Opinion
No. 33578-6-II.
August 29, 2006.
Appeal from a judgment of the Superior Court for Thurston County, No. 02-2-00820-5, Paula Casey, J., entered July 15, 2005.
Counsel for Appellant(s), Carol J. Cooper, Davies Pearson PC, Tacoma, WA.
Counsel for Respondent(s), Michael B. Tierney, Michael B. Tierney PC, Mercer Island, WA.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Armstrong, J., concurred in by Houghton and Penoyar, JJ.
Kenneth and Terrie Beckford appeal summary judgment dismissal of their negligent misrepresentation claims against the City of Tenino and several of its officials. They argue that the statute of limitations does not bar their claims against the city building inspector, that material questions of fact exist as to whether they received express assurances from city officials that they could operate their business on a particular piece of property, and that the trial court incorrectly concluded that, had their case proceeded to trial, they could not seek lost profits as damages. Because the Beckfords have raised issues of material fact on their express assurances claim and whether the statute of limitations barred their claims, the trial court erred in granting summary judgment. Accordingly, we reverse and remand.
FACTS
We refer to the City of Tenino, Harold Vassar, Jean Pettit, Frank Anderson, Bennett Barnes, and other city employees as 'Tenino' or 'The City' or 'City Officials.'
Ken and Terrie Beckford own and operate Country Car Care, Inc., an automotive repair business in Tenino. The Beckfords also own several rental properties and vacant land in and around Tenino that they intend to develop.
Ken initially operated the business out of two separate buildings at 599 West Sussex, in Tenino. Country Car provides both mechanical and auto body repairs; the body repair work includes limited spray painting. Ken wanted to move the business to a different location and build a shop where he could perform the mechanical and body work under one roof.
In February 1998, the Beckfords began discussions with city officials regarding the property located at 722 East Sussex. The property is zoned C-2, which permits 'automotive repair facilities,' but does not expressly permit 'painting and body shops.' Clerk's Papers (CP) at 594. The City's zoning code expressly permits 'painting and body shops' in areas zoned 'I Industrial.' CP at 594, 596.
When Ken first inquired at City Hall about moving his business to the new location, city employees told him that '[a]ll zoning maps were at the City Attorney's office and [that the] City Building Inspector and official, Harold Vassar, would need to visit the property to determine whether [it was appropriate] for Beckford's business.' CP at 242. Vassar and Ken visited the property together, and Ken explained his plans for the property. While at the new property, Ken asked Vassar if there would be any problems moving his repair shop to the new location. Vassar told him, 'No.' CP at 681. Accordingly, the Beckfords bought the property in May 1998.
At the City's request, the Beckfords submitted a building permit application, a site plan, and two sets of blueprints showing that the Beckfords designated a 1,250 square foot portion of the building for body work. The Beckfords told Vassar that they also planned to install a state-of the-art spray booth in the body shop side of the building.
The fire marshal approved the Beckfords' building plans, subject to meeting several occupancy requirements, and noted that the Beckfords planned to separate the building into two separate occupancies; a mechanical repair side and a body shop side. Tenino also hired David Coombs, an environmental consultant, to review the Beckfords' building plans and to recommend additional requirements that the Beckfords should meet before the City issued a building permit. Coombs told the City to ask the Beckfords to supply details of the body shop/spray paint area and said that the City may need to require an approved spray painting booth before approving the building plans. Up to this point, nobody from Tenino had notified the Beckfords that their proposed use was impermissible.
In late February or early March 1999, Mayor Jean Pettit called Terrie and said there was a zoning problem concerning the Beckfords' planned paint booth. Pettit did not mention any zoning problem related to auto body repair. At a meeting with Terrie and interim building inspector Bennett Barnes, Pettit suggested that the Beckfords ask the Planning Commission for a conditional use permit for the paint booth. The Beckfords met with the Planning Commission, and the Commission moved to schedule a public hearing where it planned to recommend that the City Council approve a conditional use permit for Country Car.
