Opinion
No. CV-04-0276-EFS.
November 15, 2004
UNIVERSITY LEGAL ASSISTANCE, Owen F. Clarke, Jr., Supervising Attorney, Jaime Baxter, Legal Intern, Spokane, Washington.
Owen F. Clarke, Jr., UNIVERSITY LEGAL ASSISTANCE, Supervising Attorney, Jaime Baxter, Legal Intern, Spokane, Washington.
J. GREGORY LOCKWOOD, Hackney Carroll, SPOKANE WA, Attorney for Defendants.
GUSTAFSON HOGAN, P.S., STEVE K. GUSTAFSON, WSBA #29397, Attorney for Defendants ALLEN, Spokane, Washington.
UNIVERSITY LEGAL ASSISTANCE, David McIntosh, Legal Intern, Zane S. Froerer, Legal Intern, Owen F. Clarke, Jr., Supervising Attorney, Spokane, Washington.
Wade Hulsizer, husband represented by Owen F Clarke, Jr, University Legal Assistance, Spokane, WA, Beverly Ohlhausen, wife represented by Owen F. Clarke, Jr, Spokane, WA, for Plaintiff.
Jethro W Allen, husband and their marital community composed thereof, represented by John Gregory Lockwood, Hackney Carroll, Steven Kent Gustafson, Gustafson Hogan PLLC, Monica Allen, wife and their marital community composed thereof represented by John Gregory Lockwood, Steven Kent Gustafson, Gustafson Hogan PLLC, Spokane, WA, for defendant.
TRANSFER ORDER: GRANTING DEFENDANT'S MOTION TO TRANSFER CASE TO THE DISTRICT OF IDAHO PURSUANT TO 28 U.S.C. § 1404(a)
On October 22, 2004, the Court conducted a motion hearing in the above-captioned matter. At the hearing, the Court considered Defendants' Motion to Change Venue, (Ct. Rec. 8), filed September 24, 2004. J. Gregory Lockwood appeared on behalf of the Defendants and argued the motion. Jaime Baxter, legal intern, supervised by Owen F. Clarke, Jr., appeared for Plaintiffs and argued in opposition. After reviewing the motion, memoranda, submitted materials, applicable case law, statutory authority, and taking oral argument, the Court was fully informed. At the conclusion of the hearing, the Court granted the Defendants' Motion to Change Venue. This Order memorializes and supplements the Court's oral ruling.
I. BACKGROUND
Plaintiffs Wade Hulsizer and Beverly P. Ohlhausen are married and reside in Post Falls, Idaho. Defendants Jethro and Monica Allen are married and reside in Usk, Washington. On September 2, 2003, the Defendants sold their single family residence and large barn located on a 5-acre parcel in Post Falls, Idaho, to the Plaintiffs. This claim arises from a series of alleged Idaho Building Code ("I.C.") violations. Plaintiffs argue the Defendants failed to disclose various alleged deficiencies that were not readily observable at the time Plaintiffs were shown the property. The Plaintiffs' Amended Complaint, (Ct. Rec. 6), filed September 13, 2004, alleges: (1) Fraud and Deceit, (2) Intentional Misrepresentation, (3) Violation of I.C. § 55-2516, and (4) I.C. § 55-207 damages. Plaintiffs seek a jury trial and an award of rescission of the real estate purchase agreement, actual and consequential damages, costs, and reasonable attorney's fees.II. MOTION TO TRANSFER VENUE
On September 24, 2004, Defendants filed a timely motion to transfer venue to the United States District Court for the District of Idaho, pursuant to 28 U.S.C. § 1404(a) which provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." The Ninth Circuit set forth a series of factors district courts should consider when deciding transfer of venue motions:
Under § 1404(a), the district court has discretion "to adjudicate motions for transfer according to an `individualized, case-by case consideration of convenience and fairness'" A motion to transfer venue under § 1404(a) requires the court to weigh multiple factors in weighing in its determination whether transfer is appropriate in a particular case. For example, the Court may consider: (1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff's choice of forum, (4) the respective parties' contacts with the forum, (5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the differences in the costs of litigation in two forums, (7) the availability of compulsory process to compel attendance of un-willing non-party witnesses, and (8) the ease of access to sources of proof. Additionally, the presence of a forum selection clause is a "significant factor" in the court's § 1404(a) analysis. We also conclude that the relevant public policy of the forum state, if any, is at least as significant a factor in the § 1401(a) balancing.Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir. 2000) (citations omitted).
Under the first factor, it is undisputed that at the time of the sale, Plaintiffs lived in Washington and the Defendants lived in Idaho. The negotiations appear to have principally occurred in Idaho, where the property is located. There is no dispute that all sales documents were executed in Idaho. The second issue to consider is which state is the most familiar with the governing law. Here, the claims arise exclusively under Idaho law.
The Complaint alleges violations of Idaho Code §§ 48-601, 55-2517, 55-2516 and 55-2507 in the sale and closing of the Post Falls residence.
Third, courts consider a plaintiff's choice of forum. Plaintiffs justify their choice of forum in the Eastern District of Washington for the following reasons:
(1) Defendants reside in Washington, (2) the Plaintiffs lived in Washington at the time the sales agreement was executed, (3) the chosen forum is in close proximity to the real property that is at issue, and (4), most importantly, because the Eastern District of Washington is where Plaintiffs' are able to obtain free legal representation.
(Ct. Rec. 13, Pgs. 2-3). Fourth, on the issue of contact with the forum state, it is undisputed that at the time of the sale, Plaintiffs resided in Washington, but now reside in Idaho and that the Defendants, former residents of Idaho, now reside in Washington. In addition, Plaintiffs' counsel reside and are only licensed to practice law in Washington.
The fifth prong for district courts to consider is the contacts related to the plaintiff's cause of action in the chosen forum. As discussed immediately above, at the time of the sale, Plaintiffs resided in Washington. Now Defendants reside in Washington. Plaintiffs' counsel resides in and are only licensed in Washington. The real property is in Idaho. The sales documents principally at issue were executed in Idaho.
