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        IN THE SUPREME COURT OF THE STATE OF WASHINGTON

TIMOTHY L. JACKOWSKI and                            )
ERI JACKOWSKI, husband and wife,                    )      No. 83660-4
                                                    )
                      Respondents,                  )
                                                    )
       v.                                           )      En Banc
                                                    )
DAVID BORCHELT and ROBIN BORCHELT,  )
husband and wife; HAWKINS POE, INC.,                       )
dba COLDWELL BANKER HAWKINS-POE                     )
REALTORS; and ROBERT JOHNSON,                       )
real estate agent,                                  )
                                                    )
                      Petitioners,                  )
                                                    )
HIMLIE REALTY INC. and VINCE HIMLIE,                )
broker for WINDERMERE HIMLIE REAL                          )
ESTATE, real estate brokers; and                           )
JEF CONKLIN, real estate agent,                            )
                                                    )
                      Respondents.                  )
                                                    )      Filed June 14, 2012

       ALEXANDER, J.* -- After a landslide damaged their home, the homeowners sued 

the sellers of the home, seeking rescission or, in the alternative, damages for fraud, 

fraudulent concealment, negligent misrepresentation, and breach of contract. The 

homeowners also sued the sellers' broker and agent, alleging fraud, fraudulent 

       *Justice Gerry L. Alexander is serving as a justice pro tempore of the Supreme 
Court pursuant to Washington Constitution article IV, section 2(a). 

No. 83660-4

concealment, negligent misrepresentation, and breach of common law fiduciary duties. 

They leveled similar claims against their own broker and agent together with a claim for 

breach of statutory fiduciary duties. The trial court entered summary judgment 

dismissing all of the homeowners' claims, except the fraudulent concealment claims 

against the sellers and the sellers' broker and agent regarding cracks in the concrete 

basement floor. The Court of Appeals affirmed that decision in part and reversed it in 

part. The sellers and the homeowners' broker and agent then obtained review in this 

court. We affirm the Court of Appeals' decision and remand to the trial court for further 

proceedings consistent with this opinion.

                                                I

       In 2004, Timothy Jackowski and Eri Takase (collectively Jackowskis), a married 

couple, purchased a waterfront home in Mason County from David and Robin Borchelt

(Borchelts). In the transaction, the Jackowskis' broker was Hawkins Poe Inc., dba

Coldwell Banker Hawkins-Poe Realtors (Hawkins Poe), and their real estate agent was 

Robert Johnson (Johnson). The Borchelts' broker was Himlie Realty Inc. and Vince 

Himlie of Windermere Himlie Real Estate (collectively Windermere Himlie), and their 

real estate agent was Jef Conklin (Conklin).

       The Jackowskis and Borchelts entered into a residential real estate purchase 

and sale agreement (PSA) on May 13, 2004. As part of the transaction, the Borchelts, 

as sellers, completed a "Form 17" real property transfer disclosure statement. On this 

form, the Borchelts checked "no" in response to the following questions: (1) "Has there 

                                               2 

No. 83660-4

been any settling, slippage, or sliding of the property or its improvements?" (2) "Does 

the property contain fill material?" (3) "Is there any material damage to the property 

from . . . landslides?" and (4) "Are there any other existing material defects affecting the 

property that a prospective buyer should know about?" Clerk's Papers (CP) at 915, 

916. Prompted by an inspection of a county-ordered revegetation project, the Borchelts

later amended Form 17 to refer to a Mason County Department of Community 

Development letter dated June 11, 2003. The letter, which signified the granting of a 

permit for a block wall as a part of the revegetation project, indicated that the property 

was located within a landslide hazard area. It also referred to a geotechnological report 

by geologist Harold Parks, which had been ordered in 2002 when the Borchelts

contemplated an addition to the house. The Parks report said that a slope on the 

property was unstable within the first 25 feet of the shoreline, particularly within the first 

10 feet. Although the report indicated that an addition could be safely placed only to the 

west of the existing house, it was eventually built to the north of the existing house.

       The Borchelts provided the amended Form 17, including the above mentioned 

documents, to Conklin. Conklin then passed along the information to Johnson. It is 

unclear from the record when the Jackowskis received and reviewed the amended 

Form 17. It appears, however, that Johnson e-mailed the form to them within a day or 

two of the date on which the parties signed the PSA.

