MARK SOLOMON & another vs. MARVIN BIRGER & another.
Appellate Court of Massachusetts
April 22, 1985
19 Mass. App. Ct. 634
Middlesex. September 26, 1984. Present: BROWN, KASS, & SMITH, JJ.
Where the buyers of a dwelling house claimed that the sale eleven years earlier had been induced by the sellers’ oral misrepresentations respecting the condition of the house, the buyers’ cause of action accrued no later than the time at which they received an engineer‘s report disclosing that the house had a serious foundation defect, and the buyers could not escape the bar of the applicable three-year statute of limitations by claiming that their action, sounding in tort, was based upon their purchase and sale agreement which had recited that it was a “contract under seal.” [637-640]
Any rights created by language in a printed form of agreement for the purchase and sale of a dwelling house providing that, at the time of conveyance, the premises are to be “not in violation of . . . building and zoning laws” were merged into the deed from the sellers to the buyers and were thereby extinguished. [640-643] BROWN, J., dissenting.
Purchasers of a dwelling house who claimed they had been induced through fraud to accept a statutory form of quitclaim deed, a sealed instrument, were not entitled to the benefit of the twenty-year statute of limitations applicable to an action upon a sealed instrument. [643]
CIVIL ACTION commenced in the Superior Court Department on August 7, 1979.
The case was heard by Charles R. Alberti, J., on a motion for summary judgment.
Edward Greer (Jeanne Baker with him) for the plaintiffs.
Michael R. Coppock for the defendants.
1Pauline Solomon.
2Eleanor Birger.
We summarize certain undisputed facts which we are able to deduce from a mass of affidavits, answers to interrogatories, responses to notices to admit facts, and depositions. The house in question is located at 104 Oldham Road, Newton, and was built in 1954, i.e., twenty-five years before this action was brought, by a home builder, Dorchester House Remodeling, Inc. Marvin Birger, one of the defendants, was the first buyer and resident owner. In 1959 Marvin Birger conveyed the property to himself and his wife as tenants-by-the-entirety. They continued to occupy the premises as their home until 1968, the year they sold the house to the plaintiffs.
On June 3, 1968, the Birgers, who were building a new home in Weston, placed their property for sale with a real estate brokerage firm. A broker from that firm took the Solomons through the house on June 22, 1968. There was no conversation of consequence between the prospective buyers and Mrs. Birger, who was at home during the tour. The Solomons were free to inspect the premises. About a month later, on July 5, 1968, the Solomons made a written offer to buy the Birger house for $36,000, an offer which the Birgers accepted. The offer form contemplated execution of a purchase and sale agreement and the parties, under date of July, 1968,4 executed an agreement on the Greater Boston Real Estate Board
Delivery of the deed occurred on December 9, 1968. During the interim, the Solomons made a number of visits to the house. On one such visit Mrs. Birger took a painter through the house to estimate painting work to be done. Above an archway leading to the bedrooms, the painter noticed a crack five feet long and about an eighth of an inch wide. “What is this crack?” he inquired. Mrs. Birger replied, “Oh, it is probably from sonic boom.” Mrs. Solomon construed that remark as “kind of” facetious. That statement is the one upon which the plaintiffs have fixed as the Birgers’ oral misrepresentation of the condition of the house.5 There is no record of any other statement by the Birgers regarding the structural integrity of the house. So far as appears, neither the Solomons nor anyone on their behalf made a physical inspection, other than the walk through with the painter.
Within a few months after they moved in, Mr. Solomon discovered a large crack in the basement slab when he pulled back a rug. In 1970, the Solomons replaced a lower retaining wall, and, in 1973, they added a buttress wall at the rear of the house in an attempt to arrest movement of the back wall. In 1974, the Solomons noticed cracks in their front and rear foundation walls. There followed a series of consultations with engineers, contractors, and building consultants. One of the first of these, Tsiang Engineering, Inc., in 1975 reported that the house was settling because of, among other reasons, poor soil condition, horizontal soil pressure, poor fill material, and insufficient compaction of fill.
During the discovery phase of the case, the battle was fought over the buyers’ charge that the sellers had misrepresented and concealed the condition of the premises. The plaintiffs have conceded that a tort claim based on misrepresentation is time-barred, even giving effect to the extension provision which
1. Fraud. Actions for damages based on deceit sound in tort, a fact reflected in reported cases where the gravamen was that the plaintiff had been induced into a real estate transaction through the misrepresentation of a material fact by the defendant. See, e.g., Sheffer v. Rudnick, 291 Mass. 205, 205 (1935); Forman v. Hamilburg, 300 Mass. 138, 139 (1938) (wherein it is noted, however, at 142, that upon discovery of the fraud the plaintiff could have elected to rescind the contract); Swinton v. Whitinsville Sav. Bank, 311 Mass. 677, 677-678 (1942); Kabatchnick v. Hanover-Elm Bldg. Corp., 328 Mass. 341, 342 (1952); Fogarty v. Van Loan, 344 Mass. 530 (1962) (whether action for breach of warranty will lie for oral representation of quality of real estate not decided); Friedman v. Jablonski, 371 Mass. 482, 483-484 (1976); Nei v. Burley, 388 Mass. 307, 310 (1983); Henshaw v. Cabeceiras, 14 Mass. App. Ct. 225, 225-226 (1982).7
If we were to apply to the normal statute of limitations of three years8 the extension which
(Second) of Contracts §§ 164 and 380 (2) (1979). Rather, the plaintiffs argue that since the defendants’ alleged misrepresentation served to induce the plaintiffs to sign the purchase and sale agreement as an instrument under seal, they may sue for damages on the basis of the misrepresentation at any time within twenty years of the performance of that contract.
