DAVIS, Justice:
The petitioners herein and plaintiffs below, David F. Finch and Shirley R. Finch (hereinafter
On July 7, 2009, Mr. and Mrs. Finch entered into a "Residential Real Estate Sale Contract" (hereinafter "purchase contract") to purchase a house owned by Brian and Angela Richardson (hereinafter "Dr. and Mrs. Richardson" or "the Richardsons"). While neither the Finches nor the Richardsons were represented by a real estate agent during the course of this transaction, Mrs. Finch is a licensed real estate agent. With respect to home inspections, the purchase contract provided that
(Emphasis and footnote added). The purchase contract did not expressly specify, however, that the contract was contingent upon a favorable home inspection or otherwise condition the purchase of the house upon the findings of the home inspector should one be retained.
Additionally, the purchase contract stated that,
It is not apparent from the appendix record whether the Richardsons also had completed a separate, standard "Seller's Property Condition Disclosure" form regarding the subject property.
Exercising their rights under the purchase contract, the Finches hired Inspectech to perform a home inspection of the subject property. As part of the house inspection, the Finches and Inspectech, by its representative, Gary Flanagan (hereinafter "Mr. Flanagan"), entered into an Inspection Agreement. At issue in the case sub judice is the enforceability of the "Unconditional Release and Limitation of Liability" (hereinafter "release") clause contained within the parties' Inspection Agreement. The release provides:
(Emphasis in original). Mr. Flanagan performed the subject home inspection on July 9, 2009, and reported his findings to the Finches.
Thereafter, the Finches purchased the Richardsons' house on August 19, 2009, for $160,000. Within one week of closing, the Finches discovered water damage; prior repairs to correct said water damage; and water infiltration in the basement of their new home, as well as structural problems affecting the house's foundation. The Finches allege that these defects were not previously detectable because the location of a workbench owned by the Richardsons concealed the water damage, and, thus, the Finches claim that they could not fully view this portion of the house until the Richardsons had removed all of their belongings.
At the request of the Finches, Mr. Flanagan performed an additional inspection of the subject property on September 11, 2009. In his report, Mr. Flanagan observed that he had
The Finches then filed the instant lawsuit against the Richardsons and Inspectech seeking to recover, among other things, the approximately $39,000 they have expended to remedy and repair the house's water and structural issues. In their complaint, the Finches (1) alleged that the Richardsons failed to disclose and/or concealed these defects
Inspectech then filed a motion for summary judgment claiming that the release set forth in the parties' Inspection Agreement relieved it of liability for any negligence in its inspection of the subject home and its attendant inspection report.
From this adverse ruling, the Finches appeal to this Court.
Before this Court, the Finches challenge the circuit court's grant of summary judgment to Inspectech based upon that tribunal's interpretation of the parties' Inspection Agreement in accordance with existing law. Given the nature of the instant controversy, we must consider the issues raised by the parties in light of multiple, interrelated standards of review.
We first are called upon to decide whether disposition of the Finches' claims against Inspectech by way of summary judgment was appropriate. Our review of a lower court's order granting a party's motion for summary judgment is plenary: "A circuit court's entry of summary judgment is reviewed de novo." Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). In conducting our de novo review, we consider whether the facts and the law entitle the moving party to an award of summary judgment.
Rule 56(c) of the West Virginia Rules of Civil Procedure requires a court to award summary judgment "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." (Emphasis added). Stated otherwise,
Next we must consider the overarching framework within which the instant controversy has presented itself: the parties' Inspection Agreement contract. In determining that Inspectech was entitled to summary judgment, the circuit court concluded that the subject contractual terms were valid and enforceable. We previously have held that "`[i]t is the province of the Court ... to interpret a written contract.' Syl. Pt. 1[, in part], Stephens v. Bartlett, 118 W.Va. 421, 191 S.E. 550 (1937)." Syl. pt. 1, in part, Orteza v. Monongalia Cnty. Gen. Hosp., 173 W.Va. 461, 318 S.E.2d 40 (1984). Therefore, "we apply a de novo standard of review to [a] circuit court's interpretation of [a] contract." Zimmerer v. Romano, 223 W.Va. 769, 777, 679 S.E.2d 601, 609 (2009) (per curiam) (citation omitted).