       The PSA included an inspection addendum that was signed by the Jackowskis. 

It provided them with an option to inspect the property within 15 days after they made 

                                               3 

No. 83660-4

an offer. Although the Jackowskis obtained a standard home inspection on Johnson's 

advice, they did not conduct an inspection of soil stability prior to closing. The sale 

closed on June 30, 2004. 

       In 2006, a landslide occurred that caused damage to the house. The Jackowskis

were advised by an engineer to vacate the house immediately and they did so. The 

Jackowskis claim that at this time they learned from neighbors that the Borchelts had 

concealed the fact that the addition on  the north side  of the house had been 

constructed on uncompacted fill material. The Jackowskis also claim that they learned 

after the sale had closed that the Borchelts concealed cracks in the concrete basement 

floor by covering the floor with carpet. The concealment, according to the Jackowskis, 

occurred after the Borchelts put the house on the market, but prior to the time the 

Jackowskis first viewed the property.

       The    Jackowskis    brought suit against the Borchelts             for rescission or, 

alternatively, for damages based on causes of action for fraud, fraudulent concealment, 

negligent misrepresentation, and breach of contract. The Jackowskis also sued the 

brokers and agents for fraud or negligent misrepresentation related to the property 

being in a landslide hazard area and for breach of common law fiduciary duties. The 

trial court permitted the Jackowskis to amend their complaint against Hawkins Poe and 

Johnson to include an allegation of failure to meet statutory duties under 

18.86.050(1)(c) and against the Borchelts, Windermere Himlie, and Conklin for fraud 

and fraudulent concealment of cracks in the basement.

                                               4 

No. 83660-4

                A. BORCHELTS' MOTION FOR SUMMARY JUDGMENT

       The Borchelts moved for a summary judgment dismissing all of the Jackowskis'

claims against them. The trial court dismissed the Jackowskis' breach of contract claim 

on the basis that the Jackowskis failed to respond to that portion of the Borchelts'

motion for summary judgment. The trial court also dismissed the Jackowskis' negligent 

misrepresentation claims, applying the economic loss rule set forth in Alejandre v. Bull, 

159 Wn.2d 674, 153 P.3d 864 (2007). The trial court dismissed the Jackowskis' "claims 

of Fraud and Rescission arising out of the Chapter 64.06 RCW real estate disclosure 

form, Form 17." CP at 89. Finally, it dismissed the Jackowskis' claims relating to fraud 

regarding "allegations that the property is in a known landslide hazard area or had 

been previously subject to landslides," as well as "allegations that the property 

contained fill or that the addition was constructed on fill." Id. at 90. It did so because the 

evidence showed the Borchelts disclosed to the Jackowskis in written form that the 

property was in a landslide hazard area and that a reasonable investigation, on which 

the Jackowskis made their offer contingent, would have revealed the landslide issue 

and the presence of fill material. 

       The trial court denied the Borchelts'          request to dismiss the Jackowskis'

fraudulent concealment claim insofar as it was based on an allegation that the 

Borchelts concealed cracks in the basement by covering them with carpet.

     B. HAWKINS POE AND JOHNSON'S MOTION FOR SUMMARY JUDGMENT 

       Hawkins Poe and Johnson also moved for summary judgment. The trial court 

                                               5 

No. 83660-4

granted their motion only as to the negligent misrepresentation claim, again relying on

Alejandre. Because the trial court did not address the remaining claims, Hawkins Poe 

and Johnson again moved for a summary judgment dismissing the claims the trial court 

had not addressed. The trial court granted the motion also on the basis of Alejandre.

 C. WINDERMERE HIMLIE AND CONKLIN'S MOTION FOR SUMMARY JUDGMENT

       Windermere Himlie and Conklin similarly moved for summary judgment. The trial 

court partially granted their motion reasoning that the Jackowskis had received written 

disclosures that the property was in a landslide hazard area and that a reasonable 

inspection of the property would have disclosed landslide risk and the presence of fill 

material. The trial court denied summary judgment on the Jackowskis'                 fraudulent 

concealment claim based on cracks in the basement for reasons similar to those set 

forth by the trial court in response to the Borchelts' motion.

