Noise Disclosure Lawsuit Continues

Washington court reinstates deceptive trade practice allegations against real estate professionals for failing to provide the exact disclosures required by a county ordinance regarding airplane noise.

Two consumers (“Consumers”) purchased homes on Whidbey Island (“Island”) in Island County (“County”), Washington. The Island contained a large naval airbase as well as other airports. Because of the airplane noise generated from the airports on the Island, the County enacted an ordinance (“Ordinance”) with very specific disclosures about the type of airplane noise residents may experience and included a map identifying the location of airports on the Island. The Ordinance requires both property owners and their real estate professionals to comply with the disclosure obligations.

When the Consumers purchased their homes on the Island, they received a standard disclosure form prepared by the local multiple listing service. The disclosure form did not contain the required language found in the Ordinance, and instead simply stated that airports make significant noise. The Consumers filed a class action lawsuit against the listing brokers (“Brokers”) arguing that the Brokers’ failure to comply with the Ordinance violated the state’s deceptive trade practices law. The trial court granted the Brokers’ motion to dismiss, and the Consumers appealed.

The Court of Appeals of Washington, Division 1, reversed the trial court and reinstated the Consumers’ lawsuit. In order to succeed on a deceptive trade practices claim, a consumer must show: that an individual engaged in an unfair or deceptive act that occurred in trade or commerce; the conduct affected the public interest; the consumer suffered harm; and there is a causal link between the deceptive trade practice and the injury. The Brokers argued that the Consumers had not suffered harm from the failure to make the disclosures required by the Ordinance because the Consumers had received notice about airport noise on the Island and so had a duty to make further inquiry.

The court ruled the Consumers had sufficiently plead a deceptive trade practices claim by alleging that the Brokers had omitted material facts by failing to provide the disclosures required by the Ordinance. The court found that an omission of facts can constitute a deceptive trade practice and so simply providing notice of an issue would not necessarily require a consumer to make an inquiry. The court also rejected the Brokers argument that the Consumers had failed to plead the public interest prong of the state’s deceptive trade practices law because the Brokers had provided the disclosures required by the state property condition disclosure law. The court found that the state statute did not preempt the Ordinance and so did not change the fact that not providing the Consumers the full Ordinance could constitute an omission. Thus, the court reversed the trial court and sent the case back to the trial court for further proceedings.

Deegan v. Windermere Real Estate/Center-Isle, Inc.

, 391 P.3d 582 (Wash. App. Ct. 2017).