Finally, we must determine the pivotal question of law presented by the case sub judice: whether the subject contractual provision at issue, which purports to release Inspectech from claims resulting from its allegedly negligent performance of a house inspection, is valid and enforceable. "Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review." Syl. pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995). Accord Syl. pt. 1, Appalachian Power Co. v. State Tax Dep't of West Virginia, 195 W.Va. 573, 466 S.E.2d 424 (1995) ("Interpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review.").
In accordance with these standards, we now consider the parties' arguments.
The instant appeal presents a single question for our consideration and resolution: is an anticipatory release in a home inspection contract that releases the home inspector from claims related to defects that are not reported in the home inspection report valid and enforceable? We answer this question in the negative: an anticipatory release in a home inspection contract is invalid and unenforceable because such a contractual provision is violative of and contrary to the public policy of this State.
At issue in this proceeding is the anticipatory release contained in the parties' Inspection Agreement contract. This clause provides:
(Emphasis in original). Based upon this contractual language, the circuit court awarded
Before this Court, the Finches argue that the subject anticipatory release provision is invalid and unenforceable as contrary to public policy because it insulates Inspectech by relieving it of liability for any and all damages they have suffered as a result of Inspectech's allegedly negligent performance of its inspection of the subject house and its preparation of the resultant inspection report. In this regard, the Finches contend that Mr. Flanagan, who performed the home inspection and prepared the home inspection report for Inspectech, held himself out as having been certified as a home inspector by the State of West Virginia. Nevertheless, the Finches assert that they have no recourse against either Mr. Flanagan or Inspectech for failure to abide by such certification standards because the subject release precludes them from asserting any claims for damages resulting from said home inspection. Thus, the Finches argue, the anticipatory release in the parties' Inspection Agreement thwarts the protections afforded to home buyers by the State's certification standards, and, as such, the release violates public policy because it provides a disincentive for experts to fully and adequately perform the services they are hired and paid to perform. Citing Kyriazis v. University of West Virginia, 192 W.Va. 60, 450 S.E.2d 649 (1994); Murphy v. North American River Runners, Inc., 186 W.Va. 310, 412 S.E.2d 504 (1991).
By contrast, Inspectech disagrees with the Finches' characterization of the anticipatory release as contrary to public policy and argues, instead, that this provision does not violate public policy because it did not provide or perform a public service in inspecting the Finches' prospective home. As an independent home inspection company, Inspectech contends that it is not a public service entity as contemplated by the Kyriazis opinion, which determined public service status based upon the nature of the entity providing the service, not upon the nature of the service provided. See Syl. pt. 3, Kyriazis, 192 W.Va. 60, 450 S.E.2d 649. Rather, Inspectech asserts that it is a private enterprise, and, as such, it may freely contract to relieve itself of future liability. Finally, Inspectech states that it does not provide an essential service or a service that is a matter of practical necessity. Citing Baker v. Roy H. Haas Assocs., Inc., 97 Md.App. 371, 629 A.2d 1317 (1993) (enforcing limitation of liability clause to limit home inspector's liability for ordinary negligence in performing home inspection); Morse v. Bullseye Mktg., Inc., 123 Wn.App. 1037 (2004) (unpublished op.) (concluding that exculpatory clause in home inspection contract is not contrary to public policy and thus is enforceable because residential home inspectors do not provide essential public service). This lack of essentialness and necessity is particularly true under the facts of the instant appeal insofar as a home inspection was not essential to the Finches' purchase of the subject home because the purchase was not contingent upon the performance of a home inspection nor was a home inspection required by the contracting parties, a real estate agent, or a financial institution.
The case sub judice presents a matter of first impression as to whether an anticipatory release or limitation of liability clause in a home inspection contract is valid, although this Court twice has found such clauses to be unenforceable in other contexts. In the first such case, Murphy v. North American River Runners, Inc., 186 W.Va. 310, 412 S.E.2d 504 (1991), an anticipatory release purported to relieve a whitewater rafting company of liability for injuries its customers might sustain in the pursuit of the whitewater rafting activities the company provided. After a customer who had signed the release was injured when the guide of her raft attempted to rescue another raft during their expedition, she sued the whitewater rafting company. The circuit court granted summary judgment to the rafting company based upon the language
In reaching this result, the Court found that the West Virginia Whitewater Responsibility Act, W. Va.Code § 20-3B-1 et seq.,
Murphy, 186 W.Va. at 317, 412 S.E.2d at 511 (citation and footnote omitted). Recognizing that the Legislature had imposed upon the whitewater rafting industry a standard of care with which it is expected to comply in order to protect its participants, we concluded that the whitewater rafting company could not relieve itself of liability for failure to act in accordance with its statutorily mandated responsibilities. In reaching this decision, we held, in Syllabus point 1, that, "[w]hen a statute imposes a standard of conduct, a clause in an agreement purporting to exempt a party from tort liability to a member of the protected class for the failure to conform to that statutory standard is unenforceable." Murphy, 186 W.Va. 310, 412 S.E.2d 504.
