{ "id": 1582568, "name": "Vincent J. AMATO and Sally Amato, Plaintiffs-Appellants, v. RATHBUN REALTY, INC. and Jean Greenwell, Defendants Third-Party Plaintiffs-Appellees, v. MONTOYA-PANDO REALTORS, INC. and Isabelle Caire, Third-Party Defendants", "name_abbreviation": "Amato v. Rathbun Realty, Inc.", "decision_date": "1982-06-01", "docket_number": "No. 5482", "first_page": "231", "last_page": "234", "citations": [ { "type": "official", "cite": "98 N.M. 231" }, { "type": "parallel", "cite": "647 P.2d 433" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "97 N.M. 173", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1555207 ], "weight": 2, "year": 1981, "opinion_index": 0, "case_paths": [ "/nm/97/0173-01" ] }, { "cite": "89 N.M. 155", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2867609 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/89/0155-01" ] }, { "cite": "83 N.M. 789", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5334147 ], "weight": 2, "year": 1972, "opinion_index": 0, "case_paths": [ "/nm/83/0789-01" ] }, { "cite": "86 N.M. 571", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2825826 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/86/0571-01" ] }, { "cite": "92 N.M. 26", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1557068 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/92/0026-01" ] }, { "cite": "84 N.M. 38", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2772521 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/84/0038-01" ] }, { "cite": "75 N.M. 745", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5377551 ], "weight": 2, "year": 1965, "opinion_index": 0, "case_paths": [ "/nm/75/0745-01" ] }, { "cite": "89 N.M. 145", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2863975 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/89/0145-01" ] }, { "cite": "81 N.M. 248", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5367480 ], "weight": 2, "year": 1970, "opinion_index": 0, "case_paths": [ "/nm/81/0248-01" ] } ], "analysis": { "cardinality": 634, "char_count": 10801, "ocr_confidence": 0.798, "pagerank": { "raw": 1.6423151584948008e-07, "percentile": 0.6913192622427021 }, "sha256": "ee8a0e56cd5c901c6e4c9111495c7c071aba1cbe106cc5e44418da804e3ccf47", "simhash": "1:176e5d31ca0cc350", "word_count": 1774 }, "last_updated": "2023-07-14T19:13:49.367595+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "DONNELLY and NEAL, JJ., concur." ], "parties": [ "Vincent J. AMATO and Sally Amato, Plaintiffs-Appellants, v. RATHBUN REALTY, INC. and Jean Greenwell, Defendants Third-Party Plaintiffs-Appellees, v. MONTOYA-PANDO REALTORS, INC. and Isabelle Caire, Third-Party Defendants." ], "opinions": [ { "text": "OPINION\nHENDLEY, Judge.\nDefendants\u2019 motion for summary judgment was granted in plaintiffs\u2019 action for damages for loss of property as a result of negligent misrepresentation, and negligent and fraudulent failure to disclose information. Plaintiffs appeal. We reverse in part and remand.\nThe following facts are undisputed. In 1976, plaintiffs contacted defendants for assistance in procuring income producing property. Plaintiffs and defendants had dealt with each other in property matters prior to the transaction in question. Plaintiffs had specifically dealt with Ms. Rathbun, a broker at Rathbun Realty. After considering several pieces of property in May of 1976, plaintiffs chose to buy an apartment complex at 904 Third Street, S.W., in Albuquerque, with Ms. Rathbun acting as broker. Plaintiffs \u2019 ere informed that the property needed only cosmetic repairs in order to become income producing. The source of this information is a disputed fact. Shortly after the closing of the sale, the property was condemned, closed down, and the buildings were destroyed.\nPlaintiffs present three issues on appeal: 1) defendants are not entitled to summary judgment as a matter of law; 2) there is a material issue of fact whether defendants knew or should have known the condition of the property; and 3) there is a material issue of fact whether defendants made independent representations to plaintiffs concerning the condition of the property.\nSummary Judgment as a Matter of Law\nWe first decide whether there is a duty on the part of a broker to educate himself on the condition of property for which he intends to arrange a sale. Defendants contend that New Mexico case law has already defined that duty, and a broker may only be held liable for actual knowledge withheld from a party. See, eg., Snell v. Cornehl, 81 N.M. 248, 466 P.2d 94 (1970); Neff v. Bud Lewis Company, 89 N.M. 145, 548 P.2d 107 (Ct.App.1976). Defendants would only place a duty of disclosure on brokers if they have actual knowledge of a defect with the property, no matter how obvious the problem may be. We disagree.