The 1997 Uniform Fire Code defines 'spray booth' as a 'mechanically ventilated appliance of varying dimensions and construction provided to enclose or accommodate a spraying operation and to confine and limit the escape of spray vapor and residue and to exhaust it safely.' CP at 710. A 'spray booth' or 'paint booth' is essentially a small, self-contained building used for painting that is installed within the larger building. CP at 607.
At the April 6 City Council meeting, the Council said that they were 'unable to issue a conditional use permit for the paint booth part of [the Beckfords' auto shop].' CP at 78. The Tenino Municipal Code precluded conditional uses in C-2 zones. The Council explained that although they could not issue a conditional use permit, they would amend the 20-year growth plan to allow the Council to issue conditional use permits in the C-2 zone. The Council told the Beckfords that they would start the process the next day, but that it could take up to a year to amend the plan. The Beckfords subsequently hired an attorney and attempted, unsuccessfully, to obtain a conditional use permit. Building inspector Barnes then wrote to Terrie specifying the items the City needed before issuing the building permit. In the letter, Barnes said that 'it is my understanding that you intend to do the same type of work at the new site as you are currently doing in your present business.' CP at 778.
The Beckfords knew they would not get a conditional use permit because, earlier that day, Pettit had called Terrie and told her that the City could not issue conditional use permits in C-2 zones.
After the Beckfords met the City's demands, the City approved the Beckfords' building plans with the condition that neither a 'spray booth [n]or auto painting [were] allowed in buildings in C-2 zoning.' CP at 198. Terrie testified that she did not expect the City to approve the spray booth because Pettit already told her that she and Ken needed to apply for a conditional use permit for the paint booth itself. Ken testified that he did not have a problem with the restriction because he nonetheless 'could spray nine square feet in . . . an open shop, without a spray booth,' enough to continue his current business. CP at 198.
Ken then met with Pettit about painting in the new shop. Pettit told Ken that the body shop was not an issue, but that she wanted Ken to sign a statement that he would not do any painting. Ken refused and told her, '[w]e'll let the lawyers hack [the painting controversy] out. I don't care. Let's get the building built.' CP at 196. He said that he 'had [the] okay from the city council [that] they were going to see to it that [the proposed zoning ordinance amendment allowing conditional uses in C-2 zones] got through' and that he knew this because 'the city council is supposed to run the mayor.' CP at 196. Ken built the building, intending to sort out the painting issue later.
On May 31, 2000, the City issued an occupancy permit approving the building for 'automotive vehicle repair' but not for 'painting or body shop work.' CP at 890. Terrie contacted the City Clerk about the restriction against body work, and the City Clerk replied that 'the City had changed its mind' about allowing body work. CP at 612. The Beckfords disregarded the occupancy permit's restrictions and performed body work in their shop for two months before the City threatened to cite them for each 'auto body work and illegal painting activity observed.' CP at 755. The Beckfords then filed claims for damages against the City under RCW 4.96.020(4), and filed the complaint initiating this lawsuit on May 15, 2002.
The trial court granted the City's summary judgment motion, ruling that as of March 1999, the Beckfords could no longer rely on Vassar's representations. Based on this ruling, the court concluded that the Beckfords had not filed the lawsuit within the three-year statute of limitations. Accordingly, the trial court dismissed the Beckfords' negligent misrepresentation claims against Vassar. But the trial court explained that if the statute of limitations had not run, questions of fact would exist as to whether Vassar guaranteed Beckford that he could operate an auto repair, auto body, and paint shop on the property. It also explained that if the Beckfords could pursue their claims against Vassar, it would limit damages to those arising out of paying for the land and selling it at a loss.
