Hinson v. Forehead

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
07/27/2021 08:08 AM CDT
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Nebraska Court of Appeals Advance Sheets
30 Nebraska Appellate Reports
HINSON v. FOREHEAD
Cite as 30 Neb. App. 55Jeremy Hinson and Kelsie Hinson, husband
and wife, appellants, v. Cindy Forehead
and Ambassador Real Estate Company,
a Nebraska corporation, doing
business as Berkshire Hathaway
Home Services Ambassador
Real Estate, appellees.
___ N.W.2d ___
Filed July 20, 2021. No. A-20-370.
1. Summary Judgment: Appeal and Error. In reviewing a summary
judgment, an appellate court views the evidence in the light most favor-
able to the party against whom the judgment was granted, and gives
that party the benefit of all reasonable inferences deducible from the
evidence. An appellate court affirms a lower court’s grant of summary
judgment if the pleadings and admitted evidence show that there is no
genuine issue as to any material facts or as to the ultimate inferences
that may be drawn from those facts and that the moving party is entitled
to judgment as a matter of law.
2. Statutes: Appeal and Error. Statutory interpretation presents a ques-
tion of law, for which an appellate court has an obligation to reach
an independent conclusion irrespective of the decision made by the
court below.
3. Summary Judgment. In the summary judgment context, a fact is mate-
rial only if it would affect the outcome of the case.
4. Statutes. A statute’s meaning is determined based on its text, context,
and structure.
5. Statutes: Appeal and Error. Statutory language is to be given its plain
and ordinary meaning, and an appellate court will not resort to interpre-
tation to ascertain the meaning of statutory words that are plain, direct,
and unambiguous.
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 556. Statutes: Legislature: Intent. The court, in discerning the meaning of
a statute, should determine and give effect to the purpose and intent of
the Legislature as ascertained from the entire language of the statute
considered in its plain, ordinary, and popular sense.
7. Real Estate: Licensee: Agents. A licensee acting as a seller’s agent is
required to provide to a buyer or prospective buyer written disclosure of
adverse material facts actually known by the licensee under Neb. Rev.
Stat. § 76-2417(3)(a) (Reissue 2018).
8. Contracts: Real Estate: Words and Phrases. Adverse material facts
under Neb. Rev. Stat. § 76-2403 (Reissue 2018) include any fact which
significantly affects the desirability or value of the property to a party
and is not reasonably ascertainable or known to that party, and which
may include, but is not limited to, a fact pertaining to any environmen-
tal hazards affecting the property required by law to be disclosed, the
physical condition of the property, any material defects in the property,
any material defects in the title, or any material limitation on the client’s
ability to perform under the terms of the contract.
9. Real Estate: Licensee: Agents: Statutes. The duty of a licensee acting
as a seller’s agent to disclose adverse material facts to a buyer or pro-
spective buyer pertaining to a property is not limited to circumstances
when the licensee has actual knowledge of a material defect or that the
home needs extensive repair. Rather, the statutes contemplate whether
the licensee knew of any facts which significantly affected the desirabil-
ity or value of the property and which were not reasonably ascertainable
or known by the buyer or prospective buyer, pertaining to the physical
condition of the property or any material defects in the property.
10. Summary Judgment: Testimony. When the testimony of the parties is
in conflict and credibility is a factor, summary judgment is not proper.
11. Appeal and Error. An appellate court will not consider an issue on
appeal that was not passed upon by the trial court.
Appeal from the District Court for Douglas County: W.
Russell Bowie III, Judge. Reversed and remanded for further
proceedings.
Andrew M. Hollingsead, Michael J. Matukewicz, and Hattie
K. Miller of Liakos & Matukewicz, L.L.C., for appellants.
Dan H. Ketcham and Alexander D. Struck, of Engles,
Ketcham, Olson & Keith, P.C., for appellees.
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55Riedmann, Bishop, and Welch, Judges.
Bishop, Judge.
I. INTRODUCTION
Jeremy Hinson and Kelsie Hinson purchased a home from
Michael Bean and Deborah Bean in February 2018. The
Hinsons subsequently filed a complaint against the Beans
and several other defendants in the Douglas County District
Court alleging the existence of significant structural issues
related to the property which they claimed the defendants
failed to disclose to the Hinsons. Following a stipulated
dismissal of the Hinsons’ claims against some defendants,
the district court granted summary judgment in favor of the
remaining defendants, Cindy Forehead and Ambassador Real
Estate Company, doing business as Berkshire Hathaway Home
Services Ambassador Real Estate (Ambassador), which the
Hinsons now appeal. We reverse the judgment and remand the
cause for further proceedings.
