Avila v. Hughes, 2021 Ohio 2463

Background

Avila bought a 130‑year‑old house from Christy and Matthew Hughes in October 2017 after receiving the Hugheses’ Ohio Residential Property Disclosure and obtaining a buyer‑selected home inspection (which led to a second inspection after repairs).
The Disclosure Form acknowledged basement wetness, a fireplace/chimney not used/inspected, and that the water softener was never used; USDA financing required specified repairs based on the inspector’s report.
Avila later discovered numerous defects (water intrusion, mice, chimney, plumbing, electrical, broken sewer pipes causing a smell, condensation on basement windows, etc.) and sued the sellers and others; summary judgment was sought only against the Hugheses on Avila’s fraudulent misrepresentation/nondisclosure/concealment claim.
The trial court grouped the alleged defects and concluded most were open or discoverable on reasonable inspection (invoking caveat emptor) or otherwise not actionable because the purchase was contingent on inspection; it granted summary judgment for the Hugheses on the fraud claim.
The Twelfth District affirmed: no genuine issue of material fact on the fraud claim because defects were discoverable, there was no evidence of active concealment or seller knowledge of latent defects (except for routine repairs), and Avila could not show justifiable reliance where an inspection contingency existed.

Issues

Issue	Avila’s Argument	Hugheses’ Argument	Held
Whether caveat emptor bars fraud claims for defects that are open or discoverable on reasonable inspection	Many alleged defects (gutters, water stains, mice, electrical, plumbing, chimney, water softener, porch/furnace leaks) were known to sellers or concealed	Avila and her inspector had full, unimpeded opportunity to inspect; many defects were disclosed or observed and thus discoverable	Caveat emptor bars fraud recovery for defects that were open or discoverable; summary judgment affirmed
Whether sellers had duty/knowledge re: broken sewer pipes (bad smell) such that nondisclosure is actionable	The bad smell and later‑discovered broken pipes indicate the Hugheses should be liable for nondisclosure	No evidence Hugheses had actual knowledge or had a professional diagnosis prior to sale; sellers have no duty to inspect	No duty/knowledge shown; nondisclosure claim fails as a matter of law
Whether inspection contingency defeats justifiable reliance for latent defects (e.g., basement window condensation)	Windows leaked in certain weather and could not be discovered in summer; Avila relied on disclosure and inspection contingency	Purchase agreement was contingent on inspection; buyer had opportunity to investigate; no evidence of active concealment or affirmative misrepresentation	Even assuming latent defect, buyer cannot show justifiable reliance where sale was inspection‑contingent and no evidence of seller misrepresentation or active concealment
Whether disclosure statements (water softener, chimney, fireplace) amount to actionable misrepresentations	Statements on the disclosure form were false or made with reckless disregard (e.g., water softener “never used,” chimney painted over to conceal defects)	Disclosures reflected actual knowledge (or lack thereof); inspector examined items; no evidence sellers intentionally misrepresented or concealed	Disclosure statements did not create a triable fraud issue absent proof of actual, known falsity or active concealment; summary judgment proper

Key Cases Cited

Wisinstainer v. Elcen Power Strut Co., 67 Ohio St.3d 352 (1993) (trial court may certify final order under Civ.R. 54(B) to avoid piecemeal trials)
Russ v. TRW, Inc., 59 Ohio St.3d 42 (1991) (elements of common‑law fraud)
Layman v. Binns, 35 Ohio St.3d 176 (1988) (seller duty to disclose and limits on recovery where buyer had opportunity to inspect)
Miles v. McSwegin, 58 Ohio St.2d 97 (1979) (buyers protected from being misled by nondisclosure of material facts)
Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367 (1998) (summary judgment standard)