This is аn action for fraud brought by the appellants, James E. Goff and Janice Sue Goff, homeowners, against appellee, American Savings Association of Kansas, holder of the first mortgage, and Clarence H. Lyden, contractor.
The trial court granted summary judgment against the Goffs and in favor of American Savings Association, and the Goffs appeаled. The action against Clarence H. Lyden is pending in the district court and Lyden is not a party to this appeal.
In the latter part of 1973, the appellants signed a construction loan agreement whereby Lyden would build a home for appellants and American Savings Association would loan money to the appellants to pay for the сonstruction as it progressed.
The following day, the Goffs requested Mrs. Goff’s father and Lee Likes, a family friend, to inspect the basement for the sole purpose of ascertaining if it would be watertight. Lee Likes was a building contractor. Likes and Mrs. Goff’s father told the Goffs that the basement would leak and it should be torn out. Likes, in particular, was very adamant, saying, “. . . it will never work”; “the cracks would not seal out water”; and, “. . . no contractor in his right mind would build a frame on top of a wall like that.”
Approximately one month later, Mr. Goff talked to Benny Benge and Dale Casto, the cement contractors who were pouring the basement and garage floor, and they told Goff that the basement would never hold water.
Appellants’ cause of action for fraud is based on a conversation with Delores Green, a contracting officer for American Savings Associatiоn, and a single five- to ten-minute phone conversation with Bill Light, an appraiser for American Savings Association. The conversation with Delores Green took place at the time of the signing of the construction loan agreement. The phone conversation with Bill Light took place on April 19. Appellants testified Delores Green assured them American Savings Association’s inspector would see that the construction “was being handled properly and so on and so forth.” Delores Green did not state American Savings Association would guarantee the workmanship. Mr. Goff testified Delores Green told them “that American Savings would have to send out an inspector quite periodically tо inspect the job site, to make sure that the material and the workmanship was 100 percent satisfactory.”
On April 15 or 16, 1974, Mrs. Goff called American Savings Association and requested that Bill Light inspect the basement walls. On April 19, 1974, Mrs. Goff talked to Bill Light on the phone. Taking Mrs. Goff’s testimony in its most favorable con
The basement leaked and appellants filed suit. The trial court held that a lending institution may insist on the right to supervise construction and to inspect as construction proceeds in order to protect its mortgage, and in this case had protected itself by providing:
“The Owner Agrees. ... To grant American’s inspector access to the building and premises during construction to inspect said construction, and to grant American, or its agents, the right to reject аnd to require replacement of any materials or work that does not in American’s opinion comply with the plans and specifications; provided however, American shall be under no obligation to so inspect or to accept or reject materials or work, and it is agreed that,the right granted in this paragraph shall be solely fоr the benefit of American.”
The trial court then concluded, as a matter of law, that (1) there was no confidential relationship between the plaintiffs and American Savings Association; (2) according to the terms of their contract, the plaintiffs were not entitled to rely on American’s evaluation of the quality of construction; (3) American cоuld not have intentionally defrauded the plaintiffs without damaging their own interest in the property, something which it would not do intentionally. The trial court later added a fourth finding that “fraud cannot be predicated upon the expression of an opinion and that Mr. Light’s statements relied upon by plaintiff clearly fall within that rule,” and then granted summary judgment against the aрpellants as to their claim against American Savings Association.
Appellants rely on five points. Basically, appellants contend that the trial court erred in making the above findings as a matter of law as to four points.
The fifth point on which appellants rely is that a question remains whether the written document referred to by the court as bеing determinative on the question of reliance was modified by subsequent parol. Appellants concede that this issue was not raised in the trial court. We note that appellants filed a motion, or motions, after summary judgment was entered, requesting the
“A litigant may not for the first time on appeal change the theory of his case from that on which it was presented to the trial court, nor may he present matters or issues which he did not bring to the attention of that court. (In re Bowlus,197 Kan. 351 ,416 P. 2d 711 ; Green v. Kensinger,193 Kan. 33 ,392 P. 2d 122 ; Potwin State Bank v. Ward,183 Kan. 475 ,327 P. 2d 1091 , 80 A. L. R. 2d 166.)” Evangelist v. Bellem Research Corporation,199 Kan. 638 , 641,433 P. 2d 380 .
Each case alleging fraud must be dealt with on its own particular set of facts and circumstances, and unless one finds an identical set of facts the case will usually be distinguishable in many particulars.