II. BACKGROUND
During 2017, the Beans placed their home on the market
and made efforts to sell the property. In October 2017, after
several unsuccessful listings, Michael contacted Forehead, a
licensed real estate broker affiliated with Ambassador, hoping
to hire her to act as the sellers’ limited agent for the sale of the
home. Forehead met with Michael at the Beans’ home later in
October to discuss the hiring, and she was also given a tour of
the property during this meeting. On November 18, the Beans
and Forehead, acting on behalf of Ambassador, entered into a
“Listing Contract” appointing Forehead as the Beans’ agent
in the listing and sale of their home. The listing contract also
set the listing price for the property at $469,500. Forehead
provided to Michael an “Agency Disclosure Information for
Buyers and Sellers” form which listed the legal duties she and
Ambassador owed to the Beans as sellers and to prospective
buyers, including the duty to “disclose to a buyer otherwise
undisclosed adverse material facts about the property.” The
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55Beans also ­completed and provided to Forehead a “Seller
Property Condition Disclosure Statement” (disclosure state-
ment) that, in pertinent part, affirmed there were neither “any
structural problems with the structures on the real property”
nor “any moving or settling of” foundation, floor, or wall.
On November 29, 2017, Forehead listed the house for sale
and made it available for potential buyers to tour. Forehead
received several survey responses and other communications
from potential buyers, some of which contained concerns about
the condition of the Beans’ home, including some regarding
the property’s foundation. On December 6, a potential buyer,
Beau Starkel, requested through his agent, Melissa Boldt,
permission to have an inspection of the home done prior to
placing an offer, and the Beans allowed the inspection. Starkel
thereafter hired a company named “RamJack” to inspect the
Beans’ property. After giving Starkel permission to conduct an
inspection, Michael provided Forehead with a report from an
inspection conducted in May 2017 by Foundation-2-Rooftop,
Inc. On December 14, Boldt sent an email containing the
RamJack inspection report, estimate, and other accompany-
ing documents to Forehead following the completion of the
inspection. The report identified, in pertinent part, signs of
interior water intrusion, mold, and problems with the home’s
foundation. While Forehead confirmed that she received the
email containing the documents, she claimed she did not open
the email or review any of the attached documents. On January
4, 2018, Boldt contacted Forehead with an offer of $300,000 for
the Beans’ home, referencing that Starkel was “willing to take
on the work that they feel needs to be done to the property” that
included “the foundation work, replacing the rotted windows,
and fixing damaged drywall due to water damage.” Forehead
presented this offer to the Beans, and it was rejected without
further negotiation.
On January 6, 2018, the Hinsons entered into a pur-
chase agreement with the Beans to purchase the property for
$462,500. The Beans had provided the Hinsons with a copy of
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55the disclosure statement. On January 10, prior to closing, the
Hinsons hired Complete Inspection Services, LLC, to perform
an inspection of the home. The report given to the Hinsons
after the inspection noted, in pertinent part, “[e]vidence of
cracking . . . on right exterior of home, efflorescence noted
on front block wall in mechanical room” and recommended
“further review by qualified contractor for any repairs neces-
sary.” Based on this recommendation, the Hinsons hired Bruce
Harris, an engineer affiliated with e.Construct, USA-LLC
(e.Construct), to assess the home’s foundation. Harris’ report
noted several issues, but concluded that “[n]othing discussed
. . . would indicate that there are significant structural issues or
damage to the residence.” The Hinsons and the Beans agreed
to several addendums to the purchase agreement addressing
final concerns in the property, including mold remediation and
other maintenance work required before closing. The Hinsons
and the Beans agreed to remove an addendum that included the
Hinsons’ requests for permission to remove drywall covering a
“foundation crack on the south wall” of the property in order
to caulk that crack and to seal the “south wall exposed founda-
tion . . . with waterproof sealant.” The Hinsons’ purchase of
the property closed on February 12. After closing, Starkel came
to the home and informed the Hinsons of the inspection report
provided by RamJack that indicated structural defects in the
home’s foundation.
On July 24, 2018, the Hinsons filed a complaint in the district
court against the Beans, Forehead, Ambassador, Harris, and
e.Construct. They alleged six theories of recovery, including
fraudulent and negligent misrepresentation, fraudulent conceal-
ment, violations of Neb. Rev. Stat. § 76-2,120 (Reissue 2018),
breach of fiduciary duties, and negligence. The Hinsons sought
damages of at least $82,325 and other relief. Throughout the
remainder of 2018 and into 2019, the Hinsons had additional
inspections done to assess the nature and extent of the defects,
and the Hinsons received additional estimates for the cost of
necessary repairs.
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55On December 2, 2019, the district court entered an order dis-
missing with prejudice the Hinsons’ claims against the Beans,
Harris, and e.Construct pursuant to the Hinsons’ stipulation and
agreement to dismiss the claims against those defendants.
Subsequently, Forehead and Ambassador jointly filed a
motion for summary judgment, followed by a motion for sum-
mary judgment filed by the Hinsons. In considering the cross-
motions for summary judgment, the district court entered an
order on April 30, 2020, granting summary judgment in favor
of Forehead and Ambassador. The court initially noted that
the “central issue before the Court is whether Forehead had
knowledge of an adverse material condition.” It then addressed
whether there was a violation of Neb. Rev. Stat. § 76-2417(3)(a)
(Reissue 2018). It stated that for a seller’s agent to be liable for
the failure to disclose adverse material facts to a buyer under
§ 76-2417(3)(a), “an agent must have actual knowledge of a
material defect” in the real property. The court determined that
Forehead did not breach her duty as the Beans’ agent to the
Hinsons as prospective buyers, because she “did not have actual
knowledge of a material defect” in the Beans’ home. The court
referenced Forehead’s statement that she had not opened the
email from Boldt containing the RamJack documents and had
not opened the attached documents.