                        D. THE COURT OF APPEALS' DECISION

       The Jackowskis appealed the trial court's decisions to the Court of Appeals. 

That court affirmed the trial court in part and reversed it in part, remanding for trial on 

unresolved issues. Jackowski v. Borchelt, 151 Wn. App. 1, 209 P.3d 514 (2009).

Specifically, the Court of Appeals affirmed the trial court's dismissal of the following

claims by the Jackowskis: (1) negligent misrepresentation claims against the Borchelts

and (2) all fraud and fraudulent concealment claims against "all parties" relating to the 

landslide issue. Id. at 21. The Court of Appeals reversed the trial court's dismissal of 

the following claims by the Jackowskis: (1) statutory and common law breach of 

                                               6 

No. 83660-4

fiduciary duty claims against Hawkins Poe and Johnson; (2) all causes of action 

relating to fraud regarding fill material; and (3) the breach of contract claims against the 

Borchelts. The Court of Appeals also held that the Jackowskis were not, under either 

the economic loss rule or chapter 64.06 RCW, barred from seeking common law 

rescission of the PSA.

       The Borchelts, Hawkins Poe, and Johnson sought and obtained our review of

the Court of Appeals' decision. Jackowski v. Borchelt, 168 Wn.2d 1001, 226 P.3d 780 

(2010). They claimed that the Court of Appeals erred in (1) reversing the trial court's 

dismissal of the Jackowskis' claims that the real estate licensees breached statutory 

and common law fiduciary duties, (2) reversing the trial court's dismissal of causes of 

action alleging fraud concerning fill material, and (3) permitting the Jackowskis to seek

common law rescission. Windermere  Himlie and Conklin did not file a petition for 

review, but argued in their answer to Hawkins Poe and Johnson's petition for review 

that the Court of Appeals improperly reversed the trial court's dismissal of the claims 

relating to fill material. In light of the parties' disputes about whether the economic loss 

rule applies, we stayed consideration of this case until we issued our opinions in 

Eastwood v. Horse Harbor Found., Inc., 170 Wn.2d 380, 241 P.3d 1256 (2010)

(plurality opinion) and Affiliated FM Ins. Co. v. LTK Consulting Servs., Inc., 170 Wn.2d 

442, 243 P.3d 521 (2010).

                                               II

       We review de novo an order granting summary judgment, "taking all facts and 

                                               7 

No. 83660-4

inferences in the light most favorable to the nonmoving party." Biggers v. City of 

Bainbridge Island, 162 Wn.2d 683, 693, 169 P.3d 14 (2007). Summary judgment is only 

appropriate if the moving party shows 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).

       This case also presents questions of statutory interpretation, which we review de 

novo. See Whatcom County Fire Dist. No. 21 v. Whatcom County, 171 Wn.2d 421, 

427, 256 P.3d 295 (2011) (citing In re Pers. Restraint of Cruze, 169 Wn.2d 422, 426, 

237 P.3d 274 (2010)). In interpreting the meaning of a statute, we are to discern and 

implement the legislature's intent. If we conclude that the statutory language is 

unambiguous and legislative intent is apparent, we will not construe the statute 

otherwise. Plain meaning, however, may be gleaned "'from all that the Legislature has 

said in the statute and related statutes which disclose legislative intent about the 

provision in question.'" Id. at 433 (Chambers, J. dissenting) (quoting Dep't of Ecology v. 

Campbell & Gwinn, LLC, 146 Wn.2d 1, 11, 43 P.3d 4 (2002)).

                                               III

       We begin by addressing the question of whether the Court of Appeals erred in 

reversing the trial court's dismissal of the Jackowskis' claims that Hawkins Poe and 

Johnson breached common law and statutory fiduciary duties. As stated above, the trial 

court's decision and the Court of Appeals' decision, as well as most of the parties' 

briefing for our review, relied upon our exposition  of the economic loss rule in 

Alejandre. Since accepting review of this case, we have recast the economic loss rule 

                                               8 

No. 83660-4

as the independent duty doctrine. See Eastwood, 170 Wn.2d 380.               The parties have 

provided additional briefing, which we have considered.

