Gauld v. O'Shaugnessy Realty Co.

671 S.E.2d 79

380 S.C. 548

Samantha GAULD, Appellant, v. O'SHAUGNESSY REALTY COMPANY d/b/a Prudential Carolina Real Estate, Chip Allen, Julie Lynch, and Raymond Harris, Defendants Of whom O'Shaugnessy Realty Company d/b/a Prudential Carolina Real Estate, Chip Allen, and Julie Lynch are the, Respondents.

No. 4455.

Court of Appeals of South Carolina.

Submitted November 5, 2008.

Filed November 14, 2008.

Rehearing Denied January 27, 2009.

R. Clenten Campbell, of Walterboro and Jonathan F. Krell and Alan Toporek, both of Charleston, for Appellant.

Michael Scarafile, of North Charleston and Michael Scardato, of Charleston, for Respondents.

ANDERSON, J.:

Samantha Gauld (Gauld) appeals the summary judgment granted in favor of Respondents on her claims for breach of contract, breach of contract with a fraudulent act breach of fiduciary duty, negligence, negligent misrepresentation, and violation of the South Carolina Unfair Trade Practices Act. We affirm.¹

FACTUAL/PROCEDURAL BACKGROUND

In this case arising from Samantha Gauld's purchase of 102 Lucretia Lane in Summerville, she alleged breach of contract, breach of contract accompanied by a fraudulent act, breach of fiduciary duty, negligence, violation of the South Carolina Unfair Trade Practices Act, and negligent misrepresentation against her real estate agent, Julie Lynch (Lynch); the agent of the seller, Chip Allen (Allen); and the employer for both, O'Shaugnessy Realty Company d/b/a Prudential Carolina Real Estate (Prudential).

At the hearing for the defendants' motion for summary judgment, Gauld agreed to dismiss the breach of contract claim against Allen. The circuit court expounded in its order, "there is no admissible or credible evidence as to the existence or amount of any alleged damage and, as such, summary judgment is appropriate as to all Defendants and all causes of action."

Over a fifteen year period preceding this action, Gauld purchased, refurbished and resold numerous homes across the country. In fall of 2002, while living in Maine, Gauld became interested in the Charleston market. After deciding Charleston was beyond her budget, her search expanded to include the Summerville area. Ideally, she sought a historic property suitable as a bed and breakfast. If real estate with these characteristics could not be found, Gauld had a "Plan B" which entailed "a short term investment that I expected to make a big profit on in a very short period of time while we continued to look for a historic property."

Gauld made trips from Maine to South Carolina in 2002, 2003, and 2004, and she enlisted the services of Lynch, a real estate agent with Prudential's Mount Pleasant office. Gauld and her husband routinely reviewed realty websites and discovered 102 Lucretia Lane in the Tea Farm subdivision. The owner had relocated out of state and hired Allen, an agent with Prudential's Summerville office, to sell the home.

Gauld offered to buy the residence "as is" for $400,000, but made the deal contingent upon her satisfaction with a home inspection and an appraisal at or above the purchase price. After the home inspection and an appraisal valuing the home at $420,000, Gauld accepted the property "as is" and closed in May 2004. She and her husband moved in and made substantial repairs. Gauld testified that, within a week of closing, she was approached by a landscaper asking to cut her lawn. Through their conversation, she became aware of the proposed extension of Phase III of the Berlin G. Myers Parkway along the Sawmill Branch, three hundred feet behind the home. According to Allen's deposition, Phase III has been discussed over the last thirty-five years with citizens and environmental attorneys resisting its construction. Phases I and II were completed years ago. Approximately six months after the closing on 102 Lucretia Lane, a Dorchester County tax referendum passed providing potential funds for road projects. In Allen's estimation, this event made the construction of the road a "probability."

Multiple appraisals were conducted on 102 Lucretia Lane valuing it at $570,000 in April 2005, $605,000 in May 2005, and $650,000 in January 2006. On January 4, 2005, Gauld put the property up for sale with an asking price of $650,000, which she later increased to $660,000. In June 2005, the house was advertised at $660,000, and a listing in the record, dated July 7, 2006, features a price of $787,500. When asked why she listed the home at more than its appraisal, Gauld explained:

A: Again, I'm not a realtor, but usually when you're selling real estate, you don't put the price you want. You add a little on top. No one is ever going to offer you what you're asking, that I'm aware of. Secondly, there was some personal property conveyed, and that value was not reflected in here. I, also, in following the local comps, was aware that land right in Tea Farm was selling for — like, a cluster lot was selling for 200,000, and my opinion, my lot, a portion of the price was low in here. I'm not an expert, but to me it seemed a little low on the golf course. I have great views. That's just my personal opinion. That means nothing. I'm not an appraiser.

