* Robert C. Lions, et ux, et al, v. Camille E. Evans, et al

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
ROBERT C. LIONS and NICOLE E.
MOORE, husband and wife, and the
marital community composed thereof, and
DARLENE MOORE, a single individual,
Appellants,
v.
CAMILLE E. EVANS, a single
individual,
Respondent,
STEPHANIE JONES, and “JOHN DOE”
JONES, a presumed marital community,
and H & N REAL ESTATE
CONNECTIONS, LLC, a Washington
limited liability company, dba
WINDERMERE REAL ESTATE/NCW,
Defendants.
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No. 40278-9-III
OPINION PUBLISHED
IN PART
LAWRENCE-BERREY, C.J. — Robert Lions and Nicole Moore, husband and wife,
and Darlene Moore (collectively, Moore) appeal the trial court’s order granting summary
judgment dismissing their fraudulent concealment, fraudulent misrepresentation, and
innocent misrepresentation claims against Camille Evans. The claims arise out of Evans’
sale of her custom home to Moore.
The facts of this case require us to clarify the fifth element of the Atherton
fraudulent concealment test—whether “a careful, reasonable inspection on the part of the
FILED
MAY 6, 2025
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
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purchaser would not disclose the defect.” Atherton Condo. Apartment-Owners Ass’n v.
Blume Dev. Co., 115 Wn.2d 506, 524, 799 P.2d 250 (1990). We reaffirm our prior
holding that such an inspection does not require residential purchasers to engage in an
exhaustive search for a defect that might not exist. We hold that a residential purchaser
may satisfy the fifth element of the Atherton inquiry by proving they took reasonable
steps toward discovering the existence or scope of the possible defect. What steps were
reasonable typically is a factual question and involves considering what the purchaser
reasonably believed at the time of the home purchase. We reverse the trial court’s
summary judgment order.
FACTS
In 2001, Camille Evans hired a contractor to build her custom home. One year
later she moved into it and, one year after that, she began noticing substantial cracks and
voids under the home’s foundation—much more than would be expected from normal
settling. In 2003, she hired Forsgren Associates, Inc. (Forsgren) to investigate the cause
of the settling and to recommend solutions. In 2004, she filed suit against her contractor.
Forsgren had discovered fill material under Evans’ home and tension cracks in the
crawlspace beneath it. The engineering firm also discovered cattails growing below the
adjacent property, indicating that water was flowing through the fill.
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Forsgren determined that the problem required a two-part solution. The first part
required that the portion where the foundation had settled be raised and several helical
piers be placed into the native soil and connected to the foundation. Forsgren completed
this work for Evans in 2003. The second part required the fill under the house to be
stabilized with a subsurface pile wall to prevent future sliding of the fill material. In a
declaration filed in the 2004 lawsuit, Evans’ engineer explained why such a wall was
needed: “Stabilization of the fill material is essential, as the helical piers could buckle
and compromise the home.” Clerk’s Papers (CP) at 135 (emphasis added).
The need for slope stabilization was confirmed by Nelson Geotechnical
Associates, Inc. (NGA), a separate engineering firm hired by Evans. NGA performed an
exhaustive investigation of the problem and detailed its findings and recommendation in
a comprehensive 2004 report to Evans. NGA determined that the home was on a thick
layer of unstable fill that was continuing to slide. The report stated:
The fill is moving very slightly in a general west to northwest direction and
consolidating under its own weight and the loads from the residence and
pool. The rate of fill movement, although slight, could be accelerated by
external factors such as weather and human activity. In that case a major
failure of the fill mass that would significantly affect the property and the
residence could take place without major warning signs.
. . . [W]ithout stabilizing the fill mass, the Helical piers may lose
confinement as the fill pulls away from the pie[r]s, thus causing the piers to
buckle, which in turn would cause the residence to experience major
distress.
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CP at 188 (emphasis added).
The 2004 report recommended that a subsurface pile wall be constructed and
stated that such a “wall should stop the lateral movement of the fill mass and prevent
future sliding above the wall location.” CP at 188. Nothing in the report supported the
notion that the fill was stable or that a lack of cracks in the house over a period of time
meant that the fill stabilized. In short, the fill was moving slightly and would continue to
move if not stabilized.
