Ponder v. Cult
2017 Ohio 168
| Ohio Ct. App. | 2017Background
- Sellers (Daniel & Kristen Culp) and buyers (James & Shannon Ponder) executed a residential purchase agreement with a 14‑day inspection contingency and an "as is" clause if contingency not timely exercised. Sellers completed the Ohio Residential Property Disclosure Form before inspection.
- Sellers disclosed some foundation work previously done and noted in "OTHER KNOWN MATERIAL DEFECTS" that water came up through a garage floor crack during heavy rain; other sections indicated no known basement water leakage or drainage problems.
- Buyers obtained a general home inspection and an engineering inspection. The home inspector warned he “didn’t trust” a laundry‑room wall and predicted possible water intrusion from driveway slope; the buyers did not notify sellers of dissatisfaction within 14 days and removed contingencies before closing.
- After closing, the buyers experienced recurring basement flooding and hired a waterproofing contractor who reported longstanding water infiltration damage.
- Buyers sued sellers for fraudulent inducement, fraud, and mutual mistake. The trial court granted summary judgment for sellers; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud / fraudulent inducement: whether sellers knowingly misrepresented or concealed basement/water issues | Ponders: sellers’ disclosure omissions/misrepresentations were false or made recklessly; defects were concealed (plastic over walls) and preexisting | Culps: buyers had inspections and were warned; no evidence sellers knew of concealed, ongoing problem; buyers failed to timely invoke inspection contingency | Court: Summary judgment for Culps—buyers failed to show justifiable reliance because inspections put them on notice and they proceeded "as is" |
| Justifiable reliance element of fraud | Ponders: relied on sellers’ disclosures and did not know true extent | Culps: Ponders had inspector warnings about the laundry room and thus could not justifiably rely on seller statements | Held: No justifiable reliance—inspections and warnings preclude recovery |
| Mutual mistake as ground for rescission | Ponders: contract should be voidable due to mutual mistake about material condition (absence of water problems) | Culps: buyers had inspection, removed contingencies, and bought "as is"; mutual mistake doctrine inapplicable when buyer had notice | Held: No mutual mistake—buyers knew of risk from inspection and chose to buy "as is" |
| Appropriateness of summary judgment | Ponders: disputes of fact exist (e.g., concealment, longstanding problems) | Culps: record (depositions, inspector reports) shows no genuine issue on key elements (knowledge, intent, reliance) | Held: Summary judgment proper—no genuine issue of material fact on fraud or rescission claims |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (summary judgment reviewed de novo)
- Murphy v. Reynoldsburg, 65 Ohio St.3d 356 (facts must be viewed in favor of nonmoving party on summary judgment)
- Dresher v. Burt, 75 Ohio St.3d 280 (burden‑shifting framework for summary judgment)
- Russ v. TRW Inc., 59 Ohio St.3d 42 (elements of fraud)
- Layman v. Binns, 35 Ohio St.3d 176 (caveat emptor and discoverability on inspection)
- State ex rel. Illuminating Co. v. Cuyahoga Cty. Court of Common Pleas, 97 Ohio St.3d 69 (fraud elements and reliance)
- State ex rel. Zimmerman v. Tompkins, 75 Ohio St.3d 447 (nonmoving party’s reciprocal burden to show genuine issue)