## Facts

- Harry Fisher, an out-of-state lawyer unfamiliar with Alabama real estate markets, contacted Alabama Land Locators, Inc. seeking help finding plantation/hunting property.
- Locators’ agent, Timothy Speaks, provided Fisher information on multiple properties, including a 2,600-acre tract known as Comer Plantation.
- Speaks provided Fisher an appraisal prepared by appraiser Roger M. Pugh valuing the property at $919,000; the appraisal contained express limitations restricting its intended purpose and audience and was prepared at the request of Paul H. Thomas.
- Thomas owned Locators and also held an ownership interest in Comer Plantation, creating a potential conflict of interest.
- After inspecting the property and noting it needed extensive work, Fisher negotiated with the owners; using the appraisal value as a benchmark, the parties agreed to a $710,000 purchase price.
- Fisher signed a purchase agreement and paid $50,000 in earnest money, which Locators held in its escrow account.
- Fisher later discovered an arithmetic error in the appraisal that reduced the appraised value by nearly $100,000; he attempted to terminate the contract and demanded return of the earnest money.
- Locators, through Speaks, refused to return the earnest money; the sellers did not release Fisher from the contract on Fisher’s proposed terms.
- Fisher sued, alleging (among other theories) negligent misrepresentation against Pugh; suppression and breach of fiduciary duty against Speaks, Thomas, and Locators; and breach of fiduciary duty by Locators as escrow agent.
- The trial court entered summary judgment for all defendants on all claims; Fisher appealed.

## Issues

1. Whether an appraiser who issued an appraisal with explicit limitations for a specified client and purpose owed a negligence-based duty to a nonclient prospective purchaser who relied on the appraisal.
2. Whether evidence created a jury question that the broker, its agent, and its owner stood in a fiduciary or confidential relationship with the purchaser and had a duty to disclose material facts, supporting claims for suppression and breach of fiduciary duty.
3. Whether the brokerage, acting as escrow agent for earnest money, could be liable for breach of fiduciary duty based on its refusal to return the deposit amid disputed facts about contract termination and entitlement to funds.
4. Whether summary judgment was proper on the remaining tort and contract claims against the seller entities, owners, and other theories against the broker and agent.

## Decision

- Affirmed summary judgment for the appraiser (Pugh) on the negligent-misrepresentation/negligent-appraisal theory.
- Reversed summary judgment on Fisher’s claims against Speaks, Thomas, and Locators alleging suppression and breach of fiduciary duty.
- Reversed summary judgment on Fisher’s claim that Locators breached fiduciary duties in its role as escrow agent for the earnest money.
- Affirmed summary judgment on all remaining claims against the other defendants and on other theories not included in the reversals.
- Remanded for further proceedings.

## Legal Principles

- A professional’s negligence-based liability to nonclients for misinformation generally extends only to persons the professional intended to benefit or knew would rely; express limitations in the work product and lack of evidence of intended reliance can defeat any duty to a third party.
- A fiduciary or confidential relationship may arise when one party places trust and confidence in another who accepts that trust, particularly where there is unequal knowledge; when such a relationship exists, the fiduciary has duties of disclosure and loyalty and may be liable for suppression of material facts.
- Fraudulent suppression requires a duty to disclose; that duty can arise from a fiduciary/confidential relationship or from the particular circumstances of the transaction.
- An escrow agent holding earnest money generally owes fiduciary duties to the parties to handle and disburse funds properly; disputed facts regarding contract rights and termination can preclude summary judgment on an escrow-related fiduciary-duty claim.

## Conclusion

The court held that the appraiser owed no actionable duty to the purchaser where the appraisal’s intended use and audience were expressly limited and there was no substantial evidence the appraiser expected purchaser reliance, but it allowed the purchaser to proceed to a jury on suppression and fiduciary-duty claims against the broker/agent and on a fiduciary-duty claim against the broker as escrow agent.


Fisher v. Comer Plantation, Inc., 772 So. 2d 455 (Ala. 2000)