Wallington v. HagemanWallington v. Hageman
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-663245
RELEASED AND JOURNALIZED: December 16, 2010
Daniel S. White
34 Parmelee Drive
Hudson, OH 44236
ATTORNEY FOR APPELLEE
David J. Pasz
12001 Prospect Road, Suite A-1
Strongsville, OH 44149
MELODY J. STEWART, J.:
{¶ 1} Plaintiffs-appellants, Ronald and Charlotte Wallington (collectively referred to as “the Wallingtons“), appeal the trial court‘s grant of summary judgment in favor of defendant-appellee, Michelle Hageman, trustee of the Stellа Radschuk Trust (“Hageman“). Upon review, we conclude that no genuine issues of material fact exist, and appellee is entitled to judgment as a matter of law. Accordingly, we affirm.
{¶ 2} This case involves the sale of a property located at 6175 Vernondale Drive, in Parma Heights, that was owned by the Stella Radschuk Trust. The original trustee was Hageman‘s grandmother, who had lived in the house until the summer of 2003 when health problems forced her to move. Upon her grandmother‘s death in 2005, Hageman became successor trustee.
{¶ 3} In November 2007, the Wallingtons entered into a purchase agreement to buy the property. The purchase agreement contained an “inspection contingency” clause, permitting the Wallingtons to have the home inspected before the purchase was completed. After the inspection, the Wallingtons had the option of terminating the agreement, negotiating with the seller to fix any рroblems, or accepting the property “as is.”
{¶ 4} The Wallingtons arranged to have the home inspected by Affordable Inspections, a professional inspection company recommended to them by their realtor. The inspector was given complete access to the house for his inspection.1 Ronald Wallington accompanied the inspector as he inspected the basement. Wallington stated in his deposition that he was pleased with the inspection. After the inspection was completed, the Wallingtons accepted the property “as is.” The purchase agreement specified that the Wallingtons bought the рroperty in its “‘AS IS’ PRESENT CONDITION.”
{¶ 5} As part of the transaction, Hageman completed and gave the Wallingtons a Residential Property Disclosure Form. Hageman signed the
{¶ 6} The Wallingtons took possession of the property on December 10, 2007. In mid-January 2008, the Wallingtons discovered water accumulation in the basement. After attempting to fix the problem themselves with waterproofing paint, “water plugs,” and concrete seаl, the Wallingtons contracted with Ohio State Waterproofing to waterproof the basement at a cost of $13,500.
{¶ 7} In June 2008, the Wallingtons filed a complaint against Hageman for damages arising from “undisclosed defects” in the home that required “extensive repair work.” The complaint alleged Hageman “mistakenly represented” а lack of knowledge regarding “previous or current water leakage, water accumulation, excess moisture or other defects to the property,” “water or moisture related damage to floors, walls or ceilings,” “any material problems with the foundation, basement/crawl space, floors, or interior/exteriоr walls,” and “any repairs, alterations or modifications to control the cause or effect of any problem identified above” on the disclosure
{¶ 8} After discovery was completed, Hageman moved for summary judgment. She argued that she was entitled to a judgment as a matter of law since the Wallingtons could not prevail on a “mutual mistake of fact” claim. She also argued that the Wallingtons could not establish an intentional fraud claim and the Wallingtons’ claims were barred by the purchase agreеment in which they agreed to purchase the property in its “present physical condition.” Hageman supported her motion with transcripts of Ronald Wallington‘s and Charlotte Wallington‘s deposition testimony, copies of the purchase agreement and disclosure form, and her own affidavit in which she stated that she had never lived in thе home; was unaware of any problems in the home, including water intrusion problems, prior to this litigation; had never seen or spoken to the Wallingtons prior to the taking of their depositions; and, had completed the disclosure form with statements that were true to the best of her knowledge. The Wallingtons opposed summary judgment arguing that the pleadings indicated that there were material issues of fact as to whether Hageman lied concerning the representations made in the disclosure form. They supported their opposition with their own affidavits that detailed the problems they encountered after January 2008, and an affidavit from the foreman of the
{¶ 9} The trial court granted summary judgment to Hageman finding that the property was sold in its “present physical condition,” the Wallingtons had full access to the property and had the house inspected by Affordable Inspections, and Hageman made no fraudulent representations to the Wallingtons.2
{¶ 10} The Wallingtons timely appeal raising as a single assignment of error that the trial court erred in granting summary judgment.
{¶ 11} This court reviews the granting of summary judgment under a de novo standard. We afford no deference to the trial court‘s decision and independently review the record to determine whether summary judgment is appropriate. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 1996-Ohio-336, 671 N.E.2d 241.
