Hopkins v. Fox & Lazo Realtors

GARIBALDI, J.,

dissenting..

Today for the first time the Court imposes an expansive, ambiguous, and vague liability on real-estate brokers for injuries sustained by an open-house visitor. Unable to find the authority to impose such liability under statutory law, the law of agency, the law of contracts, or even under the traditional common-law approach to landowner or occupier tort liability, the Court’s authority is instead “rooted in the philosophy of the common law.” Ante at 438, 625 A.2d at 1115-1116. To determine the liability imposed on a specific broker “courts will be required to draw on notions of fairness, common sense and morality in order to fix the limits of liability as a matter of public policy.” Ante at 443, 625 A.2d at 1118. All this for a simple slip-and-fall accident in which the injured party already has readily available redress against the homeowner, the bro*454ker’s principal who has control and possession of the property and the knowledge and authority to make the necessary repairs. Neither the law nor public policy require the creation of further needless litigation when the injured party already has adequate redress for her injuries. The Court’s decision to impose liability on real estate brokers who conduct open houses is unreasonable, impractical, and unnecessary.

By converting real-estate brokers into home inspectors, the opinion raises more questions than it answers. Nowhere among the citations to Posner, Horwitz, or other legal luminaries does the majority define the new duty it now imposes. The opinion sets boundaries, but the nebulous standards set by the majority and the concurrence provide no guidelines for brokers. Fairness requires that one be able to ascertain what one's duty is and how it can be performed. Consider the inevitable vagueness and impracticality of the majority’s decision. How can a broker know what constitutes a “dangerous condition?” If a jury can find that a step “camouflaged” with the same color linoleum as the surrounding area is a “dangerous condition,” then what other common features in a house will be considered perilous to the unsuspecting open-house attendee? What exactly must a broker do?

Must a broker arrive at the site early, inspect the premises and then post warning signs on all steps, low ceilings, railings, hanging plants, newly-waxed floors, and other potential “dangerous conditions”? Must the broker tidy up the house and pick up errant skateboards or banana peels? Or must the broker escort people who might prefer to look at the home without an eager salesperson hovering around, so that the broker can point out all potential safety hazards? Or should the broker greet the potential.purchasers at the door with a list of conceivable hazards? I wonder how a well-meaning broker, attempting to comply with the majority’s ruling, will handle the problem, and how his or her solution will affect the salability of the property and the broker’s relationship with the principal, the seller.

*455The broker, as agent for the seller, has a legal and fiduciary obligation to act in the principal’s best interest. Ellsworth v. Dobbs, Inc. v. Johnson, 50 N.J. 528, 553, 236 A.2d 843 (1967). Although the majority recognizes the agency relationship between broker and seller, it fails adequately to address the conflict of interests that would arise if the broker who works for the seller is forced by this Court to disclose defects that the seller does not want disclosed.

Finally, we look to the public interest in the proposed, and in my view unnecessary, solution. Although open-house real-estate dealings are fairly common, not only does no statutory authority exist for the majority’s proposition, no common-law authority exists in this state or in forty-eight other states for the imposed liability. The only state that has imposed this broker liability, Washington, did so in a case in which the broker had admitted that he had possession and control of the premises, and in which the prospective buyer was injured while roaming unescorted through an active construction site. See Jarr v. Seeco Construction, 35 Wash.App. 324, 666 P.2d 392 (Ct.App.1983).

The only two other states that have even considered the question have refused to impose such a duty. See Christopher v. McGuire, 179 Or. 116, 169 P.2d 879 (1946) (holding broker not liable when plaintiff injured after following broker’s suggestion to test strength of porch fence); Turner v. Carneal, 156 Va. 889, 159 S.E. 72 (1931) (finding broker who was authorized to make minor repairs to property not liable to plaintiff who fell through open trap door). Clearly, broker liability is not a public policy that is evoking great support or interest anywhere else in the nation.

Tort law has two goals. One is to make an injured plaintiff whole, and the other is to deter. Prosser and Keeton on Torts § 4 (5th Ed.1984) (noting compensation for losses and “prophylactic” factor of preventing future harm are primary considerations in tort law). Today’s ruling does neither. All this *456decision will do is increase litigation by clogging the dockets with new parties for plaintiffs to sue. Plaintiff has already sued the current homeowners, prior homeowners, the builder, and the architect in this case. Why does plaintiff need another party to sue? Plaintiffs injured in a seller’s house already have recourse through the seller’s homeowner’s insurance. All this ruling does is make it more expensive for all parties concerned — except the lawyers who will file and defend these new suits.

Brokers currently charge a sizeable commission fee to sell a house. The concurrence acknowledges that and argues in the next sentence that there is “no intolerable burden, no injustice, in requiring [brokers] to take a look around and tell folks about any reasonably-discernable dangers * * Ante at 453, 625 A.2d at 1122-1123. But the “burden” the majority imposes is not only on the broker but on the homeowner and the prospective buyer. Because of the newly-created duty to inspect and warn, brokers forced to defray the cost of the additional liability insurance will simply add costs to the commission. Moreover, as the majority recognizes, the broker still would retain the right of either contribution or indemnification from the homeowner. Thus, in the end, the homeowner will pay even more to insure against injuries that might occur in the home, while the brokers will have no more incentive to inspect and warn.than they did before today’s decision.

In addition, the smart homeowner, saddled with new costs, will simply increase the asking price for the house. Therefore, the potential buyer will have to pay more for a house, which has had costs added to the purchase price, all in the name of the buyer’s protection.

Rather than serving the public, the majority’s decision will add extra layers of litigation, paperwork, and cost to the already complex and expensive process of selling and buying a house. Because I believe that the ruling is unnecessary, im*457practical, unreasonable, potentially expensive, and unenforceable, I dissent.

. For affirmance — Chief Justice WILENTZ, and Justices HANDLER, POLLOCK, O’HERN and STEIN — 5.

For reversal and remandment — Justice GARIBALDI — 1.

For concurrance in result — Justice CLIFFORD — 1.