An action on a written contract under seal enjoys a long statute of limitations because “the writing is clear evidence in permanent form of the terms of the agreement . . . .” 18 Williston, Contracts § 2020, at 678 (3d ed. 1978). A misrepresentation of the sort here alleged is not written into the agreement and such evidence as the plaintiffs proffer is entirely oral.
The ephemeral nature of unwritten representations and the natural tendency of persons to reconstruct history in a self-justifying manner are considerations which militate in favor of restricting the time in which an action may be founded on them. In choosing the correct limitations period we look to the essential nature of the action, not its form. Hendrickson v. Sears, 365 Mass. 83, 85 (1974). Here the essential nature is deceit. The plaintiffs’ theory would stretch the limitations period far beyond the extension already worked in cases of fraudulent concealment by the remedial provisions of
That the defendants failed to mention the house had developed cracks, including one in the basement obscured by floor covering, does not constitute fraudulent concealment. Homeowners who sell their houses are not liable for bare nondisclosure in circumstances where no inquiry by a prospective buyer imposes a duty to speak. Swinton v. Whitinsville Sav. Bank, 311 Mass. at 678-679. Nei v. Burley, 388 Mass. at 310-311. Henshaw v. Cabeceiras, 14 Mass. App. Ct. at 227. There must be some affirmative act of concealment of the cause of action. Salinsky v. Perma-Home Corp., 15 Mass. App. Ct. 193, 197 (1983). Compare Kannavos v. Annino, 356 Mass. 42, 50 (1969).
2. The building law clause. It requires a very expansive, indeed, imaginative, reading of the complaint to find a statement of the claim based on the building law clause in the purchase and sale agreement. The complaint never mentions any clause of the purchase and sale agreement which purports to make a representation. Rather, paragraphs 11 and 12 of the complaint make only general allegations of warranty by the sellers, without reference to any writing. As the defendants have elected to meet the plaintiffs on substantive rather than pleading grounds, and in view of the liberal amendment provisions of
Section 4 of that agreement calls upon the seller to convey a good and clear record and marketable title, free from encumbrances, except, among other things, provisions of existing building and zoning laws. Section 9, upon which the plaintiffs heavily rely, provides: “Full possession of said premises free of all tenants and occupants . . . is to be delivered at the time of the delivery of the deed, said premises to be then (a) in the same condition as they now are, reasonable use and wear thereof excepted, and (b) not in violation of said building and zoning laws. . . .” Into this latter section, i.e., § 9, the plaintiffs read a warranty by the sellers that the premises at the time of delivery of the deed will conform to the building code of the city of Newton. If the agreement so warrants, the materials submitted by the plaintiffs in opposition to the defendants’ motion for summary judgment are sufficient to raise a question of fact whether at the closing between the parties a building code violation existed.9
We do not think that the purchase and sale agreement so warrants. Sections 4 and 9 of the agreement are interdependent. Section 4 deals fundamentally with the state of the title. It does so expressly and mentions building and zoning laws, party wall agreements, taxes, and betterments as aspects of title considerations. There is a blank subparagraph in which counsel tailoring the agreement may insert references to such things as easements. Under § 4, certain fundamental criteria for conveyance of title are established so that the buyer, between the time of execution of the purchase and sale agreement and delivery of the deed, can investigate what kind of pig is in the poke. If the buyer discovers a building or zoning law violation, the buyer may, under § 9, opt out of the agreement, unless the defect is cured in accordance with the provisions of § 10. Section 9 is not expressed in terms of warranty, but rather in terms of the conditions upon which the buyer may accept or refuse conveyance.
It is difficult to imagine that an agreement designed by a real estate association would contain a twenty-year warranty about a fact of which the seller is likely to have imperfect knowledge, i.e., whether his structure, at the time of sale, conforms in every respect with the building code. Whatever doubt might exist about the meaning of the agreement is, however, resolved by the merger provision which appears in § 13. That section is carefully drawn: “The acceptance of a deed by the Buyer or his nominee as the case may be, shall be deemed to be full performance and discharge of every agreement and obligation herein contained or expressed, except such as are, by the terms hereof, to be performed after the delivery of said deed.” This language embodies the doctrine that acceptance of a deed ordinarily merges all obligations in the purchase and sale agreement, except those specified in the deed itself. Pybus v. Grasso, 317 Mass. 716, 717 (1945). Snyder v. Sperry & Hutchinson Co., 368 Mass. 433, 441-442 (1975).
