Bevins v. Ballard

of the tory employer an the relative nature definition an reflects element of an Thus, if it is only result, work test. determined erroneous standard of law. As a in employer as an that Kroll acted issue of threshhold whether Kroll’s con- may course of his construction activities activity struction was sufficient to establish been reasonably Donald be said to have as employer his status an must also be part which was “a engaged regular work remanded to the Board further for cоnsid- regular of the work.” employer’s Ostrem eration.9 Board, Compensation Alaska Workmen’s REVERSED and REMANDED. 511 P.2d at 1063.5 Act, employ For purposes person “a one or employing

er is defined as

more in connection with a business persons coming scope

or within the this industry 28.30.265(12). Board

chapter.” AS regard:

stated in this (12) ‘in

The definition of subsection industry a connection with business or Inc., Max BEVINS and Johnson-Bevins coming scope chapter’ of this within Realty, Appellants, Star d/b/a is to mean or interpreted all business by be considered as covered industry is to L. David BALLARD and Linda K. would interpretation the Act and Ballard, Appellees. every рer- which follow Larson’s includes son in the of another con- service under No. 4571. [Emphasis tract. added.] Supreme Court of Alaska. 23.- The Board’s broad construction of AS 30.265(12) give to the proper weight fails to 19, Nov. 1982. rela- statutory employment limitation tionships “in with a or connection business terms,6 policy In Larson’s

industry.”

question is Kroll’s ac- construction itself

tivity, either or as an element of by activities,7

his rental was a profit-making

enterprise ought to bear costs of

injuries business, in the incurred ‍​‌‌​‌‌​​​​‌​‌​‌‌​​‌‌​‌‌‌​‌​‌‌‌​‌‌​‌​​​​​‌​‌​​‌‌‌‍activity simply cost-cutting

construction a

shortcut was basically consump- in what a

tive productive by and not a roll played

Kroll.8

We conclude that Board’s statement respect parameters statu- concept “regular being 5.The work” used in as er the work done the claimant is a part differentiating regular part Ostrem test for that business. independent employees between contrac- Larson, tors is a supra subclass “business” as AS used 6. A. 50.21. § See 1C note 23.30.265(12). person engages Whether meaning “business” within of AS 23.30.- 7. 50.24. Id. at § 265(12), purposes determining is relevant regu- “extent to which claimant’s work is 50.21, 8. Id. at 9-70 to & nn. 4 and 5. at 9-71 § part employer’s regular lar work.” Os- Whatley, But Donald v. 346 So.2d 898 see trem, 511 P.2d at 1063. The Board’s first obli- (Miss. 1977). gation particu- is to the nature ascertain enterprise injury lar in which al- businеss Smallwood, Burgess Constr. Co. legedly occurred, and then to wheth- determine (Alaska 1981). Anchorage, ap- for Pettyjohn, P.

Fredrick pellants. Hedland, Friedman, Fleischer & R.

Saul Friedman, Anchorage, appellees. CONNOR, RABINOWITZ, C.J., Before MATTHEWS, JJ., and DI BURKE, and MOND, Justice.* Senior * Alaska, Alaska R.Admin.P. ‍​‌‌​‌‌​​​​‌​‌​‌‌​​‌‌​‌‌‌​‌​‌‌‌​‌‌​‌​​​​​‌​‌​​‌‌‌‍Dimond, Justice, sitting by assignment Constitution Senior IV, pursuant 23(a). 11 of the to article section made vicariously acts, liable for