The trial court also dismissed the Beckfords' negligent misrepresentation claims against the City Council members and Pettit. It ruled that, because city officials told the Beckfords that the City would have to change a zoning ordinance before they could use the property as planned, '[i]t was up to [the Beckfords]' to determine whether the City made any zoning changes before construction. CP at 324. It further noted that the Beckfords had a lawyer, that Ken was on the Planning Commission, and that both Ken and the attorney knew of the needed zoning ordinance change. The trial court concluded that Ken acted unreasonably in proceeding with construction without knowing that the City had changed the zoning ordinance. Therefore, it reasoned, the Beckfords could not justifiably rely on city officials' statements that they would change the zoning ordinance to allow for the Beckfords' proposed use. Finally, it dismissed the Beckfords' claim that the Tenino Municipal Code allowed them to use nine square feet of the building for body repair and painting in the C-2 zone.
ANALYSIS I. Standard of Review
We review an order granting summary judgment de novo. Korslund v. Dyncorp Tri-Cities Servs., Inc., 156 Wn.2d 168, 177, 125 P.3d 119 (2005). Summary judgment is appropriate only if 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' CR 56(c). We consider the facts in the light most favorable to the nonmoving party; and only affirm summary judgment where reasonable persons could reach but one conclusion from the evidence. Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wn.2d 16, 26, 109 P.3d 805 (2005) (citations omitted).
II. Preliminary Issues
As a preliminary matter, the City claims that the Beckfords never exhausted their administrative remedies, which the City claims 'is a prerequisite for proximate cause.' Br. of Appellant at 49-50. The City cites a case involving a land use decision for support. But the Beckfords are not appealing a land use decision. And other than this mere assertion, the City provides no argument to support its exhaustion of administrative remedies argument. Because the City fails to provide a reasoned argument, we do not further address this argument. See RAP 10.3(a)(5).
III. Statute of Limitations and Vassar's February 1998 Statement
Ruling that the Beckfords filed their misrepresentation claims against Vassar outside of the applicable three-year statute of limitations, the trial court dismissed the claims arising out of Vassar's February 1998 statements. The Beckfords argue that they could not have discovered the factual basis for each element of their negligent misrepresentation claim against Vassar until May 2000. The City argues that by early March 1999, the Beckfords knew that any representation that Vassar made to them regarding zoning was incorrect.
Ordinarily, a cause of action accrues, and the statute of limitations begins to run, when the tortious act or omission occurs. See In re Estates of Hibbard, 118 Wn.2d 737, 744, 826 P.2d 690 (1992). But in certain instances, where the injured party does not, or cannot, know he has been injured, a cause of action accrues at the time the plaintiff learns of, or should learn of, the factual basis for each element of the cause of action. See Doe v. Finch, 133 Wn.2d 96, 101, 942 P.2d 359 (1997). Injury is an element in a cause of action for negligent misrepresentation. Sabey v. Howard Johnson Co., 101 Wn. App. 575, 593, 5 P.3d 730 (2000). Thus, the statute of limitations on the Beckfords' claims against Vassar did not begin to run until they discovered, or through due diligence should have discovered, both the misrepresentation and the injuries caused thereby. See Sabey, 101 Wn. App. at 593.
The trial court ruled that the statute of limitations had run because in March 1999, Pettit told the Beckfords that 'there were problems with the zoning for operating an auto painting business.' CP at 316. The trial court reasoned that after the mayor advised the Beckfords of zoning problems, they could no longer rely on Vassar's representations and that, accordingly, the statute of limitations began for Beckfords' negligent misrepresentation claims against Vassar. But when Pettit told Terrie, in early March 1999, that there was a zoning problem, Pettit identified the paint booth as the problem. At that time, the Beckfords believed they could continue with the repairs they performed in the existing building, but needed a conditional use permit to install the state-of-the-art paint booth.
And the City did not advise the Beckfords until May 31, 2000, when the City granted their occupancy permit, that they could neither paint nor perform body work at the new facility. We conclude that the Beckfords have provided sufficient evidence to create issues of material fact as to when they learned the final element that they were damaged of their claim based on Vassard's representations. If the fact finder concludes that May 31, 2000 is the date they learned of their damages, then the Beckfords timely filed the claim. See Doe, 133 Wn.2d at 101 (statute of limitations does not run until the person knows, or should know, the factual basis for each element of the cause of action).
