Fowerbaugh v. Sliman
2022 Ohio 1314
Ohio Ct. App.2022Background
- In 2017 defendant David Sliman bought and renovated a Rocky River single‑family home and performed substantial electrical, plumbing, HVAC, framing, and structural work largely without building permits; he obtained only a window permit.
- A Rocky River building inspector drove by, met with Sliman in June 2017, and—after Sliman represented the work was only slight interior updates—declined to compel an interior inspection.
- Sellers (Sliman and his wife) signed a residential property disclosure form representing no known code violations, defects, or mechanical problems; buyers were told permits were not needed.
- Buyers purchased the house, later discovered sewer odor and multiple hidden defects, retained AHI and experts who identified about 50+ latent defects and code violations, and incurred $91,569.59 to remediate them.
- Buyers sued for fraudulent concealment/misrepresentation (among other claims); the trial court granted buyers summary judgment on fraud liability, awarded $91,569.59 compensatory damages, $1.00 punitive damages, and $82,985.62 in attorney fees; Sliman appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment on fraud liability was proper | Buyers: undisputed evidence shows Sliman knew of hidden defects, failed to obtain permits, and made false disclosures on the residential disclosure form — fraud precludes caveat emptor | Sliman: caveat emptor and the home inspection bar recovery for patent defects; many problems were or should have been observable; factual disputes exist | Affirmed. Buyers met Dresher burden; Sliman failed to identify specific record evidence creating a genuine issue of material fact. |
| Whether caveat emptor bars the fraud claim | Buyers: caveat emptor does not apply where seller concealed latent defects or intentionally misrepresented material facts | Sliman: many defects were patent or discoverable; buyers waived inspections and therefore assumed the risk | Court: caveat emptor does not bar recovery for latent defects concealed by seller; presence of latent, undisclosed defects and seller knowledge supports fraud finding. |
| Whether punitive damages and attorney fees were properly awarded | Buyers: Sliman acted with actual malice (conscious disregard for safety/rights), satisfying R.C. 2315.21 and permitting attorney fees as compensatory damages tied to punitive award | Sliman: conduct reflected poor judgment/ignorance, not bad faith or malicious intent; therefore fees/punitive damages improper | Affirmed. Trial court had competent evidence to find conscious disregard (actual malice); punitive damages (even nominal) support awarding reasonable attorney fees under Ohio law. |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (de novo standard on summary judgment)
- Dresher v. Burt, 75 Ohio St.3d 280 (burden-shifting framework for Civ.R. 56)
- Layman v. Binns, 35 Ohio St.3d 176 (caveat emptor and seller duty to disclose latent defects)
- Cohen v. Lamko, Inc., 10 Ohio St.3d 167 (elements of common-law fraud)
- Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552 (attorney fees may be awarded as element of compensatory damages when punitive damages are warranted)
- Galmish v. Cicchini, 90 Ohio St.3d 22 (punitive damages permit recovery of reasonable attorney fees)
- Phoenix Lighting Group, L.L.C. v. Genlyte Thomas Group, L.L.C., 160 Ohio St.3d 32 (American Rule and exceptions regarding fee awards)
- Sivit v. Village Green of Beachwood, L.P., 143 Ohio St.3d 168 (definition of actual malice/ conscious disregard for rights and safety)