OPINION Lucas’s Ferrises that the were vicariously liable for BURKE, Justice. the actions of their agents, Bevins and Lu- is an hold- appeal judgment This complaint cas. The did not explicitly allege а real liable ing estate broker for certain misrepresentation. misrepresentations of a made the course After the close of plaintiffs’ evidence, the estate real transaction. trial court dismissed certain counts of the Facts A. First, complaint. the court ruled that the February On David and Linda broker did not have a general duty to in- purchased Ballard a lot with an unfinished Second, spect premises. the it held that the Patricia, dwelling Josephine, from and Wil- vicariously broker was not liable for the to purchase, liam Ferris. Prior their cer- acts of his employee, Lucas. In a subse- representations were to allegedly tain made decision, quent written the court further Ballards the of regarding adequacy the a ruled that Lucas was not liable. It then on the The property. purchaser, well David held that Bevins and the sellers were jointly Ballard, who previous experience had a liable, and severally each with a right of contractor, attempted complete general to from contribution the other for any pay- existing the well the in- property. on He ment in excess of a pro rata share. While a pump stalled to piping and the well both the sellers and the broker filed timely well, however, house. the failed to Bevins, appeal, only broker, notice of the result, provide As the sufficient water. a pursues appeal. his were to Ballards forced haul water to their property. They subsequently incurred ex- basis broker’s is not $6,935.00 of penses deepening the well to clear. The court found that the sellers adequate an level. representation were the source of the that “good,” i.e., the was capable well of supply- Believing the of themselves victims ing the reasonable water needs of the resi- misrepresentations, fraudulent the Ballards dents. It ruled that the right broker had a sellers, (Bevins), sued the the broker and representations, to the rely on and thus the employee (Lucas). the broker com- Their (as were liable principals) sellers for the plaint alleged, neg- act part, intentional and (their addition, Bevins broker and thus ligent misrepresentation.1 In it their alleged passed duty agent) misrepresenta- Bevins and Lucas had a to who condition, the check well’s knew court Lucas tion. The also found that Lucas well, was no there functional that Bevins the passed representation intending (i) represеntations knowing made sellers the complaint following 1. The the al- made factual false, they purpose deceiving were for the legations: plaintiffs buy; inducing them (a) personally inspected property; Bevins the induced; and, (j) plaintiffs did were (b) sellers a well told Bevins that there was (k) plaintiffs were to discover unable the de- property; drilled on the purchase. after fect until (c) sellers failed to disclose to Bevins addition, following legal allegations In well, incomplete nature of with the knowl- were made: edge potential and intent tell that Bevins would (l) plaintiffs duty owed Bevins investi- well; buyers there was a gate accuracy representa- sellers’ (d) represented sellers to the em- broker’s tions, duty (this and breached that count was finished, ployee that the feet well was held 36 evidence); plaintiffs’ at the dismissed close of standing water, support- capable was (broker’s (2) employee) plain- Lucas owed ing the reasonablе water needs of residents of duty investigate, tiffs a and breached that house; duty; (e) representations sellers made those with vicariously (3) was liable for Bevins acts of buyers; the intent would tell Lucas (this employee his Lucas count dismissed (f) Ballards; represent Lucas did so and, evidence); plaintiffs’ at the close of (g) representations false; were vicariously (4) (h) sellers were liable for the acts Lucas made the agents, Bevins, false; knowledge their and his were employee, Lucas. Thus, negligent only need address we admitted to Bevins upon; relied it be misrepresentation claims and innocent further found The court intent. same to be sus- Bevins’ appeal. and that their this rely, so did the Ballards tained, of these two theo- must rest on one justified. reliance was ries.2 concluded court earlier Although the Misrepresentation Negligent it inspect, general duty no Bevins had duty inquiry held that subsequently claim for relief stated The Ballards’ third Bevins, on behalf asked when Lucas аrose negligence a cause of action Ballards, adequacy about alleged that Bevins had That claim Bevins. Bevins act- court concluded well. The steps to deter- to “take reasonable Lucas assuring by simply unreasonably ed well ... was a whether or not the mine than well” rather “good was a it capacity well” and had sufficient completed liability ap- Thus Bevins’ investigating. reasonable water purchaser’s