This case arises from the plaintiffs’ purchase of the defendants’ house in June of 1987. The purchase agreement stated that the buyers were purchasing the house in an "as is” condition. The plaintiffs took possession of the house in December of 1987. In March of 1989, the plaintiffs filed a complaint against the defendants for fraudulent concealment of latent defects in the property. The complaint alleged that the defendants had a duty to disclose numerous defects of the property, including a leaky roof and a faulty septic system. During a jury trial in the Oakland Circuit Court, the trial court granted a partial directed verdict in favor of defendant Helene Lesnek. The court did not inform the jury about the directed verdict, and the jury returned a verdict against both defendants for $96,500 in damages. In Docket No. 132370, the plaintiffs appeal as of right the trial court’s order granting defendant Helene Lesnek a directed verdict. In Docket No. 134859, defendant John Lesnek appeals as of right the trial court’s order denying his motion for judgment notwithstanding the verdict, a new trial, or remittitur.
Claiming that the trial court erred in granting defendant Helene Lesnek a directed verdict, the plaintiffs contend that, as purchasers, it was not necessary for them to prove that undisclosed hidden defects were unreasonably dangerous in order to recover damages for fraud despite the fact that the purchase agreement contained an "as is” clause. The plaintiffs maintain that the failure to disclose allegedly known material defects constitutes fraudulent inducement, thereby making the purchase agreement voidable.
Under the common law, a land vendor who surrenders title, possession, and control of property shifts all responsibility for the land’s condition to the purchaser. Caveat emptor prevails in land sales, and the vendor, with two exceptions, is not liable for any harm due to defects existing at the time of sale.
The first exception is the vendor’s duty to disclose to the purchaser any concealed condition known to him which involves an unreasonable danger. Failure to make such a disclosure or efforts to actively conceal a dangerous condition render the vendor liable for resulting injuries. The second exception is that a vendor is liable to those outside the land for a dangerous condition on the land after the sale until the purchaser discovers or should have discovered it. Once the purchaser discovers the defect and has had a reasonable opportunity to take precautions, third parties such as subvendees have no further recourse against the vendor. Under both exceptions, then, knowledge of the defect on the part of the purchaser relieves the vendor of any duty or liability. [Christy, supra, pp 694-695.]
Citing this language from
Christy,
this Court in
Farm Bureau Mutual Ins Co v Wood,
We agree with the plaintiffs that they were not required to prove that undisclosed hidden defects were unreasonably dangerous in order for them to recover damages for fraud despite the fact that the purchase agreement contained an "as is” clause. In
Christy,
the cause of action was premised upon negligence because there was no contractual relationship between the defendant and the plaintiffs. Consequently, there was no reason for the Court in
Christy
to decide whether the provision of an "as is” clause in the purchase agreement would have relieved the seller of liability. See
Niecko v Emro Marketing Co,
Before discussing the plaintiffs’ next argument, that the trial court erred in granting a directed verdict for defendant Helene Lesnek, we first consider the defendants’ claim that the trial court erred in denying defendant John Lesnek’s motion for judgment notwithstanding the verdict.
In
Michigan Microtech, Inc v Federated Publications, Inc,
When deciding a motion for a directed verdict or judgment notwithstanding the verdict, the trial court must review the testimony in the light most favorable to the nonmoving party. Lester N Turner, PC v Eyde,182 Mich App 396 , 398;451 NW2d 644 (1990). A judgment notwithstanding the verdict is proper where insufficient evidence is presented to create an issue for the jury. It is improper where reasonable minds could differ on issues of fact. We will not disturb the trial court’s decision, unless there has been a clear abuse of discretion. Wilson v General Motors Corp,183 Mich App 21 , 36;454 NW2d 405 (1990).
