Flores v. Payne et al

Filing 58

MEMORANDUM RULING re 34 MOTION for Summary Judgment filed by Christy Frye Branch, Jan Frye & Associates L L C. Signed by Chief Judge S Maurice Hicks, Jr on 10/12/2018. (crt,McDonnell, D)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
JOSE A. FLORES, JR. AND
PAULA JEAN CAMPBELL FLORES

CIVIL ACTION NO. 16-0856

VERSUS

JUDGE S. MAURICE HICKS, JR.

DONNA F. PAYNE, ET AL.

MAGISTRATE JUDGE HORNSBY
MEMORANDUM RULING

Before the Court is Defendant Christy Frye Branch and Jan Frye & Associates,
LLC’s (collectively “Branch”) Motion for Summary Judgment pursuant to Federal Rule of
Civil Procedure 56. See Record Document 34. Plaintiffs Jose A. Flores, Jr. and Paula
Jean Campbell Flores (“Plaintiffs”) oppose the motion. See Record Document 43. Branch
seeks dismissal of all of Plaintiffs’ claims. For the reasons set forth below, Branch’s motion
is hereby DENIED.
I.

BACKGROUND
Plaintiffs bring this action alleging claims for fraud and negligent representation

against Branch arising from a residential property transaction in which Branch
represented them as their real estate agent. Plaintiffs, who are California residents but
sought to purchase a home in Minden, Louisiana, employed Branch’s services in
purchasing the property at issue in this case, located at 709 Elm Street in Minden,
Louisiana. See Record Document 55 at 2, Proposed Pretrial Order. On April 17, 2015,
Plaintiffs met with Branch at the property where they conducted a “walk through” of the
house that lasted roughly 30 minutes. Id. at 3.
On April 18, 2015, Plaintiffs, assisted by Branch, made an offer on the Elm property
and completed a Louisiana Residential Agreement to Buy or Sell as directed by Branch.

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See id. at 4. Later that same day, Branch emailed to Plaintiffs several documents,
including a property disclosure statement by the seller of the home, Donna F. Payne
(“Payne”), on her behalf. Branch also included in her email to Plaintiffs a dual agency
agreement, as Branch was the agent for both the seller and Plaintiffs in this transaction.
See id. On April 21, 2015, Plaintiffs returned the signed and initialed offer to Branch
without any modifications, after which an appraisal was completed by Cholla Ardoin
(“Ardoin”) on May 25, 2015 pursuant to the Veterans Administration (“VA”) rules
governing VA financing. Id. at 4. Ardoin also conducted an inspection of the home for
compliance with these rules and stated in his report that, after completion (of specified
repairs), the home would meet the VA’s requirements. Id. In addition, a termite inspection
was performed on the house that revealed damage from a prior infestation, which was
then later inspected a second time by a Laura H. Stanley (“Stanley”) of LaState
Construction. See id. at 4-5.
The closing of the sale occurred on June 18, 2015, and after a more detailed
inspection of the property upon moving into the house in August, Plaintiffs maintain they
first became aware of alleged unsafe conditions of the house that rendered it
uninhabitable. See Record Document 34-1 at 14. Plaintiffs described several problems
they learned of, including the sealed windows that could not be opened, the rotting
wooden porch floor, mold-covered interior walls, a moist crawl space with a water-stained
floor, and uninsulated plumbing under the house. Id. at 14-15. Plaintiffs then returned to
California and subsequently hired Andrew J. Rayner (“Rayner”), a licensed home
inspector who is also Plaintiffs’ expert witness in this case; Rayner conducted a post-sale
inspection of the house on March 7, 2016. See id. at 14, 16. Rayner has testified that his

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inspection revealed many of the conditions complained of by Plaintiffs. He further opined
that while the conditions were easily discoverable to him due to his experience as a home
inspector, many of the conditions would likely go unnoticed by the ordinary home buyer.
See Record Document 42 at 2-3. Furthermore, it is worth noting that Plaintiffs had initially
sued the seller, Payne, for a claim in redhibition; however, Payne and all claims against
her were dismissed upon joint consent motion by this Court on August 30, 2018. See
Record Document 50. Thus, the only claims at issue are Plaintiffs’ claims against Branch
for fraud and negligent representation. See Long v. Bruns, 31,427 (La App. 2d Cir.
1/20/99), 727 So. 2d 664, 667 (“The action for redhibition is between vendor and
purchaser and cannot be maintained absent such relationship.”).
II.