The sixth factor the Court considers is the difference, if any, in the costs of litigation in two forums. The parties sharply disagree on this point. Defendants argue that the costs of litigating this case will be substantially less in Idaho given the fact that all lay and expert witnesses are located in Idaho. Plaintiffs argue that the proximity of Post Falls, Idaho, to Spokane, Washington, makes the difference in transportation costs de minimis. Plaintiffs argue they will bear a tremendous increase in cost if this matter is transferred to Idaho because they would lose of their free legal representation.
The seventh factor and eighth factors the Court considers are the availability of compulsory process to compel attendance of un-willing non-party witnesses and the ease of access to sources of proof. The parties agree that all likely witnesses reside in the Spokane, Washington/Post Falls, Idaho/Coeur d'Alene, Idaho area and that the geographical proximity of the three cities does not make either the seventh or eight factors persuasive for other side. Next, there is no dispute that the sales agreement at issue in this litigation did not contain a forum selection clause. Finally, the relevant public policy of the forum state must be given equal weight in a balancing analysis.
The Idaho public policy at issue is protecting consumers by ensuring proper disclosure of information prior to executing the sale of real property.
III. DISCUSSION
After weighing the factors outlined above and considering the parties differing positions, the Court finds that this matter should be decided by the Idaho courts. The claims arise exclusively under Idaho law, the real property is located in Idaho, the Plaintiffs traveled from Washington to Idaho to inspect the property, the negotiations principally took place in Idaho, and the property disclosure form and sales agreement at issue in this case were executed in Idaho. The Court further finds that the differences in witness transportation costs is de minimis given the geographical proximity of the Spokane/Post Falls/Coeur d'Alene area. After balancing the factors set out in Jones v. GNC Franchising, Inc., the Court is not persuaded that the motion to transfer venue should be denied solely for the reason that Plaintiffs may well be deprived of their current counsel.Accordingly, for the reasons stated herein and on the record,
IT IS HEREBY ORDERED: Defendants' Motion to Change Venue, (Ct. Rec. 8), is GRANTED. IT IS SO ORDERED. The District Court Executive is directed to
(A) Enter this Order;
(B) TRANSFER THIS FILE to the District of Idaho; and
(C) Provide copies to all counsel.
NOTICE RESETTING TELEPHONIC MOTION HEARING
PLEASE TAKE NOTICE that due to conflicts with the Court's calendar, the Telephonic Motion Hearing Re: Motion to Transfer Venue currently set for October 27, 2004, at 10:00 A.M., is reset for telephonic hearing on October 22, 2004, at 10:00 A.M. before the Honorable Edward F. Shea.The parties are directed to call the Court's public conference line at that time: 509-376-8880.
The use of cell phones is prohibited.
DECLARATION IN OPPOSITION OF MOTION FOR TRANSFER OF VENUE
I, Jaime Baxter, declare:I am the legal intern of record for plaintiffs, WADE HULSIZER and BEVERLY OHLHAUSEN, husband and wife, in this action.
The statements made by J. Gregory Lockwood in his DECLARATION IN SUPPORT OF MOTION TO CHANGE VENUE is correct, except statements 5, 7, and 9.
1. At the time of the sale, plaintiffs were residents of the state of Washington and defendants were residents of the state of Idaho. The defendants are currently residents of the state of Washington.
2. The real property which is at issue is located in the state of Idaho. Plaintiffs resided in the state of Washington at the time the sale of house was negotiated. The documents associated with the sale were executed in the state of Idaho.
3. Plaintiff expects to call at the time of trial witnesses located in the state of Washington and in the state of Idaho.
I declare under penalty of perjury under the laws of the State of Washington that the foregoing is true and correct.
RESPONSE TO MOTION FOR TRANSFER OF VENUE
A party's motion for change of venue should be denied if the transfer of venue will not serve the convenience of the parties and witnesses and will not promote the interests of justice as required by 28 U.S.C. § 1404(a). In the Ninth circuit the courts look at multiple factors when determining whether a change of venue is proper. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-499 (9th Cir. 2000). When weighing the factors, the courts give considerable weight to a plaintiff's choice of forum in determining a motion to transfer. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257; Italian Colors Restaurant v. American Express Company, 2003 WL 22682482 (N.D. Cal.).In analyzing the factors in Jones and taking into consideration the greater weight given to the plaintiffs choice of forum we find as follows:
(1) The location where the relevant agreements were negotiated and executed.
At the time the defendants sold their property in Idaho, the plaintiffs lived in Washington. All documents were executed in Idaho
(2) The state that is most familiar with the governing law.
Federal courts may apply the appropriate substantive state law.
(3) The plaintiffs choice of forum.
The plaintiffs chose to file in the state of Washington because: (1) the defendants live in the state of Washington, (2) the plaintiffs lived in Washington at the time the sales agreement was executed, (3) the chosen forum is in close proximity to the real property that is at issue, and (4), most importantly, because that is where they were able to obtain free legal representation.
The plaintiffs were unable to afford to hire an attorney in the state of Idaho. As a result, the plaintiffs sought legal representation at University Legal Assistance (ULA) in Spokane. ULA agreed to take the case without requiring a retainer fee.
Plaintiffs were so strapped financially that they needed to petition the Court for waiver of the filing fee in this case.
ULA is a non-profit law firm that accepts cases on the basis of economic need. The Hulsizers met the criteria and ULA agreed to take the case. As part of ULA's program, clients are assigned Rule 9 Interns, licensed in the state of Washington, to work on their cases. The Rule 9 interns are then supervised by attorneys licensed to practice law in the state of Washington.
If the case were to be transferred to the state of Idaho, the Plaintiffs would lose their legal representation because the Rule 9 legal interns are not licensed to practice in the state of Idaho. Plaintiffs would need to find Idaho counsel who would be willing to take their case without a retainer for fees and costs. As a practical matter, transfer of venue in this case would likely result in the plaintiff's having to pursue their claims for relief in this case as pro se litigants.
(4) The respective parties' contacts with the forum.
The defendants currently reside in the state of Washington. At the time of the real estate sale agreement the plaintiffs resided in the state of Washington. Plaintiffs legal representation is in the state of Washington.
