Gordon Rees Scully Mansukhani Partner Mia Obciana and Senior Counsel Kristen Yamamoto obtained the dismissal of a complaint filed against a real estate appraisal company in Hawaii.
On September 20, 2023, plaintiffs filed a complaint alleging the appraisal company engaged in fraud, unfair and deceptive business practices, was negligent in drafting the appraisal report, and breached its fiduciary duty toward the plaintiffs seeking to buy a property.
Gordon Rees Scully Mansukhani's attorneys filed a motion to dismiss the complaint on the grounds that it failed to allege fraud with particularity and on the basis that the appraiser did not owe any duty to prospective buyers as it had been retained by the bank to secure financing. The motion further argued that the plaintiffs could not have relied on the appraisal report in their decision to purchase the property as the purchase contract had been executed a month before the appraisal report was completed.
The court agreed and dismissed the complaint without leave to amend. This ruling shows that an appraiser does not owe a duty to the parties to a real estate purchase contract without reliance or other facts showing the parties contracted the appraisal report for a specific purpose.