The Court next considered the validity of anticipatory releases in Kyriazis v. University of West Virginia, 192 W.Va. 60, 450 S.E.2d 649 (1994), wherein a university student was injured while playing in a rugby match as a member of the university-sanctioned Rugby Club. Unlike the opinion rendered in Murphy, the Kyriazis opinion turned upon whether West Virginia University (hereinafter "WVU") had provided a public service in sanctioning the university's Rugby Club. In deciding that, by authorizing the Rugby Club as an official student organization WVU had provided a public service to its students, we recognized the general rule that contracting parties may freely enter into contracts limiting the parties' liability to one another unless such contractual terms conflict with public policy considerations:
Syl. pt. 1, Kyriazis, 192 W.Va. 60, 450 S.E.2d 649 (emphasis in original). We then explained under what circumstances a limitation of liability or anticipatory release provision would violate public policy and, thus, be rendered unenforceable:
Syl. pt. 2, Kyriazis, 192 W.Va. 60, 450 S.E.2d 649. Finally, with respect to the "public service" test enunciated in Syllabus point 2, we further held that, "[i]n the context of tort liability, when considering whether an enterprise qualifies as a public service, the Court must examine the nature of the enterprise itself." Syl. pt. 3, id.
Id. Lastly, we concluded that, because WVU had employed an attorney to prepare the subject release and had required students to sign the release as a prerequisite to their participation in the Rugby Club, WVU possessed a "decisive advantage in bargaining strength over the [student] at the time he signed the Release," which rendered the contract one of adhesion and, thus, unenforceable. Id.
The facts of the case sub judice also involve a contract that includes an anticipatory release provision that seeks to limit the liability of the party drafting the contract. Here, the Finches contracted with Inspectech for an inspection of the house they were planning to purchase, and the Inspection Agreement included a provision whereby Inspectech sought to limit its liability with respect to its performance of the subject home inspection and its preparation of the resultant home inspection report. Whether this limitation of liability provision is enforceable, however, depends upon whether the inclusion of this exculpatory provision is consistent with or contrary to the public policy of this State. See generally Kyriazis v. University of West Virginia, 192 W.Va. 60, 450 S.E.2d 649; Murphy v. North American River Runners, Inc., 186 W.Va. 310, 412 S.E.2d 504.
As our prior opinion in Murphy determined, a limitation of liability contractual provision may be invalidated as contrary to public policy if it absolves a party of liability for failure to conform to a statutorily imposed standard of conduct. See Syl. pt. 1, Murphy, 186 W.Va. 310, 412 S.E.2d 504. Moreover, an anticipatory release is not enforceable if it exempts a tortfeasor from liability to a person who is a member of a protected class, which protection is designed to insulate the protected class members from the tortfeasor's misconduct. See Syl. pt. 2, Kyriazis, 192 W.Va. 60, 450 S.E.2d 649 (1994). In the State of West Virginia, home inspectors are governed by and are required to comply with guidelines regulating the home inspection industry for the protection of the consumers of such services. See generally W. Va.C.S.R. § 87-5-1 et seq.
W. Va.C.S.R. § 87-5-1.1 (2006). Subsequent provisions of the rule require home inspectors to be certified and define the requirements for certification, W. Va.C.S.R. §§ 87-5-2 to 87-5-10; adopt general standards of practice for the home inspection industry, W. Va.C.S.R. § 87-5-11.1; specify what components of a house must be inspected and reported upon, W. Va.C.S.R. §§ 87-5-14 to 87-5-23; impose responsibilities upon home inspectors, W. Va. C.S.R. § 87-5-24; and provide procedures for the disposition of consumers' complaints about home inspectors and their provision of home inspection services, W. Va.C.S.R. §§ 87-5-26 to 87-5-27.
