Green v. Woolery

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

LINDA GREEN, et al., Plaintiffs/Appellants,

v.

CARA JEAN WOOLERY, Defendant/Appellee.

No. 1 CA-CV 19-0735
FILED 1-28-2021

Appeal from the Superior Court in Maricopa County
No. CV2018-096693
The Honorable Janice K. Crawford, Judge

REVERSED AND REMANDED

COUNSEL

Udall Shumway PLC, Mesa
By Bradley D. Gardner, David R. Schwartz
Counsel for Plaintiffs/Appellants

MacQueen & Gottlieb PLC, Phoenix
By Patrick R. MacQueen, Brandon P. Bodea, Patrick T. Nackley
Counsel for Defendant/Appellee
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Decision of the Court

MEMORANDUM DECISION

Chief Judge Peter B. Swann delivered the decision of the court, in which
Presiding Judge Samuel A. Thumma and Judge Randall M. Howe joined.

S W A N N, Chief Judge:

¶1 Linda Green and Larry Kammerzell (“Buyers”) asserted
various contract and tort claims against Cara Jean Woolery (“Seller”) based
on her failure to disclose plumbing defects before selling them her house.
The superior court granted Seller summary judgment on all claims,
concluding that Buyers had provided insufficient evidence to show that
Seller knew the nature of the underlying defects.

¶2 We hold that the superior court applied an incorrect legal
standard. Buyers did not have to provide evidence that Seller knew the
technical details of the plumbing failure; they only had to provide evidence
from which a reasonable juror could conclude that Seller knew of a
plumbing problem—and Buyers met that burden. We therefore reverse
and remand.

FACTS AND PROCEDURAL HISTORY

¶3 Seller sold her two-bathroom Phoenix house to Buyers in
September 2017. Seller disclosed in connection with the sale that she was
not “aware of any past or present plumbing problems,” and by way of
explanation stated that a “new clean-out line [was] installed in 2012.” She
disclosed nothing further concerning plumbing. She warranted in the
purchase contract that she had “disclosed to Buyer[s] . . . all material latent
defects and any information concerning the Premises known to Seller,
excluding opinions of value, which materially and adversely affect the
consideration to be paid by Buyer[s].”

¶4 Soon after the close of escrow, Buyers became aware of a
problem with one of the toilets in the house. They engaged a plumbing
contractor, who discovered that severe deterioration in the relevant
bathroom’s sewage and drain lines was causing sewage and water to
discharge into the ground beneath the foundation.

¶5 Buyers paid to repair the defective pipes, and then brought an
action against Seller. Buyers’ complaint alleged six counts: (1) breach of

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Decision of the Court

contract, (2) breach of the covenant of good faith and fair dealing, (3)
negligent misrepresentation, (4) negligence per se, (5) consumer fraud, and
(6) fraud.

¶6 Seller moved for summary judgment, arguing that Buyers
had failed to produce sufficient evidence to show that Seller knew of the
plumbing defects and, additionally, that the economic loss rule barred
Buyers’ negligent misrepresentation, negligence per se, and fraud claims.
Buyers argued in response that the economic loss rule did not apply. They
also pointed to multiple items of evidence (disputed in relevant parts by
Seller) as directly or inferentially establishing Seller’s knowledge.

¶7 First, Buyers provided the declaration of an expert who
opined that the pipes had deteriorated over the course of years and that the
deterioration would have caused “very noticeable” sewage odors inside the
house for, assuming reasonable occupant use, a “very long time.” The
expert further opined that he would not expect most buyers or home
inspectors to discover the deterioration, which would not be visible to
anyone who did not either unearth the pipes or insert a camera inside of
them, and that the odors could have come and gone depending on use and
could have been covered up with scented products.

¶8 Second, Buyers provided the declaration of Seller’s former
housekeeper, who had regularly cleaned the house throughout the year
before the sale. The housekeeper stated that signs in the relevant bathroom
had indicated “not to flush the toilet or use the sink” and that Seller had
told her that the bathroom could be used but the housekeeper “had to be
careful what [she] flushed down it.” The housekeeper further stated that
she observed air freshener packets and candles throughout the house on
multiple occasions, and that after Buyers repaired the plumbing the
property smelled better.