(5) The contacts relating to the plaintiff's cause of action in the chosen forum.
At the time of the sale agreement the Plaintiffs resided in the state of Washington.
(6) The differences in the costs of litigation in the two forums.
The difference in cost of litigation in the two forums is minimal. The real property at issue in the case is only 20 miles from Spokane, Washington. The difference in transportation costs between Post Falls, Idaho and Spokane, Washington versus the costs of traveling between Post Falls, ID and Coeur d'Alene, ID is minimal. In addition, the plaintiffs expect to call expert witnesses who are located both in Washington and in Idaho.
(7) The availability of compulsory process to compel attendance of unwilling non-party witnesses.
Plaintiffs will have expert witnesses who are in the state of Washington. All other lay and expert witnesses are located in close proximity to the state of Washington.
(8) The ease of access to source of proof.
The Defendants reside in the state of Washington. Plaintiffs have expert witnesses located in the state of Washington. The real property at issue in the case is only 20 miles from Spokane County. Access to all documentary and physical evidence is easily accessible from Spokane County.
(9) A forum selection clause.
The parties have no forum or venue clause in their sale agreement
(10) Relevant public policy of the forum state.
There has been a long standing policy in the state of Washington that there should not be a transfer of venue when the "ends of justice" would not be forwarded, RCW 4.12.030(3). This is just such a case. The plaintiffs would have considerable difficulty in pursuing their claims if the case were to be transferred to Idaho. Plaintiffs would lose their current legal representation and could not afford to hire new representation in Idaho.
CONCLUSION
The defendant's motion should be denied because the ends of justice will not be forwarded by transferring the case to Idaho. The witnesses are not greatly inconvenienced by the chosen forum. In addition, a transfer of venue would cause great hardship and injustice to the plaintiffs.
CERTIFICATE OF MAILING
I, EVLEYN M. HANSON, hereby certify that I mailed a copy of the following documents:1. Notice of Telephonic Hearing;
2. Motion for Transfer of Venue;
3. Declaration in Support of Motion to Transfer Venue; and
4. Memorandum in Support of Motion to Transfer Venue.
The above-referenced documents were mailed to University Legal Assistance, Owen F. Clarke, Jr. and Jaime Baxter, PO Box 3528, Spokane, WA 99220.
NOTICE OF TELEPHONIC HEARING
You and each of you will please take notice that hearing of Defendant's Motion regarding Change of Venue, a copy of which is attached hereto, will be heard on Wednesday, October 27, 2004 at 10:00 a.m. The hearing will be held telephonically. Parties are directed to call the court's public conference line at (509) 376-8880 at the time specified for hearing. Use of cell phones is prohibited.DECLARATION IN SUPPORT OF MOTION TO TRANSFER VENUE
I, J. Gregory Lockwood, declare that I am the attorney of record for defendants JETHRO W. ALLEN and MONICA ALLEN, husband and wife, in this action and declare that the following statements are true and correct and made under penalty of perjury under the laws of the state of Washington:1. This litigation arose from the sale of the defendants' home in Post Falls, Idaho.
2. The defendants sold their residence to the plaintiff, which consisted of the main residence and a barn located on approximately 5 acres.
3. The plaintiffs have alleged violations of numerous Idaho Statutes, including Idaho Code sections 48-601, 55-2517, 55-2516 and 55-2507.
4. The defendants are secking recession of the sale contract and damages under Idaho law.
5. At the time of the sale, all parties were residents of the state of Idaho. Following the sale, the defendants moved to the state of Washington.
6. The state of Washington has no contacts to the issues presented in the plaintiff's complaint.
7. The real property which is at issue is located in the state of Idaho and all documents associated with the sale were negotiated and executed in the state of Idaho.
8. This case involves the application of Idaho statutory law to the facts of the case. Idaho law would apply under the facts of the case and the plaintiff has alleged specific Idaho statutory violations as the basis for liability.
9. All witnesses, both lay and expert, expected to be called at time of trial are located in the state of Idaho.
10. The plaintiffs are residents of the state of Idaho.
11. For the above reasons, this case should properly be brought in the state of Idaho.
MEMORANDUM IN SUPPORT OF MOTION TO TRANSFER VENUE
The defendants bring their motion to transfer venue pursuant to 28 U.S.C. § 1404 which reads:
(a) or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
(b) Upon motion, consent or stipulation of all parties, any action, suit or proceeding of a civil nature or any motion or hearing thereof, may be transferred, in the discretion of the court, from the division in which pending to any other division in the same district. Transfer of proceedings in rem brought by or on behalf of the United States may be transferred under this section without the consent of the United States where all other parties request transfer.
(c) A district court may order any civil action to be tried at any place within the division in which it is pending.
(d) As used in this section, the term "district court" includes the District Court of Guam, the District Court for the Northern Mariana Islands, and the District Court of the Virgin Islands, and the term "district" includes the territorial jurisdiction of each such court.
Specifically section 1404(a) authorized the court to transfer venue for "the convenience of parties and witnesses" or "in the interest of justice". In Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir. 2000), the court clearly stated that a trial court is to consider multiple factors in deciding on a motion to transfer venue by stating at page 498:
[4] Under § 1404(a), the district court has discretion "to adjudicate motions for transfer according to an `individualized, case-by-case consideration of convenience and fairness.'" A motion to transfer venue under § 1404(a) requires the court to weigh multiple factors in its determination whether transfer is appropriate in a particular case. For example, the court may consider: (1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff's choice of forum, (4) the respective parties' contacts with the forum, (5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof. Additionally, the presence of a forum selection clause is a "significant factor" in the court's § 1404(a) analysis. We also conclude that the relevant public policy of the forum state, if any, is at least as significant a factor in the § 1404(a) balancing.
In analyzing the above-referenced factors we find as follows:
(1) The location where the relevant agreements were negotiated and executed.
In the case at bar, the defendants sold their residence located at 2749 W. Fisher Avenue Road, Post Falls, Idaho to the to the plaintiffs. All sale documents were executed in Idaho.
