By: Karl MacOmber, Esq.
In Cook v. Orkin Exeterminating Co.,
an Opinion issued by: Division One of the Arizona Court of Appeals on May 19, 2011.
The Court ruled that Orkin did not owe the buyers of a home a fiduciary duty. The Cooks had purchase a home from a contractor who used dirt that was not treated for termites as part of the backfill around the basement. After the contractor went bankrupt, his insurance company hired Orkin to treat the home. Orkin came back in 1989, 1990, 1991 and 1994. In 1995, the Cooks moved out of the house for a full year to allow Orkin to do a full scale treatment.
After they moved back in the Cooks had to call Orkin back in for further treatments in 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2004 and 2007. The Cooks sued Orkin for the cost of repair of the damage to the home by the termites. The Cooks alleged Orkin owed them a fiduciary duty because Orkin had “specialized knowledge” concerning the efficacy of their treatments which Orkin knew was not available to the Cooks.
The Court of Appeals rejected this argument that the disparity in knowledge alone would create a fiduciary relationship.
The Court of Appeals noted that such disparity is common in commercial transactions.