2017 Ohio 2954
Ohio Ct. App.2017Background
- In Oct. 2009 Washburn contracted to buy 622 Fleming Rd “as is”; seller Gvozdanovic completed the Ohio Residential Property Disclosure Form and answered in the structural section that “there has been ground movement in the area.”
- Pre‑closing inspections: Tencon (Dec. 2009) found visible mold and groundwater entering basement through cracks; Truman P. Young (Feb. 2010) reported floors tilted indicating probable foundation settlement and noted cracks that could not be fully assessed without removing finishes.
- Closing occurred Mar. 19, 2010. After drywall removal for mold remediation, TKS (by no later than May 20, 2010) informed Washburn it had found cracked foundation walls.
- In May 2011 geotechnical engineer Quentin Gorton inspected and told Washburn the property sat on an active landslide and that he had previously told Gvozdanovic the same.
- Washburn sued May 22, 2015 for fraud, breach of contract, and violation of R.C. 5302.30; trial court granted summary judgment for Gvozdanovic as to all claims and struck Gorton’s affidavit for alleged untimely expert disclosure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether fraud claim was time‑barred under discovery rule | Fraud was not discovered until May 25, 2011 when Gorton informed Washburn of the active landslide and prior notice to seller | Constructive notice arose by May 20, 2010 (TKS found cracked foundation walls), so suit filed in 2015 was too late | Court held limitations began by May 20, 2010; fraud claim untimely; summary judgment affirmed |
| Whether trial court erred excluding expert affidavit (Gorton) for untimely disclosure | Gorton was timely identified in written discovery; counsel had notice and could have deposed him; exclusion improper | Plaintiff failed to provide a written expert report by the case‑management deadline, so his affidavit should be struck | Majority affirmed exclusion as moot (statute‑of‑limitations disposition); dissent argued disclosure was timely and exclusion was error |
| Whether material facts existed to defeat summary judgment on fraud merits | Seller’s disclosure was evasive; drywall/asphalt repairs concealed latent defects; jury could infer fraudulent nondisclosure | Plaintiff failed to show fraudulent concealment or justifiable reliance | Majority did not reach merits (limitations dispositive); dissent would have allowed fraud claim to proceed to jury |
| Standard of review for summary judgment and discovery‑rule accrual | N/A (procedural posture) | N/A | Court applied de novo review; discovery rule accrual is when a reasonably diligent person would have been alerted to possibility of fraud |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (summary judgment reviewed de novo)
- Investors REIT One v. Jacobs, 46 Ohio St.3d 176 (discovery rule accrual for fraud actions)
- Cundall v. U.S. Bank, 122 Ohio St.3d 188 (constructive knowledge suffices to start limitations period)
- Palm Beach Co. v. Dun & Bradstreet, Inc., 106 Ohio App.3d 167 (facts that would alert reasonable person start limitations)
- State ex rel. Howard v. Ferreri, 70 Ohio St.3d 587 (summary judgment standards)
- Hamilton v. Ohio Savs. Bank, 70 Ohio St.3d 137 (discovery‑rule commencement is factual question for jury when close)
- Burr v. Cty. Comms. of Stark Cty., 23 Ohio St.3d 69 (elements of fraud)