Staggs v. Sells

86 S.W. 3d 219 (2001)

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Nature of the Case

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Facts

In 1987, Ds purchased a home in which their daughter lived until 1995 when they placed this house up for sale. Ds never lived in the home, but lived close by and visited their daughter regularly. P viewed the home on three occasions and negotiated a purchase price of $71,000.00. A contract was signed. The contract also provided 'that the Property has not been damaged or affected by flood or storm run-off and that the Property does/does not require flood insurance.' The box next to the phrase 'does not' in this sentence was checked. No other explanation was provided by Ds. D accepted the offer, but never saw the contract. Ds authorized their agent to sign it for them. Their agent never read the terms of the contract to them and did not inquire regarding any flooding which might have occurred on the property. P inspected the property herself. She also had the property appraised and inspected by professionals. The appraisal came in at $71,000.00; however, the appraiser noted that the property was in a low lying area and could be subject to minor flooding. He recommended having a surveyor check for flooding but issued the appraisal, which was accepted by the bank, without obtaining a survey on the assumption that the property did not flood. A flood certification was obtained that established that the property, like the majority of property in Putnam County, was in flood zone C. Flood insurance could be purchased but was not required. At the closing, P inquired of her agent what 'flood zone C' was. She was told by her agent that 'it was a flood zone, but it is a low flood zone, it wasn't supposed to flood.' She never ask Ds about any flooding, and D who were present at the closing never mentioned any flooding to her. Over the next few years, water came up flooding the yard around 15 times. In some cases, the flooding was so severe that the house was completely surrounded by water rendering it a virtual island. Water has never come into the house and has not yet caused any structural damage to the dwelling. The water usually recedes quickly, allowing access to the house within a few hours and completely clearing the property within a day or two. P sued Ds for negligent misrepresentation. The court awarded P $25,000 with D 60% at fault and P 40% at fault. Damages were reduced to $15,000. Ds were found to be reckless and failed to use reasonable care when representing that the property was not a flood risk. Ds appealed.