a support to theory. negligence on а pears to rest needs, duty, that Bevins breached that of result proximate a direct and that as are not contested: facts Certain the purchased the Ballards Bevins’ breach 100 foot well. mentioned a listing The 1. completed. was believing the well property i.e., incomplete, to be proved well 2. The noted, subsequently dis- the trial court As reasonable support to inadequate claim, not and the Ballards did missed that needs. water however, the opinion, In its final appeal. that the Bevins, testified 3. the grounds on that imposed liability trial court reasonably well would listing of a of the sellers “duty inquire Bevins had a well was assume the buyers lead was, fact, good in ‘a the well whether i.e., “good,” adequate. ” thus argues that the court well.’ Bevins listing The Ballards relied 4. though negligence even negligent him held the well was that and, further, the case was dismissed from “good.” dis- thereby because prejudiced that he was Bevins intended Both Lucas and 5. forego him to a third claim led missal of the rely. Ballards so the defense. negligence misrepresentation, the As to the source of negli tort of recognized We have he would not testified that Bevins Ti in Transamerica misrepresentation gent it came from listing unless written it on the 507 P.2d 492 Ramsey, tle Insurance Co. sellers, however, denied the sellers. Pfeifer, 443 1973), and Howarth (Alaska it; they testified him about telling 1968). theory, this (Alaska Under P.2d 39 must have misunderstood. Bevins breaching have been liable for Bevins could Bevins, concluding that court bеlieved information accurate duty provide his repre- original source sellers were In determin speak. he undertook to once sentation. exists, must duty one ing whether such a Liability B. The Broker’s had (a) the defendant consider: the infor knowledge, equivalent, or its misrepresenta- types There are three purpose for a serious mation was desired intentional, and innocent. negligent, tions: upon to rely intended plaintiff and that the intentional assert an the Ballards did Whilе harm; (c) the it; foreseeability of sellers, (b) the against claim misrepresentation suf- plaintiff would certainty degree or Lucas. against Bevins did not do so evidence, dismissed the trial court liability a vicarious the Ballards’ be based on Bevins’ could 2. relief, eighth which had asserted employee claim for liability Lucas. As of his for the acts Second, vicariously Dahl, liable. was 879 n. that Bevins 625 P.2d we noted Black v. opinion, found 1981), the trial court its written estate broker can be a real Lucas, Thus there is no respondeat superior salesman. favor of liable under the doctrine liability be underlying which Bevins could sales-people. How- her for the acts of his or responsible. vicariously The Ballards ever, preclude resting rulings held two of the ‍​‌‌​‌‌​​​​‌​‌​‌‌​​‌‌​‌‌‌​‌​‌‌‌​‌‌​‌​​​​​‌​‌​​‌‌‌‍below rulings. First, appealed not these at the close of have on such a basis. causation; evidence, harm; provides and further (d) fer directness future (e) policy preventing failure “does to so amend not affеct Pfeifer, 42; harm. Howarth 443 P.2d at issues, on result of the trial” those the rule see Title Insurance Co. v. Transameriea sets as a threshold the requirement In Ramsey, P.2d at the land 494r-95.3 “tried or by express implied such issues be context, arise sales such a can when a parties.” consent of the We not believe do suspicious aware broker becomes facts this was condition met in the case at or her regarding representations, his Subsequent bar. neither dismissal inquiry when a makes an affirmаtive buyer party argued negligent fails the accuracy and the broker to check parties in their trial briefs. The court and subsequent responding representa- of his involving treated the case one innocent tion, a public or when court determines that misrepresentations. Bevins neither ex- policy requires brokers to undertake certain pressly impliedly trying nor consented See, e.g., First Church functions. negligence claim. Accordingly, Bevins’ lia- Inc., Open Realty, v. Cline J. Dunton Biblе bility negligent misrepre- cannot rest 1211 (1978). Wash.App. theory. sentation believe, however, We the trial court’s dismissal of Ballards’ third claim for Misrepresentation Innocent relief, only negligence their against The case went forward Bevins on Bevins, precludes claim broker’s theory misrepre- apparent resting on negligent misrep sentation, by colloquy quoted evidenced the theory.4 Alaska Rule of resentation While 15(b) arguments in note 4 and the advanced in Civil post-judgment Procedure allows to conform the trial The tort of innocent mis- amendments the issues tried to briefs.5 Title, upheld submitting 3. In we there’s there Transameriea That is when been been—when has duty negligence jury the insurance issue to adduced as to of a the where a title