The district court further stated that “even if an agent is not
required to have actual knowledge of a material defect, the
information presented to Forehead would not have caused her
to believe that such a defect existed.” The court decided that
the “concerns” raised by other potential buyers about “set-
tling and potential problems with the foundation . . . did not
amount to facts indicating that there were major structural
issues that would need to be addressed.” (Emphasis in origi-
nal.) Identifying the numerous inspections that conflicted with
one another and Forehead’s testimony that she only reviewed
the report provided to her by Michael, the court determined
that “[a] difference of opinion [among inspection reports] does
not amount to actual knowledge of facts that would cause a
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55reasonably prudent person to believe that a material defect
existed.” (Emphasis in original.) The court thereafter found
that because “Forehead did not have knowledge of an adverse
material fact, she did not breach the only duty she owed to the
Hinsons under the circumstances” and granted summary judg-
ment in favor of Forehead and Ambassador “as to the Hinsons’
claim for violation of §76-2417.”
The district court also granted summary judgment in favor of
Forehead and Ambassador on the Hinsons’ claim that Forehead
and Ambassador violated § 76-2,120 by having knowledge
of an error, inaccuracy, or omission in the Beans’ disclosure
statement concerning a structural defect actually known by the
Beans. The court cited to its previous analysis of Forehead’s
lack of actual knowledge and further concluded there was
“no evidence that the Beans actually knew that the foundation
was in need of extensive repair.” (Emphasis in original.) The
court reasoned that since Forehead and the Beans lacked any
knowledge of errors in the Beans’ written disclosures, neither
Forehead nor Ambassador could be held liable for any such
error in the written disclosures.
Finally, in considering claims of negligence and breach of
fiduciary duty, the district court concluded that the “only duty
owed to the Hinsons by Forehead under the circumstances
was to disclose adverse material facts that she actually knew
of ” and that she did not breach this duty, “because she did
not have knowledge of the extent of repairs needed to fix
the foundation.” (Emphasis in original.) The court went on
to state, “Indeed, there appears to be a difference of opinion
even among the experts as to the nature and extent of repairs
needed.” The court concluded that since Forehead did not have
knowledge of an adverse material fact, “she did not breach
the only duty she owed to the Hinsons,” and that therefore,
Forehead and Ambassador were entitled to judgment as a mat-
ter of law as to the Hinsons’ claims of negligence and breach
of fiduciary duty.
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55In its April 30, 2020, “Order on Cross Motions for Sum­
mary Judgment,” the district court sustained Forehead’s and
Ambassador’s motion for summary judgment and overruled
the Hinsons’ motion for summary judgment. The case was dis-
missed with prejudice. The Hinsons timely filed this appeal.
III. ASSIGNMENT OF ERROR
On appeal, the Hinsons claim the district court erred in grant-
ing summary judgment in favor of Forehead and Ambassador
on the Hinsons’ claim that Forehead and Ambassador breached
§ 76-2417(3)(a) by failing to disclose to the Hinsons adverse
material facts actually known by Forehead and Ambassador.
IV. STANDARD OF REVIEW
[1] In reviewing a summary judgment, an appellate court
views the evidence in the light most favorable to the party
against whom the judgment was granted, and gives that party
the benefit of all reasonable inferences deducible from the
evidence. Sundermann v. Hy-Vee, 306 Neb. 749, 947 N.W.2d
492 (2020). An appellate court affirms a lower court’s grant
of summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from those
facts and that the moving party is entitled to judgment as a
matter of law. Id.[2] Statutory interpretation presents a question of law, for
which an appellate court has an obligation to reach an inde-
pendent conclusion irrespective of the decision made by the
court below. Chaney v. Evnen, 307 Neb. 512, 949 N.W.2d
761 (2020).
V. ANALYSIS
The Hinsons claim the district court erred in granting sum-
mary judgment in favor of Forehead and Ambassador because
the evidence presented, when construed in the light most
favorable to the Hinsons and affording the Hinsons all rea-
sonable inferences deducible from the evidence, created a
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55genuine issue of fact as to Forehead’s actual knowledge of
adverse material facts pertaining to the physical condition of
the property or any material defects in the property. Their
assignment of error challenges only that portion of the district
court’s decision related to the Hinsons’ claim against Forehead
and Ambassador under § 76-2417(3)(a); we limit our review
accordingly. We will first set forth the evidence in the record
related to Forehead’s knowledge and then consider the evi-
dence under the summary judgment standard.
1. Alleged Facts Related to
Forehead’s Knowledge
(a) Forehead’s Communications With Boldt
As noted previously, Forehead engaged in correspondence
with Boldt, who had acted as Starkel’s agent in probing a
prospective purchase of the Beans’ home. On December 6,
2017, Forehead spoke with Boldt over the phone. Forehead
testified at her deposition that during this conversation, Boldt
informed her that Starkel was interested in putting in an offer,
but that he knew “there [was] some work that needs to be
done, and his main concern [was] the foundation, and [he]
wants to make sure there [was] no water damage mainly to
the northeast corner of the house.” Boldt then asked Forehead
whether the Beans would permit Starkel to have an inspection
done on the house. In an email sent to Michael on December
6, Forehead relayed the request to have an inspection done,
noting again the concern regarding the foundation and water
damage while also stating that Boldt’s was “the second request
that [she has] had from an agent that wants to take someone in
to look at the foundation and water issues.” Michael consented
to the inspection. On December 14, Boldt called Forehead to
inform her that a copy of the inspection report would be for-
warded to her, and Boldt forwarded the report the same day
in an email that also stated, “Attached are the estimates and
other supporting documents for the structural inspection . . . .”
