Mt. Homes, Inc., a Washington Corporation v. United States
Opinion
Opinion
Wright, J.
Although the United States is generally liable for its torts under the Federal Tort Claims Act, 28 U.S.C. § 2674 , et seq., it is immune from any claim arising out of misrepresentation. Id. § 2680(h). We consider here if Mt. Homes’ claim falls within the misrepresentation exception to tort liability.
BACKGROUND
Mt. Homes built 49 houses between 1981 and 1984 that were financed by the Farmers Home Administration (FmHA), which supplied the contracts for use between Mt. Homes and buyers, and conducted the closings.
The FmHA treated Mt. Homes as a “speculative builder” constructing “spec” houses. According to Wash.Admin.Code § 458-20-170, the buyer of a “custom” house built by a prime contractor pays full retail sales tax for the house. The buyer of a “spec” house built by a speculative builder does not. The speculative builder pays state sales tax only on materials and labor on the “spec” house but not on the full contract price.
During the loan approval process, FmHA supplied Mt. Homes with cost estimate sheets that requested information about the cost of building, including estimates for sales tax on labor and materials. Mt. Homes completed the forms, showing sales tax figures…