IV. Negligent Misrepresentation and the Public Duty Doctrine
The City argues that the Beckfords failed to establish a prima facie case of negligent misrepresentation. The City also maintains that the Beckfords failed to establish the 'special relationship' exception to the public duty doctrine, which requires the City to ensure accurate representations to the Beckfords. Br. of Respondent at 34.
A plaintiff claiming negligent misrepresentation must prove, by clear, cogent, and convincing evidence, that: (1) the defendant supplied false information to another in his business transaction; (2) the defendant knew or should have known that he or she supplied the information to guide the plaintiff in a business transaction; (3) the defendant negligently communicated the false information; (4) the plaintiff justifiably relied on the false information; and (5) the false information proximately caused the plaintiff's damages. Lawyers Title Ins. Corp. v. Baik, 147 Wn.2d 536, 545, 55 P.3d 619 (2002) (citing ESCA Corp. v. KPMG Peat Marwick, 135 Wn.2d 820, 827-28, 959 P.2d 651 (1998)). Neither party disputes the second element, that city officials knew that the Beckfords sought information to guide them in a business transaction.
1. False Information
The City argues that Vassar's statement to Ken — that he would have no problem relocating his business to the new property — was not a false statement of fact sufficient to support a misrepresentation claim. The City also argues that no city official ever represented to Ken that he would be allowed to perform 'nine square feet of painting' at the new location. Br. of Respondent at 43. Finally, the City contends that the Beckfords cannot identify a single instance where they discussed the distinction between a paint booth and 'nine square feet of painting' with city officials. Br. of Respondent at 43. The Beckfords argue that the only zoning problem that city officials raised related to a paint booth and, necessarily, any painting extensive enough to require a paint booth. They argue that city officials represented that the Beckfords could perform body work at the new location, but that they could not operate a paint booth.
Although several officials told the Beckfords that they could not install a paint booth or perform any painting, Vassar, Pettit, former Mayor Lycan, Anderson, and Barnes each informed the Beckfords that they could operate a body shop at the new location. Yet the Beckfords' business license and occupancy permit prohibited them from performing any auto body work. Viewed in the light most favorable to the Beckfords, a question of fact exists as to whether the city officials supplied false information to the Beckfords.
2. Negligent Communication of False Information
To establish negligence, a plaintiff must prove (1) the existence of a duty; (2) breach of that duty; (3) injury to the plaintiff; and (4) that the breach proximately caused the plaintiff's injury. Christensen v. Royal Sch. Dist. No. 160, 156 Wn.2d 62, 66, 124 P.3d 283 (2005). Whether a duty exists is a question of law. Hertog v. City of Seattle, 138 Wn.2d 265, 275, 979 P.2d 400 (1999). Breach and proximate cause are generally questions for the trier of fact unless reasonable minds could not differ. Hertog, 138 Wn.2d at 275.
Under the public duty doctrine, a public official's duty to the public-at-large does not create tort liability to individual citizens. Taylor v. Stevens County, 111 Wn.2d 159, 163, 759 P.2d 447 (1988). An exception to this general rule exists where an individual has a 'special relationship' with the public official such that official owed the injured party a duty that he or she did not owe to the public in general. Taylor, 111 Wn.2d at 166. To fall within the 'special relationship' exception, the Beckfords must establish: (1) that there is direct contact or privity between them and the public official(s), and (2) the public official(s), in response to a specific inquiry, gave express assurances, which (3) the Beckfords justifiably relied upon. 1515-1519 Lakeview Blvd. Condo. Ass'n. v. Apt. Sales Corp., 146 Wn.2d 194, 206, 43 P.3d 1233 (2002) (quoting Taylor, 111 Wn.2d at 166).
A. Privity Between the Beckfords and City Officials
In the context of the 'special relationship' exception, we construe privity broadly. Bratton v. Welp, 145 Wn.2d 572, 577, 39 P.3d 959 (2002). The record is replete with instances of direct contact between the Beckfords and city officials. More importantly, the City effectively concedes this issue by failing to argue a lack of privity between the Beckfords and city officials.