evidence the company arising inquire failed to inform a client realtor circum- to from some power attorney, upon directing that relying which she was stances the attention of a reasona- authority asserting рrudent her to sell the ble to realtor some—some—some- property, Although thing been In had revoked. the title unusual. this case it to me seems revocation, just company ordinary was unaware of the that that this was an transaction. readily property, information to That was available it. We it’s rural most of does require by the concluded that title insurer knew that the be serviced a well. It is it seller, client, incomplete, accept its desired information about her if I the evidence as it and land, stands, legal capacity represented to sell the that she intended now it was information, well, good to on that that there and was there was a that that’s the end of matter, poorly duty to foreseeable harm her should she be the there’s no on the real- jury go inquire advised. We concluded that the could find tors the actual unusual ordinary prudent and that is further whether company “duty know, speak nothing that the title had a You there’s fact. carefully.” rеjected any We distinction be- that well that alert the about would company tween the title nonfeasance of the realtor of the need to do something and the misfeasance in the Howarth case. 507 P.2d at 494-95. it. To it out. about check Well, MR. FRIEDMAN: if court finds the duty, they no Howarth, there was then can’t obvi- damages sought In a vendor for the ' ously negligent. I alleged by be But still ask the court negligent misrepresentation the de- purchaser fendant insurer that of vendor’s They well, they THE the still cаn be— property property. COURT: had obtained fire insurance the — they still could made the assuming defendants presence heldWe be— representation, which is—facts show was not establishing essential factors care, true. engaged those in the insurance business MR. FRIEDMAN: Correct. speak required are with reasonable care. they THE So that can can COURT: be— negligence 4. That the court intended to dismiss having be held liable for made the same. But by claims from the case is further еvidenced (indiscernible) negligence— not on—not on— colloquy: following theory. negligence THE COURT: ... claim for relief that I feel it’s the third you thereby seek to im- 5. The of innocent elements pose upon degree. Paragraph alleged realtors a burden that does not were sufficient to a except extraordinary exist circumstances. 8 of the Ballards’ first claim for relief makes Wright, (D.C.App. 552C(1) pani v. A.2d by is defined section representation (1977) of Torts (Second) Restatement 1954). follows: presented in this case is question exchange who, sale, in a rental or One misrep- not for innocent whether or another, makes a mis- transaction should to the owner’s resentation extend fact for of a material representation real where that agent, estate other to act or to inducing purpose as a the owner’s party serves conduit for it, upon reliance is acting refrain from addressing misinformation. Most courts pecu- other fоr subject recognize by of action this issue a cause justifiable his loss caused to him niary against the broker purchasers property upon misrepresentation, even reliance misrepresentation.6 latter’s fraudulently or for the though it is not made negligently. Spargnapani illustrative case is An open ques- Id. The Restatement leaves There, 82 (D.C.App.1954). 110 A.2d Wright, action a cause of lies tion of such held liable the seller and broker were both 552C, Id. against § real estate brоkers. could be heat- representing that a house g. Comment per year, more ed for a little than $100.00 a cause recognized We have impossi- when a defect in the boiler made it who realty in action owner of heat the house at all. Id. at 85. ble to condition to the nocently misrepresents its seller’s merely passed had broker Walker, 613 Cousineau v. P.2d purchaser. information, had neither defendant Cousineau, 1980). grant In we Nevertheless, knowledge of a defect. purchaser to a ed rescission restitution liability: court sustained the seller false statements con where made innocently represented If the broker frontage gravel cerning highway heating plant in workable condi- was doing, In so purchased land. content inno representa- of even in that guilty we held that owner tion and mistaken hide be misrepresentation could not cent tion, without representation or made Id. emptor. doctrine caveat at hind the false, оr knowing it was true pre are This is so owners 614-16. because in an action injured party may recover know the and sumed to character attributes for fraud. are conse conveyed buyers land the broker was may ... We assume that entitled to on the seller’s rea quently rely deception no and had guilty of deliberate Sorenson v. representations. sonable See concealed de- knowledge no actual 769, Adams, 708, 98 Idaho 571 P.2d 776 But on own evidence fect. defendants’ Walker, v. (1977), quoted Cousineau 613 agent selling their did not disclaim such 608, 1980). (Alaska 615 n. 14 The P.2d ... knowledge representation .... The of land must therefore be both truth owner inaccurate, de- flagrantly since the making any representa and informed in ful it heat the impossible fect ... made tions, pretense for fraud includes Spargna- at all .... “Fraud includes knowledge where there is none. house 16, French, Colo.App. necessary allegation concerning P.2d v. 35 531 Bevins’ 6. Sodal 972, (1974); Wright, Paragraph Spargnapani 110 scienter. 