                        A. THE INDEPENDENT DUTY DOCTRINE

       The long-established purpose of the economic loss rule was to supply courts 

with a method by which to discern the line between contract and tort. Alejandre, 159 

Wn.2d at 681. In Alejandre, home purchasers made a tort claim against a seller for an 

allegedly negligent misrepresentation regarding a septic tank. We disallowed the claim, 

concluding that it was barred by then-extant economic loss rule. Id. at 689.

       Subsequent to Alejandre, in Eastwood  we said that the "term 'economic loss 

rule' has proved to be a misnomer." Eastwood, 170 Wn.2d at 387 (Fairhurst, J., 

plurality opinion). In its place we adopted the nomenclature independent duty doctrine. 

Id.; see also id. at 408 (Chambers, J., concurring). We recognized in Eastwood that the 

duty to not commit waste was based either on statute and common law or statute alone.

We held, therefore, that the duty to not commit waste was independent of the lease 

agreement. We concluded that "[a]n injury is remediable in tort if it traces back to the 
breach of a tort duty arising independently of the terms of the contract." Id. at 3891

                             B. PROSPECTIVE APPLICATION

       1In Eastwood, Justice Fairhurst wrote for four justices and concluded that when 
deciding if a duty arises independent of contract, we must consider logic, common 
sense, justice, policy, and precedent. Eastwood, 170 Wn.2d at 389. Justice Chambers,
writing for four concurring justices, indicated that the independent duty doctrine is "not 
a rule at all; rather it is an analytical tool used by courts to decide whether there is an 
independent duty cognizable in tort in the first instance." Id. at 409 (Chambers, J., 
concurring). Chief Justice Madsen also concurred but stated that the rearticulation of 
the economic loss rule as the independent duty doctrine was "unnecessary." Id. at 402
(Madsen, C.J., concurring). 

                                               9 

No. 83660-4

       Before  reaching the question of whether an independent duty existed in this 

case, we must address an argument made by Hawkins Poe and Johnson that the 

doctrine enunciated in Eastwood should apply prospectively only. See Pet'rs Hawkins 

Poe and Johnson's Suppl. Br. re Eastwood & Affiliated FM at 15. "'Ordinarily, a decision 

of a court of last resort overruling a former decision is retrospective as well as 

prospective in its operation, unless specifically declared by the opinion to have a 

prospective effect only.'" State ex rel. Wash. State Fin. Comm. v. Martin, 62 Wn.2d 645, 

671, 384 P.2d 833 (1963) (quoting Fla. Forest & Park Serv. v. Strickland, 154 Fla. 472, 

476, 18 So. 2d 251 (1944)). The default of retroactive application is "'"overwhelmingly 

the norm."'" Lunsford v. Saberhagen Holdings, Inc., 166 Wn.2d 264, 270, 208 P.3d 

1092 (2009) (quoting Robinson v. City of Seattle, 119 Wn.2d 34, 74, 830 P.2d 318 

(1992) (quoting James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 535, 111 S. Ct. 

2439, 115 L. Ed. 2d 481 (1991))). In Lunsford, we unequivocally held that "[b]y its very 

nature, the decision to apply a new rule prospectively must be made in the decision 

announcing the new rule of law." Id. at 279. Because we did not decide in Eastwood or 

Affiliated FM that the independent duty doctrine is to be applied prospectively only, we 

decline to do so here.

    C. DUTIES OWED TO THE JACKOWSKIS BY HAWKINS POE AND JOHNSON

                                   1. Common Law Duties

       In their complaint, the Jackowskis        alleged that Hawkins Poe and Johnson 

breached their common law fiduciary duties to disclose material information about the 

                                              10 

No. 83660-4

property. See, e.g., CP at 1392. In response, Hawkins Poe and Johnson assert that the 

common law fiduciary duties of real estate licensees2 were abrogated by chapter 18.86 

RCW. See, e.g., Hawkins Poe and Johnson's Pet. for Review at 13. To interpret a 

statute, we look first to the plain meaning of its language. See Dowler v. Clover Park 

Sch. Dist. No. 400, 172 Wn.2d 471, 481, 258 P.3d 676 (2011). Chapter 18.86 RCW 

contains two provisions that are particularly relevant to our inquiry. The first provision, 