¶9 Third, Buyers provided a declaration in which one of them
stated that Seller had candles going when he inspected the house and that
he later discovered air freshener packets in the bathroom cabinets as well
as discolored grout around the toilet. Finally, Buyers provided excerpts
from Seller’s deposition. Seller first testified that though she had on
multiple occasions experienced problems with the toilet and companion
shower backing up, the problems ceased after the disclosed clean-out was
installed in 2012. She then testified, however, that she was “sure [she] had
something going on in the bathroom” thereafter that had prompted her to
contact her home warranty company, though she could not remember
“what it would have been.”

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¶10 At oral argument, the superior court suggested that Buyers
had to prove that Seller knew—specifically—that defects in the buried
pipes were the cause of the malodors and her efforts to restrict use of the
bathroom:

THE COURT: . . . [Y]our expert is saying you’re not going to
know this unless you’ve dug up the pipes or you have a
camera. But you’re—you’re telling me that there can be a
reasonable inference that a homeowner who has a toilet that
is not flushing properly knew there was something wrong
with the sewer line?

[BUYERS’ COUNSEL]: That’s right.

THE COURT: That’s a big leap to me. . . .

....

THE COURT: It’s like you’ve got some evidence that
contradicts your own position. . . .

....

THE COURT: . . . What my concerns are is you’re telling me
that because the toilet didn’t flush right, because when the
toilet was flushed, there was a horrendous smell, because it
clogged before, she should have known that. But then your
very evidence says the only way you’re going to know this is
if you dig it up or you have a scope. And so we—we know
that most ordinary people aren’t going to know that. . . .

....

THE COURT: [And h]ow is it that a homeowner is going to
know more than the plumbers because the plumbers did not
know what it was right away. They did not go out, flush a
toilet, see it rise, go we have—we have a defective line.

¶11 The court granted summary judgment for Seller on the
ground that Buyers “failed to come forward with any admissible evidence
by which a reasonable fact finder could find that [Seller] knew of, or even
should have known of, corrosion in the sewer line that allowed leakage of
sewage and sewer gas under the residence.” Buyers appeal.

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DISCUSSION

¶12 We review the grant of summary judgment de novo. Andrews
v. Blake, 205 Ariz. 236, 240, ¶ 12 (2003). Summary judgment should be
granted “if the moving party shows that there is no genuine dispute as to
any material fact and the moving party is entitled to judgment as a matter
of law.” Ariz. R. Civ. P. (“Rule”) 56(a). Summary judgment is appropriate
“if the facts produced in support of the claim . . . have so little probative
value, given the quantum of evidence required, that reasonable people
could not agree with the conclusion advanced by the proponent of the
claim.” Orme Sch. v. Reeves, 166 Ariz. 301, 309 (1990). The evidence and all
reasonable inferences therefrom must be viewed in the light most favorable
to the non-moving party. Andrews, 205 Ariz. at 240, ¶ 12.

¶13 Buyers presented ample admissible evidence that Seller was
aware of but did not disclose a “past or present plumbing problem” that
constituted “information concerning the Premises known to Seller . . .
which materially and adversely affect[ed] the consideration . . . paid by
Buyer[s].” Most notably, they presented evidence that the pipes’ defects
would have caused longstanding, very noticeable sewage odors inside the
house and that Seller, knowing the bathroom had a history of problems,
had taken action to restrict its use. We reject the superior court’s conclusion
that Buyers had to prove more specialized knowledge regarding the
defects’ nature. A seller cannot disclaim knowledge of an obvious
plumbing problem based on her failure to obtain a professional diagnosis.
Cf. Maycock v. Asilomar Dev., Inc., 207 Ariz. 495, 499, ¶¶ 20–22 (App. 2004)
(holding that whether original homeowner’s observations of transient
unevenness in the floors constituted discovery of soil-compaction defect
was a question for the finder of fact). We conclude the superior court erred
by granting summary judgment to Seller on the grounds of a failure of
proof.1

CONCLUSION

¶14 We reverse the grant of summary judgment, and we remand
for further proceedings. Subject to Buyers’ compliance with ARCAP 21, we
grant Buyers’ request for attorney’s fees and costs on appeal in view of the
purchase contract’s provision that “[t]he prevailing party in any dispute or

1 Because the superior court did not address Seller’s alternate
argument that the economic loss rule entitled her to summary judgment on
the negligent misrepresentation, negligence per se, and fraud claims, we
decline to address that argument for the first time on appeal.

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claim between Buyer[s] and Seller arising out of or relating to this Contract
shall be awarded their reasonable attorney fees and costs.”

AMY M. WOOD • Clerk of the Court
FILED: AA

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