(2) The state that is most familiar with the governing law.
The plaintiffs have alleged that the defendants violated Idaho Code sections 48-601, 55-2517, 55-2516 and 55-2507 in the sale and closing of their residence. The issues before the court are based entirely on Idaho statutory law and how it is applied to the facts of the case.
(3) The plaintiff's choice of forum.
The plaintiffs as Idaho residents had the choice of bring this action in either Idaho or Washington. The defendant resides in Washington but the real property which is at issue is located in Post Falls, Idaho.
(4) The respective parties' contacts with the forum.
The only contacts with the state of Washington is that the defendants reside in this state. The plaintiffs have no contacts with the state of Washington. At the time of the real estate sale agreement, all parties were residents of the state of Idaho. Following the sale, the defendants moved to the state of Washington.
(5) The contacts relating to the plaintiff's cause of action in the chosen forum.
The state of Idaho is the only state which has any contacts to the plaintiffs' cause of actions. No contact with the state of Washington existed prior to the parties sale agreement nor were there any contacts with the state of Washington at the time of the parties executed the agreement. The state of Washington has no contacts to the plaintiffs' cause of actions.
(6) The differences in the costs of litigation in the two forums.
The costs of litigating this case will be less expensive in the state of Idaho as all lay and expert witnesses are located in the state Idaho. The defendants wish to transfer this action to the home state of the plaintiffs. The defendants would also agree to personal jurisdiction in Idaho state court as well. The property which is at issue is located in the state of Idaho together with all evidence which will be submitted at time of trial.
(7) The availability of compulsory process to compel attendance of unwilling non-party witnesses.
All witnesses both lay and expert are located in the state of Idaho.
(8) The ease of access to sources of proof.
All documentary evidence as well as all physical evidence which will be submitted at trial is located in the state of Idaho. This case is very dependant upon physical evidence, as the causes of actions relate to the condition of the residential property sold to the plaintiffs.
(9) A forum selection clause.
The parties have no forum or venue clause in their sale agreement.
(10) Relevant public policy of the forum state.
There is no Washington state public policy consideration as to the issues before this court. However, the state of Idaho does have state policy issues which arise from alleged statutory violations.
CONCLUSION
This case should be properly brought in the state of Idaho as all causes of actions involve the application of Idaho statutory law to a sale of residential property situated in the state of Idaho.
The defendants respectfully request that their motion be granted and this case be transferred to the Northern District of Idaho.
MOTION FOR TRANSFER OF VENUE Pursuant to 28 U.S.C. Section 1404(a)
Defendants, JETHRO W. ALLEN and MONICA ALLEN, husband and wife, by and through their attorney of record, move the court for an Order Transferring Venue of the above-captioned case to the United States District Court for the District of Idaho, pursuant to 28 U.S.C.S 1404(a). The grounds for this motion are set forth in the defendants' memorandum filed in support of this motion.AMENDED COMPLAINT FOR RECISSION AND DAMAGES, AND DEMAND FOR JURY TRIAL
PLAINTIFFS by and through UNIVERSITY LEGAL ASSISTANCE, allege as follows:I. INTRODUCTION
This complaint is filed under the 28 U.S.C. § 1332. Plaintiffs seek redress of damages resulting from the misrepresentations of defendants regarding the conveyance of certain real property located in the State of Idaho. Plaintiffs seek damages and attorney's fees as allowed under state and federal law. Plaintiffs also seek damages and attorney's fees for Defendants' violations of the State of Idaho's Consumer Protection Act, I.C. § 48-601 et. seq. (hereafter CPA), Fraud, Intentional Misrepresentation, and Negligent Misrepresentation. Plaintiffs also seek damages under I.C. §§ 55-2507, 55-2516, and 55-2517 for failure to properly disclose defects in the property and for failure to act in good faith.II. JURISDICTION
2.1 Jurisdiction is conferred on this Court by 28 U.S.C. § 1331, § 1337, and § 1332. Supplemental jurisdiction exists for state law claims pursuant to 28 U.S.C. § 1367. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b).
2.2 Plaintiffs currently reside in the State of Idaho.
2.3 Defendants currently reside in the State of Washington.
2.4 The amount in controversy exceeds $75,000.
III. PARTIES
3.1 Plaintiffs, WADE HULSIZER and BEVERLY P. OHLHAUSEN, (hereinafter Plaintiffs) are married and reside in the City of Post Falls, Idaho.3.2 Defendants, JETHRO W. ALLEN and MONICA ALLEN, (hereinafter Defendants) are married and reside in the City of Usk, Washington. All acts, practices, and/or omissions alleged herein which benefited either Jethro Allen or Monica Allen also benefited their marital community.
IV. FACTUAL ALLEGATIONS
4.1 Defendants owned real property located at 2749 W. Fisher Avenue, Post Falls, Idaho.
4.2 This real property (hereinafter property) constituted a single family residence and large barn built on approximately five acres.
4.3 The residence consists of a main floor with three bedrooms and one bathroom, a basement, and a metal roof constructed over an existing tar roof.
4.4 The construction of the metal roof was done by Defendants without proper permit, inspection, or professional assistance.
4.5 On information and belief, Defendants' constructed and installed the roof themselves while residing in the residence.
4.6 On information and belief, Defendants' had been marketing the property as for sale since approximately early 2002.
4.7 In the summer of 2003, Plaintiffs contacted the Defendants through their real estate agent regarding purchasing the property.
4.8 Plaintiffs were shown the home by Defendants and Plaintiffs' real estate agent.
4.9 On July 12, 2003, Defendants had completed a property disclosure form, pursuant to I.C. § 55-206.
4.10 Defendants represented in the property disclosure form that as of that date:
a. Fireplace and fireplace insert worked;
b. Pellet stove in the house was without any defects and in working order;
c. The chimney to the fireplace was cleaned annually by the Defendants;
d. Defendants were unaware of any drainage problems with the property;
e. No plumbing problems;
f. No moisture or water intrusion or related damage to any portion of the property;
g. No mold-related problems on any interior portion of the property;
h. No inspection had been done for the existence of any mold;
i. No substantial modifications had been done to the property without proper permits;
j. No pest infestation or damage to any part of the property;
k. No encroachments, easements, zoning violations;
l. No lot line disputes other than along one property boundary;
m. No receipt of government notices affecting the property;
n. No structural problems with any improvements;
o. No structural problems with the foundation.