RCW 18.86.110, provides that chapter 18.86 RCW "supersedes only the duties of the 

parties under the common law, including fiduciary duties of an agent to a principal, to 

the extent inconsistent with this chapter. The common law continues to apply to the 

parties in all other respects." The other provision, RCW 18.86.050(1), states that 

"[u]nless additional duties are agreed to in writing signed by a buyer's agent, the duties 

of a buyer's agent are limited to those set forth in RCW 18.86.030 and [those listed in 
this statute]." (Emphasis added.)3 Thus, although RCW 18.86.110 retains the common 

law to the extent it is not inconsistent with chapter 18.86 RCW, the legislature

redefined the duties of real estate brokers. See Sing v. John L. Scott, Inc., 134 Wn.2d 

24, 31 n.3, 948 P.2d 816 (1997) (noting that "the Legislature enacted comprehensive 

       2"'Licensee' means a real estate broker, associate real estate broker, or real 
estate salesperson, as those terms are defined in chapter 18.85                  RCW."  RCW 
18.86.010(8).

       3RCW 18.86.050 sets forth a buyer's agent's fiduciary duties, which include
loyalty to the buyer, timely disclosure to the buyer of any conflicts of interest, advising 
the buyer to seek expert advice on matters relating to the transaction that are beyond 
the agent's expertise, nondisclosure of confidential information, and good faith and 
continuous efforts to find a property for the buyer. Additional duties generally 
applicable to all licensees are set forth in RCW              18.86.030; duties specifically 
applicable to the seller's agent are set forth in RCW 18.86.040.

                                              11 

No. 83660-4

legislation which redefined the duties of real estate brokers").

       In adopting this statutory scheme, the legislature changed some of the common 

law fiduciary duties of real estate licensees and codified other preexisting duties. For 

example, under the prior  common law,             real estate agents were         required to 

"scrupulously avoid representing any interest antagonistic to that of the principal in 

transactions." Mersky v. Multiple Listing Bureau of Olympia, Inc., 73 Wn.2d 225, 229, 

437 P.2d 897 (1968). The legislature, however, now permits dual agency under chapter 

18.86 RCW. See RCW 18.86.050(2)(b), .010(7). Thus, a single broker may represent 

multiple sellers and buyers at the same time even though their interests may conflict.

Id. Furthermore, a dual agent may market a property after a client-buyer has made an 

offer to buy it even though doing so might not be in the client-buyer's interests. RCW 

18.86.060(4)(a). 

       Since the language of the statute, RCW 18.86.110, is not ambiguous, we will not 

construe it to mean anything different from what it says: common law duties continue 

only to the extent they have not been limited by or are not otherwise inconsistent with 

the statute. That does not, however, end our inquiry.  

                                              12 

No. 83660-4

                                      2. Statutory Duties

       We next determine whether Hawkins Poe and Johnson owe the Jackowskis an 

independent duty based in statutory law. The Jackowskis allege that Hawkins Poe and 

Johnson breached their duty under RCW 18.86.050(1)(c), which requires a buyer's 

agent to "advise the buyer to seek expert advice on matters relating to the transaction 

that are beyond the agent's expertise." More specifically, the Jackowskis claim that 

Hawkins Poe and Johnson should have advised the Jackowskis to hire a geotechnical 

expert to inspect the property. Hawkins Poe and Johnson make several arguments in 

an attempt to avoid liability; however, none of these arguments adequately addresses 

the   Jackowskis'    allegation that the real estate licensees breached RCW 

18.86.050(1)(c) by failing to advise the Jackowskis to seek the advice of a geotechnical 

expert. Hawkins Poe and Johnson first argue that the "legislative enactments codified 

in RCW     18.86 recognize and accept that real estate agents do not have an 

independent duty to conduct an inspection of the property." Pet'rs Hawkins Poe and 
Johnson's Suppl. Br. re Eastwood and Affiliated FM at 7.4 Although none of the parties 

disagree with this argument, it is not germane to the contention that Hawkins Poe and 

Johnson should have advised the Jackowskis to seek expert advice.

       4Hawkins Poe and Johnson cite RCW 64.06.020 to support their argument that 
real estate licensees do not owe an independent duty to inspect the property. However, 
RCW 64.06.020 merely articulates the disclosure requirements of the seller (Form 17) 
but does not reference duties owed by real estate licensees. The language referenced 
by Hawkins Poe and Johnson, which advises buyers to obtain an expert to inspect the 
property, does not eliminate the buyer's agents' duty to advise the buyer to seek expert 
advice as set forth in RCW 18.86.050(1)(c).