With respect to that email from Boldt, the following exchange
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55occurred during Forehead’s deposition between Forehead and
the Hinsons’ counsel:
Q. [by the Hinsons’ counsel:] What is Exhibit No. 4?
A. [by Forehead:] This is the e-mail that [Boldt] told
me that she had sent to me. She called me . . . on the
phone, and told me that she had the report, and that she
was sending it to me.
Q. Do you recall anything else she told you about the
report, and what she was sending you?
A. No.
Q. And when did . . . Boldt send this e-mail to you?
A. December 14th.
Q. And what did . . . Boldt say to you in the text of the
e-mail at the top?
A. It says — and I am not sure — I am not sure.
Attached are the estimates and other supporting docu-
ments for the structural inspection; is that what you’re
talking about?
Q. Correct.
....
A. Yes, she called me to let me know this was coming.
Q. Okay. And if you go down towards the bottom of
the e-mail, it appears that she was actually forwarding
you an e-mail from . . . Ram[J]ack?
A. Oh, yeah. Uh-huh.
Q. Okay. And if you look at the bottom of Page 2,
it indicates there were nine attachments to the e-mail,
correct?
A. It looks like there was, yes.
Q. And then the first of the attachments is actually
entitled capital E estimate, correct?
A. On here, yes, on the piece of paper, yes.
Q. Okay. What did you do when you got Exhibit
No. 4?
A. Well, first of all, when she called me I called the
seller and I said, We have an inspection report back
from the agent, . . . Boldt. And we had a conversation. I
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Cite as 30 Neb. App. 55don’t remember a lot of the conversation other than the
fact that we talk about the fact that there was no offer
with this.
Q. Okay.
A. It’s just an inspection report.
Q. Okay.
A. And [Michael] said he did not want to see it.
Q. Did you forward it to him?
A. No, I did not.
Q. So you didn’t even forward this e-mail?
A. I did not forward it to him.
Q. Did you open any of the attachments?
A. I did not open the e-mail.
Q. So based upon this e-mail, you knew that it was a
follow-up, or it came after . . . Boldt’s client having a
structural inspection of the property, correct?
A. Yes.
Q. And you at least read the text of the e-mail, correct?
A. I read the top part, but . . . when she called me I was
not at my computer. I was somewhere else. She called
me. I talked to her. She said she was sending the report.
Q. Okay. And that indicates right in the sentence there
that there was an estimate and other support documents
for the structural inspection, correct?
A. Yes.
Q. What’s your understanding of what . . . an esti-
mate is?
A. My understanding is that . . . if . . . an e-mail says
that there’s an estimate on it, that there’s a cost involved.
Q. Okay. More basic than that, what is an estimate?
A. An estimate is an estimate. If you have broken win-
dow, and someone comes out to look at it, they give you
a price to fix it.
....
Q. So here we knew that this estimate came in the
context of a follow-up to a structural inspection of the
property, correct?
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Cite as 30 Neb. App. 55A. Yes.
Q. So from this e-mail without opening the attachment
you could tell that that this engineer . . . from Ram[J]ack
had provided some cost estimate to do some kind of
repair . . . to the property, correct?
A. Yes.
Q. But this Exhibit 4 you did not forward to [Michael]
at his request, correct?
A. Yes.
Q. And you did not open it, correct?
A. I did not open it.
Q. Although you knew there was an estimate attached?
A. Yes.
The RamJack report forwarded to Forehead contained the
inspector’s observation report that read, in pertinent part:
The sever [sic] elevation changes are on the West wall
but all the foundation walls have settlement except the SE
back corner. Those elevations are showing zeros showing
no settling. . . . In a few different room[s] their [sic] are
cracks in the drywall most likely from the sever [sic] set-
tling. The front pillar has moved away from the founda-
tion approximately 1’ at this time. I have purposed [sic] to
install 2 piles to stabilize and possible recovery.
On January 4, 2018, Boldt sent a followup email to Forehead,
stating in part:
I sent over an offer for Jones Circle. The buyers are
very interested and love the neighborhood and lot. They
are willing to take on the work that they feel needs to be
done to the property. Mainly the foundation work, replac-
ing the rotted windows, and fixing damaged drywall due
to water damage.
Forehead forwarded this email to Michael, stating that she
received the email “with the earlier offer for $300,000” and
that “[t]he perception by agents and their buyers is that there
are problems with the property.” Our record does not include
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Cite as 30 Neb. App. 55further communications from Forehead after she informed
Boldt that the Beans rejected the offer.