2 of the fifth claim for 973 v. 82, alleged agent passed (D.C.App. 1954); Pumphrey on the 85 v. relief representation Bevins’ A.2d Quil 328, len, 343, to cause action with the intent St. N.E.2d 331 165 Ohio 135 270, Finally, paragraph Berryman (1956); Riegert, 15 of in reliance thereon. 286 Minn. v. 438, alleged Schep (1970); the first claim for actual reliance. relief N.W.2d 442 Lawlor v. 175 this, plus parties’ light 269, er, 94, (1957); In arguments concerning the court’s and 271 101 232 S.C. S.E.2d 588, Terrace, 552 of the Re- Section Harper, Inc. v. S.W.2d Polk 386 statement, we Bevins was “ade- 1965). conclude that Lyons (Tex.App. v. Christ 593 Contra quately notified” the Ballards were assert- Church, 257, Episcopal Ill.App.3d 27 Ill.Dec. 71 misrep- ing on innocent a cause action based 623, 559, (1979). 389 N.E.2d 625 Agency Doyle, Clary See resentations. Ins. 194, 1980). 201 made, knowledge against has a cause of action knowledge when pretense of originating communicating broker or there is none.” Restatement misrepresentation. See omitted). (citations Id. at 83-84 552C(1) (Second) (1977). of Torts § for in favoring liability policy view, recog- consequences In our on a rec misrepresentation is found nocent nizing a cause of action in this situation are be entitled purchasers should ognition that presence a cause entirely beneficial. As representations. a broker’s rely on against of action the broker would tend to notes: opinion one the likelihood of transactions tainted lessen agents estate brokers and their Real and confusion. Addi- by misinformation as hav- public themselves out to the hold tionally, recognizing a cause of action knowledge regard ing specialized provide the broker would another and related housing, housing conditions purchaser of de- recovery source of is to and public matters. The entitled property. Frequently, fective the owners real estate expertise on the rely does the broker as the may away, leaving move of its purchase brokers in the and sale As only reachable defendant. between there is а on the homes. Therefore misrepresen- broker who communicated the real estate brokers to be accurate part of tation, whose fault purchaser only and the knowledgeable concerning prod- rely was to we think it selling— in the business of they uct are any the broker bear loss preferable is, types homes and other of real Brokers, in by misrepresentation. caused many held in cases estate. Courts have turn, protect can themselves from rely are entitled to purchasers statements, the owner’s by investigating real brokers’ statements. estate by disclaiming knowledge, by requiring Church, Episcopal 71 Ill. Lyons Christ state- sign listing seller to at the time of 623, 559, 27 Ill.Dec. 389 N.E.2d App.3d setting ment forth (1979) (dissenting opinion). made, will are true certifying be reasoning persuasive. We find this if they for indemnification providing frequent Parties real estate transactions Hart, 134 Ga. are not.7 See Goldman equal do not deal on terms. Real estate ly (1975). App. S.E.2d possess prоfessionals, brokers are licensed Having determined that cause realty they ing superior knowledge exists, in innocent action generally. sell and the real estate market below judgment apparent it is recognize this ex Prospective purchasers affirmed. Bevins does not contest must be repre and tend to on a broker’s pertise listing prepared he mentioned are entitled purchasers sentations. Just as well, reason listing 100 that this would foot representations, Cous rely on an owner’s the well was 1980), ably buyers lead to assume Walker, (Alaska ineau v. 613 P.2d 608 relied, the Ballards so good, purchasers should be entitled was, actuality, inadequate. rule the well in representations. Any other broker’s an in misleading facts establish under permit would brokers to use These Re selling property, yet theory. re See misrepresentation statements in nocent ‍​‌‌​‌‌​​​​‌​‌​‌‌​​‌‌​‌‌‌​‌​‌‌‌​‌‌​‌​​​​​‌​‌​​‌‌‌‍552C(1) by simply (Second) from re of Torts main immune statement § true is therefore AFF maining ignorant property’s (1977). of the The decision below Accordingly, we hold that characteristics. IRMED.8 mis purchaser who relies on a material J., COMPTON, innocently participating. not