\nA broker is a fiduciary, in a position of great trust and confidence, and must exercise the utmost good faith. Iriart v. Johnson, 75 N.M. 745, 411 P.2d 226 (1965). In Maxey v. Quintana, 84 N.M. 38, 499 P.2d 356 (Ct.App.1972), this Court reversed a summary judgment which had been granted in favor of a broker who allegedly made false representations to his principal. The Court held that negligent misrepresentation is a tort determined by general principles of the law of negligence. In Stotlar v. Hester, 92 N.M. 26, 582 P.2d 403 (Ct.App.1978), this Court further held that 3 Restatement of Torts (Second) \u00a7 552 (1977) defines negligent misrepresentation in New Mexico. The relevant subsection of \u00a7 552 reads as follows:\n(1) One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. (Emphasis added.)\nThe comments following this section make it clear that a broker\u2019s duty is not limited to failure to convey information within his actual knowledge. In Comment \u201ca\u201d a distinction is made between liability for intentional deception and negligence coupled with good faith. The section speaks to the latter.\nAnother factor leading us to the conclusion that a broker has the duty to exercise reasonable care or competence in obtaining or communicating information is that they are a licensed, regulated group. See, Real Estate Brokers and Salesmen Act, \u00a7 61-29-1, et seq., N.M.S.A.1978. The purposes of these statutes are to regulate and, thus, protect the public against abuses which can occur within the real estate business. These purposes are well within the traditional police powers. See, Pharmaceutical Mfrs. Ass\u2019n v. New Mexico Bd. of Ph., 86 N.M. 571, 525 P.2d 931 (Ct.App.1974), and cases cited therein.\nThe Real Estate Brokers and Salesmen Act provides a thorough and extensive scheme of regulation. The Act sets forth, with exactness, the necessary qualification for a license (\u00a7 61-29-9), what information the application for a license must contain (\u00a7 61-29-10), why a license may be refused, suspended, or revoked (\u00a7 61-29-12), provisions for hearings before suspension or revocation of the license (\u00a7 61-29-13), and civil and criminal penalties for its violations (\u00a7\u00a7 61-29-16 and 61-29-17).\nThe Act also provides that its requirements are in addition to the existing or future requirements of a city or village taxing, licensing, or regulating real estate brokers. This provision was undoubtedly included so as to provide those communities with a means to regulate any problem which would be unique.\nThus, we hold that it is incumbent upon the broker to have a general knowledge of the building code and the zoning ordinances which deal with the particular property being offered for sale or which is being purchased. We do not hold that this knowledge in any way relates to hidden or latent defects.\nBreach of the Duty\nOnce the existence of a duty is established, this Court must decide whether defendants made a prima facie case that there is no material issue of fact whether they breached their duty, i.e. whether they failed to properly advise plaintiffs of the condition of the property.\nIt is, in general, a matter of the care and competence that the recipient of the information is entitled to expect in the light of the circumstances and this will vary according to a good many factors. The question is one for the jury, unless the facts are so clear as to permit only one conclusion.\nRestatement, \u00a7 552, supra, Comment \u201ce\u201d.\nDefendants did not present facts that only one conclusion is possible. The movant, in this case defendants, has the burden of showing there is an absence of a genuine issue of material fact. Goodman v. Brock, 83 N.M. 789, 498 P.2d 676 (1972). The only evidence presented by defendants outside the pleadings was an affidavit of Ms. Rathbun. Paragraph 3 of that affidavit states:\nThat she did not have nor did she acquire any knowledge concerning the real property which is the subject matter of the Complaint except for such information she received from representatives of Montoya-Pando Real Estate Company [broker representing the seller] or from the multiple listing service advertisement concerning the subject property. (Emphasis added.)