(b) Communications With Other
Prospective Buyers’ Agents
Several other agents of prospective buyers communi-
cated with Forehead regarding the Beans’ property. Forehead
received an email on December 4, 2017, from an agent affili-
ated with Heartland Properties, Inc., reporting that “[i]t seemed
as if there had been some settling” and that settling “scared
the buyer.” An email sent on December 6 by an agent with
Nebraska Realty indicated that “[w]indows in family room
and basement on the North side of home are a concern of the
buyer,” and Forehead testified at her deposition that this agent
informed Forehead in a subsequent phone call that the potential
buyers were concerned that “[t]he trim around the windows
[had] come apart, and it look[ed] like . . . water [had] come
into the basement around the baseboards.” On December 7, a
different agent with Nebraska Realty sent an email, noting that
the house “[s]eemed a little rough around the edges” in that
there was “some decent cracking in the ceiling/walls in the
master bedroom” in addition to “wavy floors” and indications
of “some settling going on.” An agent with NP Dodge emailed
Forehead on December 14, describing in part that the home
“had some foundational issues/tilt slant in some parts.”
(c) Forehead’s Observations of Property
At her deposition, Forehead was asked whether she observed
any conditions while touring the property. She described the
home as “an older home” that she believed was built “[p]rior
to 1990.” She saw that “[o]ne of the pillars [of the front porch]
had moved slightly.” When asked if she observed anything of
note regarding the windows along the north wall of the prop-
erty, Forehead answered, “Nothing in particular. It’s an older
house.” She recounted that she “saw settling,” but she believed
it “typical of houses in that age category [to] have settling
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Cite as 30 Neb. App. 55cracks.” She recalled that the “floor sloped in the entryway”
and also “a little bit in the kitchen.” While she remembered
that Michael had told her about previous water damage caused
by a broken water heater or water softener, Forehead testified
that she did not recall seeing any other signs of water intrusion
during her tour.
(d) Foundation-2-Rooftop Report
In the email Forehead sent to Michael on December 6, 2017,
concerning Boldt’s request for permission to have an inspec-
tion done on the property, she also asked Michael, “Do you
have any reports on the basement[?] I know you had an inspec-
tion once on the property. Do you have anything that you can
share and what do you want me to tell the agent[?]” Forehead
acknowledged that Michael provided her the Foundation-2-
Rooftop report and that she “glanced at it,” recalling “[t]ypical
inspection things that needed to be repaired, a few things” that
she described as “[n]othing major.” When asked whether the
Foundation-2-Rooftop report “suggested any followup with
engineers or contractors or others,” Forehead replied, “To the
best of my knowledge, [the report] did not.” She recalled that
Michael had told her “some things had been done” with respect
to the recommendations in the report, but that she did “not
know what.”
The Hinsons have asserted that the Foundation-2-Rooftop
report indicated a number of issues with the property that the
report recommended “a licensed Contractor review and repair
as deemed necessary.” These issues included concerns such as
a brick column on the front porch that “slid out at the bottom
approximately 1⁄2 [inch]”; another brick column that “moved
slightly enough to crack the brick and stoop concrete”; the
“OSB sub-floor [that] rotted out [1 to 2 feet] along the founda-
tion from water not being able to drain”; several windows that
had parts of their “trim, sills, and frames rotted”; rotted areas
in the basement subfloor; stains on the block foundation due
to moisture damage; and floors in certain areas of the house
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Cite as 30 Neb. App. 55that “settled” and “slope.” Reply brief for appellants at 7-9.
With respect to the property’s foundation, the report described
the property’s “concrete block foundation” from the exterior
and interior as “plumb and in good condition” with “no signs
of structural movement.”
2. Summary Judgment
[3] Summary judgment is to be granted when there is no
genuine issue of material fact and the moving party is enti-
tled to judgment as a matter of law. Wintroub v. Nationstar
Mortgage, 303 Neb. 15, 927 N.W.2d 19 (2019). Under this
standard of review, summary judgment is proper only when the
pleadings, depositions, admissions, stipulations, and affidavits
in the record disclose that there is no genuine issue as to any
material fact or as to the ultimate inferences that may be drawn
from those facts and that the moving party is entitled judgment
as a matter of law. Id. In the summary judgment context, a
fact is material only if it would affect the outcome of the case.
Pitts v. Genie Indus., 302 Neb. 88, 921 N.W.2d 597 (2019). In
reviewing a summary judgment, an appellate court views the
evidence in a light most favorable to the party against whom
the judgment is granted and gives such party the benefit of all
reasonable inferences deducible from the evidence. Wintroub v.
Nationstar Mortgage, supra.(a) Actual Knowledge Under
§ 76-2417(3)(a)
As part of its April 30, 2020, order, the district court found
that for Forehead to be liable as the seller’s agent under
§ 76-2417(3)(a) in this case, she “must have actual knowl-
edge of a material defect.” Section 76-2417(3)(a), in pertinent
part, provides:
A licensee acting as a seller’s . . . agent owes no duty
or obligation to a buyer . . . or a prospective buyer . . .
except that a licensee shall disclose in writing to the buyer
. . . or prospective buyer . . . all adverse material facts
actually known by the licensee. The adverse material
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55facts may include, but are not limited to, adverse mate-
rial facts pertaining to: (i) Any environmental hazards
affecting the property which are required by law to be
disclosed; (ii) the physical condition of the property; (iii)
any material defects in the property; (iv) any material
defects in the title to the property; or (v) any material
limitation on the client’s ability to perform under the
terms of the contract.
