The Indiana Court of Appeals upheld a trial court's finding of summary judgment on the issue of whether a real estate appraiser owed a duty to a property seller. Here, BSA Construction, LLC entered into a contract to sell a residential home to a buyer. The buyer obtained financing for the home purchase from a bank that was contingent on an appraisal of the property. Per the contract, the purchase price of the property was to be $60,000; but the real estate appraiser only appraised the property at $50,000. Consequently, the bank financing the transaction denied the loan due to the appraised price of the property being less than the amount of the loan.
BSA thereafter sued the appraiser arguing that he owned it a duty of care. The basis of BSA’s claim was that it was a third-party beneficiary to the bank’s lending agreement with the purchaser and, therefore, the appraiser owed it a duty of care. The trial court and COA disagreed, finding that the appraiser instead only owed a duty of care to the bank that hired him to perform the appraisal, not BSA, a third-party.
BSA Construction, LLC v. Jimmie Johnson, (Ind. App. 2016).