\nThis is not enough to make a prima facie showing that no issue of fact exists as to whether Ms. Rathbun was negligent. Without an affidavit or other testimony of a qualified expert stating that Ms. Rathbun did not breach the standard of care of brokers in the community, no prima facie showing was made. See, Lay v. Vip\u2019s Big Boy Restaurant, Inc., 89 N.M. 155, 548 P.2d 117 (Ct.App.1976).\nIndependent Representations\nDefendants contend it is undisputed that they did not make any independent representations to plaintiffs; all representations were made by the seller or the seller\u2019s broker. Without deciding whether it is a breach of a broker\u2019s duty to allow a client to rely on the misrepresentations of a seller, we hold there is a material issue of fact whether Ms. Rathbun made independent representations to plaintiffs. Although Ms. Rathbun\u2019s affidavit denies making independent representations, the deposition of plaintiff states otherwise. In referring to a visit to the property with Ms. Rathbun only, plaintiff answers as follows:\nQ. I\u2019m still talking about your first inspection. What did you suspect had to be done?\nA. I didn\u2019t know.\nQ. Well, you\u2019ve just stated that it didn\u2019t look too good. I\u2019m trying to find out what you recall particularly didn\u2019t look too good to you?\nA. Well the porch. There was like a porch on the front. The paint job on the outside. I saw some broken windows, and I assume it needed a lot more work than just a cosmetic job.\nQ. Did you have any particular suspicion as to what might have to be done apart from cosmetic work?\nA. No, because I didn\u2019t know the codes down here.\nQ. Did Mrs. Rathbun at that time, at that first visit, make any representations to you about what she thought had to be done, from her\u2014\nA. Cosmetics, face-lifting.\nQ. By cosmetics and face-lift, you mean a paint job?\nA. Paint job, a couple of windows, a few panels of wood. I was told there was a fire alarm system and all the electrical system was in good working order.\nQ. Who told you that?\nA. Mrs. Rathbun.\nIn discussing telephone conversations after the first visit, plaintiff testified:\nQ. In the interim, did you have any conversations with anyone concerning that property?\nA. Just Rathbun. I was curious as to how much work had to be done, because I told her I didn\u2019t think that just a cosmetic job might work there.\nQ. Is this the same day, or is this a series of conversations?\nA. Probably a series of conversations.\nQ. What do you recall her telling you about the property?\nA. That it could be a big money maker, and fixing it up cosmeticly [sic] would work, for income.\nThe above testimony, coupled with Ms. Rathbun\u2019s affidavit, creates an issue of fact whether Ms. Rathbun made independent representations to plaintiffs of the condition of the property.\nActual Knowledge\nThe trial court also granted summary judgment on the issue of whether defendants had actual knowledge of the condition of the property. We affirm that part of the summary judgment.\nDefendants\u2019 answer denies actual knowledge of the condition of the property. Plaintiff\u2019s deposition testimony states that \u201cshe [Ms. Rathbun] might not have known [the condition of the property].\u201d This \u201cmight not have known\u201d language is only plaintiff\u2019s statement of opinion or belief, which is not enough to create a material issue of fact. Martinez v. Metzgar, 97 N.M. 173, 637 P.2d 1228 (1981).\nWe reverse the summary judgment on all issues except actual knowledge and remand to the trial court for proceedings consistent with this opinion.\nIT IS SO ORDERED.\nDONNELLY and NEAL, JJ., concur.", "type": "majority", "author": "HENDLEY, Judge." } ], "attorneys": [ "Angela J. Jewell, Harold H. Parker, Harold H. Parker, P. C., Albuquerque, for plaintiffs-appellants.", "Peter H. Johnstone, Rebecca A. Houston, Keleher & McLeod, P. A., Albuquerque, for defendants third-party plaintiffs-appellees.", "Arnold Melbihess, Albuquerque, for third-party defendants." ], "corrections": "", "head_matter": "647 P.2d 433\nVincent J. AMATO and Sally Amato, Plaintiffs-Appellants, v. RATHBUN REALTY, INC. and Jean Greenwell, Defendants Third-Party Plaintiffs-Appellees, v. MONTOYA-PANDO REALTORS, INC. and Isabelle Caire, Third-Party Defendants.\nNo. 5482.\nCourt of Appeals of New Mexico.\nJune 1, 1982.\nAngela J. Jewell, Harold H. Parker, Harold H. Parker, P. C., Albuquerque, for plaintiffs-appellants.\nPeter H. Johnstone, Rebecca A. Houston, Keleher & McLeod, P. A., Albuquerque, for defendants third-party plaintiffs-appellees.\nArnold Melbihess, Albuquerque, for third-party defendants." }, "file_name": "0231-01", "first_page_order": 269, "last_page_order": 272 }