Gibb v. Citicorp Mortgage, Inc.

518 N.W.2d 910 (1994)

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Nature of the Case

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Facts

D acquired a house through the foreclosure of a mortgage when the mortgagee abandoned the property because of extensive termite infestation and damage and defaulted on his mortgage obligation.

D's agent had been informed through a termite service that the property in question was infested with termites and appeared to have extensive damage. The service recommended that a qualified building inspector assess the damage. D chose to ignore the recommendation and instead hired the service to treat the termites and '[shore] up' the visible damage to the house. D's selling agent showed P a single area where termite damage had occurred and assured P that this was the only termite-damaged area and that all necessary repairs and treatments had been made to eliminate the termite problem. The agent knew that this was a complete fabrication. D and the agent concealed and suppressed all evidence of termite damage. The purchase agreement recited that the transaction was 'based upon [P's] personal inspection or investigation of the Property and not upon any representation or warranties of condition by D or its agent.' The agreement further provided that the property was 'sold strictly in 'AS IS' condition. D does not make any warranties regarding the condition of the property at the time of sale and thereafter.' P bought the property and then sued to recover damages from the termite infestation. The court dismissed the suit. P appealed, and the appeal was removed to this court.