4.11 Plaintiffs and Defendants closed on the sale of the property on or about September 2, 2003.
4.12 Defendants prevented Plaintiffs from entering or taking possession of the premises for several days after the closing.
4.13 After taking possession of the premises, Plaintiffs discovered:
a. An illegally constructed and unusable chimney for the fireplace and pellet stove;
b. The chimney had not been cleaned for years;
c. Various drainage problems;
d. A septic system had been put in with no permit;
e. Plumbing problems;
f. Moisture leaks in and around the fireplace brick work;
g. Moisture seepage through the foundation of the residence;
h. Condensation problems in the walls, windows, and ceiling resulting in severe wood decay;
i. Inadequate roof ventilation;
j. Moisture and seepage caused damage to the foundation, windows, floors, and walls of the house;
k. Soggy and moldy walls, ceiling, and floor around the fireplace;
l. Severe insect damage to wood panel wall in the living room, which had been covered by a large framed picture when Plaintiff had visited the house prior to deciding to make an offer of purchase.
m. All fence lines were not aligned with the true lot lines, including an encroachment upon the county right of way;
n. Severe water seepage through the foundation.
4.14 None of the defects listed above were readily observable to plaintiffs at the time they were shown the property.
4.15 In deciding to purchase the property, Plaintiffs relied upon the written representations of Defendants in the property disclosure form regarding the condition of the residence and property.
4.16 Defendants fraudulently and deceitfully concealed or failed to disclose material defects concerning the property.
4.17 Defendants actively and intentionally misrepresented to Plaintiffs the condition of the house by concealing:
a. Water damage,
b. Insect damage, and
c. Mold problems.
4.18 Defendants were negligent in their disclosure of said material defects in the residence and with the property in violation of I.C. § 55-2517.
4.19 Defendants failed to act in good faith as required by I.C. § 55-2516.
4.20 Defendants failed to comply with I.C. § 55-2507 requiring mandatory disclosures for certain conditions and material defects to real property.
V. FIRST CLAIM FOR RELIEF: FRAUD AND DECEIT
5.1 Plaintiffs re-allege all factual allegations in section 4 of this complaint for damages.
5.2 Defendants knowingly misrepresented and concealed material facts from the Plaintiffs.
5.3 Plaintiffs were induced into action by the Defendants concealment and misrepresentations of material fact.
5.4 Further, Defendants' fraud and deceit have caused direct and substantial injury to Plaintiffs.
5.5 Defendants' fraudulent and deceitful acts are continuing to cause direct and substantial injury to Plaintiffs.
VI. SECOND CLAIM FOR RELIEF: INTENTIONAL MISREPRESENTATION
6.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.
6.2 Defendants' intentionally misrepresented several material defects to the Plaintiffs'.
6.3 Plaintiffs' were deceived by these intentional misrepresentations.
6.4 Further, Defendants' intentional misrepresentations have caused direct and substantial injury to Plaintiffs.
6.5 Defendants' intentional misrepresentations are continuing to cause direct and substantial injury to Plaintiffs.
VII. THIRD CLAIM FOR RELIEF: VIOLATION OF I.C. § 55-2516
7.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.
7.2 Further, Defendants' failure to truthfully fill out the disclosures in good faith on the real estate purchase agreement has caused direct and substantial injury to Plaintiffs.
7.3 Defendants' failure to comply with I.C. § 55-2516 has caused direct and substantial injury to Plaintiffs.
7.4 Defendants' failure to comply with I.C. § 55-2516 is continuing to cause direct and substantial injury to Plaintiffs.
VIII. FOURTH CLAIM FOR RELIEF: VIOLATION OF I.C. § 55-2507
8.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.8.2 Defendants' negligent failure to comply with the mandatory disclosure forms in the real estate purchase agreement caused direct and substantial injury to Plaintiffs.
8.3 Defendants' negligent failure to disclose property defects impaired Plaintiffs ability to reasonably ascertain the costs of repair or remedial measures.
8.4 Defendant's negligent failure to comply with § 55-2507 has caused and is continuing to cause direct and substantial injury to Plaintiffs.
IX. PRAYER FOR RELIEF
Wherefore, Plaintiff prays as follows:
9.1 Rescission of the real estate purchase agreement pursuant to § 55-2515; and
9.2 Actual and consequential Damages resulting to Plaintiffs as a result of the fraud and deceit; and
9.3 Actual and consequential Damages resulting to Plaintiffs as a result of the intentional misrepresentations by Defendants; and
9.4 Actual Damages caused to Plaintiffs pursuant to I.C. § 55-2517; and
9.5 Plaintiffs' costs and reasonable attorney's fees; and
9.6 For other such relief the Court may deem just and equitable.
X. DEMAND FOR A JURY TRIAL
1.1 Plaintiffs demand a jury trial.
NOTICE OF APPEARANCE
TO: The above-named Plaintiffs and your attorneys, UNIVERSITY LEGAL ASSISTANCE, OWEN F. CLARKE, JR., Attorney; DAVID McINTOSH, Legal Intern, ZANE S. FROERER, Legal Intern, and to the CLERK of the above-named Court.YOU, AND EACH OF YOU, ARE HEREBY NOTIFIED that STEVE K. GUSTAFSON, of Gustafson Hogan, P.S., without waiving objections as to improper service or jurisdiction, hereby appears as attorney for JETHRO W. ALLEN and MONICA ALLEN, in the above-captioned matter, and you are notified that service of all further pleadings, notices, documents or other papers herein, exclusive of process, may be had upon said defendants by serving the undersigned attorney at his address stated below.