B. Express Assurances from City Officials
The City claims that the Beckfords did not make sufficiently specific inquiries to invoke the 'special relationship' exception. The City also argues that city officials did not give the Beckfords express assurances in response to their inquiries.
To fit within the 'special relationship' exception, a plaintiff must show that the government gave express assurances that he or she specifically sought. Babcock v. Manson County Fire Dist. No. 6, 144 Wn.2d 774, 789, 30 P.3d 1261 (2001). If the plaintiff seeks express assurances and the government provides them, then the government owes the plaintiff a duty to ensure that the assurances are correct. Meaney v. Dodd, 111 Wn.2d 174, 179, 759 P.2d 455 (1988). Implied assurances do not create the city official's duty; the plaintiff must seek an express assurance and the government must unequivocally give that assurance. Babcock, 144 Wn.2d at 789.
Construing the evidence in the light most favorable to the Beckfords, material questions of fact exist as to whether city officials expressly assured the Beckfords that they could operate a body shop at the new location. First, Ken specifically asked Vassar whether there would be a problem 'moving [his] repair shop [to the new location.]' CP at 69. Vassar told Ken '[n]o.' CP at 69. And Vassar knew that when Ken said 'auto repair business,' that meant auto repair, body work, and painting.
In addition, Terrie testified that in late spring or early summer of 1999, she and Ken met with City Attorney Argal Oberquell, David Coombs, and Rick Cordes, the Beckfords' attorney. Terrie said that she 'specifically asked Mr. Oberquell if there were any remaining issues regarding [the] project, other than the spray booth.' CP at 611. Oberquell told Terrie that once the Beckfords met Coombs's concerns 'that were unrelated to painting, the only remaining issue was the paint booth.' CP at 611. Oberquell did not mention any zoning problem with the Beckfords' proposed body work.
Finally, the City conditionally approved the Beckfords' building plans, which designated 1,250 square feet of the building for body work use. The only condition of approval was that the Beckfords could not operate a spray booth or do any painting. Barnes, the interim building inspector, specifically referred to complying with the Uniform Fire Code (UFC). Barnes attached UFC sections pertaining to nine square foot 'limited spraying areas' and spray booth fire protection equipment to a building permit approval he gave the Beckfords. CP at 882. Although Barnes's approval prohibited the Beckfords from operating a spray booth and from painting, the permit approval did not prohibit the Beckfords from performing body work. Plan approval by itself cannot be an express assurance. Mull v. Bellevue, 64 Wn. App. 245, 254, 823 P.2d 1152 (1992). But in light of Barnes's reference to the UFC, and the UFC attachment to the building permit approval, a reasonable person may have taken that as an explicit assurance that the City would permit body work and perhaps even the 'limited spraying' that accompanies the body work. This question must be resolved by the trier of fact.
The Beckfords also alleged a claim for negligent misrepresentation against city council member Frank Anderson. The only possible negligent misrepresentation claim against Anderson stemmed from his assurance that the City Council would amend the 20-year growth plan to allow for conditional use permits in C-2 zones. But failure to perform promises of future conduct cannot alone establish the basis for a negligent misrepresentation claim. Havens v. CD Plastics, Inc., 124 Wn.2d 158, 182, 876 P.2d 435 (1994). Thus, as to Anderson, the court properly granted summary judgment.
C. Justifiable Reliance
Justifiable reliance is an element of both negligent misrepresentation and the 'special relationship' exception to the public duty doctrine. A plaintiff must prove justifiable reliance by clear, cogent, and convincing evidence. Lybbert v. Grant County, 141 Wn.2d 29, 38, 1 P.3d 1124 (2000). Reliance is justified if it was reasonable under the surrounding circumstances — a question of fact. Lawyers Title, 147 Wn.2d at 551; see also Havens, 124 Wn.2d at 181.
