2004 Ohio 6536 | Ohio Ct. App. | 2004
{¶ 3} The Clevidences had completed and signed a Residential Property Disclosure Form (the "Disclosure Form"), pursuant to R.C.
{¶ 4} On February 1, 2002, the Garveys and CTS executed a Rider to their purchase agreement, which stated, in relevant part:
"Condition of Premises
"Buyer understands the Property has been previously occupied and should not be expected to be in the same condition as a new property. Buyer understands that CTS is a relocation management company and has never lived on or in the Property. The Property, including the contents * * * being sold and purchased are not new, and are being sold `as is,' in their present condition. Neither CTS or any of its agents make any representations concerning the Property * * *."
As to the Disclosure Form, the Rider provides that "CTS makes no representations as to the accuracy or the conclusiveness of this statement. CTS has made no independent investigation of the Property." In addition, the Rider specified that "Buyer acknowledges that he has not been influenced to enter into this transaction nor has he relied upon any warranties or representations not set forth or incorporated in the Agreement or previously made in writing[.]" The Rider provided that any exceptions were to be listed after this language. However, no representations or warranties were included, and both parties initialed this section to acknowledge this fact.
{¶ 5} The sale closed, and the title was transferred to the Garveys. It is undisputed that the Clevidences were not a party to the agreement between CTS and the Garveys.
{¶ 6} It was not until after they moved into the home that the Garveys discovered that the basement was leaking and that the sprinkler system was defective. The Clevidences had not indicated on the Disclosure Form any problems with either the basement or the sprinkler system. After a few unsuccessful attempts were made to discuss the matter with CTS, its real estate agents, and the Clevidences, the Garveys filed a complaint against CTS and the Clevidences alleging fraud and breach of contract. Specifically, the Garveys asserted that the Clevidences and CTS intentionally failed to disclose and intentionally concealed the defects.
{¶ 7} On January 16, 2003, CTS filed a Civ.R. 12(B)(6) motion to dismiss the complaint against them. The court denied the motion. On January 17, 2003, the Clevidences also filed a Civ.R. 12(B)(6) motion to dismiss. On April 22, 2003, the trial court granted the Clevidences' motion and dismissed the Clevidences from the case. The court concluded that the Clevidences could not be held liable under the agreement because they were not a party in privity with the Garveys, and that they did not have a duty to disclose any defects to the Garveys.
{¶ 8} On March 15, 2004, CTS filed a motion for summary judgment, asserting that the Garveys could not provide any evidence that CTS had knowledge of the alleged defects, or that it made any representations or concealed any information pertaining to the basement or sprinkler system. CTS argued that the Garveys purchased the property "as is," and that therefore, the legal principle of caveat emptor applied to entitle CTS to summary judgment. The Garveys responded to the motion. The Garveys also filed a motion to delay ruling on CTS's motion for summary judgment in order to complete discovery. On May 12, 2004, the trial court denied the Garveys' motion to delay, and granted CTS's summary judgment motion. The court specifically found that CTS made no warranties or representations to the Garveys as to the condition of the property, and that the doctrine of caveat emptor applied to bar recovery under these claims. This appeal followed.
{¶ 9} The Garveys timely appealed, asserting two assignments of error for review.
{¶ 10} In their first assignment of error, the Garveys assert that the trial court erred when it granted the Clevidences' motion to dismiss. We disagree.
{¶ 11} A trial court may grant a motion to dismiss for failure to state a claim upon which relief can be granted only if it appears beyond a doubt that the plaintiff can prove no set of facts that would entitle her to relief. Wilson v. State (1995),
{¶ 12} In their complaint, the Garveys alleged fraudulent nondisclosure and concealment. To recover for fraud, a buyer must demonstrate all of the following: 1) a representation, or in a situation where there was a duty to disclose, a concealment of fact; 2) which fact is material to the transaction; 3) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred; 4) with the intent of misleading another into relying upon it; 5) justifiable reliance on the misrepresentation; and 6) a resulting injury proximately caused by the reliance. Buchanan v. Geneva Chervenic Realty (1996),
{¶ 13} To recover for breach of contract, a party must establish "`the existence of a binding contract or agreement; the non-breaching party performed its contractual obligations; the other party failed to fulfill its contractual obligations without legal excuse; and the non-breaching party suffered damages as a result of the breach.'" Bender Dev. Co. v. Streza, 9th Dist. No. 03CA008397,
{¶ 14} It is undisputed that the Clevidences did not have an ownership interest in the real estate at the time of this transaction. It is also undisputed that the agreement lists the Garveys and CTS as the sole parties to the agreement. Therefore, there is no privity of contract between the Clevidences and the Garveys, and therefore, the Garveys cannot sue the Clevidences upon the agreement or claims stemming from the agreement. SeeMorse v. Summit Moving Storage, 9th Dist. No. 21258, 2003-Ohio-1475, at ¶ 9 (granting a motion to dismiss based on a breach of contract claim when the party opposing the motion was not in privity with the movant). Because the Clevidences were neither in privity with the Garveys nor a party to the Garveys' purchase agreement, they had no duty to disclose any defects to the Garveys.