From the plain language of these home inspector regulations, it is clear that there exists in this State an established standard of conduct with which home inspectors are expected to comply in performing home inspections and in preparing reports for their clients. This standard of conduct renders unenforceable exculpatory clauses in home inspection contracts that purport to exempt home inspectors for their failure to comply with such conduct standards. See Syl. pt. 1, Murphy, 186 W.Va. 310, 412 S.E.2d 504. Also apparent from the numerous regulatory requirements with which home inspectors are expected to comply and the extensive protections afforded to consumers of home inspection services is that the legislative rule establishing a standard of conduct for home inspectors is intended to insulate such consumers from home inspectors' tortious misconduct consistent with the protected class public policy prohibition of exculpatory clauses in Syllabus point 2 of Kyriazis, 192 W.Va. 60, 450 S.E.2d 649. Therefore, we hold that W. Va.C.S.R. § 87-5-1 et seq. imposes upon providers of home inspection services a standard of conduct with which home inspectors are required to comply in the performance of home inspections and the preparation of reports based upon such inspections. Accordingly, a provider of home inspection services may not seek to relieve itself of liability for failure to comply with such regulations, and, thus, the inclusion of a limitation of liability provision, anticipatory release, or exculpatory clause in a contract for home inspection services which does so is invalid and unenforceable as contrary to the public policy of this State.
Moreover, the specific terms of the "Unconditional Release and Limitation of Liability" clause of the parties' Inspection Agreement expressly attempt to relieve Inspectech of liability attributable to its inspection of the house the Finches requested it to inspect, and, to the extent said release does not completely absolve Inspectech of such liability, such terms further endeavor to limit the extent of Inspectech's liability, both of which provisions directly contravene the home inspector standard of conduct established by W. Va.C.S.R. § 87-5-1 et seq. The governing standard of home inspector conduct describes, in great detail, the components of a dwelling that a home inspector is required to inspect and upon which he/she is expected to report his/her findings. See W. Va.C.S.R. §§ 87-5-14 to 87-5-23. To the extent that the subject release attempted to relieve Mr. Flanagan and Inspectech of liability for failing to perform the subject home inspection and prepare the corresponding report in accordance with such standard of conduct, said release is invalid and unenforceable as contrary to public policy. See Syl. pt. 1, Murphy, 186 W.Va. 310, 412 S.E.2d 504. Furthermore, the standard of home inspector conduct requires home inspectors to maintain liability insurance of at least $250,000. See W. Va.C.S.R. § 87-5-4.3. Insofar as the "Unconditional Release and Limitation of Liability" provision purported to limit the amount of Mr. Flanagan's and
In its order granting summary judgment, the circuit court concluded that "Defendant Inspectech, LLC[,] is entitled to judgment as a matter of law" because the Finches had "contractually released Defendant Inspectech, LLC[,] from all liability and responsibility for the cost of repairing and replacing any unreported defect or deficiency and for any consequential damage, property damage or personal injury of any nature." Because we find the subject release to be invalid and unenforceable as contrary to the public policy of this State, Inspectech is not entitled to judgment as a matter of law because this release does not operate to bar the Finches' claims against Inspectech. Absent a party's entitlement to judgment as a matter of law, summary judgment is improper. See Syl. pt. 5, Wilkinson v. Searls, 155 W.Va. 475, 184 S.E.2d 735. Accordingly, we reverse the circuit court's order granting summary judgment to Inspectech based upon the parties' "Unconditional Release and Limitation of Liability" and remand this case to the circuit court for further proceedings consistent with this opinion.
For the foregoing reasons, the January 11, 2011, order of the Circuit Court of Wood County is hereby reversed, and this case is remanded for further proceedings consistent with this opinion.
Reversed and Remanded.