NOTICE OF APPEARANCE
YOU ARE HEREBY NOTIFIED that the undersigned attorney appears in this action as attorney for Defendants JETHRO W. ALLEN and MONICA ALLEN, and that henceforth service of all papers, except original process, shall be made on the undersigned.COMPLAINT FOR RESCISSION AND DAMAGES DEMAND FOR JURY
PLAINTIFFS by and through UNIVERSITY LEGAL ASSISTANCE, allege as follows:I. INTRODUCTION
This complaint is filed under the 28 U.S.C. § 1332. Plaintiffs seek redress of damages resulting from the misrepresentations of defendants regarding the conveyance of certain real property located in the State of Idaho. Plaintiffs seek damages and attorney's fees as allowed under state and federal law. Plaintiffs also seek damages and attorney's fees for Defendants' violations of the State of Idaho's Consumer Protection Act, I.C. § 48-601 et. seq. (hereafter CPA), Fraud, Intentional Misrepresentation, and Negligent Misrepresentation. Plaintiffs also seek damages under I.C. §§ 55-2507, 55-2516, and 55-2517 for failure to properly disclose defects in the property and for failure to act in good faith.
II. JURISDICTION
2.1. Jurisdiction is conferred on this Court by 28 U.S.C. § 1331, § 1337, and § 1332. Supplemental jurisdiction exists for state law claims pursuant to 28 U.S.C. § 1367. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b).
2.2. Plaintiffs currently reside in the State of Idaho.
2.3. Defendants currently reside in the State of Washington.
2.4. The amount in controversy exceeds $75,000.
III. PARTIES
3.1. Plaintiffs, WADE HULSIZER and BEVERLY P. OHLHAUSEN, (hereinafter Plaintiffs) are married and reside in the City of Post Falls, Idaho.
3.2. Defendants, JETHRO W. ALLEN and MONICA ALLEN, (hereinafter Defendants) are married and reside in the City of Usk, Washington. All acts, practices, and/or omissions alleged herein which benefited either Jethro Allen or Monica Allen also benefited their marital community.
IV. FACTUAL ALLEGATIONS
4.1 Defendants owned real property located at 2749 W. Fisher Avenue, Post Falls, Idaho.4.2 This real property (hereinafter property) constituted a single family residence and large barn built on approximately five acres.
4.3 The residence consists of a main floor with three bedrooms and one bathroom, a basement, and a metal roof constructed over an existing tar roof.
4.4 The construction of the metal roof was done by Defendants without proper permit, inspection, or professional assistance.
4.5 On information and belief, Defendants' constructed and installed the roof themselves while residing in the residence.
4.6 On information and belief, Defendants' had been marketing the property as for sale since approximately early 2002.
4.7 In the summer of 2003, Plaintiffs contacted the Defendants through their real estate agent regarding purchasing the property.
4.8 Plaintiffs were shown the home by Defendants and Defendants' real estate agent.
4.9 On July 12, 2003, Defendants had completed a property disclosure form, pursuant to I.C. § 55-206.
4.10 Defendants represented in the property disclosure form that as of that date:
a. Fireplace and fireplace insert worked;
b. Pellet stove in the house was without any defects and in working order;
c. The chimney to the fireplace was cleaned annually by the Defendants;
d. Defendants were unaware of any drainage problems with the property;
e. No plumbing problems;
f. No moisture or water intrusion or related damage to any portion of the property;
g. No mold-related problems on any interior portion of the property;
h. No inspection had been done for the existence of any mold;
i. No substantial modifications had been done to the property without proper permits;
j. No pest infestation or damage to any part of the property;
k. No encroachments, easements, zoning violations;
l. No lot line disputes other than along one property boundary;
m. No receipt of government notices affecting the property;
n. No structural problems with any improvements;
o. No structural problems with the foundation.
4.11 Plaintiffs and Defendants closed on the sale of the property on September 5, 2003.
4.12 Defendants prevented Plaintiffs from entering or taking possession of the premises for several days after the closing.
4.13 After taking possession of the premises, Plaintiffs discovered:
a. An illegally constructed and unusable chimney for the fireplace and pellet stove;
b. The chimney had not been cleaned for years;
c. Various drainage problems;
d. A septic system had been put in with no permit;
e. Plumbing problems;
f. Moisture leaks in and around the fireplace brick work;
g. Moisture seepage through the foundation of the residence;
h. Condensation problems in the walls, windows, and ceiling resulting in severe wood decay;
i. Inadequate roof ventilation;
j. Moisture and seepage caused damage to the foundation, windows, floors, and walls of the house;
k. Soggy and moldy walls, ceiling, and floor around the fireplace;
l. Severe insect damage to wood panel wall in the living room, which had been covered by a large framed picture when Plaintiff had visited the house prior to deciding to make an offer of purchase.
m. All fence lines were not aligned with the true lot lines, including an encroachment upon the county right of way;
n. Severe water seepage through the foundation.
4.14 In deciding to purchase the property, Plaintiffs relied upon the written representations of Defendants in the property disclosure form regarding the condition of the residence and property.
4.15 Defendants fraudulently and deceitfully concealed or failed to disclose material defects concerning the property.
4.16 Defendants actively and intentionally misrepresented to Plaintiffs the condition of the house by concealing:
a. Water damage,
b. Insect damage, and
c. Mold problems.
4.17 Defendants were negligent in their disclosure of said material defects in the residence and with the property in violation of I.C. § 55-2517.
4.18 Defendants failed to act in good faith as required by I.C. § 55-2516.
4.19 Defendants failed to comply with I.C. § 55-2507 requiring mandatory disclosures for certain conditions and material defects to real property.
V. FIRST CLAIM FOR RELIEF: FRAUD AND DECEIT
5.1 Plaintiffs re-allege all factual allegations in section 4 of this complaint for damages.
5.2 Defendants knowingly misrepresented and concealed material facts from the Plaintiffs.
5.3 Plaintiffs were induced into action by the Defendants concealment and misrepresentations of material fact.
5.4 Further, Defendants' fraud and deceit have caused direct and substantial injury to Plaintiffs.
5.5 Defendants' fraudulent and deceitful acts are continuing to cause direct and substantial injury to Plaintiffs.
VI. SECOND CLAIM FOR RELIEF: INTENTIONAL MISREPRESENTATION
6.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.