                                              13 

No. 83660-4

       Hawkins Poe and Johnson also argue that the PSA had already allocated the 

risk of disclosure failures and, therefore, "[a]llowing a party to impose additional tort 

duties not set forth in the contract, but within the bargained-for subject matter of the 

contract, would circumvent the allocation of losses set forth in, and impair the integrity 

of, the governing contract." Id. at 10. Parties to a contract may allocate the risk between 

them. But here, Hawkins Poe and Johnson, as real estate licensees, are not parties to 

the contract. The issue before us, involving allegations of breach of statutory duties by 

real estate licensees imposed under RCW            18.86.050(1)(c), is independent  of the 

bargained-for subject matter of the PSA.

       Hawkins Poe and Johnson also contend that the duty imposed under RCW 

18.86.050(1)(c) can be understood

       as a duty to refer a client to an attorney should legal questions arise in a 
       transaction, to an accountant should tax questions arise, or to a mortgage 
       advisor should there be questions involving lending. It should not be 
       construed as a duty to advise a client to seek additional inspections.

Pet'rs Hawkins Poe and Johnson's Suppl. Br. re Eastwood and Affiliated FM at 11-12. 

Contrary to Hawkins Poe and Johnson's assertion, RCW 18.86.050(1)(c) does not limit 

a licensees' duties to these hypothetical situations. Rather the statute broadly includes 

"matters relating to the transaction that are beyond the agent's expertise." RCW 

18.86.050(1)(c). In our view, informing a party to seek expert advice from a 

geotechnical expert could fall within the ambit of this statute.

       Hawkins Poe and Johnson argue, additionally, that the Court of Appeals "erred 

in holding that RCW 18.86 creates a private right of action." Suppl. Br. of Pet'rs 

                                              14 

No. 83660-4

Hawkins Poe and Johnson at 15. The Court of Appeals did not indicate that it was creating 

a new cause of action and did not apply the three-part test, set forth in Bennett v. 

Hardy, 113 Wn.2d 912, 920-21, 784 P.2d 1258 (1990), for determining whether a 
statue creates a new cause of action.5 Chapter 18.86 RCW does not indicate the 

creation of a new statutory cause of action but it does state that the common law 

continues to apply where it is not limited or inconsistent.  See  RCW               18.86.110. 

Therefore, common law tort causes of action remain the vehicle through which a party 

may recover for a breach of statutory duties set forth in chapter 18.86 RCW.

       We hold that there is sufficient evidence in the record on the factual issue of 

whether Hawkins Poe and Johnson violated RCW 18.86.050(1)(c) to survive summary 

judgment. Therefore, we affirm the Court of Appeals' reversal of the trial court's grant of 

summary judgment on the Jackowskis' claims that Hawkins Poe and Johnson breached 

statutory duties.

                                               IV

       The next question before us is whether the Court of Appeals erred in finding that 

chapter 64.06 RCW does not bar common law rescission. The Borchelts make a 

statutory argument that "[c]hapter 64.06 RCW eliminates the availability of common law 

rescission with respect to claims based solely on Form 17 disclosures, where any such 

       5Under Bennett, this court considers the following factors to determine whether 
there is an implied statutory cause of action: "[F]irst, whether the plaintiff is within the 
class for whose 'especial' benefit the statute was enacted; second, whether legislative 
intent, explicitly or implicitly, supports creating or denying a remedy; and third, whether 
implying a remedy is consistent with the underlying purpose of the legislation." Bennett, 
113 Wn.2d at 920-21.

                                              15 

No. 83660-4

claim does not require proof of the seller's 'actual knowledge.'" Borchelts' Pet. for 

Review at 13. The Borchelts depend on RCW 64.06.070 and .050 to support their 

abrogation argument. RCW 64.06.070 states:

       Except as provided in RCW 64.06.050, nothing in this chapter shall 
       extinguish or impair any rights or remedies of a buyer of real estate 
       against the seller or against any agent acting for the seller otherwise 
       existing pursuant to common law, statute, or contract; nor shall anything 
       in this chapter create any new right or remedy for a buyer of [residential] 
       real property other than the right of rescission exercised on the basis and 
       within the time limits provided in this chapter.

