Montgomery v. Vargo, 2016 Ohio 809

Montgomery purchased a house from Vargo in December 2011; the den was an addition with a flat roof completed before Vargo owned the property.
While Vargo owned the property briefly during a foreclosure renovation, he removed a fireplace and chimney attached to the den and resided/sided that area; he did not disclose that renovation on the Ohio Residential Property Disclosure Form.
About 20 months after the sale, Montgomery discovered water intrusion and rotted wood in the den roof; repair cost was $2,939.55.
A small-claims magistrate awarded Montgomery $1,500, finding Vargo should have disclosed removal of the chimney under R.C. 5302.30; the municipal court adopted the magistrate’s decision over Vargo’s objections.
On appeal, the Eighth District reversed, holding Montgomery failed to prove fraudulent concealment, causation, or Vargo’s actual knowledge of the latent roof defect; the court emphasized the purchaser bought the property “as is.”

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether failing to disclose removal of the chimney/fireplace is actionable fraudulent concealment for den roof rot	Montgomery: omission of chimney removal on disclosure form was concealment of a material fact that caused his injury	Vargo: chimney removal was unrelated to the later roof rot and he lacked actual knowledge of roof defect	Court: No — plaintiff failed to prove a causal link or fraudulent concealment elements
Whether an "as is" clause bars recovery for latent defects absent fraud	Montgomery: nondisclosure of renovation supports fraud exception to "as is"	Vargo: "as is" and lack of fraud/cause bars recovery	Court: "As is" bars recovery absent proof of fraud; Montgomery did not prove fraud
Whether R.C. 5302.30 creates an independent cause of action	Montgomery: statute imposed duty and liability for nondisclosure	Vargo: statute codifies duty but does not replace common-law fraud elements	Court: R.C. 5302.30 imposes duty to disclose but does not create an independent cause of action; plaintiff must prove all fraud elements
Whether there was evidence of the seller's actual knowledge of the latent roof defect	Montgomery: circumstantial evidence (permit, neighbor letter, renovations) implies knowledge	Vargo: no evidence he knew of rotted roof; prior inspection showed acceptable roof	Court: No — evidence was speculative; actual knowledge not established as required by statute

Blakemore v. Blakemore, 5 Ohio St.3d 217 (1983) (standard for abuse of discretion review)
Volbers-Klarich v. Middletown Mgt., Inc., 125 Ohio St.3d 494 (2010) (elements required to prove fraudulent concealment)
O'Brien v. O'Brien, 167 Ohio App.3d 584 (2006) (standard for reviewing magistrate decisions/adoption)