The City argues that the Beckfords could not justifiably rely on the statements city officials made because (1) the Beckfords were 'sophisticated real estate investors,' (2) Ken testified that he did not trust Vassar, (3) the case involved a zoning misrepresentation and an attorney represented the Beckfords, (4) both the City and the Beckfords were in a position to determine the law and had knowledge of the underlying facts, (5) the Beckfords should have known that they could not rely on Vassar because he lacked the authority to interpret zoning ordinances, and (6) Ken was a member of the Tenino Planning Commission and should have known the City Attorney's interpretation of the City's zoning ordinances. Br. of Respondent at 44-47.
The Beckfords dispute the 'sophisticated investors' characterization and maintain that they had no reason to believe the City would change its position and prohibit all body work at the new location. They also claim that nothing the city officials said about a paint booth restriction led them to reasonably believe that the City would prohibit body work or the limited painting they performed in their old shop.
The Beckfords operated their old shop in a C-1 zone, which is more restrictive than the C-2 zone. In 1997, the City granted Ken a permit to add a spraying room onto his existing building to paint up to nine square feet of automobile parts.
We hold that the Beckfords presented sufficient evidence to create material issues of fact as to whether the Beckfords could justifiably rely on the City's representations. The City referred Ken to Vassar when he first asked about permissible uses on the property; the mayor told Ken that she was not concerned with the body repair issue; the City approved the Beckfords' building plans and disallowed only the paint booth or any auto painting; and in response to Pettit's zoning problem call, Terrie wrote Pettit that '[she and Ken] needed to rely on City office staff, [the] Building Inspector and the Mayor for [their] information' to make sure their project complied with local ordinances. CP at 722. A trier of fact could find that the Beckfords reasonably believed that the City required a conditional use permit for the paint booth, but that it would not prohibit the Beckfords from doing body work and the limited painting associated with that work.
Questions of fact remain as to whether representations by city officials constituted express assurances and whether those assurances, if any, were such that the Beckfords could reasonably rely on them. See Sundberg v. Evans, 78 Wn. App. 616, 625, 897 P.2d 1285 (1995); see also Noakes v. Seattle, 77 Wn. App. 694, 699, 895 P.2d 842 (1995) (whether or not public employees' various statements constituted express assurances or merely implied assurances was a question of fact).
3. Proximate Cause
The Beckfords argue that they incurred damages, including substantial lost profits, because of city officials' representations that they could perform body work at the shop, but could not install a spray booth. The Beckfords claim that they would not have bought the property, built the new building, and moved their business if they knew that the City would preclude them from performing body work and limited painting.
The City contends that the only 'proximate cause of [the] Beckford[s'] detrimental reliance in this case consists of the statements made by City Council members and the Council's subsequent inaction in moving legislation favorable to [the] Beckford[s].' Br. of Respondent at 49. But this overlooks the fact that the City prohibited the Beckfords from performing any body work whatsoever. A reasonable fact finder could have concluded that the city officials' statements that 'painting was the issue . . . [and that] [a]uto body repair was allowed, but painting was not allowed,' proximately caused the Beckfords' detrimental reliance. CP at 793.
Proximate cause is generally a question for the trier of fact unless reasonable minds could not differ. Hertog, 138 Wn.2d at 275. Reasonable minds could differ as to whether the city officials' statements proximately caused the Beckfords to suffer their alleged damages. Accordingly, the Beckfords' claims should not have been dismissed on summary judgment.
V. Lost Profits as Damages
In dismissing the Beckfords' negligent misrepresentation claims, the trial court opined that damages, if any, 'would be limited to the differences between what [the Beckfords] paid for the property and what it was worth and the costs of the transaction.' CP at 366. In their complaint, the Beckfords claimed ongoing damages for lost profits, lost rental income, and diminished property value.