Evans settled her lawsuit against her contractor. Despite the warnings from both
Forsgren and NGA, Evans did not have the subsurface pile wall installed. In a deposition
connected with this case, Evans admitted she did not have any information to refute the
conclusion that a subsurface pile wall was necessary.
Years later, in 2017, Evans listed her home for sale and completed a Form 17
Disclosure Statement for potential buyers to review. One of the required disclosures
asked if the property contained fill material. Evans disclosed that a portion of the lot
contained fill material, that she was advised to install helical piers to stabilize the
foundation, and that a contractor had raised a corner of the house 4.5 inches, drove 13
piers into the native soil, and attached the piers to the foundation. She concluded, “I have
no reason to believe that there are any issues with the stability of the foundation of the
home.” CP at 23 (emphasis added).
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In addition to disclosing the construction of the piers, Evans attached letters from
two licensed engineers—Forsgren and Structural Phil LLC (SPL)—and a letter from the
contractor who had installed the piers.
The Forsgren letter was written in 2011 and discussed its 2003 investigation, the
work done by the contractor, and explained it had since inspected the work and the
“foundation and home are stable due to the corner being stabilized with engineered
helical piers.” CP at 28. The SPL letter explained that one of its engineers had tested the
soil and it was found to be “a good bearing material,” and the repair to the foundation
would provide a “stable and permanent support for this house.” CP at 29-30. The
contractor letter noted that its installation of the piers had been overseen by a Forsgren
engineer. None of the letters alluded to the need for or the absence of a subsurface pile
wall.
In the spring of 2017, Moore signed a purchase and sale agreement to buy the
home. Moore hired a home inspector to perform a prepurchase inspection. The inspector
prepared an extensive report and, in the report, included pictures showing large gaps
between a portion of the foundation and the soil. The inspector surmised that the gaps
were possibly caused by erosion or settlement and recommended an evaluation by a
qualified geotechnical engineer.
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Moore then contacted four engineering firms. One of the firms, Forsgren,
responded that it did not have any structural engineers available to inspect the foundation
and recommended that Moore contact SPL or Pacific Engineering.
Moore contacted Pacific Engineering. Mike Rolfs, the principal engineer at the
firm, provided some informal opinions, said that the 2011 letter from Forsgren was
reassuring, and said that if his company was to do an onsite inspection, it would hire a
geotechnical engineer and a structural engineer, and an adequate inspection “would take
weeks to complete and is not feasible in your short inspection window.” CP at 107.
Rolfs recommended that Moore contact NGA.
Moore then spoke to NGA’s president, David Nelson, who disclosed that his
company had done stabilization work on the property in the past but said he needed
Evans’ paperwork1 before he could give an opinion, and the opinion would cost between
$2,000 and $3,000.
In a text message between Evans’ realtor and Evans, the realtor informed Evans
that Nelson would not talk with Moore without Evans’ e-mail permission. There is no
evidence that Evans gave Nelson e-mail permission to talk to Moore. When Moore asked
1 It is unclear what “paperwork” refers to. Based on context, we construe
“paperwork” as information from Evans about what stabilization work had been
performed.
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Evans to pay for NGA’s $2,000 to $3,000 opinion, Evans countered that she would pay
one-half but only after Nelson gave a firm price.
Moore also contacted SPL, who helped resolve the impasse. On June 2, 2017,
Evans agreed to pay the cost of injecting polyurethane foam to fill the large gaps between
the foundation and soil, shown in the prepurchase inspection. According to a June 19,
2017 letter from SPL to Evans,2 the “foam [would be] a good solution [because it]
expands as it cures to fill cavities and actually provides a significant bearing pressure . . .
[that will] provide stability to this residence.” CP at 161.
Two years after the sale closed, the home’s kitchen floor receded about one-half
inch from the northwest wall. Moore contacted NGA and learned that NGA had prepared
a report about the settling problem in 2004, but NGA would not provide the actual report
without Evans’ permission. Evans then gave NGA permission to disclose the report to
Moore. Upon learning that a subsurface pile wall was necessary to stabilize the fill and
that Evans had not installed the wall, Moore filed this lawsuit.