LAW AND ANALYSIS
A.

Summary Judgment Standard

Summary judgment is proper pursuant to Rule 56 of the Federal Rules of Civil
Procedure when “there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”1 Quality Infusion Care, Inc. v. Health Care Serv.
Corp., 628 F.3d 725, 728 (5th Cir. 2010). A genuine issue of material fact exists if the
record, taken as a whole, could lead a rational trier of fact to find for the non-moving party.
See Geoscan, Inc. of Tx. v. Geotrace Techs., Inc., 226 F.3d 387, 390 (5th Cir. 2000).
During this stage, courts must look to the substantive law underlying the lawsuit in order
to identify which facts are “material.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S. Ct. 2505, 2510 (1986).

The Court notes that amended Rule 56 requires that there be “no genuine dispute as to
any material fact,” but this change does not alter the court’s analysis. F.R.C.P. 56(a) and
advisory committee’s note (emphasis added).
1

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Rule 56(c) mandates the entry of summary judgment, after adequate time for
discovery and upon motion, against a party “who fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof [at trial].” See Patrick v. Ridge, 394 F.3d 311, 315 (5th
Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552
(1986)). If the movant demonstrates the absence of a genuine dispute of material fact,
“the nonmovant must go beyond the pleadings and designate specific facts showing that
there is a genuine [dispute] for trial.” Gen. Universal Sys., Inc. v. Lee, 379 F.3d 131, 141
(5th Cir. 2004). Where critical evidence is so weak or tenuous on an essential fact that it
could not support a judgment in favor of the nonmovant, then summary judgment should
be granted. See Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005).
In reviewing a motion for summary judgment, the court is to view “the facts and
inferences to be drawn therefrom in the light most favorable to the non-moving party.”
Tubos de Acero de Mexico, S.A. v. Am. Int'l Inv. Corp., Inc., 292 F.3d 471, 478 (5th Cir.
2002); Harris v. Serpas, 745 F.3d 767, 771 (5th Cir. 2014). The court should not, however,
in the absence of any proof, presume that the nonmoving party could or would prove the
necessary facts. See Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
B.

Fraud Claim

Branch moves for summary judgment on the ground, inter alia, that Plaintiffs
cannot prevail on their fraud claim because the alleged conditions of the house that
Plaintiffs claim Branch intentionally misrepresented to them were readily apparent and
thus should have been discovered by Plaintiffs. See Record Document 34-1 at 5. Under
Louisiana law, fraud is defined as a “misrepresentation or suppression of the truth made

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with the intention to obtain an unjust advantage or to cause a loss or inconvenience to
the other party.” See La. C.C. art. 1953. To succeed on a fraud claim, a party must show:
(1) a misrepresentation, suppression, or omission of true information; (2) an intent to
either obtain an unjust advantage or cause damage or inconvenience to the other party;
and (3) the error induced by fraud must relate to a circumstance substantially influencing
consent to the contract. Taylor v. Dowling Gosslee & Associates, Inc., 44,654 (La. App.
2d Cir. 10/7/09), 22 So. 3d 246, 255 (citing Shelton v. Standard/700 Associates, 01–0587
(La. 10/16/01), 798 So. 2d 60). A defendant can defeat a fraud action by showing that the
party claiming fraud could have ascertained the truth without difficulty or special skill. See
La. C.C. art. 1954. However, this rule does not apply when “a relation of confidence has
reasonably induced a party to rely on the other's assertions or representations.” See id.;
see also Henderson v. Windrush Operating Co., L.L.C., 47,659 (La. App. 2d Cir. 8/21/13),
128 So. 3d 283, 296 (stating that the jurisprudence demonstrates that a relation of
confidence arises when the case involves a familial, marital, or fiduciary relationship)
(emphasis added).
In this case, both parties dispute the extent to which the alleged conditions of the
house were “easily discoverable” by the Plaintiffs before the closing of the sale. See
Record Document 34-2 at 6, Defendant’s Statement of Undisputed Material Facts; see
also Record Document 42 at 2, Plaintiffs’ Response to Defendant’s Statement of
Undisputed Material Facts. The parties also dispute the key issue of whether Branch
intentionally misrepresented material conditions of the house or declined to make
Plaintiffs aware of such conditions. See Record Document 43 at 9-10. Furthermore,
although both parties have offered proper summary judgment evidence in the form of

