Kincaid v. Dess
298 P.3d 358
| Kan. Ct. App. | 2013Background
- Kincaids purchased home from Sirva Relocation LLC for about $1,040,000; they alleged the Desses failed to disclose defects before sale.
- Sirva acquired the property under an exclusive listing contract with the Desses; two disclosure statements were provided to Sirva and then to the Kincaids.
- Rider to the sale contract stated disclosures were informational, that Sirva made no representations, and that home was sold 'as is'; Kincaids signed acknowledging receipt.
- Post-closing, Kincaids discovered EIFS exterior, prior water damage, damp walls, rotten windows, and mold; repairs were needed and delayed occupancy.
- Kincaids sued Desses, Sirva’s realtor Wolfe, and Reece & Nichols for breach of contract, fraud, negligent misrepresentation, and civil conspiracy; Sirva was not named in the suit.
- Trial court granted summary judgment for Desses on breach, fraud, and negligent misrepresentation; conspiracy and rescission claims proceeded to discovery before additional rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether privity or intended third-party beneficiary status established lawful contract claim | Kincaids were intended third-party beneficiaries and privity existed via incorporation by reference. | No privity; disclosure forms did not create contractual rights for Kincaids. | Privity established; Kincaids are intended third-party beneficiaries. |
| Whether fraud/negligent misrepresentation required strict reliance despite waiver | Osterhaus allows reliance despite waivers; reasonable reliance shown via disclosures. | Waiver and rider negate reliance; no reasonable reliance shown. | Reasonable reliance can be shown; Osterhaus controls and reverses summary judgment on these claims. |
| Whether civil conspiracy claim survives given lack of meeting of minds | Wolfe and Desses conspired to defraud by omitting defects. | No evidence of agreement or meeting of minds; conspiracy cannot stand on speculation. | Summary judgment upheld for Desses on civil conspiracy. |
| Whether rescission claim supported given discovery and post-discovery conduct | Fraud warrants rescission to place parties in original status. | No prompt rescission post-discovery and Kincaids retained possession and repaired the home. | Rescission claim properly resolved against Kincaids. |
| Whether the trial court properly granted summary judgment on breach of contract given privity and incorporation findings | Privity and incorporation by reference support contract claim. | Lack of privity bars contract claim. | Summary judgment reversed on breach of contract; trial to proceed on merits. |
Key Cases Cited
- O Osterhaus v. Toth, 291 Kan. 759 (2011) (disclosure statements can support claims without a separate writing; waiver does not bar reliance)
- Hartford Fire Ins. Co. v. Western Fire Ins. Co., 226 Kan. 197 (1979) (third-party beneficiary standing depends on contract language and beneficiary class)
- Stovall v. Reliance Ins. Co., 278 Kan. 777 (2005) (standing to sue as a third-party beneficiary requires proof of intended benefit)
- Hart v. City of Wichita, not cited in text with reporter (not applicable) (placeholder)
- Stoldt v. City of Toronto, 234 Kan. 957 (1984) (civil conspiracy requires a meeting of the minds and an independent wrong)
- Dreiling v. Home State Life Ins. Co., 213 Kan. 137 (1973) (rescission defined; equitable remedy placing parties in status quo)
- Brennan v. Kunzle, 37 Kan. App. 2d 365 (2007) (reasonableness of inspection questions of fact)
- Morse v. Kogle, 162 Kan. 558 (1947) (prompt rescission after discovery of fraud)
- Osterhaus v. Toth, 291 Kan. 759 (2011) (interpretation of contracts and incorporation in disclosures)