(Emphasis supplied.) The portion of Neb. Rev. Stat. § 76-2403(Reissue 2018) applicable here defines an “[a]dverse material
fact” as “a fact which . . . significantly affects the desirability
or value of the property to a party and is not reasonably ascer-
tainable or known to a party.”
[4-6] We determine a statute’s meaning based on its text,
context, and structure. Ash Grove Cement Co. v. Nebraska
Dept. of Rev., 306 Neb. 947, 947 N.W.2d 731 (2020). Statutory
language is to be given its plain and ordinary meaning, and
an appellate court will not resort to interpretation to ascer-
tain the meaning of statutory words that are plain, direct,
and ­unambiguous. Weatherly v. Cochran, 301 Neb. 426, 918
N.W.2d 868 (2018). The court, in discerning the meaning
of a statute, should determine and give effect to the purpose
and intent of the Legislature as ascertained from the entire
language of the statute considered in its plain, ordinary, and
popular sense. Id.[7-8] Our reading of the plain language of §§ 76-2403 and
76-2417(3)(a) informs us that a licensee acting as a seller’s
agent is required to provide to a buyer or prospective buyer
written disclosure of adverse material facts actually known by
the licensee. An adverse material fact is a fact which signifi-
cantly affects the desirability or value of the property to a party
and is not reasonably ascertainable or known to that party, and
which may include, but is not limited to, a fact pertaining to
any environmental hazards affecting the property required by
law to be disclosed, the physical condition of the property,
any material defects in the property, any material defects in
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55the title, or any material limitation on the client’s ability to
perform under the terms of the contract. As applicable here,
Forehead was required to provide in writing to the Hinsons any
facts actually known by Forehead which would significantly
affect the desirability or value of the property and which were
not reasonably ascertainable or known by the Hinsons, pertain-
ing to the physical condition of the property or any material
defects in the property.
(b) Propriety of Summary Judgment
The district court determined that “Forehead did not have
actual knowledge of a material defect.” The court was per-
suaded by Forehead’s testimony that she never opened the
email from Boldt containing the estimate and other docu-
ments together with Forehead’s reported observations of the
Beans’ property. The court also noted that “[a] couple buyers
expressed concern about settling and potential problems with
the foundation,” but these concerns “did not impute upon
Forehead knowledge that the home needed extensive repair.”
(Emphasis in original.)
[9] However, we do not construe §§ 76-2403 and
76-2417(3)(a) as narrowly as the district court. These statutes
do not limit Forehead’s duty to disclose facts only when she
has actual knowledge of the existence of a material defect or
only when she has knowledge that a home needs extensive
repair. Rather, the statutes contemplate whether Forehead knew
of any facts which significantly affected the desirability or
value of the property and which were not reasonably ascertain-
able or known by the Hinsons, pertaining to the physical con-
dition of the property or any material defects in the property.
Based on the record before us, a fact finder could conclude that
Forehead was aware of such facts.
As we have previously described, Forehead received com-
munications from no fewer than four agents indicating the
existence of settling, tilting, or slanting with respect to the
foundation. These communications also referenced prospective
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55buyers who were either dissuaded from giving an offer or gave
a lower offer than the listing price set by the Beans because of
such concerns. Forehead’s communications with Boldt are par-
ticularly illustrative, as Boldt first wrote that Starkel’s “main
concern [was] the foundation” and later sent Forehead an offer
of $300,000 for the Beans’ property that was substantially
lower than the property’s listing price of $469,500. Forehead
herself noted in an email to Michael that Boldt was the second
agent to request permission for a prospective buyer to hire an
inspector to examine “the foundation and water issues.” In an
email accompanying Starkel’s $300,000 offer, Boldt noted that
Starkel was “willing to take on the work . . . need[ed] to be
done,” which consisted of “[m]ainly the foundation work” in
addition to “replacing the rotted windows[] and fixing dam-
aged drywall.” This evidence could support a conclusion that
Forehead was aware of, but did not disclose to the Hinsons,
facts which significantly affected the desirability or value of
the property.
Also, Forehead’s deposition testimony that she never opened
Boldt’s email forwarding the RamJack report or that she
“glanced” at the contents of the Foundation-2-Rooftop report
and saw “[n]othing major” is not dispositive on the question of
Forehead’s knowledge of facts pertaining to the physical condi-
tion of the property or any material defects affecting the desir-
ability or value of the property. Forehead’s receipt of responses
and other communications from the various other prospective
buyers’ agents cannot be discounted. The record demonstrates
that Forehead received communications indicating that sev-
eral prospective buyers, specifically because of the property’s
foundation, had elected to either not enter offers for the Beans’
property or offer a purchase price substantially lower than the
property’s listing price.
[10] When viewing the evidence in the light most favorable
to the Hinsons, the believability of Forehead’s claimed lack
of knowledge of any facts pertaining to the physical condition
of the property or any material defects therein which would
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55significantly affect the desirability or value of the property
to the Hinsons is a matter to be considered by the fact finder.