6.2 Defendants' intentionally misrepresented several material defects to the Plaintiffs'.
6.3 Plaintiffs' were deceived by these intentional misrepresentations.
6.4 Further, Defendants' intentional misrepresentations have caused direct and substantial injury to Plaintiffs.
6.5 Defendants' intentional misrepresentations are continuing to cause direct and substantial injury to Plaintiffs.
VII. THIRD CLAIM FOR RELIEF: VIOLATION OF I.C. § 55-2516
7.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.7.2 Further, Defendants' failure to truthfully fill out the disclosures in good faith on the real estate purchase agreement has caused direct and substantial injury to Plaintiffs.
7.3 Defendants' failure to comply with I.C. § 55-2516 has caused direct and substantial injury to Plaintiffs.
7.4 Defendants' failure to comply with I.C. § 55-2516 is continuing to cause direct and substantial injury to Plaintiffs.
VIII. FOURTH CLAIM FOR RELIEF: VIOLATION OF I.C. § 55-2507
8.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.
8.2 Defendants' negligent failure to comply with the mandatory disclosure forms in the real estate purchase agreement caused direct and substantial injury to Plaintiffs.
8.3 Defendants' negligent failure to disclose property defects impaired Plaintiffs ability to reasonably ascertain the costs of repair or remedial measures.
8.4 Defendant's negligent failure to comply with § 55-2507 has caused and is continuing to cause direct and substantial injury to Plaintiffs.
IX. PRAYER FOR RELIEF
Wherefore, Plaintiff prays as follows:9.1 Rescission of the real estate purchase agreement pursuant to § 55-2515; and
9.2 Actual and consequential Damages resulting to Plaintiffs as a result of the fraud and deceit; and
9.3 Actual and consequential Damages resulting to Plaintiffs as a result of the intentional misrepresentations by Defendants; and
9.4 Actual Damages caused to Plaintiffs pursuant to I.C. § 55-2517; and
9.5 Plaintiffs' costs and reasonable attorney's fees; and
9.6 For other such relief the Court may deem just and equitable.
X. DEMAND FOR A JURY TRIAL
10.1 Plaintiffs demand a jury trial.
STATE OF WASHINGTON ) )ss. County of Spokane )
WADE HULSIZER, being first duly sworn upon oath, deposes and states: I am the plaintiff in the foregoing action and I have read the Complaint for Rescission and Damages and believe the same to be true and correct.
Dated this 30 day of July, 2004.
SUBSCRIBED AND SWORN to before me this 30 day of July, 2004.
STATE OF WASHINGTON ) )ss. County of Spokane )
BEVERLY OHLHAUSEN, being first duly sworn upon oath, deposes and states: I am the plaintiff in the foregoing action and I have read the Complaint for Rescission and Damages and believe the same to be true and correct.
Dated this 30 day of July, 2004.
SUBSCRIBED AND SWORN to before me this 30 day of July, 2004.
ORDER TO PROCEED IN FORMA PAUPERIS
Plaintiffs seek to file in forma pauperis a Complaint. Because it appears Plaintiffs lack sufficient funds to prosecute this action, the District Court Executive shall file the Complaint without payment of the filing fee.IT IS SO ORDERED.
DATED this 3rd day of August, 2004.
COMPLAINT FOR RESCISSION AND DAMAGES DEMAND FOR JURY
PLAINTIFFS by and through UNIVERSTY LEGAL ASSISTANCE, allege as follows:I. INTRODUCTION
This complaint is filed under the 28 U.S.C. § 1332. Plaintiffs seek redress of damages resulting from the misrepresentations of defendants regarding the conveyance of certain real property located in the State of Idaho. Plaintiffs seek damages and attorney's fees as allowed under state and federal law. Plaintiffs also seek damages and attorney's fees for Defendants' violations of the State of Idaho's Consumer Protection Act, I.C. § 48-601 et. seq. (hereafter CPA), Fraud, Intentional Misrepresentation, and Negligent Misrepresentation. Plaintiffs also seek damages under I.C. §§ 55-2507, 55-2516, and 55-2517 for failure to properly disclose defects in the property and for failure to act in good faith.
II. JURISDICTION
2.1. Jurisdiction is conferred on this Court by 28 U.S.C. § 1331, § 1337, and § 1332. Supplemental jurisdiction exists for state law claims pursuant to 28 U.S.C. § 1367. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b).
2.2. Plaintiffs currently reside in the State of Idaho.
2.3. Defendants currently reside in the State of Washington.
2.4. The amount in controversy exceeds $75,000.
III. PARTIES
3.1. Plaintiffs, WADE HULSIZER and BEVERLY P. OHLHAUSEN, (hereinafter Plaintiffs) are married and reside in the City of Post Falls, Idaho.
3.2. Defendants, JETHRO W. ALLEN and MONICA ALLEN, (hereinafter Defendants) are married and reside in the City of Usk, Washington. All acts, practices, and/or omissions alleged herein which benefited either Jethro Allen or Monica Allen also benefited their marital community.
IV. FACTUAL ALLEGATIONS
4.1 Defendants owned real property located at 2749 W. Fisher Avenue, Post Falls, Idaho.4.2 This real property (hereinafter property) constituted a single family residence and large barn built on approximately five acres.
4.3 The residence consists of a main floor with three bedrooms and one bathroom, a basement, and a metal roof constructed over an existing tar roof.
4.4 The construction of the metal roof was done by Defendants without proper permit, inspection, or professional assistance.
4.5 On information and belief, Defendants' constructed and installed the roof themselves while residing in the residence.
4.6 On information and belief, Defendants' had been marketing the property as for sale since approximately early 2002.
4.7 In the summer of 2003, Plaintiffs contacted the Defendants through their real estate agent regarding purchasing the property.