Moore’s complaint asserted three causes of action against Evans: fraudulent
concealment, fraudulent misrepresentation, and innocent misrepresentation. The parties
conducted discovery, and Evans moved for summary judgment dismissal. Evans
2 We presume the letter was written for Evans to give to Moore to facilitate the
closing, which occurred on June 28, 2017.
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primarily argued that Moore had notice of the settling issues but failed to conduct a
careful and reasonable inspection, which according to Moore’s own inspector, required
an evaluation from a geotechnical engineer. The trial court agreed and summarily
dismissed the three causes of action.
Moore appeals the dismissal of those claims to this court.
ANALYSIS
A. STANDARD OF REVIEW
We review summary judgment orders de novo and engage in the same analysis as
the trial court. Keck v. Collins, 184 Wn.2d 358, 370, 357 P.3d 1080 (2015). That is, we
consider the evidence and all reasonable inferences in the light most favorable to the
nonmoving party. Rinehold v. Renne, 198 Wn.2d 81, 96, 492 P.3d 154 (2021). Summary
judgment is appropriate only if the submitted pleadings show that there is no genuine
issue as to any material fact. CR 56(c). A genuine issue of material fact exists when
reasonable minds could differ on the facts that control the outcome of the case. Dowler v.
Clover Park Sch. Dist. No. 400, 172 Wn.2d 471, 484, 258 P.3d 676 (2011).
With these standards in mind, we address whether summary judgment dismissal
was appropriate on each of Moore’s three causes of action.
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B. FRAUDULENT CONCEALMENT
A seller of a residential dwelling has a duty to inform a purchaser of a defect when
“(1) the residential dwelling has a concealed defect; (2) the vendor has knowledge of the
defect; (3) the defect presents a danger to the property, health, or life of the purchaser;
(4) the defect is unknown to the purchaser; and (5) the defect would not be disclosed by a
careful, reasonable inspection by the purchaser.” Alejandre v. Bull, 159 Wn.2d 674,
689, 153 P.3d 864 (2007); see also Atherton, 115 Wn.2d at 524; Obde v. Schlemeyer,
56 Wn.2d 449, 452, 353 P.2d 672 (1960).
Evans challenges each of the five fraudulent concealment elements. For the
reasons explained below, we disagree with her challenges.
1. Concealed defect
Evans argues there was no defect when she sold her home in 2017, given that it
took Moore two years to notice any settling problems. This argument is disingenuous.
In a November 2004 declaration filed in her lawsuit against her contractor, Evans
stated:
Forsgren analyzed the problem and determined that two phases of
engineering work would be required to save the house. The first phase was
to install several supporting helical piers under the foundation of the house,
to jack up the house. Forsgren completed this work in 2003. The second
phase of engineering required is to stabilize the lot itself. . . .
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. . . I then hired Nelson Geotechnical Associates [NGA], which is
currently working on engineering solutions for phase two of the
remediation.
CP at 119 (emphasis added).
From the 2004 NGA report, Evans also knew that the fill under her home’s
foundation was continuing to slide. The continued sliding of the fill was confirmed in
2017 by the prepurchase inspection report, which reported large gaps between the
northwest foundation of her home and the soil. Evans knew she did not complete the
second step, which in her own words was “required to save the house.” CP at 219. The
failure to complete the necessary repair was a concealed defect.3
2. Seller’s knowledge of defect
Evans claims she had forgotten all about the second step of the repair by the time
she sold the house in 2017. We are unmoved by this claim. When, on summary
judgment, a “fact” is particularly within the knowledge of the moving party, and where
this “fact” might reasonably be disbelieved by a jury, the matter should proceed to trial to
permit the nonmoving party to impeach the witness directly through cross-examination or
3 Evans makes much ado about the reluctance of any engineer to guaranty that the
subsurface pile wall would hold. Her argument is a red herring. No repair lasts forever.
What was guaranteed is that the fill would continue sliding and further sliding risked the
piers buckling and compromising the home. This is why the pile wall was required.
