Stechschulte v. Jennings
297 Kan. 2
Kan.2013Background
- Jennings signed a seller’s disclosure form with a Buyer Acknowledgment containing a reliance waiver defense.
- Seller disclosed past water leaks and window repairs; Stechschultes purchased the home relying on disclosures.
- After closing, substantial water intrusion and mold issues were discovered; plaintiffs sued Jennings, the trust, Golson, and PHB for fraud, misrepresentation, breach of contract, and KCPA violations.
- District court granted partial summary judgment to Jennings and to Golson/PHB on certain claims, with others surviving for trial.
- Court of Appeals reversed some grants and remanded; the supreme court now addresses Osterhaus-based interpretation of the Buyer Acknowledgment and remand implications.
- Key question: does Paragraph 5 of the Buyer Acknowledgment bar reliance and bar or limit claims against seller, agent, and brokerage firm?
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of Buyer Acknowledgment on reliance | Stechschultes rely on disclosures; Paragraph 5 does not bar reliance. | Paragraph 5 operates as integration/waiver of reliance. | Paragraph 5 does not bar reliance on the disclosures themselves. |
| Fraud and misrepresentation claims against Jennings | Disclosures contained false or incomplete material facts. | Waiver of reliance defeats damages claims. | Fraudulent inducement and fraud by silence survive; factual disputes remain; remand necessary. |
| Negligent misrepresentation vs. BRRETA | Golson/PHB liable for negligent misrepresentation; BRRETA does not bar common law. | BRRETA precludes independent-agent liability absent personal knowledge. | Negligent misrepresentation claims against Golson and PHB survive; BRRETA does not eliminate them. |
| KCPA claims against Golson and PHB | KCPA claims should proceed; willful omissions shown. | Waiver and lack of willful conduct foreclose KCPA claims. | KCPA claims against Golson and PHB may proceed; willfulness may be proven on remand. |
| Breach of contract damages tied to reliance | Damages tied to Jennings’ failure to disclose. | Reliance issues resolved by Paragraph 5; damages barred. | Damages arising from failure to provide accurate disclosures may proceed; remand for damages analysis. |
| Standing and party-related issues | Satu, Daniel, and the trust may have standing on all claims. | Standing and real-party-in-interest concerns may bar some claims. | Standing issues reviewed; remand to address potential limitations on claims by the Stechschulte trust. |
Key Cases Cited
- Osterhaus v. Toth, 291 Kan. 759 (2011) (Buyer Acknowledgment not a universal waiver; integrates but does not absolve disclosures)
- Brennan v. Kunzle, 37 Kan. App. 2d 365 (2007) (reliance standards and disclosures in real estate)
- McLellan v. Raines, 36 Kan. App. 2d 1 (2006) (reliance and disclosure considerations in real estate transactions)
- Katzenmeier v. Oppenlander, 39 Kan. App. 2d 259 (2008) (early appellate treatment of disclosure and reliance)
- ARY Jewelers v. Krigel, 277 Kan. 464 (2004) (integration clause purposes and reliance protection)
- Shamberg v. Johnson & Bergman, Chtd., 289 Kan. 891 (2009) (contract interpretation standards and remedies)
- Milano's, Inc. v. Kansas Dept. of Labor, 296 Kan. 497 (2013) (duty interpretation and harmonization of BRRETA with common law)
- Oosterhaus? (contextual reference to BRRETA-based scope), N/A (n/a) (see Osterhaus for BRRETA duties and agent liability)