Walraven v. Marti

333 N.W.2d 569 (1983)

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Nature of the Case

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Facts

P purchased a business, Bill's Cafe, from Ds Martin and Samuels, the owners. The property was listed by the sellers with defendant Kenneth Warner, a real estate broker for defendant Warner Realty, Inc. Plaintiff sought the services of defendant Joseph Malenfant, a real estate broker for defendant Real Estate One of Bay County, Inc. Malenfant was involved in the negotiations between the owners and P, drafted the purchase and sales agreement, and was present at the closing of the property. Upon taking possession of the premises and after beginning remodeling, P discovered that the city would be constructing a sewer in the area of Bill's Cafe and, as a result, streets and sidewalks would be torn up, the parking lot would be unavailable at times, utilities would be cut off for periods of time, and the traffic on the streets bordering the restaurant would be interrupted. P offered to rescind the transaction and demanded repayment of the down payment and reimbursement for remodeling and other expenses. Rescission was denied by Ds. P reconveyed the property to Ds by quitclaim deed pursuant to an agreement signed by Ds and P. The agreement provided that restoration of the premises to Ds would not constitute a release or waiver of any rights of P arising out of the transaction, including an action for breach of contract, rescission, and fraud, nor would restoration constitute acceptance by the sellers of a rescission of the contract. P seeks rescission of the contract, alleging that Ds had prior knowledge of the impending sewer construction but intentionally withheld the information to induce P to make the purchase. Upon learning of the fraudulent concealment by Ds, P immediately tendered the property back to the owners and demanded rescission. P sought damages in connection with the contract which resulted from Ds' fraudulent concealment of information concerning the sewer project. P also seeks damages from Malenfant and his employer, Real Estate One of Bay County, Inc., for Malenfant's negligence in failing to discover or advise P that Bill's Cafe was an unprofitable business and of the impending sewer construction in the vicinity. P learned in deposition that D had informed the listing agent, Kenneth Warner, of the sewer project prior to closing on the property. P then amended the complaint and sought damages from Warner, alleging that Warner had a duty to disclose to plaintiff the material fact of the sewer construction and that Warner intentionally withheld this from plaintiff to induce plaintiff to purchase Bill's Cafe and, as a result, committed a fraud upon P. Warner and Warner Realty, Inc., filed a motion to require P to make an election of remedies. That motion was granted. The order required P to choose between proceeding against Martin and Samuels in equity for rescission, with the result that all other defendants would be dismissed, or to proceed against all defendants for damages resulting from the alleged fraud committed upon him. The action was stayed by the trial court per the parties' stipulation, and the order was certified by the court as final for purposes of appeal under GCR 1963, 518.2.