The Beckfords argue that we should not limit their damages to the difference between the property's purchase price and its actual value, plus transaction costs. They argue that the trial court should allow them to prove any and all damages, including lost profits, proximately resulting from Vassar's negligent misrepresentations and the city officials' 'subsequent conduct, statements, and negligent' omissions. Br. of Appellant at 31. The City argues that Washington law does not permit recovery of lost profits in a negligent misrepresentation case, citing Janda v. Brier Realty, 97 Wn. App. 45, 50-53, 984 P.2d 412 (1999). The Beckfords counter that the Restatement (Second) of Torts, section 552B(1)(b) does not preclude the possibility that consequential damages may include lost profits.
In Janda, the plaintiff bought two pieces of property with plans to subdivide the lots and sell off the subdivided lots. Janda, 97 Wn. App. at 47. The seller told the plaintiff that the plaintiff could subdivide the lots for a relatively small amount of money and with few expenditures in the way of required improvements to the subdivided lots. Janda, 97 Wn App at 48. When the plaintiff could not sell one of the lots because he was financially unable to complete the subdivision, he sued the seller, alleging negligent misrepresentation. Janda, 97 Wn. App. at 48. In addition to other damages, the plaintiff sought damages for lost profits. Janda, 97 Wn. App. at 48.
The court noted that Washington adopted the Restatement (Second) of Torts with regard to negligent misrepresentation, and stated that under the Restatement, damages are limited to "those necessary to compensate the plaintiff for the pecuniary loss to him" legally caused by the misrepresentation. Janda, 97 Wn. App. at 50 (quoting Restatement (Second) of Torts sec. 552B. The court then ruled that Restatement (Second) of Torts section 552B(2) prohibited awarding that plaintiff damages 'for the benefit of the plaintiff's contract with the defendant.' Janda, 97 Wn. App. at 50 (citing Restatement (Second) of Torts sec. 552B). Additionally, in declining to award the plaintiff damages for profits the plaintiff claimed he would have realized, the court noted that the plaintiff suffered no recoverable damages because he sold each property for more than the purchase price. Janda, 97 Wn. App. at 51.
Janda is distinguishable. Here, the Beckfords did not enter into a contract with the City, a fact that renders Restatement (Second) of Torts section 552B(2) inapplicable. Further, the Beckfords have allegedly suffered more than the nominal damages, if any, that the plaintiff in Janda suffered.
The Restatement (Second) of Torts section 552B(1)(b) provides that 'the damages recoverable for a negligent misrepresentation are those necessary to compensate the plaintiff for the pecuniary loss to him of which the misrepresentation is a legal cause, including . . . pecuniary loss suffered otherwise as a consequence of the plaintiff's reliance upon the misrepresentation.' Had the City informed the Beckfords, after they purchased the property, that they could not perform body work at the new location, the Beckfords could have sold the property or constructed a building designed only for mechanical work. In that case, the court would probably be correct in limiting damages to those enunciated in Restatement section 552B(1)(a). But section 552B(1)(a) does not necessarily encompass all of the damages that the Beckfords allegedly suffered.
Comments a through f under Restatement section 549 apply to Restatement section 552B. See Restatement sec. 552B, comment a. Comment d of Restatement section 549 states that a plaintiff can recover consequential damages resulting from a misrepresentation as long as the misrepresentation is a legal cause of the loss and the loss is of a kind 'that might reasonably be expected to result from reliance upon the misrepresentation.' Here, a fact finder could determine that the city officials' representations proximately caused the Beckfords to lose profits. City officials initially told the Beckfords that the only problems related to painting and not to operating a body shop. The officials could reasonably expect the Beckfords, relying on the City's representations, to build a shop designed to perform body work. If so, the City could reasonably expect the Beckfords to lose profits once the City changed its position and prohibited all body work. Whether these 'expectations' were reasonable is for the trier of fact to decide.
We conclude that the Beckfords are not necessarily limited to damages for the difference between what they paid for the property and its value with the zoning limitations. If the Beckfords can prove that the City is liable, they are entitled to all consequential damages they can prove under Restatement section 552B(1)(b).
We affirm the summary judgment in favor of Frank Anderson, reverse the summary on Beckfords' other claims, and remand for trial.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
HOUGHTON, P.J. and PENOYAR, J., concur.