The main contention between the parties regarding the defects was the condition of the roof and the septic system, the defendants’ representations about them, and the plaintiffs’ opportunity to inspect them. Reviewing the evidence in a light most favorable to the plaintiffs as the nonmoving party, we find that plaintiff Bernard Clemens walked on the roof with defendant John Lesnek for approximately fifteen minutes in May 1986. When Clemens asked about the condition of the roof, Lesnek replied that it had a couple of minor leaks in the past but that it was in good condition. In 1987, a professional roofer inspected the roof on behalf of
Turning to the evidence presented concerning the septic system and viewing it in a light most favorable to the plaintiffs, we find that the plaintiffs had asked about it and that defendant John Lesnek said it was pumped annually. However, the plaintiffs detected septic odors immediately after moving into the house. In conducting a red-dye test, the plaintiffs determined that the water from their septic tank was flowing into a nearby stream. When the plaintiffs excavated the pipe running to the stream, they discovered that the pipe had been manufactured in 1974, indicating that it had been added to the system after the septic tank was originally installed. In 1987, the county health department found no failures in the system, but issued a reminder that older septic systems needed eventual replacement. We conclude that judgment
Next, the defendants argue that the plaintiffs did not introduce sufficient evidence to sustain the verdict with respect to damages. At trial, the plaintiffs sought damages that reflected the difference between the property’s value as it was represented to them and the property’s actual value at the time of the sale. The plaintiffs also asked for damages for mental anguish. The trial court instructed the jury to measure damages on the basis of the evidence, but did not describe a specific method of calculation. The jury did not award damages separately, but awarded a lump sum of $96,500.
We find that the plaintiffs provided sufficient evidence of damages with respect to the property’s value to create an issue for the jury, and reasonable minds could differ with regard to the issue.
Id.
The trial court accordingly denied the defendants’ motion for judgment notwithstanding the verdict with respect to this issue. Regarding the damages for mental anguish, Elizabeth Clemens testified that she was upset about the septic system odor. She also stated that "its been pretty humiliating knowing that there’s a stench coming out of the back yard and it’s yours.” The plaintiffs argue that their demeanor on the witness stand convincingly conveyed to the jury the mental toll wrought by the alleged fraud. However, without direct evidence of the mental anguish suffered by the plaintiffs, we find that the plaintiffs failed to present sufficient evidence of damages related to mental
We next review for an abuse of discretion the trial court’s decision to deny the defendants’ request for remittitur.
Snell v UACC Midwest, Inc,
As previously mentioned, the plaintiffs sought damages that reflected the difference between the property’s value as it was represented to them and the property’s actual value at the time of the sale. William England, an experienced real estate broker, inspected the house one month before trial. Taking into consideration the roof and the septic system, he testified for the plaintiffs that the value of the property was $90,000 at the time of the sale in 1986. However, he explained that the market value of the home at the time of the sale would have been established by the purchase price, and he mistakenly believed that the purchase price was $129,000. Although defendant Bernard Clemens testified that the market value of the house at the time of the sale was between $50,000 and $75,000, we find his testimony insufficient to support an award of $96,500 in light of the $149,500 bank appraisal of the house at the time of the closing. Moreover, the house was appraised at
Finally, we examine the plaintiffs’ second claim, that the trial court erred in granting defendant Helene Lesnek a directed verdict. Again, we must review the testimony in a light most favorable to the plaintiffs in order to determine whether sufficient evidence was presented to create an issue for the jury. Michigan Microtech, Inc, supra. Reviewing the evidence in such light, we find that defendant Helene Lesnek lived in the house for nineteen years before its sale to the plaintiffs. We also find that makeshift repairs had been made to stop the leaks that were present in most of the rooms in the house. In addition, the plaintiffs detected septic odors immediately after moving into the house and later determined that the water from their septic tank was flowing into a nearby stream. Consequently, the plaintiffs presented sufficient evidence for the jury to decide whether defendant Helene Lesnek knew there was a concealed condition on the property at the time of the sale. We conclude that the trial court abused its discretion in directing a verdict in favor of defendant Helene Lesnek.
We affirm the trial court’s decision denying defendant John Lesnek’s motion for judgmennt notwithstanding the verdict with respect to the plaintiffs’ substantive claims. We also affirm the trial court’s decision denying the defendants’ mo
Affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion. We do not retain jurisdiction.