(Emphasis added.) RCW 64.06.050(1) provides that "[t]he seller shall not be liable for 

any error, inaccuracy, or omission in the real property . . . disclosure statement if the 

seller had no actual knowledge of the error, inaccuracy, or omission." (Emphasis 

added.) Although RCW 64.06.030 permits buyers to rescind an offer within three days 

of receiving the disclosure statement, the statute does not explicitly bar buyers from 

seeking remedies, including rescission, at a later date if they discover negligence or 

intentional misrepresentations. The Borchelts         read the aforementioned  provisions 

together to mean that the common law was retained except in situations, such as they 

claim  here,  where the seller lacked adequate knowledge relating to Form 17 

disclosures as provided in RCW 64.06.050. We agree with the Borchelts that to the 

extent the Jackowskis base their request for rescission on negligent misrepresentation
under RCW 64.06.050(1), they must show actual knowledge, as the statute indicates.6

       The Borchelts also argue that the Jackowskis are not entitled to common law 

       6Although the Court of Appeals addressed the rescission issue solely with regard 
to the Jackowskis' negligent misrepresentation claims, we do not view the Jackowskis'
request for rescission as being so limited.

                                              16 

No. 83660-4

rescission because they are limited to the statutory rescission right created in RCW 

64.06.030. We disagree. It is true that RCW 64.06.030 establishes a right of rescission 

that must be exercised, if at all, within three days of the buyer's receipt of the disclosure 

statement. If the buyer does not exercise the right to rescind within the time limit, the 

disclosure statement is considered approved and accepted. RCW 64.06.030. However, 

as we noted, RCW 64.06.030 supplements the common law rights of buyers; it does 

not displace those rights. See RCW 64.06.070 ("nothing in this chapter shall extinguish 

or impair any rights or remedies of a buyer of real estate"). A buyer is, therefore, 

entitled to pursue common law remedies, including common law rescission, outside of 

that three-day period. We hold that the Court of Appeals was correct in holding that 

chapter 64.06 RCW        does not bar a  common law rescission action based on 

misrepresentations in the Form 17 disclosures.

                                               V

       The final issue in this case is whether the Court of Appeals erred in reversing 

the trial court's grant of summary judgment on the fill issue. The Court of Appeals 

explained that "the Jackowskis sued the Borchelts alleging both fraud and fraudulent 

concealment, while alleging only fraudulent concealment against Hawkins-Poe, 

Johnson, Windermere Himlie, and Conklin." Jackowski, 151 Wn. App. at 17. That court 

concluded that "the Borchelts were not entitled to summary judgment dismissal of the 

fill issue as a matter of law for the Jackowskis' fraud and fraudulent concealment 

claims." Id. at 19. The Court of Appeals' decision does not mention the Jackowskis'

                                              17 

No. 83660-4

fraudulent concealment claims against the real estate licensees insofar as those claims relate to the 

fill issue.7

After our decision in Eastwood, the Court of Appeals' reliance on the economic loss 

rule is in error. Because the duty to not commit fraud is independent of the contract, the 

independent duty doctrine permits a party to pursue a fraud claim regardless of 

whether a contract exists. See Eastwood, 170 Wn.2d at 390. The same is true for a 

claim of  negligent misrepresentation, but only to the extent the duty to not commit 

negligent misrepresentation is independent of the contract.

       In a fraud claim, the plaintiffs must establish that they had a right to rely on the 

representation. Jackowski, 151 Wn. App. at 17 (citing Williams v. Joslin, 65 Wn.2d 696, 

697, 399 P.2d 308 (1965)). Because the Borchelts represented in Form 17 that the 

property did not contain fill material, the  Jackowskis were entitled to rely upon the 

representation. The Borchelts contend that because they later amended the Form 17 

and disclosed a geotechnological report indicating the property was within a landslide 

area and unstable within 25 feet of the shoreline, an adequate disclosure was made. 

The parties, however, dispute the facts with regard to when the Jackowskis received 

the amended Form 17. Because there are genuine issues of material fact, it was 

improper for the trial court to grant summary judgment on the Jackowskis' fraud claim. 