To this general rule, Massachusetts decisions have carved an exception given expression in Lipson v. Southgate Park Corp., 345 Mass. 621, 625-626 (1963), Holihan v. Rabenius Builders, Inc., 355 Mass. 639, 642 (1969), and McMahon v. M & D Builders, Inc., 360 Mass. at 59-60. All three cases involve house builders, i.e., there was a separate agreement to construct or repair a building upon the premises to be conveyed. In those circumstances it was plausible to reason that the obligation to build was collateral to the undertaking to convey. It was also reasonable to suppose that a purchaser from a builder-vendor would rely on the contractor‘s possessing the skill to build a house which is habitable. For a discussion of illustrative cases, see 12 Williston, supra, § 1506A. In the case now before us there is no undertaking collateral to conveyance of the premises. The seller had no obligation to fix anything, to remove anything, or to add something. Nothing needed doing if the buyers decided, after investigation, that the conditions of conveyance had been met.
Moreover, the language of the merger clause in the agreement in this case is more carefully drawn than that considered in the Lipson, Holihan, and McMahon cases. The language in the instant case merges into the deed every agreement and obligation except “such as are, by the terms hereof, to be performed after the delivery of said deed.” No provision appears in the agreement which by its terms calls for performance of an obligation after delivery of the deed. It is also worth noting that the form of agreement which the parties used was, unlike the form construed in the Lipson, Holihan, and McMahon line of cases, designed to cover the case of land with buildings on it. The sellers, who must surely have been surprised to be on the business end of a law suit eleven years after they passed a deed to their house, are entitled to the benefit of the language of their agreement.
That language, of course, has a purpose. The real estate market is unorganized in the sense that it has a vast number of individual buyers and sellers, some of whom participate in the market once or twice in their lives and move elsewhere thereafter. It is a market in which amateurs are the preponderant
3. The deed. In a final effort to come within a twenty-year statute of limitations, the plaintiffs argue that they were induced by fraud to accept a deed, a sealed instrument. The deed delivered, however, was a short form quitclaim deed. See
The motion judge rightly concluded that, on the facts as to which there was no material dispute, the plaintiffs’ action was time-barred. He correctly allowed the defendant‘s motion for summary judgment.
Judgment affirmed.
But more to the point. The plaintiffs assert that the warranty in the purchase and sale agreement of building code compliance was violated because the house had been constructed on uncompacted landfill contrary to the local building code. I think that the instant case is controlled in all material respects by McMahon v. M & D Builders, Inc., 360 Mass. 54, 59-60 (1971), which held that agreements which are not essential to the promise to convey do not necessarily merge with the deed, notwithstanding the existence of a merger clause in the accepted deed.
Notwithstanding the cogent analysis of the majority, I am of opinion that the present posture of the record does not lend itself to an immediate resolution of the merits, because the defendants’ claims are, for the most part, inappropriate for determination in a summary judgment proceeding. See
The buyers have demonstrated a prima facie claim for breach of a sealed instrument, and, as such, the claim is not time-barred. See
As a general rule the contractual duties of a seller of land are discharged by the buyer‘s acceptance of a deed. However, “there is an exception to the effect that promises in the original agreement which are additional or collateral to the main promise to convey the land and are not inconsistent with the deed as given are not necessarily merged in the deed, but may survive it and be enforced after the deed is given.” McMahon v. M & D Builders, Inc., 360 Mass. at 59, quoting from Pybus v. Grasso, 317 Mass. 716, 717 (1945). See also Rouse v. Brooks, 66 Ill. App.3d 107, 110 (1978). In McMahon, the buyers sought to rescind a transaction because of false oral representations as to the quality of a nearly completed new house. The standard form purchase and sale agreement contained a provision that “[t]he acceptance of a deed by the Buyer shall be deemed to be a full performance and discharge hereof” (emphasis deleted). Ibid. This language was held “applicable only to the title . . . which was to be conveyed, and . . . the plaintiffs’ acceptance of the deed operated as a merger or waiver only to the extent of precluding any claim that the title . . . did not satisfy the requirements of the agreement.” Id. at 60.3
Promises concerning title and possession are essential to any conveyance, and consequently they are merged into the accepted deed. Id. at 59-60. On the other hand, promises that do not concern title or possession are collateral to the main agreement to convey and may be deemed not to have been merged into the deed. Ibid. The warranty language expressed in § 9 of the purchase and sale agreement does not relate to title or possession — that is, it neither clouds the title nor prevents possession of the property. The warranty concerns the question of habitability.4 A promise that a house is suitable for habitation has been held not to merge into the deed. Id. at 57, 60.
Viewing the allegations in the complaint in conjunction with the express warranty language in § 9 of the purchase and sale agreement it becomes clear that the defendants were not entitled to summary judgment as matter of law.5 The verified complaint
The sellers’ assertion that the local building code is not in evidence misses the point in this summary judgment proceeding. The sellers’ contention that the building code issue was not raised below is specious; the code problem surfaces throughout the record. At the summary judgment stage the burden was on the defendants to establish that there was no issue of a building code violation.
I would reverse the judgment, vacate the order denying the plaintiffs’ motion for partial summary judgment with regard to the defendants’ statute of limitations contention, and remand the case to the Superior Court to stand for further proceedings.