Good faith is required in every business trаnsaction and the law will not permit a business person to intentionally or recklessly make false representations. If the business person does so, he may be called upon to respond in damages if damages are, in fact, incurred. This does not mean, however, that a business person is responsible in damages for every erroneous, reckless, or false representation made to a person, even though it may cause the other person damage. On the undisputed facts of this case, certain elements must be present in order for plaintiffs to recover on a fraud theory. If any one element is absent, then plaintiffs may not recover. The essential elements are that a representation was made as a statement of a material fact, which was untrue and known to be untrue by Bill Light at the time he made the statement, or else recklessly made, which was of such a character that the Goffs had a right to reasonably rely on it, and did rely on it to their damage. The statement must have been of such a nature that it was rеasonably calculated to deceive the Goffs and to induce them to do what they otherwise would not have done. It must have been a statement of fact, which existed at the time it was made or had existed in the past, as opposed to an opinion. 37 Am. Jur. 2d,
Fraud & Deceit
§ 12, pp. 33-4,
Atlas Acceptance Corp. v. Weber,
With that general background, we now look to the facts of this case to ascertain whether the trial court was correct in granting summary judgment based on the pleadings, uncontroverted facts, answers to interrogatories, and depositions on file. Plaintiffs do not dispute the evidence or make claim of other favorable evidence that is not in the record. The general rules for summary judgment were recently summarized by Chief Judge Harman, then Commissioner Harman, in
Timi v. Prescott State Bank,
“ ‘Generally before a summary [judgment] may be granted, the record before the court must show conclusively that there remains no genuine issue as to a material fact, and that the moving party is entitled to judgment as a matter of law. A mere surmise or belief on the part of the trial court, no matter how reasonable, that a party cannot prevail upon a trial will not warrant a summary judgment if there remains a dispute as to a material fact which is not clearly shown to be sham, frivolous, or so unsubstantial that it would be futile to try the case . . . The manifest purpose of a summary judgment is to obviate delay where there is no real issue of fact. A court should never attempt to determine' the factual issues on a motion for summary judgment, but should search the record for the purpose of determining whether factual issues do exist. If there is a reas onable doubt as to their existence, a motion for summary judgment will not lié. ... A court, in making its determination, must give to the party against whom summary judgment is sought the benefit of all inferences that may be drawn from the facts under consideration’ (Lawrence v. Deemy,204 Kan. 299 , 301-302,461 P. 2d 770 ). ‘. . . A popular formula is that summary judgment should be granted on the same kind of showing as would permit direction of a verdict were the case to be tried. ... If there is any question as to the credibility of witnesses or the weight of evidence, a summary judgment should be denied.’ (Hastain v. Greenbaum,205 Kan. 475 , 481,470 P. 2d 741 .)”
The existence of frаud is ordinarily a question of fact to be heard by the trier of facts. The actionable nature of a representation, however, involves a question of law. Where the facts are
The question also “. . . may be entirely one of law, as where it appears without dispute in the evidence that the representation was only a statement of the opinion or belief of the person making it, not to be relied upon as a statement of fact.” 37 Am. Jur. 2d, Fraud and Deceit § 44, p. 69.
“While as a general rulе the question as to whether a particular statement is one of fact or opinion is for the jury, this is not always so, for cases frequently arise which are so plainly of one class or the other that they can be disposed of by the court without the aid of the jury. Thus, a statement may be so clearly an expression merely of the opinion of thе person making it, and not to be relied upon as a representation of fact, that it may be held, as a matter of law, not actionable as a false representation constituting a fraud.” 37 Am. Jur. 2d, Fraud and Deceit § 48, pp.77-8.
James E. Goff had completed high school and some college. He was 29 years old and employed in credit and collection work for Goodyear Tire & Rubber Company. The age and educational level of Mrs. Goff are not shown. The Goffs had previously owned a home in Topeka, Kansas. When the construction loan agreement was executed, the Goffs knew, or were bound to have known, that American Savings Association’s inspection was “solely for the benefit of American” and that American Savings Association was not bound to inspect or to accept or reject materials or work. It is not customary in the business of making loans to provide inspections for the benefit of the mortgagor-purchaser. It is customary for the purchasers to inspect the premises as construction progresses and to satisfy themsеlves as to material and workmanship prior to final closing. While this is a case of first impression in Kansas, other jurisdictions have interpreted similar loan agreements and held that the providing of periodic inspection was normal procedure for a lending institution and would not impose liability.
Bradler v. Craig,
It is not necessary, however, for us to decide whether a confidential relationship did or did not exist. Assuming arguendo that the specific contract provision did not bar recovery and that
First, fraud cannot be predicated upon what as a matter of law amounts to an expression of an opinion and which cannot reasonably be understood to be anything else.
Second, Light obviously was attempting to predict some future event,
i.e.,
would the basement be waterproof in the future. The basement was not leaking at the time and, in fact, did not leak for nearly two months thereafter. Light merely expressed an opinion and confidence in the contractor. Plaintiffs picked the contractor and, other than the basement wall, were happy with his work. A number of authorities and cases are available to anyone interested. See:
Timi v. Prescott State Bank,
supra;
Finch v. McKee,
Plaintiffs could not reasonably rely on Light’s statement in view of the fаcts of this case. Plaintiffs had actual knowledge of the cracks in the basement wall. Plaintiffs knew that prior to jacking the wall back in place the cracks went all the way through the basement wall and were as wide as a pencil or bail-point pen point. They also knew the basement wall did not return to its original position. Plaintiffs had requested thе contractor to guarantee the basement to be watertight and the contractor refused. That, in itself, should have put any reasonable person on notice that the basement wall might leak. When coupled with plaintiffs’ own observation of the size of the cracks alf'the way through the wall, it is devastating to plaintiffs’ case. But, there is more. Plаintiffs also made an investigation on their own. The investigation was unhampered by American Savings Association. The investigation certainly disclosed to plaintiffs that Light’s opinion was just that, an opinion, and a controversial one at that. Plaintiffs requested Mrs. Goff’s father and Lee Likes, a family friend, to inspect the premises, and they did so. The family friend was a building contractor. Both, Mrs. Goff’s father and Lee Likes, told the Goffs the basement would leak. Likes suggested that fact in rather harsh language. Still later, two cement contractors who were pouring the basement and garage floors informed Goffs the basement would never hold water out.
Considering all the facts of this case, no reasonable person in the Goffs’ position and circumstances could have reasonably relied on the statements of Bill Light, and the trial court was correct in granting summary judgment as a matter of law.
The trial court’s finding, “American could not have intentionally defrauded the plaintiff without damaging their own interest in the property, something it would not do intentionally,” is immaterial to our decision. Whether or not American Savings Assoсiation would benefit' or conversely be damaged is immaterial, as the plaintiff is neither required to plead nor prove that the defrauder benefits from or has an interest in the transaction. 37 Am. Jur. 2d,
Fraud and Deceit
§ 18, p. 43;
Hewey v. Fouts,
All of the facts necessary for determination of the controlling
Affirmed.