       Similar facts drive the analysis of the fraudulent concealment claim. We have 

       7The Jackowskis also argued to the trial court that the Borchelts are liable for 
constructive fraud for failing to disclose the presence of fill.  See CP at 368 (citing 
Sorrell v. Young, 6 Wn. App. 220, 225, 491 P.2d 1312 (1971)). The Court of Appeals, 
however, did not address this claim.

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No. 83660-4

held that a "vendor's duty to speak arises where . . . the defect would not be disclosed by a 

careful, reasonable inspection by the purchaser." Alejandre, 159 Wn.2d at 689 (citing 

Atherton Condo. Apartment -- Owners Ass'n Bd. of Dirs. v. Blume Dev. Co., 115 Wn.2d 

506, 524, 799 P.2d 250 (1990)). The trial court concluded there was no material 

question of fact that the presence of fill could have been discovered by such a 

reasonable inspection.  In a deposition, the            Jackowskis'    expert, David Strong,

answered "[y]es" when asked if "any competent soils inspector, reviewing the property, 

would have been able to see there was fill on the property." CP at 141.1. He also 

indicated he believed that he had characterized the fill as being "obvious" to any 

"qualified geologist" during his inspection. Id. The Court of Appeals found it significant 

that Strong's "property evaluation occurred after the sliding event" and concluded that it 

"does not help us decide whether the presence of fill would have been disclosed with a 

careful, reasonable inspection at the time of the sale." Jackowski, 151 Wn. App. at 18.

       Additionally, Randall Thompson, the architect for the Borchelts' addition, stated 

in a declaration that "[t]he fill is apparent and is located along the north boundary line of 

the property and is armored with quarry rock." Suppl. Clerk's Papers at 1402. Again,

the Court of Appeals found it significant that "Thompson based these statements on 

what he observed when he inspected the property after the sliding event." Jackowski, 

151 Wn. App. at 18. We agree it is significant that this evidence was obtained after the 

sliding event and, therefore, the fill may not have been "obvious" or "apparent" prior to 

the landslide.

                                              19 

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       Our review of the record reveals additional evidence that supports the 

Jackowskis' argument that summary judgment was inappropriate on their claims related 

to fraud. In this regard, the Jackowskis submitted evidence purporting to show that the 

Borchelts knew the property contained fill material. Robin Borchelt was asked in a 

deposition if the retaining wall near the house "is backfilled with fill," and she answered 

"[p]art of it probably is." CP at 366. When asked again if there was fill behind the 

retaining wall, Robin Borchelt stated she "assum[ed]" fill material was used to "level it 

out." Id. The Borchelts' contractor who built the addition to the house agreed with the 

Jackowskis' counsel during a deposition that the work he bid to perform on the 

Borchelts' property "included relocating materials on the site to use as fill." Id. at 368.

He also agreed that "backfill extends all the way back to the original house foundation." 

Id. While not dispositive of the claims relating to fraud, when viewed in the light most 

favorable to the Jackowskis, this evidence shows that  there  are genuine issues of 

material fact relating to whether the fill could have been disclosed by a reasonable 

inspection prior to the landslide. We, therefore, affirm the Court of Appeals' reversal of 

the trial court's grant of summary judgment on the claims relating to fraud pertaining to 

the fill issue.

                                               VI

       The Court of Appeals        correctly reversed the trial court's dismissal of the 

Jackowskis' claims for breach of statutory fiduciary duties. The Court of Appeals also 

properly acknowledged that chapter 64.06 RCW does not bar common law rescission,

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No. 83660-4

and it properly reversed the trial court's dismissal of the Jackowskis' causes of action 

relating to fraud concerning the fill issue. For the reasons stated above, we affirm the 

Court of Appeals and remand to the trial court for further proceedings.

                                              21 

No. 83660-4

AUTHOR:
        Gerry L. Alexander, Justice Pro 
        Tem.

WE CONCUR:
        Chief Justice Barbara A. Madsen,                 Justice James M. Johnson
        result only
        Justice Charles W. Johnson                       Justice Debra L. Stephens

        Justice Tom Chambers                             Justice Charles K. Wiggins

        Justice Susan Owens

        Justice Mary E. Fairhurst

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