When the testimony of the parties is in conflict and credibility
is a factor, summary judgment is not proper. Blome v. Hottell,
200 Neb. 528, 264 N.W.2d 424 (1978). And contrary to the
dissent’s characterization, we do not view the sole issue to
be whether Forehead was required to disclose the contents
of the RamJack report; rather, the issue is whether Forehead
had actual knowledge of adverse material facts based upon
all the information available to her, which knowledge she was
obligated to disclose. We find that this is a question of fact.
Because we conclude the plain language of §§ 76-2403 and
76-2417(3)(a) as applied to the evidence in the record before us
raises a genuine issue as to material facts, summary judgment
was not appropriate.
However, there is another factor that must be considered.
As previously noted, an adverse material fact is a fact that is
“not reasonably ascertainable or known to a party.” § 76-2403.
Thus, we must determine whether there is a material issue of
fact as to whether the alleged adverse material facts described
above regarding the physical condition of the property or mate-
rial defects in the property were reasonably ascertainable or
known by the Hinsons. In doing so, we consider whether the
Hinsons’ retention of others to conduct a home inspection on
their behalf made those alleged adverse material facts reason-
ably ascertainable to them. We conclude that we cannot say, as
a matter of law, that by obtaining their own home inspection,
the Hinsons made those alleged adverse material facts reason-
ably ascertainable to them. We have found no authority stating
that prospective buyers who obtain their own home inspection
have now made any alleged adverse material facts reasonably
ascertainable to them, as a matter of law. We conclude that such
circumstances must be considered by the fact finder on a case-
by-case basis.
Given our conclusion that summary judgment was not
appropriate, it is unnecessary for us to consider the Hinsons’
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55suggestion that § 76-2417(3)(a) should be construed based
upon the Nebraska Supreme Court’s interpretation of Neb.
Rev. Stat. § 81-885.24(14) (Reissue 1981) in Hancock v. State
ex rel. Real Estate Comm., 213 Neb. 807, 331 N.W.2d 526(1983) (§ 81-885.24(14), penal in nature, deals with revoca-
tion or suspension of real estate license when licensee is found
guilty of negotiating sale or listing real estate directly with
owner if he or she knows that owner already has listing con-
tract with another broker; court determined person knows of
some fact or condition when person has actual knowledge of
fact or condition or has actual knowledge of facts that would
cause reasonably prudent person to believe such fact or condi-
tion exists).
We also note that Forehead and Ambassador argue that
while the Hinsons claim there was actual knowledge under
§ 76-2417(3)(a), they “remain silent on the duties under
. . . §76-2,120.” Brief for appellees at 18. Section 76-2,120(9)
states that a “person representing a principal in the transaction
shall not be liable . . . for any error, inaccuracy, or omission
of any information in a disclosure statement unless that person
has knowledge of the error, inaccuracy, or omission on the
part of the seller.” Forehead and Ambassador argue that “[i]t
cannot be said that [they] obtained the requisite actual knowl-
edge necessary under only one of these statutes.” Brief for
appellees at 18. We disagree. Our reading of §§ 76-2,120 and
76-2417(3)(a) does not persuade us that knowledge of errors,
inaccuracies, or omissions in the seller’s disclosure statement
that would trigger liability under § 76-2,120 is necessarily
equivalent to knowledge of adverse material facts that would
trigger liability under § 76-2417(3)(a) such that a seller’s agent
could not be liable under one statute without also being liable
under the other.
[11] Forehead and Ambassador also argue that regardless
of the issue of actual knowledge, the Hinsons’ argument is
nevertheless moot on the basis that they cannot prove causa-
tion or damages against them. However, the district court did
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55not reach the issue of causation, let alone damages, in its order
granting summary judgment. We therefore decline to consider
that argument. An appellate court will not consider an issue on
appeal that was not passed upon by the trial court. Thomas v.
Peterson, 307 Neb. 89, 948 N.W.2d 698 (2020).
Viewing the entire record before us in a light most favorable
to the Hinsons and giving them the benefit of all reasonable
inferences, we agree with the Hinsons that a genuine issue of
material fact exists in this case. Specifically, that issue of mate-
rial fact is whether Forehead had actual knowledge of adverse
material facts, meaning her actual knowledge of facts, which
would significantly affect the desirability or value of the prop-
erty and which were not reasonably ascertainable or known by
the Hinsons, pertaining to the physical condition of the prop-
erty or any material defects in the property. Therefore, the dis-
trict court’s grant of summary judgment in favor of Forehead
and Ambassador was not appropriate.
VI. CONCLUSION
For the reasons set forth above, we reverse the district
court’s order granting summary judgment in favor of Forehead
and Ambassador and remand the cause for further proceedings
on the Hinsons’ claim that Forehead and Ambassador breached
a duty to the Hinsons under § 76-2417(3)(a).
Reversed and remanded for
further proceedings.
Welch, Judge, dissenting.
