Salesperson, Brokerage Not Liable for Dog Attack

Below are summaries of recent court cases affecting the real estate industry.

July 1, 2005

A Georgia appellate court has ruled that although a seller’s dog attacked potential buyers during a showing, the real estate professionals involved had no reason to know that the dog posed a threat to potential buyers.

James and Susie Foulks listed their home for sale with Rebecca Martin, a salesperson. The Foulks owned two dogs that they told Martin would be fenced in the backyard during showings. In the MLS listing for the property, Martin stated that the Foulks had pets, that there was a lockbox on the property, and that it was necessary to call for an appointment.

Sue and Davis Gibson contacted Mercedeh Rezvanpour, a real estate practitioner, about their interest in purchasing a home. Rezvanpour printed the short form of the MLS listing of the Foulks’ house, which did not contain information about the pets.

Rezvanpour called Martin to make sure the property was still available and then left the Foulks a message that she was planning to show the property. During their visit to the property, Sue Gibson opened a door to the backyard and one of the dogs bit her. The Gibsons filed a lawsuit against the Foulks, Rezvanpour, Martin, and the brokerage. The trial court dismissed all of the claims except those against the Foulks, and the Gibsons appealed.

The Court of Appeals of Georgia affirmed the trial court ruling in favor of the real estate professionals. The court found that the general statutory duties a real estate licensee owes to clients do not include any special duties related to pets. The court stated that Georgia's general premises liability statute imposes a duty on occupiers to protect visitors on the property from known dangerous conditions on the property. The court stated that even if it were assumed the real estate professionals were occupiers, they still wouldn't be liable for the dog attack in this instance because they had no reason to know or presume the dog was dangerous.

Finally, the appeals court also affirmed the dismissal of the negligence allegations against the real estate professionals. Because the brokerage and salesperson had no duty to protect the Gibsons from the dog, they could not have been negligent in that duty, said the court.

Court Rules Real Estate Not Professional Service

Idaho's highest court has ruled that because real estate services do not meet the state’s statutory definition of “professional services” the state's two-year statute of limitations for professional malpractice suits do not apply to allegations against real estate licensees.

In 1998, Douglas and Pamela Sumpter entered into an exclusive buyer representation agreement with salesperson Cheryl Wettstein of Holland Realty. The Sumpters purchased a vacant lot and retained a builder allegedly recommended by Wettstein to build a home on the property. The builder constructed the home but failed to pay his suppliers for building materials during construction. Following completion, the builder filed for bankruptcy, and the suppliers filed mechanics’ liens against the property, resulting in litigation between the Sumpters and the suppliers.

In 2002, the Sumpters filed a lawsuit against Holland Realty and Wettstein, alleging that Wettstein breached her contractual duties to the Sumpters by failing to inform them that the builder had financial difficulties; informing that they could not purchase title insurance to protect against lien claims; and failing to inform them that they should seek professional advice about the need to obtain lien protection. The trial court dismissed the lawsuit because the suit was not filed within the two-year statute of limitations for actions alleging professional malpractice. The Sumpters appealed the trial court's ruling.

The Supreme Court of Idaho reversed the trial court, finding that real estate licensees do not render “professional services” in the manner intended by the state's statute of limitations. In defining the legislature’s intent in using the words “professional services” in the statute of limitations, the court found no legislative definitions that included real estate services in that classification. The court noted that in the two instances where the legislature defined the term professional services—in the creation of a “professional service corporation” and a “professional service limited liability company”—both lists included professions that generally required some type of apprenticeship or advanced education, such as medical or legal services.

Although Holland Realty and Wettstein argued that because the state regulates real estate services and requires a license, these services are necessarily professional services, the court rejected the argument. The court found that obtaining a real estate license only required a high school degree and 90 hours of education. Since these requirements were not equivalent to the requirements for the other occupations listed under the definition of professional services, the court determined that real estate services did not qualify. Thus, the court reversed the trial court's dismissal of the Sumpters’ lawsuit and ruled that a four-year statute of limitations applied. Therefore, the court's ruling allowed the Sumpters’ lawsuit to proceed because they had filed it within four years of the alleged breaches.

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