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indirectly through inferences drawn from other evidence. Acosta v. City of Mabton,
2 Wn. App. 2d 131, 138, 408 P.3d 1095 (2018).
Evans also argues she told her realtor in a text exchange that she was willing to
disclose the 2004 NGA report to Moore. A jury might reasonably believe otherwise. In
the same text exchange, Evans’ realtor told Evans that NGA’s president, Nelson, would
not talk with Moore without Evans’ consent and then clarified that Nelson needed the
consent in an e-mail. The fact that Evans did not provide e-mail consent to Nelson
supports a reasonable inference that Evans changed her mind and was unwilling to risk
the sale unraveling by Nelson sharing the 2004 NGA report with Moore.
Evans further claims that one could not know why settling had begun to occur
after several years. We disagree. The 2004 NGA report explains why. The 13 helical
piers provided only temporary support for the foundation; thus, the home would not show
signs of problems until one or more of the piers buckled. That it took years for the fill to
slowly slide and buckle enough piers to cause the foundation to drop is not surprising.
As noted previously, nothing in the 2004 NGA report warranted Evans believing that the
fill would stop sliding or that the risk of pier buckling would simply go away.
3. Finding of danger
Evans argues the trial court did not make any express finding of danger. Given
our de novo review, the lack of or presence of trial court findings in a summary judgment
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order are superfluous. Chelan County Deputy Sheriffs’ Ass’n v. County of Chelan,
109 Wn.2d 282, 294 n.6, 745 P.2d 1 (1987). The 2004 NGA report warns that continued
fill movement could cause the helical piers to buckle and compromise the home.
4. Defect is unknown to buyer
The trial court found that Moore had knowledge that there was a problem with the
foundation and that a geotechnical evaluation was recommended. The record supports
the trial court’s finding, but knowledge of a general problem, reasonably believed to have
been remedied, does not impute to the buyer knowledge of the actual, unknown defect.
The prepurchase inspection found large gaps between the foundation in the
northwest portion of the home and the dirt. But two engineers familiar with the
property—Forsgren and SPL—had issued previous reports attesting to the stability and
adequacy of the 2003 foundation repair. But more significantly, prior to closing, SPL
attested in writing to the adequacy of the polyurethane foam repair agreed to by the
parties, describing the repair as one that would provide stability for the residence. The
letter contained a stamp across the engineer’s signature, attesting to his status as a
“Professional Engineer.” CP at 161.
What Moore (and SPL) did not know was what Evans had not disclosed: the 2003
foundation repair was only a partial repair without the subsurface pile wall. Moore did
not know this critical fact.
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5. Careful, reasonable inspection
Evans argues that Moore did not conduct a careful, reasonable inspection once the
soil problem was noted in the prepurchase inspection report. She argues that a careful,
reasonable inspection required Moore to hire a geotechnical engineer to evaluate the
problem and points to the recommendation from Moore’s prepurchase inspection report.
We disagree that this fifth element can be decided as a matter of law, given the care that
Moore took prior to closing the purchase.
In Atherton, the court explained what it meant by a careful, reasonable, inspection:
“[I]n those situations where a purchaser discovers evidence of a defect, the purchaser is
obligated to inquire further. Simply stated, fraudulent concealment does not extend to
those situations where the defect is apparent.” 115 Wn.2d. at 525. Atherton made clear
that the rule of caveat emptor no longer applied to residential sales of property “‘to the
complete exclusion of any moral and legal obligation to disclose material facts not
readily observable upon reasonable inspection by the purchaser.’” Id. at 523 (emphasis
added) (quoting Hughes v. Stusser, 68 Wn.2d 707, 711, 415 P.2d 89 (1966)). Were we to
hold, as a matter of law, that the rule in Atherton requires a residential buyer to hire a
specialized engineer to find defects hidden beneath a home’s foundation, our holding
would be inconsistent with the softening of caveat emptor, as described in Atherton.
Consistent with this, we affirm that residential buyers do not need to engage in an
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exhaustive search for a defect that may not exist. Douglas v. Visser, 173 Wn. App. 823,
834, 295 P.3d 800 (2013). We clarify that a residential purchaser may satisfy the fifth
element of the Atherton rule by proving they took reasonable steps toward discovering
the existence or scope of the possible defect.4 What steps were reasonable is typically a
factual question and involves considering what the purchaser reasonably believed at the
time of the home purchase.