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affidavits and deposition testimony in support of their positions, see id. at 11; Record
Document 45 at 10-11, there nevertheless remains significant factual discrepancies
regarding the events leading up to the closing of the sale at issue.2
Plaintiffs allege that Branch had knowledge of significant problems regarding the
condition of the house because she represented Payne, the seller, as her agent in initially
listing the house. See Record Document 43 at 16. Plaintiffs also maintain that Branch
knowingly concealed information that would deter Plaintiffs in closing the sale of the
house, specifically that Branch intentionally misrepresented information she had allegedly
received from a licensed contractor who had inspected the “structural integrity” of the
house. Id. at 10-11. Plaintiffs point to Branch’s own deposition testimony for its claim that
Branch not only did not send Plaintiffs a report of the contractor’s findings but also that
the contractor’s inspection was in fact limited only to investigating the extent of any termite
damage, as opposed to a full inspection of the porch, roof, and other conditions relating
to the home’s foundation. See id. at 9-10 (citing Deposition of Christy Branch, Exhibit L).
Branch wholly denies these claims in her deposition and rejects Plaintiffs’ contention that
she either knew of any of the alleged problems with the house or that she in any way
knowingly misrepresented information she had regarding its condition. See Record
Document 45 at 11, 13.
Regarding the extent to which the alleged problems with the house were apparent
to Plaintiffs during their initial viewing of the house with Branch, Branch argues that
Plaintiffs could have readily discovered the problems such as the defective windows that
could not be opened, the rotting wooden porch floor, mold-covered interior walls, a moist

2

See infra note 4.
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crawl space with a water-stained floor, and uninsulated plumbing under the house. See
Record Document 34-1 at 19. Plaintiffs respond that the only time they viewed the house
was during their initial 30-minute “walk through” with Branch and thus did not have
sufficient time to discover the issues. See Record Document 43 at 17. Plaintiffs also point
to the testimony of its expert, who conducted a full post-sale inspection of the house, that
many of the issues complained of are problems that the “average homeowner wouldn’t
look at,” such as testing the home’s windows during a 30-minute walk through with a real
estate agent. See Record Document 42 at 2-3; see also Record Document 34-1 at 1617. Furthermore, Plaintiffs argue that, notwithstanding the Court’s finding as to the
apparent nature of the conditions, they were reasonable in relying on Branch’s assertions
regarding the house (or lack thereof) because Plaintiffs had a fiduciary relationship with
Branch when she began representing them and thus this relationship qualified as a
“relation of confidence” under article 1954 of the Louisiana Civil Code. See Record
Document 43 at 9; La. C.C. art. 1954; see also Tres' Chic in a Week, LLC v. Home Realty
Store, 07-1373 (La. App. 1st Cir. 7/17/08) 993 So. 2d 228, 231 (“The broker stands in a
fiduciary relationship to his client and is bound to exercise reasonable care, skill, and
diligence in the performance of his duties.”).
Although Plaintiffs have not established that Branch knowingly misrepresented
conditions of the house in order to prevail on their fraud claim, Branch’s evidence, which
may be viewed by a finder of fact as inconsistent,3 is likewise insufficient to meet her initial