Although Gauld's deposition is difficult to follow, it indicates she received offers of $650,000, $629,500, and $665,000. Additionally, she averred to having been offered $630,000 in a cash deal. In her deposition, Gauld was asked about the home's worth:

Q: [Y]ou've listed it more than what it appraised for throughout the whole thing. You keep listing it at higher [than] the appraisal when you know that an appraisal is going to require it be reduced?

A: Maybe, maybe not. I don't know that.

Q: Have you examined—this property now as I understand it, in your estimation, what should it sell for?

A: Well, there's two answers to that question. There's what it should be worth without the parkway. And if I were to buy into the theory that not only does the parkway not negatively impact this property and yet it's actually a positive selling point, and if you look at the comps currently in Tea Farm, there's a property listed on East Johnson Street at $305 a square foot. There's a property that just sold right behind mine at 160 a square foot. And say I hypothetically accept that my property is not superior to that on East Johnson at 305 a square, yet I believe it's definitely superior to the property that just sold on East Shephard at 160 a square foot, if you cut that down the middle, my property without the parkway will be would over a million dollars, if you do the math. Now, because of the parkway, I would never get anywhere near that amount of money.

Jeffery Wyman, Gauld's expert witness, opined the house was worth a maximum of $650,000. Wyman was asked about the increase in property values in the neighborhood:

Q: Okay. Do you have an idea of the average annual appreciation for Tea Farm and the Miler Country Club area for the last five years?

A: I didn't do an appreciation study, per se. But if we look at sales and resales of houses—for example, the Gauld house, which is the subject of this, she purchased at 400,000 approximately two years ago and at least got an offer of 650 to 665. So you're talking about 50 percent over two years—45 percent. So it's probably in the neighborhood of any where from 15 to 20 percent average. But, again, the latest statistics I saw show the prices going down, people reducing prices to move property.

When shown the listing for Gauld's first attempt to sell the house, Wyman stated:

A: This is 1-4-05. Okay, this is a listing, she's asking $660,000, which is about six months, more or less, after she purchased it.... She listed it in January for apparently $660,000.

Q: And as far as you're—within six months of a sale and appraisal, a sale at 400,000 and an appraisal at 420, in your opinion, is that a realistic listing price?

A: Well, if we made the assumption that the 420 was the market value, my assumption, this would be rather substantial—to me, it would be overpriced at that point.

Q: And that's just based upon assuming that it was 420?

A: Right. Again, I didn't do an appraisal. I didn't go back and look at the market at that time.

Q: Are you aware of any improvements or changes that she made in the property?

A: She—when I interviewed her, she said that she made, I believe $50,000 worth of repairs, to include the pool and—I don't remember all of them, but she made—she alluded to me that she made approximately $50,000 worth of repairs.

Q: Even with the 50,000, and if there are repairs on there, is that still high?

A: Again, I'm not trying to evade your question, but I don't know what all the repairs were. I don't know what the state of the house was when she bought it. Obviously she felt it was worth 400,000, and some appraiser felt like it was worth 420. Now, you can do a lot of cosmetic work for $50,000. And cosmetic work, a lot of times people buy the sizzle. They buy the—but I don't know that it would get to this level.

Q: This 660, you don't think that—

A: Right, it would be a stretch.

Wyman was not asked to appraise other property along the proposed parkway nor conduct appraisals considering noise impact or the value of the 102 Lucretia Lane with or without the parkway in place:

Q: [M]y question was, you were not asked to give a valuation [of what the property was worth with the road or without the road]?

A: No, I didn't quantify any amount. I'm not sure you could. By making that answer, I'm not saying that there isn't a law of diminution in value. I'm just not sure how you quantify it. We like to have comparative sales, but usually on high-end properties like that, you've got noise attenuation devices such as sound walls and things like that.

Allen answered questions concerning his method of valuing homes. At his deposition, Allen was asked whether he currently had any homes listed at a price he considered to be in excess of ten percent of their actual worth. In this...