recommended a further price reduction on March 20, 2016, to $1, 998, 000, but the Beauregards disagreed.

         On March 6, 2016, the Beauregards notified Riley they wanted to switch real estate agents because they felt Riley was not following up with prospective buyers and had too many other listings in the Bellevue area. Riley convinced the Beauregards to give her a second chance. Riley and the Beauregards made several changes to the property and updated the listing photos, which showcased the re-sodded backyard, the exterior paint job, and updated interior photos.

         Ultimately, the Beauregards terminated their Listing Agreement with Riley in April 2016, and entered a new agreement with Nancy Klinck. The property sold on August 17, 2016 for $1, 850, 000.

         The Beauregards filed their complaint alleging Riley breached statutory duties, was negligent, and violated the CPA. The Beauregards advanced a theory that Riley's cumulative breaches caused their property to remain on the market for too long, leading to low offers from prospective buyers. The Beauregards claimed that Riley fraudulently induced them to enter the Listing Agreement by inflating the value of their property to $2, 488, 000, which was an unfair and deceptive act under the CPA.

         During discovery, the Beauregards recovered an e-mail inquiry from Mark Williams, another realtor with Windermere, sent to Riley on April 6, 2016. Williams inquired whether the Beauregards would be interested in renting as opposed to selling because he had a client looking to move in mid-June from San Francisco, and rent a 2000 sq/ft house for $3, 500 a month. Riley replied that the Beauregards were not interested in renting the property. Ultimately, the prospective renter never rented a property in Bellevue, and stayed in a hotel only for a couple of months before moving back to San Francisco. The Beauregards contend that Riley was required by RCW 18.86.030(1)(c) to inform them of this "offer" to rent their property, failed to do so, and if this "offer" was conveyed, they would have accepted.

         Riley moved for summary judgment. In response, the Beauregards retained Lawand Anderson, a realtor and attorney, as an expert. The Beauregards filed a cross-motion for summary judgment. Riley filed a motion to strike the declaration of Anderson, contending Anderson was not qualified as an expert and her opinion was based on speculation.

         The trial court denied the motion to strike, indicating "the basis of speculation may be argued as part of the summary judgment motion." The trial court granted Riley's motion for summary judgment as to the Beauregards' CPA claim and negligence claim, but denied summary judgment as to the Beauregards' statutory duties claim, finding Riley had a duty to convey the rental inquiry and breached it, but reserved further ruling on causation and damages.

         Riley filed a second motion for summary judgment on the issue of causation, contending the Beauregards were unable to prove that Riley proximately caused the Beauregards' claimed injuries. The trial court granted Riley's second motion ...


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