However, one jurisdiction, New York, has issued decisions both enforcing and refusing to enforce limitation of liability clauses in home inspection contracts. See, e.g., Smith-Hoy v. AMC Prop. Evaluations, Inc., 52 A.D.3d 809, 811, 862 N.Y.S.2d 513, 516 (2008) (upholding limitation of liability clause because no special relationship between the parties, statute, or public policy imposed liability, but recognizing that "party may not limit its liability for damages caused by its own grossly negligent conduct" (internal citations omitted)); Mancuso v. Rubin, 861 N.Y.S.2d 79, 52 A.D.3d 580 (2008) (same); Schietinger v. Tauscher Cronacher Prof'l Eng'rs, P.C., 838 N.Y.S.2d 95, 40 A.D.3d 954 (2007) (per curiam) (same); Rector v. Calamus Grp., Inc., 794 N.Y.S.2d 470, 17 A.D.3d 960 (2005) (same and also enforcing release against non-signatory wife as third-party beneficiary of home inspection contract); Peluso v. Tauscher Cronacher Prof'l Eng'rs, P.C., 704 N.Y.S.2d 289, 270 A.D.2d 325 (2000) (mem. dec.) (same); Kogan v. Fenster, 744 N.Y.S.2d 628, 191 Misc.2d 525 (N.Y.Sup.App. Term 2002) (mem. dec.) (same). See also Clement v. Delaney Realty Corp., 845 N.Y.S.2d 423, 45 A.D.3d 519 (2007) (upholding limitation of liability clause because home inspector's conduct did not rise to level of gross negligence). But see, e.g., McPherson v. Husbands, 864 N.Y.S.2d 444, 54 A.D.3d 735 (2008) (denying summary judgment to home inspector because record did not demonstrate that home purchasers had signed or assented to home inspection contract containing limitation of liability provision); Ricciardi v. Frank, 620 N.Y.S.2d 918, 163 Misc.2d 337 (N.Y.City Ct. 1994) (refusing to enforce limitation of liability clause in home inspection contract because contract established special relationship between home inspector and home purchasers, clause was not clear and conspicuous, and release was unconscionable), aff'd as modified, 655 N.Y.S.2d 242, 170 Misc.2d 777 (N.Y.Sup.Ct.App. Term 1996) (mem. dec.) (enforcing exculpatory clause to limit home inspector's liability to cost of home inspection).
Furthermore, consistent with the majority position declaring exculpatory clauses in home inspection contracts to be unenforceable as contrary to public policy, several jurisdictions also have adopted statutes that specifically prohibit the inclusion of an anticipatory release or limitation of liability provision in a contract for home inspection services. See, e.g., Alaska Stat. Ann. § 08.18.085(d) (West 2003) ("Contractual provisions that purport to limit the liability of a home inspector to the cost of the home inspection report are contrary to public policy and void."); Cal. Bus. & Prof.Code § 7198 (West 1996) ("Contractual provisions that purport to waive the duty owed pursuant to Section 7196, or limit the liability of the home inspector to the cost of the home inspection report, are contrary to public policy and invalid."); Mass. Gen. Laws Ann. ch. 112, § 225(6)(v) (West 2000) (allowing for denial, refused renewal, limitation, suspension, or revocation of home inspector's license upon violation of ethical standards, including "attempting to limit liability for negligent or wrongful errors or omissions by use of a clause within a performance contract that limits the cost of damages for negligent or wrongful errors or omissions"); Wis. Stat. Ann. § 440.976 (West 1997) ("No home inspector may include, as a term or condition in an agreement to conduct a home inspection, any provision that disclaims the liability, or limits the amount of damages for liability, of the home inspector for his or her failure to comply with the standards of practice prescribed in this subchapter or in rules promulgated under this subchapter."). By contrast, other jurisdictions permit the inclusion of exculpatory provisions in home inspection contracts, but strictly limit the extent to which the home inspector may relieve himself/herself of liability. See, e.g., Kan. Stat. Ann. § 58-4505 (West 2011) (providing for suspension or revocation of home inspector's registration or imposition of probationary conditions if home inspector "includ[es] as a term or condition in an agreement to conduct a home inspection any provision that disclaims the liability of the registered home inspector for any errors and omissions which may arise during a home inspection or to limit the amount of damage for liability for any errors and omissions which may arise during a home inspection to less than $10,000 in the aggregate for each home inspection"); 68 Pa. Stat. Ann. § 7507(a)(1) (West 2000) ("The following types of provisions in a contract with a home inspector for the performance of a home inspection are contrary to public policy and shall be void: ... a limitation on the liability of the home inspector for gross negligence or willful misconduct."). But see, e.g., Md.Code Ann., Bus. Occ. & Prof. § 16-4A-01(c) (West 2008) (requiring only that "[a]ny limitation of the liability of the licensee for any damages resulting from the report on the home inspection shall be agreed to in writing by the parties to the home inspection prior to the performance of the home inspection").