Stechschulte v. Jennings

298 P.3d 1083 (2013)

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Nature of the Case

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Facts

Jennings (D) purchased a new home and four years later, contacted the builder about water leaks. By late October 2002, a Revocable Trust took title to the home. D served as trustee. In January 2003, D again contacted builder about another water leak. D contacted the window subcontractor, who in turn hired Excel Window & Door, Inc., to inspect the windows. Excel told D he could either caulk all the windows or remove the trim from the home to find the source of the water problems. D elected to caulk all the windows. Excel informed D that caulking the windows was a temporary 'Band Aid' solution. D had extensive knowledge about window and leakage problems with the home. In February 2005, D listed the home for sale. The agency agreement required Golson (in fact D's fiancée) to inform potential buyers of material defects in the home of which she had actual knowledge. Golson never noticed any evidence of water damage or leaks. D completed and signed a 'Seller's Disclosure and Condition of Property Addendum' form. D discussed the leaks with Golson, and Golson did not verify the information in the disclosure statement. Ps toured the home twice and signed a contract to purchase it. Ps had not noticed any water leakage during their visits to the home, and they signed and dated the Buyer Acknowledgment that was part of the Seller’s Disclosure form. Ds an owner's manuals related to the home and a list of subcontractors who had worked on it. He did not provide any documents related to the window repairs. He possessed only one such document, a receipt for the caulking work. Ps hired Amerispec Home Inspectors to perform a general presale inspection of the home. The inspector did not review the disclosure form before conducting the inspection. The inspector did not inspect all the windows in the home, particularly any window with furniture or personal property in front of it. The inspection report revealed no water intrusion or damage issues. The sale closed, and a few weeks later heavy rains laid bare all the problems. P and D met, and P asked to rescind the contract, and D refused. A new inspection revealed all the extensive repairs that had not been revealed. P sued D for fraud and negligent misrepresentation and eventually a breach of contract claim. Ps also moved to amend their petition to add a claim for punitive damages against D and Golson, alleging they acted willfully and wantonly by selling the home with knowledge of the water leakage problems and by failing to disclose those problems. The motion was denied subject to proof at trial. D moved for summary judgment based in the Acknowledgement. The motion was granted. Ps had waived their right to rely on D’s representations. P appealed. A panel of our Court of Appeals reversed the district judge's summary judgment in favor of D and affirmed his summary judgment in favor of Golson and PHB. P and D appealed.