I respectfully dissent from the majority opinion because
I believe the district court properly granted the appellees’
motion for summary judgment on this record. The sole issue
in this case is whether a residential property seller’s agent was
required to disclose to the appellants the contents of a report
the seller’s agent received from a previous prospective buyer’s
contractor. Here, the previous prospective buyer’s contrac-
tor, RamJack, issued a report which stated that the source of
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55certain cracks in the residential structure’s foundation and dry-
wall was “most likely from the sever [sic] settling.” The report
further stated: “The front pillar has moved away from the foun-
dation approximately 1’ at this time. I have purposed [sic] to
install 2 piles to stabilize and possible recovery.”
As to this same cracking, the appellants retained their own
contractor to observe and ascertain the cause and origin of
the cracking. The appellants’ contractor, a licensed engineer,
opined: “Nothing discussed . . . would indicate that there are
significant structural issues or damage to the residence.” After
receiving that report, the appellants purchased the residen-
tial property only to later discover the contents of the prior
RamJack report and sue the appellees for failing to disclose it.
The appellants argue that the appellees were obligated to dis-
close the RamJack report under Neb. Rev. Stat. § 76-2417(3)(a)
(Reissue 2018).
As the majority opinion notes, § 76-2417(3)(a) explicitly
provides that a seller’s agent owes no duty or obligation to
a buyer or prospective buyer except to disclose in writing
“all adverse material facts actually known by the licensee.”
As relevant to this case, those may include adverse material
facts pertaining to “the physical condition of the property,”
§ 76-2417(3)(a)(ii), and “any material defects in the property,”
§ 76-2417(3)(1)(iii). “Adverse material fact” is defined by
statute as
a fact which (1) significantly affects the desirability or
value of the property to a party and is not reasonably
ascertainable or known to a party or (2) establishes a
reasonable belief that another party will not be able to, or
does not intend to, complete that party’s obligations under
a contract creating an interest in real property.
Neb. Rev. Stat. § 76-2403 (Reissue 2018).
The majority objects to the dissent’s narrow characteriza-
tion of the issue in this case as the appellees’ failure to dis-
close the contents of the RamJack report. Instead, the major-
ity frames the issue more broadly, stating, “[T]he issue is
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55whether Forehead had actual knowledge of adverse material
facts based upon all the information available to her . . . .” But
in my view, the issue was framed by the appellants themselves
in their complaint.
In the “Facts” section of their complaint, the appellants
assert the appellees’ violation related to failing to disclose “sig-
nificant structural issues with the [p]roperty” which the appel-
lants alleged the appellees learned from the RamJack report.
Although the appellants never explicitly state in their com-
plaint the specific nature of the “significant structural issues,”
the appellants direct the court to the RamJack report, which
provides that the cracking is “most likely from the sever [sic]
settling” and states, “I have purposed [sic] to install 2 piles
to stabilize and possible recovery.” The appellants then allege
that “[d]espite having received the [RamJack] report from
. . . Starkel, neither the Beans nor . . . Forehead disclosed the
information contained in the [RamJack] Report to prospective
buyers of the Property, including the Hinsons.” Then, again, in
their fifth theory of recovery, the appellants claim the appellees
violated § 76-2417(3), alleging, “Forehead and [Ambassador]
knew or should have known that there were structural issues
with respect to the Property based upon the [RamJack] report
that . . . Starkel provided to . . . Forehead.” As such, the spe-
cific nature of that portion of the complaint relevant to this
appeal is that the “significant structural issues” the appellants
claim existed here and which the appellees failed to disclose
in violation of § 76-2417(3) were the information contained
within the RamJack report.
As to that report, the explicit terms used by RamJack pro-
vided that the “sever [sic]” settling was “most likely” the cause
of the cracking and unquestionably demonstrate the expres-
sion of an opinion on the condition of the property. Similarly,
the appellants’ own contractor, a licensed engineer, issued his
own opinion that those same cracks did not pose a significant
structural issue to the home. The question becomes whether the
seller’s agent was legally obligated to disclose the RamJack
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HINSON v. FOREHEAD
Cite as 30 Neb. App. 55opinion to the appellants. As a matter of law, I believe the
seller’s agent was not. The only duty owed by a seller’s agent
to the buyer here is to disclose adverse material facts, not
opinions. The only fact I see in this record is the fact that there
was cracking in the foundation and drywall, which cracking
was reasonably ascertainable and known by everyone involved.
Whether that cracking was caused by settling of the home,
whether the settling was “severe,” and whether any severe set-
tling amounted to a material defect in the property were mat-
ters of opinion here, not fact. The majority holds that whether
all information available to the appellees triggered a statutory
obligation of disclosure constitutes a factual question which
must be resolved by the trier of fact and should not properly be
resolved through summary judgment. I believe, on this record,
that the only fact requiring disclosure was that cracking was
present and that this patent condition, known to all, was open
to interpretation as to its cause or origin. In my view, subject-
ing a seller’s agent to potential liability here on the basis that
the agent failed to disclose the contents of RamJack’s opinion
on this record would open the door to requiring a seller’s agent,
out of an abundance of caution, to discose all opinions obtained
or received in connection with the sales process. At least on this
record, when the report contains language which provides the
condition “most likely” relates to what the contractor opines to
be a material structural problem, and where objective evidence
of a potential material problem is open, obvious, and known by
all, as a matter of law, I do not see this as being consistent with
the statutory construct requiring disclosure.