4.8 Plaintiffs were shown the home by Defendants and Defendants' real estate agent.
4.9 On July 12, 2003, Defendants had completed a property disclosure form, pursuant to I.C. § 55-206.
4.10 Defendants represented in the property disclosure form that as of that date:
a. Fireplace and fireplace insert worked;
b. Pellet stove in the house was without any defects and in working order;
c. The chimney to the fireplace was cleaned annually by the Defendants;
d. Defendants were unaware of any drainage problems with the property;
e. No plumbing problems;
f. No moisture or water intrusion or related damage to any portion of the property;
g. No mold-related problems on any interior portion of the property;
h. No inspection had been done for the existence of any mold;
i. No substantial modifications had been done to the property without proper permits;
j. No pest infestation or damage to any part of the property;
k. No encroachments, easements, zoning violations;
l. No lot line disputes other than along one property boundary;
m. No receipt of government notices affecting the property;
n. No structural problems with any improvements;
o. No structural problems with the foundation.
4.11 Plaintiffs and Defendants closed on the sale of the property on September 5, 2003.
4.12 Defendants prevented Plaintiffs from entering or taking possession of the premises for several days after the closing.
4.13 After taking possession of the premises, Plaintiffs discovered:
a. An illegally constructed and unusable chimney for the fireplace and pellet stove;
b. The chimney had not been cleaned for years;
c. Various drainage problems;
d. A septic system had been put in with no permit;
e. Plumbing problems;
f. Moisture leaks in and around the fireplace brick work;
g. Moisture seepage through the foundation of the residence;
h. Condensation problems in the walls, windows, and ceiling resulting in severe wood decay;
i. Inadequate roof ventilation;
j. Moisture and seepage caused damage to the foundation, windows, floors, and walls of the house;
k. Soggy and moldy walls, ceiling, and floor around the fireplace;
l. Severe insect damage to wood panel wall in the living room, which had been covered by a large framed picture when Plaintiff had visited the house prior to deciding to make an offer of purchase.
m. All fence lines were not aligned with the true lot lines, including an encroachment upon the county right of way;
n. Severe water seepage through the foundation.
4.14 In deciding to purchase the property, Plaintiffs relied upon the written representations of Defendants in the property disclosure form regarding the condition of the residence and property.
4.15 Defendants fraudulently and deceitfully concealed or failed to disclose material defects concerning the property.
4.16 Defendants actively and intentionally misrepresented to Plaintiffs the condition of the house by concealing:
a. Wat damage,
b. Insect damage, and
c. Mold problems.
4.17 Defendants were negligent in their disclosure of said material defects in the residence and with the property in violation of I.C. § 55-2517.
4.18 Defendants failed to act in good faith as required by I.C. § 55-2516.
4.19 Defendants failed to comply with I.C. § 55-2507 requiring mandatory disclosures for certain conditions and material defects to real property.
V. FIRST CLAIM FOR RELIEF: FRAUD AND DECEIT
5.1 Plaintiffs re-allege all factual allegations in section 4 of this complaint for damages.
5.2 Defendants knowingly misrepresented and concealed material facts from the Plaintiffs.
5.3 Plaintiffs were induced into action by the Defendants concealment and misrepresentations of material fact.
5.4 Further, Defendants' fraud and deceit have caused direct and substantial injury to Plaintiffs.
5.5 Defendants' fraudulent and deceitful acts are continuing to cause direct and substantial injury to Plaintiffs.
VI. SECOND CLAIM FOR RELIEF: INTENTIONAL MISREPRESENTATION
6.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.
6.2 Defendants' intentionally misrepresented several material defects to the Plaintiffs'.
6.3 Plaintiffs' were deceived by these intentional misrepresentations.
6.4 Further, Defendants' intentional misrepresentations have caused direct and substantial injury to Plaintiffs.
6.5 Defendants' intentional misrepresentations are continuing to cause direct and substantial injury to Plaintiffs.
VII. THIRD CLAIM FOR RELIEF: VIOLATION OF I.C. § 55-2516
7.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.7.2 Further, Defendants' failure to truthfully fill out the disclosures in good faith on the real estate purchase agreement has caused direct and substantial injury to Plaintiffs.
7.3 Defendants' failure to comply with I.C. § 55-2516 has caused direct and substantial injury to Plaintiffs.
7.4 Defendants' failure to comply with I.C. § 55-2516 is continuing to cause direct and substantial injury to Plaintiffs.
VIII. FOURTH CLAIM FOR RELIEF: VIOLATION OF I.C. § 55-2507
8.1 Plaintiffs re-allege all factual allegations in Section 4 of this complaint for damages.
8.2 Defendants' negligent failure to comply with the mandatory disclosure forms in the real estate purchase agreement caused direct and substantial injury to Plaintiffs.
8.3 Defendants' negligent failure to disclose property defects impaired Plaintiffs ability to reasonably ascertain the costs of repair or remedial measures.
8.4 Defendant's negligent failure to comply with § 55-2507 has caused and is continuing to cause direct and substantial injury to Plaintiffs.
IX. PRAYER FOR RELIEF
Wherefore, Plaintiff prays as follows:9.1 Rescission of the real estate purchase agreement pursuant to § 55-2515; and
9.2 Actual and consequential Damages resulting to Plaintiffs as a result of the fraud and deceit; and
9.3 Actual and consequential Damages resulting to Plaintiffs as a result of the intentional misrepresentations by Defendants; and
9.4 Actual Damages caused to Plaintiffs pursuant to I.C. § 55-2517; and
9.5 Plaintiffs' costs and reasonable attorney's fees; and
9.6 For other such relief the Court may deem just and equitable.
X. DEMAND FOR A JURY TRIAL
10.1 Plaintiffs demand a jury trial.
STATE OF WASHINGTON ) )ss. County of Spokane )
WADE HULSIZER, being first duly sworn upon oath, deposes and states: I am the plaintiff in the foregoing action and I have read the Complaint for Rescission and Damages and believe the same to be true and correct.
SUBSCRIBED AND SWORN to before me this 30 day of July, 2004.
STATE OF WASHINGTON ) )ss. County of Spokane )
BEVERLY OHLHAUSEN, being first duly sworn upon oath, deposes and states: I am the plaintiff in the foregoing action and I have read the Complaint for Rescission and Damages and believe the same to be true and correct.
SUBSCRIBED AND SWORN to before me this 30 day of July, 2004.