AE Property Servs., L.L.C. v. Sotonji
2019 Ohio 786
Ohio Ct. App.2019Background
- AE Property Services purchased a Lakewood, Ohio residence from Emilija Sotonji in March 2014 under a purchase agreement that stated the property was sold “AS IS” and contained an inspection/waiver section.
- AE checked that it refused professional inspections (including for termites) and initialed the “as is” and inspection provisions; a walk-through before escrow was agreed to.
- Seller signed the statutory Ohio Residential Property Disclosure form denying knowledge of termites/wood-destroying insects but disclosing some water intrusion.
- After AE rented the property and plumbing failed, AE’s principal discovered extensive termite damage and alleged seller concealed damage by filling/painting holes and installing a pegboard ceiling.
- AE sued (claims: fraud, fraudulent concealment, negligence, negligent misrepresentation). Summary-judgment motions were filed after discovery and expert deadlines had passed.
- Trial court granted summary judgment for Sotonji; the Eighth District affirmed, finding no genuine issue of material fact and that AE failed to prove seller knowledge or intent to deceive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether caveat emptor / "as is" sale bars AE's fraud/fraudulent concealment claims | AE says seller knowingly concealed termite damage and misrepresented on disclosure, so fraud exceptions apply | Sotonji says sale was "as is", AE waived inspections, and seller lacked actual knowledge/intent to deceive | Court held "as is" clause and buyer's opportunity to inspect bar recovery absent proof of seller knowledge/intent; AE failed to show such proof |
| Whether statutory disclosure created seller liability | AE contends it relied on the disclosure form and seller had duty to disclose known defects | Sotonji asserts she truthfully completed the disclosure and had no actual knowledge of termite damage | Court held disclosure is based on seller's actual knowledge; AE produced no evidence seller knew or recklessly disregarded truth |
| Whether negligent misrepresentation/negligence claims survive given "as is" clause | AE argues seller still liable in negligence/negligent misrepresentation despite "as is" sale | Sotonji argues ‘‘as is’’ and caveat emptor place risk on buyer and bar these tort claims absent fraud | Court held ‘‘as is’’ clause and caveat emptor bar negligence and negligent misrepresentation claims absent fraud, which AE did not prove |
| Whether summary judgment proper given procedural record (discovery/expert deadlines missed) | AE points to affidavit, photos, and its industry experience to create factual dispute | Sotonji notes missed deadlines, absence of expert report, and attached contract/disclosure; requests striking/infirming AE evidence | Court held AE's lay affidavit and blurred photos insufficient to raise genuine factual issue about seller knowledge or intent; summary judgment affirmed |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (Ohio 1996) (summary-judgment standard reviewed de novo)
- Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64 (Ohio 1978) (summary-judgment prerequisites)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (moving party burden and burden-shifting in summary judgment)
- Layman v. Binns, 35 Ohio St.3d 176 (Ohio 1988) (caveat emptor elements in real-estate transactions)
- Burr v. Stark Cty. Bd. of Commrs., 23 Ohio St.3d 69 (Ohio 1986) (elements of fraud)