Here, a rational trier of fact could find that Moore took reasonable steps toward
discovering the existence or scope of the possible defect. After the prepurchase
inspection report, Moore called four engineers, including the two engineers who knew,
but did not advise Moore, that the property needed a subsurface pile wall. Without
written consent from Evans to discuss this with Moore, the silence of the engineers was
understandable.
A rational trier of fact could find that Moore reasonably believed that the soil was
stable and the foundation problem would be fixed after the polyurethane foam was
injected into the gaps under the foundation. After all, Evans had provided Moore
4 We note that the second and third elements of the Atherton rule require a
residential purchaser to prove that the residential seller had knowledge of a serious
defect. Where a seller has knowledge of a serious defect and elects not to disclose it to
the purchaser, the seller knows that the purchaser will likely suffer substantial harm. In
such a situation, placing a duty on the purchaser to make a reasonable inquiry strikes a
proper balance between the culpable seller and the typical home buyer.
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assurances that the soil was stable in her disclosures, which included letters from two
engineers and the contractor who did the 2003 repair. In addition, just before the sale
closed, SPL provided written confirmation that injecting polyurethane foam to fill the
gaps shown in the prepurchase inspection was a “good solution,” and the “procedure will
perform as advertised to provide stability to this residence.” CP at 161.
We conclude that the trial court erred in summarily dismissing Moore’s fraudulent
concealment claim.
A majority of the panel having determined that only the foregoing portion of this
opinion will be printed in the Washington Appellate Reports and that the remainder,
having no precedential value, shall be filed for public record pursuant to RCW 2.06.040,
it is so ordered.
MISREPRESENTATION CLAIMS
Negligent misrepresentation5 has six elements: (1) the defendant gave false
information for others’ guidance, (2) the defendant knew or should have known that the
information was supplied to guide the plaintiff in their business transactions, (3) the
5 On appeal, Moore changes her “innocent misrepresentation claim” to a
“negligent misrepresentation” claim. Evans does not object to this change. Because of
the similarity between the two theories, Moore might successfully move to amend the
complaint. We exercise our discretion to determine whether the theory would be viable,
given the record here. We note that “innocent misrepresentation” is not a cause of action
in Washington. Hoffman v. Connall, 108 Wn.2d 69, 77-78, 736 P.2d 242 (1987).
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defendant was negligent in obtaining or communicating the false information, (4) the
plaintiff relied on the false information, (5) that reliance was reasonable, and (6) the false
information proximately caused the plaintiff damages. Ross v. Kirner, 162 Wn.2d 493,
499, 172 P.3d 701 (2007).
The elements of fraudulent misrepresentation are similar: (1) a representation of
an existing fact, (2) that representation was material, (3) the representation was false,
(4) the proponent of the representation knew it was false, (5) the proponent intended that
the other party act on the false representation, (6) the other party was ignorant of the
representation’s falsity, (7) the other party relied on the representation, (8) the other party
had the right to rely on the representation, and (9) the other party suffered damages due to
their reliance on the false representation. Stiley v. Block, 130 Wn.2d 486, 505, 925 P.2d
194 (1996).
In the Form 17 disclosure question about fill material, Evans disclosed the initial
problems with her foundation and the repairs made by the contractor, but stated, “I have
no reason to believe that there are any issues with the stability of the foundation of the
home.” CP at 23. Construing the evidence and all reasonable inferences in the light most
favorable to Moore, it is evident that all six elements of negligent misrepresentation and
all nine elements of fraudulent misrepresentation are met. Evans’ arguments concerning
these causes of action, similar to her arguments concerning fraudulent concealment, focus
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No. 40278-9-III
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on facts and inferences favorable to her. This is not the standard of review we employ
when reviewing summary judgment dismissals.
We conclude that the trial court erred in summarily dismissing Moore's fraudulent
concealment and fraudulent misrepresentation claims, and that sufficient facts exist to
make a negligent misrepresentation claim viable.
Reversed.
Lawrence-Berrey, C .J.
WE CONCUR:
Staab, J. 	Murphy, J.
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