representation, though even liability. See, Lopez, e.g., listing agreements Barnes v. indemnifica der 7. Some contain 477, 694, (1976). provisions, entitling Ariz.App. 698-99 tion the broker to indemni ty commu from the owner should broker’s representations engen Stepanov nication of the owner’s distinguishable 8. This case is Gavrilovich, (Alaska 1979), where- 594 P.2d 30 Justice, CONNOR, with whom RABI-

NOWITZ, Justice, in joins, dissenting рart. BAILEY, Appellant Laureen Cross-Appellee, holding that an

I dissent from the action misrepresentation for innocent should be permitted against the real estate broker. HAAS, Appellee Dennis J. When a realtor acts as a mere conduit for Cross-Appellant. passing supplied by on information the sell- 6177, Nos. 6688. er, duty independent- he should be under no information unless he has ly verify Supreme of Alaska. Court reason to the information to be believe 3, Dec. Lyons Episсopal false. v. Christ See Church, 559, 27 Ill.Dec. Ill.App.3d (1979). Allowing

389 N.E.2d misrepresentation

innocent action in circumstances is quite

the broker such imposing liability.

close to strict There is

no reason to make the broker the “insurer” representation.

of the seller’s a claim based on

Although recognized we misrepresentation

innocent Cousineau 1980),

Walker, 613 P.2d 608 from a case between distinguishable

case is buyer and a who make broker. Sellers ‍​‌‌​‌‌​​​​‌​‌​‌‌​​‌‌​‌‌‌​‌​‌‌‌​‌‌​‌​​​​​‌​‌​​‌‌‌‍property about their should representa-

be held to the accuracy

tions, normally posi- are the best

tion to know the facts. But a broker often personal knowledge proper-

has little

ty which he offers for sale. I see no reason guarantor repre-

to make the broker emanating

sentations from the seller. I hold that

would

is not available as a cause of action Thus,

buyer against I broker. would judgment superior

reverse the court. agree

I majority with the balance of the

opinion. judgment proved person offering

in we affirmed a favor of a small sion it is .. . the “subdivider,” damage upon disposing in a action founded of subdivided land did not know and the subdivider’s innocent failure to disclose un- in the exercise reasonable care could nоt permafrost detected conditions lots sold to have known of the untruth or omission.” AS plaintiffs. 34.55.030(a). Thus, a “subdivider” is not liable misrepresentations. to, subject by, protected for innocent Such Subdividers are Act, protection, the Alaska is barred the statute. This how- Land Sales Practices AS 34.55. act, ever, Under the a subdivider is liable for material is not available the defendants bar, misrepresentations affecting or omissions case at since are not “subdividers.” land, “unless in the case of an untruth omis-

Case Details

Case Name: Bevins v. Ballard

Court Name: Alaska Supreme Court

Date Published: Nov 19, 1982

Citation: 655 P.2d 757

Docket Number: 4571

Court Abbreviation: Alaska