3

For example, Plaintiffs point out several contradictory statements made by Branch
regarding the alleged “home inspection” that she allegedly hired Mrs. Stanley to perform.
Branch first stated that she emailed Stanley’s inspection report to Plaintiffs due to
concerns that Plaintiffs expressed to Branch about the property prior to closing. See
Record Document 43 at 9 (citing Deposition of Christy Branch, Exhibit L). However,
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burden as the movant in this summary judgment motion. See Vanguard Finance, Inc. v.
Smith, 256 So. 2d 662, 664 (La. App. 4th Cir. 1972), writ denied, 260 La. 1205 (La. 1972)
(“[F]raud must be proved by one who alleges fraud, but because of the nature of fraud it
sometimes must be inferred from the existence of highly suspicious conditions or
events.”). Thus, because there exists a genuine dispute as to whether Branch had actual
knowledge and the necessary intent, Branch’s Motion for Summary Judgment as to
Plaintiffs’ fraud claim is DENIED.
C.

Negligent Representation Claim

Plaintiffs also maintain a negligent representation claim against Branch. To prevail
on this claim, the relevant jurisprudence requires a plaintiff to prove: (1) a legal duty on
the part of the defendant to supply correct information; (2) a breach of that duty; and (3)
that the breach caused damages to the plaintiff. See Long v. Bruns, 31,427 (La App. 2d
Cir. 1/20/99), 727 So. 2d 664, 669. Similar to the fraud analysis described above, the
cases have held that the knowledge of the realtor or broker is the key question for this
analysis, and that the realtor only has a duty to disclose to buyers those defects of which
he has knowledge. Id. (citing Nesbitt v. Dunn, 28,240 (La. App. 2d Cir. 4/3/96), 672 So.
2d 226). Furthermore, a buyer is precluded from recovering for negligent representation
when the alleged representations relate to defects which are apparent or “discoverable
on simple inspection, which [is] afforded the buyer before the sale, and where the buyer
inspects the property before the sale.” See id.

Branch then stated later that she could not recall if she had ever seen or sent such a
report. See id. Finally, Branch’s testimony was again contradictory when she stipulated
with opposing counsel that no inspection had been performed of the home by a licensed
home inspector prior to closing of the sale. See Record Document 55 at 4.
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While one is an intentional tort and the other is grounded in negligence, the
analysis applicable to a negligent misrepresentation claim largely mirrors the analysis for
a fraud claim. Thus, the same reasons given above in Section II.B for denying summary
judgment as to Plaintiffs’ fraud claim warrant the same conclusion as to Plaintiffs’
negligent representation claim. Specifically, the Court notes the overlap between the
fraud element requiring a misrepresentation, suppression, or omission of true information
on the part of a defendant and the negligent misrepresentation element of a legal duty on
the party of a defendant to supply correct information. Moreover, a key consideration as
to both claims in the context of real estate transactions is whether the alleged defects
were readily apparent or discoverable on simple inspection. See supra at 4-5, 8. Genuine
disputes of material fact as to these issues prevent summary judgment on both the fraud
and negligent misrepresentations claims. See Murphy's Lease & Welding Service, Inc. v.
Bayou Concessions Salvage, Inc., 00-978 (La. App. 3d Cir. 3/8/01), 780 So. 2d 1284,
1289 (“[I]ssues pertaining to subjective facts such as intent, knowledge, motive, malice,
or good faith are usually not appropriate to a summary judgment determination.”). For
these reasons, Branch’s Motion for Summary Judgment as to Plaintiffs’ negligent
representation claim is likewise DENIED.
Accordingly, the parties’ conflicting summary judgment evidence using issues of
witness credibility precludes summary judgment in favor of Branch. This Court is not
permitted to make credibility determinations or weigh the evidence in the record and thus
properly leaves such questions for a jury to decide. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255, 106 S. Ct. 2505, 2513 (1986) (“Credibility determinations, the
weighing of the evidence, and the drawing of legitimate inferences from the facts are jury

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functions, not those of a judge, whether he is ruling on a motion for summary judgment
or for a directed verdict.”).
III.

CONCLUSION
Based on the foregoing reasons, Branch’s Motion for Summary Judgment (Record

Document 34) is DENIED. An order consistent with the terms of the instant Memorandum
Ruling shall issue herewith.
THUS DONE AND SIGNED, in Shreveport, Louisiana, on this 12th day of October,
2018.

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