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Hoffman v. Greenberg

In Hoffman, the Arizona Court of Appeals held that the appraiser had no duty to the buyer of real property. The appraisal was prepared for the owner of the property at a time when no sale (or trade) or financing was pending or, to the best of the appraiser’s knowledge, even contemplated. The owner of the property refused to even tell the appraiser the purpose of the report, and the appraiser had no reason to know the purpose of the report or that there was any chance that it would be provided to anyone, let alone the ultimate buyer. Instead, the seller later provided a copy of the report to another property owner (completely unknown to the appraiser) in connection with negotiations to trade the appraised property for some other properties.

The Court held that, under these circumstances, the appraiser owed no duty to the subsequent buyer (who took the appraised property in trade). The Court explained:

it is Olsson [the owner] who was Greenberg’s [the appraiser’s] client because the appraisal was prepared for him. It is clear from the record that Olsson did not tell Greenberg his intended use of the appraisal. Olsson testified that he did not tell Greenberg the function or purpose of the appraisal as he considered it ‘none of his business.’ The appraisal report itself stated that ‘The function of this report is to aid our client in a decision making process.’ The report also states that it ‘may [not] be used for any purpose other than its intended use.’ From the terms of the report, it is clear that Greenberg intended the report be used only by Olsson and did not contemplate or anticipate its dissemination to others.