Li-Conrad v. Curran
50 N.E.3d 573
Ohio Ct. App.2016Background
- Sellers Christopher and Judith Curran sold a Mentor, Ohio home that had experienced a 2006 basement flood; they disclosed the flood and some repairs on the Residential Property Disclosure Form and stated they were unaware of other foundation/basement problems.
- Buyer Jane Li-Conrad made an offer with an "AS IS" clause and an inspection contingency; inspector Nemastil reported a bowing wall in the sump-pump room and suggested a foundation specialist for possible cracks elsewhere.
- After Nemastil’s report, Li-Conrad obtained additional estimates; one contractor (Bridge/Kirtland) recommended immediate repair of the bowing wall (~$16,000). Li-Conrad negotiated the sellers to pay half and amended the purchase price.
- Post-closing, a city inspector’s follow-up and a destructive investigation revealed a thirty-foot horizontal crack in the southeast foundation wall and other dampness; estimated repair cost ~ $24,000.
- Li-Conrad sued sellers and Howard Hanna agents for fraud, negligent misrepresentation, and OCSPA violations; defendants moved for summary judgment and the trial court granted judgment for all defendants. Li-Conrad appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether negligent misrepresentation claim lies against seller/real estate agents | Li-Conrad: defendants supplied false information about other foundation defects and owed duty despite not representing her | Defendants: no fiduciary-like relationship; negligent misrepresentation is a business tort requiring party to supply information for another’s business transaction | Court: Claim fails — no duty/fiduciary-like relationship; negligent misrepresentation inapplicable here |
| Whether "AS IS" clause bars fraudulent nondisclosure claim | Li-Conrad: sellers made affirmative false representations about absence of other defects despite "AS IS" clause | Sellers: "AS IS" clause relieves seller of duty to disclose omissions and bars nondisclosure claim | Court: "AS IS" clause bars fraudulent nondisclosure (protects omissions, not positive misrepresentations) |
| Whether inspection contingency precludes justifiable reliance for fraudulent misrepresentation | Li-Conrad: she actually relied on sellers’ statements and so can show reliance despite inspection contingency | Defendants: inspection contingency means buyer relied on inspection rather than seller statements; buyer accepted property AS IS after not negotiating disclosed issues | Court: No justifiable reliance — inspection contingency and buyer’s conduct preclude reliance on seller’s statements |
| Whether evidence created a factual dispute as to fraudulent concealment (seller knowledge/intent) | Li-Conrad: contractor affidavit and repair records infer sellers knew of and concealed defects | Sellers: basement was finished/covered by drywall; no evidence they knew of the specific southeast crack or dampness | Court: Affidavits insufficient to show seller knowledge of those specific defects; summary judgment proper |
| Whether OCSPA applies because transaction included goods/services (Howard Hanna guarantee) | Li-Conrad: transaction was hybrid (real estate plus Howard Hanna money-back guarantee) so OCSPA applies | Defendants: no qualifying goods/services; buyer did not qualify for guarantee; OCSPA does not apply to pure real estate sales | Court: No factual predicate that transaction was a hybrid; OCSPA inapplicable; summary judgment affirmed |
Key Cases Cited
- Delman v. Cleveland Heights, 41 Ohio St.3d 1 (1988) (defines negligent misrepresentation elements and frames it as a limited business tort)
- Hurst v. Enterprise Title Agency, Inc., 157 Ohio App.3d 133 (2004) (OCSPA does not apply to pure real estate transactions)