## Facts

- Eddie and Eva Bloor bought a rural home and approximately five acres in Cowlitz County, Washington, from Robert and Charmaine Fritz.
- The Fritzes had moved out and used a property manager; Lance Miller (a licensed real estate agent) was involved through property-management and real-estate entities and later served as a dual agent for both sides in the sale.
- During a prior tenancy, a narcotics task force executed a search warrant and found marijuana cultivation and evidence of methamphetamine manufacturing on and under the home’s rear deck and in a hot tub; the site was processed as a meth lab.
- Trial evidence supported findings that the Fritzes and Miller learned of the drug activity through the raid, publicity, and communications with law enforcement.
- When preparing to sell, the Fritzes completed the statutory seller disclosure statement indicating the property had not been used to manufacture illegal drugs; Miller provided the disclosure to the Bloors and did not disclose the raid or drug manufacturing history.
- After closing and moving in, the Bloors learned the home was known locally as a “drug house,” contacted authorities, and a health inspection found contamination, declared the home unfit for occupancy, and ordered them to vacate.
- The Bloors incurred relocation and replacement costs, left personal property behind, hired a certified contractor, and experienced emotional distress and anxiety.
- The Bloors sued the Fritzes, Miller and related entities, and Cowlitz County, alleging misrepresentation and consumer-protection violations.

## Issues

1. Whether substantial evidence supported findings that the Fritzes negligently misrepresented the property’s condition and that Miller knew of the drug manufacturing and failed to disclose a material fact.
2. Whether Miller’s nondisclosure and misrepresentation constituted an unfair or deceptive act in trade or commerce under the Washington Consumer Protection Act (CPA), ch. 19.86 RCW.
3. Whether rescission was proper and, if so, whether the trial court’s damages and attorney-fee awards were calculated consistently with rescission’s restitutionary purpose.

## Decision

- The Court of Appeals affirmed the liability findings against the Fritzes for negligent misrepresentation based on inaccurate seller disclosures about prior drug manufacturing.
- The Court of Appeals affirmed findings that Miller failed to disclose a known material fact, negligently misrepresented the property’s condition, and violated the CPA.
- The Court of Appeals affirmed rescission as an available remedy given the undisclosed meth-lab history and resulting uninhabitability.
- The Court of Appeals remanded for recalculation of damages associated with rescission because the award exceeded what was necessary to restore the buyers to their pre-contract position.
- The Court of Appeals otherwise affirmed and directed corresponding attention on remand to ensure the attorney-fee award remained properly tied to the adjusted relief.

## Legal Principles

- A seller may be liable for negligent misrepresentation when supplying false information for the guidance of others in a transaction without reasonable care, including inaccurate responses on a real-estate disclosure form about known material defects.
- A prior methamphetamine lab and contamination affecting habitability and value constitutes a material fact requiring disclosure when known.
- A real-estate broker or agent with knowledge of a material defect has a duty to disclose it; nondisclosure in a dual-agency transaction can support negligent misrepresentation findings.
- Under the Washington CPA, nondisclosure or misleading conduct in real-estate services may be “unfair or deceptive” if it has the capacity to deceive a substantial portion of the public.
- Rescission is restitutionary: the remedy should return the parties to their pre-contract positions and may not place the injured party in a better-than-pre-contract position; damages must be limited to avoid overcompensation.

## Conclusion

The court upheld findings that the sellers’ inaccurate disclosure and the dual agent’s nondisclosure of the property’s meth-lab history supported negligent misrepresentation and CPA liability, and that rescission was appropriate, but it required recalculation of rescission-related damages to ensure restitution restored—rather than exceeded—the parties’ pre-contract positions.


Bloor v. Fritz, 143 Wash. App. 718, 180 P.3d 805 (Wash. Ct. App. 2008)