Amyot v. Luchini
1997 WL 60894, 1997 Alas. LEXIS 23, 932 P.2d 244 (1997)
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Rule of Law:
The Alaska statute requiring sellers of residential real property to provide a written disclosure statement (AS 34.70) supplants the common law cause of action for innocent misrepresentation. For a misrepresentation on the mandatory disclosure form to be actionable, the buyer must prove the seller was, at a minimum, negligent.
Facts:
- Robin and Sharon Luchini, in preparation for selling their house, hired an engineer, Kenneth Rydberg, who issued a letter opining that the foundation was stable and satisfactory.
- The Luchinis provided potential buyers Raymond Amyot and Shari Luster with a copy of Rydberg's positive report.
- Mr. Luchini also gave Amyot a mandatory "Residential Real Property Transfer Disclosure Statement," in which he indicated that, to the best of his knowledge, there were no defects in the foundation.
- In a separate "Property Information Profile," the Luchinis stated the foundation was in "good" condition.
- The Luchinis informed Amyot that the foundation was made of all-weather wood and that a fireplace had previously fallen through the floor into the basement.
- Amyot and Luster purchased the house from the Luchinis in October 1993 for $181,500.
- Shortly after closing, while preparing to install a swimming pool, Amyot and Luster discovered that the foundation had completely failed.
- Repair estimates for the failed foundation were approximately $100,000.
Procedural Posture:
- Raymond Amyot sued Robin and Sharon Luchini in the superior court (trial court) for innocent, negligent, and intentional misrepresentation.
- Prior to trial, the superior court ruled as a matter of law that Amyot's claim for innocent misrepresentation was precluded by statute AS 34.70.
- The case proceeded to a jury trial on the negligent and intentional misrepresentation claims.
- The jury returned a verdict in favor of the defendants, the Luchinis.
- The superior court entered judgment for the Luchinis and awarded them attorney's fees.
- Amyot (appellant) appealed the superior court's rulings to the Supreme Court of Alaska.
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Issue:
Does Alaska Statute 34.70, which requires sellers to complete a residential property disclosure statement in good faith, preclude a buyer from bringing a common law claim for innocent misrepresentation for statements made on that form?
Opinions:
Majority - Compton, Chief Justice
Yes. The Alaska residential property disclosure statute (AS 34.70) precludes a common law claim for innocent misrepresentation based on statements made in the required disclosure form. Prior to the statute, sellers were not required to make representations, but were held strictly liable under the common law for any they chose to make, even if made innocently. The new statute now mandates extensive disclosures, and the legislature balanced this increased duty by lowering the standard for liability. The statute explicitly provides remedies for negligent (AS 34.70.090(b)) and willful (AS 34.70.090(c)) violations, which implies the exclusion of liability for lesser degrees of fault, such as innocent misrepresentation. Furthermore, the statute's requirement that disclosures be made in 'good faith' (AS 34.70.060) and the form's language asking for information 'to the best of [the seller's] knowledge' are inconsistent with a strict liability standard. Therefore, to be actionable, a misrepresentation in the disclosure form must be at least negligent.
Analysis:
This decision clarifies that a specific, comprehensive statutory scheme governing real estate disclosures can preempt a more general common law remedy. By eliminating strict liability for innocent misrepresentations on mandatory disclosure forms, the court shifts some risk from the seller to the buyer, reinforcing the importance of independent inspections. The ruling establishes that in Alaska, a seller who completes the required disclosure form in good faith is shielded from liability for unknown defects. This precedent significantly impacts real estate litigation by requiring plaintiffs (buyers) to prove a higher standard of fault—at least negligence—rather than simply proving a statement was false.