{¶ 15} Because the Garveys could not set forth facts sufficient to entitle them to recovery under these claims, we conclude that the trial court did not err in granting the Clevidences' motion to dismiss the case against them. SeeWilson,
{¶ 16} In their second assignment of error, the Garveys assert that the trial court erred when it granted CTS's motion for summary judgment. We disagree.
{¶ 17} Appellate review of a lower court's entry of summary judgment is de novo, applying the same standard used by the trial court. McKay v. Cutlip (1992),
"(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party. Temple v. Wean United, Inc. (1977),
The party seeking summary judgment initially bears the burden of informing the trial court of the basis for the motion and identifying portions of the record demonstrating an absence of genuine issues of material fact as to the essential elements of the nonmoving party's claims. Dresher v. Burt (1996),
{¶ 18} Once this burden is satisfied, the nonmoving party has the burden, as set forth in Civ.R. 56(E), to offer specific facts showing a genuine issue for trial. Id. The nonmoving party may not rest upon the mere allegations and denials in the pleadings but instead must point to or submit some evidentiary material that shows a genuine dispute over the material facts exists.Henkle v. Henkle (1991),
{¶ 19} As stated above, a buyer must demonstrate all of the following to recover for fraud: 1) a representation, or in a situation where there was a duty to disclose, a concealment of fact; 2) which fact is material to the transaction; 3) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred; 4) with the intent of misleading another into relying upon it; 5) justifiable reliance on the misrepresentation; and 6) a resulting injury proximately caused by the reliance. Buchanan,
{¶ 20} The doctrine of caveat emptor governs real property sales transactions in Ohio and relieves a vendor of the obligation of revealing every imperfection that may exist in a residential property. Layman v. Binns (1988),
{¶ 21} In this case, the Garveys assert that CTS failed to disclose or concealed defects with the sprinkler system and the basement. In its decision, the trial court found that the agreement signed by CTS and the Garveys contained an "as is" clause. An "as is" clause will bar a claim for fraudulent nondisclosure. Dennison v. Koba (1993),
{¶ 22} The Rider does not set forth any representations or warranties on CTS' part. Furthermore, the Garveys offered no evidence that indicated that CTS had knowledge of any of these deficiencies, or that it made any representations to the Garveys as to their respective conditions. See Buchanan,
{¶ 23} The Garveys also allege that CTS breached the purchase agreement by failing to disclose or concealing allegedly known defects. The Garveys cite to Harris v. Burger (Aug. 24, 1995), 8th Dist. No. 68303, for the proposition that the transference of a deed alone will not satisfy a contract where there is a promise made that the property is free from latent defects. In Harris, the sellers promised that no significant defects existed in the property, but there was some evidence that the sellers had or should have had knowledge of defects in the property. In the present case, however, CTS made no representations concerning the real estate, as is evident from the various provisions in the purchase agreement and attending documents. Furthermore, inHarris, the sellers of the real estate had lived there prior to the sale. The Garveys also rely on numerous other cases in support of their claims against CTS. However, we agree with CTS that these cases are distinguishable, as they involve a seller that had lived in the house prior to the sale.
{¶ 24} Additionally, we reject the Garveys' argument that the Supreme Court's holding in Haddon View Investment Co. v. Coopers Lybrand (1982),
{¶ 25} Based upon the foregoing, we find that the trial court properly concluded that the doctrine of caveat emptor applied to preclude recovery from CTS based upon these claims. Therefore, we conclude that CTS was entitled to judgment as a matter of law, and that the trial court did not err in granting CTS' summary judgment motion. See Temple,
Judgment affirmed.
The Court finds that there were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(E). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellant.
Exceptions.
Carr, P.J. Slaby, J. concur.