ShareAn Indiana federal court has considered allegations against a buyer’s representative for injuries suffered by a client while visiting a home.
The Federal Home Loan Mortgage Corporation (“Owner”) had a home listed for sale with Eagle Real Estate (“Listing Broker”). Emily Campbell (“Emily”) contacted real estate licensee Teresa Mumford of Property House GMAC (“Buyer’s Representative”) about her interest in purchasing a property, and the Buyer’s Representative made an appointment to view the Owner’s property. Emily’s husband, Larry Campbell (“Larry”), and several other family members accompanied her to the showing.
While viewing the property, Emily saw a door near the kitchen that she thought was the pantry but actually was the door to the basement. She opened the door and felt for a light switch, as it was very dark inside. While trying to locate the light switch, she lost her balance and fell down the stairs. While there was a light switch near the door that Emily had opened, the switch was not working. Emily suffered injuries during her fall.
Emily and Larry filed a lawsuit against the Owner, the Listing Broker, and the Buyer’s Representative for her injuries. All of the defendants filed motions seeking judgment in their favor, arguing that they were not negligent because the home did not have a latent (or hidden) defect requiring disclosure.
The United States District Court for the Southern District of Indiana ruled in favor of all the defendants. The court first considered the allegations against the Owner. An owner of property owes “invitees” to his/her property a duty of reasonable care to protect them while they are on the premises. “Reasonable care” requires an owner to warn invitees of all known hazards on the property that the invitees will not discover on their own.
The court ruled that the facts did not show that the Owner violated its duty of reasonable care. The Owner argued that it had no duty to warn Emily about the staircase because it was not a hidden defect and she did not fall down the staircase because of the broken light, while Emily and Larry argued that a jury should consider their allegations against the Owner as the facts were in dispute. The court determined that because Emily testified that she lost her balance and fell down the stairs, it did not matter whether the stairs were dark and unlit. The condition of the property had nothing to do with her injuries; instead, she lost her balance and fell.
Next, the court considered the allegations against the Listing Broker and the Buyer’s Representative. Indiana courts have held that real estate licensees who do not control the property have no duty to inspect the property in order to warn prospective buyers about potentially dangerous conditions; instead, they only have a duty to warn prospective buyers about hidden dangers on the property of which the licensee is aware. The stairway was not a hidden defect on the property nor did it pose a risk of harm. Therefore, the court ruled in favor of the licensees on these allegations.
Finally, the court evaluated the Buyer’s Representative’s motion for attorney’s fees. Indiana law allows a party to recover its attorney’s fees when the court finds that a claim or defense has no legal basis. While the court agreed that Emily and Larry probably should have dismissed the Buyer’s Representative prior to judgment, the court found that the standard for determining that accusations were baseless is high and that Emily and Larry’s lawsuit did not fall into the frivolous category. Therefore, the court entered judgment in favor of the Owner, the Listing Broker, and the Buyer’s Representative but denied the Buyer’s Representative for attorney’s fees.
Campbell v. Federal Home Loan Mortg. Corp., NO. 1:07-CV-1428-TAB-LJM, 2009 WL 395207 (S.D.Ind. Feb 13, 2009). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].