Burgess v. French

• Decision Date: 26 September 2007
• Docket Number: No. CA 06-1394.,CA 06-1394.
• Citation: 263 S.W.3d 578,100 Ark.App. 51
• Parties: Bernard BURGESS, Appellant, v. Don FRENCH & Coretta French, Appellees.
• Court: Arkansas Court of Appeals

263 S.W.3d 578

100 Ark.App. 51

Bernard BURGESS, Appellant, v. Don FRENCH & Coretta French, Appellees.

No. CA 06-1394.

Court of Appeals of Arkansas.

September 26, 2007.

Michael U. Sutterfield, Conway, AR, for appellant.

Gordon, Caruth & Virden, PLC, by: Edward Allen Gordon, Morrilton, AR, for appellees.

BRIAN S. MILLER, Judge.

Bernard Burgess is seeking reversal of an order issued by the Van Buren County Circuit Court denying his claims of fraud and constructive fraud against Don and Coretta French. We agree with the trial court's finding that Burgess failed to show that his reliance on the Seller Property Disclosure form was reasonable and therefore we affirm.

The Frenches purchased a house in Bee Branch, Arkansas in 1996. After leasing the house to Rick and Marie Martens from 1997 until October 2003, the Frenches listed it for sale in 2004 and executed a Seller Property Disclosure form on July 27, 2004. In the disclosure form, they verified, among other things, that: (1) there had been no damage to the house prior to or during their ownership; (2) there were no known defects in the mechanical or electrical systems; (3) there had never been a problem with the roof or with any of the improvements to the house, such as "defective shingles, damaged shingles, leaking or otherwise" and that they were not aware of any "possible" problems that could occur in the future with the roof or with any of the improvements to the property; (4) they were unaware of any facts, circumstances or events on or around the property that could adversely affect the value or desirability of the property; (5) there had never been any past or present water intrusion. The disclosure form also provided that the Frenches would notify the agent if any of the answers to the disclosure became untrue and that the disclosure was not a substitute for inspections.

Burgess, who was looking for a fixer-upper to restore and sell, was shown the property by Rita Collums, the real estate agent, on December 18, 2004. At the time the house was shown to Burgess, there was only one room in the entire house that was completely finished. All other rooms were in obvious need of repair. For example, the sheetrock was missing from most of the rooms and the electric wiring and insulation were exposed. Burgess signed a contract on the house the same day and personally viewed it on at least three occasions prior to closing on January 17, 2005.

The contract of sale between the parties contained an "as is" clause which stated in pertinent part:

Buyer agrees to accept the Property "as is".... Buyer is declining to Inspect the Property as offered in paragraph 15(B). The Buyer further agrees to hold the Seller(s) and the Listing Agent Firm and Selling Agent Firm involved in this Real Estate Contract harmless of any problems relative to the mechanical or structural defect or failure in any of the components of the Property that may exist or be discovered (or occur) after closing.

Burgess also executed a Buyer's Disclaimer of Reliance, which provided in pertinent part that:

BUYER CERTIFIES BUYER HAS PERSONALLY INSPECTED OR WILL PERSONALLY INSPECT, OR HAS HAD OR WILL HAVE A REPRESENTATIVE INSPECT, THE PROPERTY AS FULLY AS BUYER DESIRES AND IS NOT RELYING AND SHALL NOT HEREAFTER RELY UPON ANY WARRANTIES, REPRESENTATIONS OR STATEMENTS OF THE SELLER ... REGARDING THE AGE, SIZE ... QUALITY, VALUE OR CONDITION OF THE PROPERTY, INCLUDING WITHOUT LIMITATION ALL IMPROVEMENTS, ELECTRICAL OR MECHANICAL SYSTEMS, PLUMBING OR APPLIANCES, OTHER THAN THOSE SPECIFIED HEREIN (INCLUDING ANY WRITTEN DISCLOSURES PROVIDED BY SELLER AND DESCRIBED IN PARAGRAPH 16 OF THIS REAL ESTATE CONTRACT), IF ANY, WHETHER OR NOT AN EXISTING DEFECTS (sic) IN ANY SUCH REAL OR PERSONAL PROPERTY MAY BE REASONABLY DISCOVERABLE BY BUYER OR A REPRESENTATIVE HIRED BY THE BUYER.

Approximately one week after closing on the purchase of the house, Burgess noticed several problems with the roof and the electrical system. He called Ms. French, who informed him that Mr. French had recently made repairs to the roof. Burgess called Ms. French again the next day and was informed that Mr. French had made repairs to the roof on at least two occasions prior to Burgess purchasing the house.

Relying on the information provided in the real estate disclosure form, Burgess sued the Frenches for fraud. At trial, Burgess testified that the disclosure form was "very important" to him and that he relied on it in determining the condition of the roof and electrical system. He also testified that he knew the house was incomplete but that, prior...