{¶ 12} Summary judgment is appropriate if (1) no genuine issue of any material fact remains, (2) the moving party is entitled to judgment as a
{¶ 13} The party moving for summary judgment carries an initial burden of setting forth specific facts that demonstrate his or her entitlement to summary judgment. Dresher v. Burt, 75 Ohio St.3d 280, 1996-Ohio-107, 662 N.E.2d 264. “When a motion for summary judgment is made and supported as provided in
Fraud
{¶ 15} “The elements of fraud are: (a) a representation or, where there is a duty to disclose, concealment of a fact, (b) which is matеrial to the transaction at hand, (c) 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, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting injury proximately caused by the reliance.” Burr v. Stark Cty. Bd. of Commrs. (1986), 23 Ohio St.3d 69, 491 N.E.2d 1101, paragraph two of the syllabus. Regarding fraudulent concealment or nondisclosure, the Ohio Supreme Court has held that “a vendor has a duty to disclose material facts which are latent, not readily observable or discoverable through a purchaser‘s reasonable inspection.” Layman v. Binns (1988), 35 Ohio St.3d 176, 178, 519 N.E.2d 642.
{¶ 16} The doctrine of caveat emptor precludes a purchaser from recovering for a structural defect in real estate if “(1) the condition
{¶ 17} While the doctrine of caveat emptor still applies,
{¶ 18} If the seller fails to disclose a material fact on the disclosure form with the intention of misleading the buyer and the buyer relies on the form, the seller is liable for any resulting injury. Pedone v. Demarchi, 8th Dist. No. 88667, 2007-Ohio-6809, at ¶31, citing Juan v. Harmon (Mar. 5, 1999), 1st Dist. No. C-980587. However, “[w]hen a plaintiff claiming fraud in the sale of property has had the opportunity to inspect the property, he is charged
{¶ 19} The Wallingtons fraud argument fails because they did not present any evidence that Hageman knew, or should have known, that the house had a water intrusion problem. Neither are the facts of this case such that knowledge of the problem may be inferred. The evidence showed that Hageman‘s grandmother lived in the house until 2003, the house was then empty until sold, and Hageman never lived in the house. The Wallingtons admitted in their depositions that they had no facts to support their belief that Hageman had knowledge of the water intrusion.
{¶ 20} In her deposition, Charlotte Wallington claimed Hageman must have known about the water problem because of the obvious “outward signs” of water problems in the basement. She described mold on the bottom of a dresser in the basement and skirts pinned up on basement furniture with mold on the bottom that was “so intense” the furniture had to be discarded. However, if these signs were sufficiently obvious as to put Hageman on notice of a water problem, they would also have been discoverable by a reasonable inspection.
{¶ 21} The Wallingtons cite to multiple cases in which summary judgment was reversed because issues of fact were found as to the seller‘s
{¶ 22} In the instant case there is no evidence that Hageman took any positive action to conceal a defect or had made any representations to the Wallingtons about the condition of the property. Additionally, in the cases cited, the sellers had actual or inferred knowledge that came from years of living in the house prior to the sale. Seе, e.g., Dinapoli v. Lewandowski (Sept. 30, 1998), 9th Dist. No. 18897 (seller built and then lived in residence from 1964 to 1994).
{¶ 23} From the record, we find that the Wallingtons have not met their burden of showing that Hageman knowingly misrepresented or concealed latent defects for the purpose of defrauding them. Accordingly, there is insufficient evidence of fraud to create a genuine issue of material fact and Hageman is entitled to summary judgment with respect to the fraud claim.
Mistake of Fact
{¶ 24} The Wallingtons argue that if the trial court accepted Hageman‘s claim that she did not have knowledge of the true condition of the basement, the court should have found there was a mutual mistake of fact, thus permitting rescission or cancellation of the contract. In Reilley v. Richards, 69 Ohio St.3d 352, 352-353, 1994-Ohio-528, 632 N.E.2d 507, the Ohio Supreme Court held that a mutual mistake as to a material fact in a real
{¶ 25} “A mistake is material to a contract when it is ‘a mistake * * * as to a basic assumption on which the contract was made [that] has a material effect on the agreed exchange of performances.’ 1 Restatement of the Law 2d, Contracts (1981) 385, Mistake, Section 152(1). Thus, the intention of the parties must have been frustrated by the mutual mistake.” Id. at 353.
{¶ 26} In Reilley, the supreme court reversed the аppellate court‘s decision and affirmed the trial court‘s finding of a mutual mistake and rescission of a real estate contract. Id. The court held that “the lack of knowledge that a significant portion of the lot is located in a floodway is a mistake of fact of both parties that goes to the character of thе property such that it severely frustrates the appellant‘s ability to build a home on the property. Thus, it is a mutual mistake of fact that is material to the subject matter of the contract.” Id.
{¶ 27} We find the holding of Reilley is not appropriate to the instant case. The evidence shows that after having the home inspected, the Wallingtons entered into а contract for the sale of the property “as is.” Therefore, the Wallingtons cannot argue that the absence of water problems in the basement was a basic assumption upon which the contract was made.
Judgment affirmed.
It is ordered that appellee recover of appellants her costs herein taxed.
The court finds there were reasonable grоunds for this appeal.
It is ordered that a special mandate issue out of this court directing the Cuyahoga County Court of Common Pleas to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
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MELODY J. STEWART, JUDGE
SEAN C. GALLAGHER, A.J., and
MARY EILEEN KILBANE, J., CONCUR