Conway v. Romarion

• Court: Georgia Court of Appeals
• Writing for the Court: POPE, Presiding.
• Citation: Conway v. Romarion, 557 S.E.2d 54, 252 Ga. App. 528 (Ga. App. 2001)
• Decision Date: 20 November 2001
• Docket Number: No. A01A1299.,A01A1299.
• Parties: CONWAY, et al. v. ROMARION, et al.

557 S.E.2d 54

252 Ga. App. 528

CONWAY, et al. v. ROMARION, et al.

No. A01A1299.

Court of Appeals of Georgia.

November 20, 2001.

Lefco & Blumenthal, Stanley M. Lefco, Atlanta, for appellants.

Smith, Gilliam, Williams & Miles, Steven P. Gilliam, Robert A. Weber, Gainesville, for appellees.

POPE, Presiding Judge.

Thomas and Victoria Conway filed suit against Roberto and Linda Romarion asserting that the Romarions concealed extensive pet damage to their home prior to the Conways' purchase of the house. The trial court granted summary judgment to the Romarions, and the Conways appeal. We reverse.

On appeal, we must view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the Conways as nonmovants. Cotton v. NationsBank, 249 Ga.App. 606, 607, 548 S.E.2d 40 (2001). Viewed in that light, the evidence shows that from July 1992 to July 1999, when they sold their house, the Romarions owned as many as five to six cats at one time, three to four of which were male. From July 1992 until approximately March or April 1995, the cats had the complete run of the house, and the Romarions concede that the cats occasionally would defecate or urinate outside their litter box. In addition, the male cats sprayed the walls or furniture approximately two to three times per month. They also admit that the odor of cat urine and spray could be detected upstairs from time to time.

In May 1995, the Romarions decided to confine all but one of the female cats in the basement. That arrangement was continued until May 1999 when the Romarions placed their house on the market and all but one of the cats was kept outside. The Romarions concede, however, that when the cats were kept in the basement, they still would occasionally get upstairs. And the cats continued to occasionally urinate, spray and defecate on the basement carpet, furniture or walls.

In 1995, Roberto Romarion detected a stain on the dropped tile ceiling in the basement. Upon investigation, he discovered that the stain was cat urine and that the cats had defecated and urinated in the dropped ceiling. As a result, Roberto Romarion replaced 50 four-foot square tiles that had been damaged by cat droppings. He then put up chicken wire to prevent the cats' access to the ceiling. Nevertheless, the cats occasionally still found a way to get into the dropped ceiling, and the Romarions had to take additional measures in an attempt to block their access.

During most of the period that the Romarions owned the house, the basement maintained an odor of cat urine. Roberto Romarion stated that he, in fact, avoided the basement as often as possible due to this odor. The Romarions' real estate agent detected the odor when she visited the house in 1999 prior to listing the house and advised them to take measures to clean up the smell. The Romarions had the carpet cleaned and removed furniture that had been sprayed by the cats.

The Conways first visited the house in July 1999, and at that time, the Romarions owned five cats. Prior to closing, the Conways visited the house approximately four to five times. During those visits they and their real estate agent observed only one cat in the unfinished basement area and two cats outside. Roberto Romarion told Thomas Conway that they only had outside cats. The Romarions' real estate agent also told Victoria Conway that the Romarions' cats were outside cats, although the agent was aware that the cats had previously been kept in the basement.

Neither the Conways nor their real estate agent ever detected any cat-related odor or damage prior to the closing on the house. Roberto Romarion did tell the Conways that he had installed the chicken wire after he discovered the cats had been getting up into the ceiling, but he never told them that the cats had urinated or defecated there. He also pointed out a cat door, which he explained they had closed off because raccoons had been getting into the basement. The Conways and their real estate agent also noticed that the Romarions kept their house cold, so cold that condensation appeared on the house's windows.

A few days after the closing on the property and after the air conditioning in the house had been off for a while, the Conways began to notice the odor of cat urine. Victoria Conway stated that the smell in the basement was so bad it burned her eyes and throat. The Conways removed the carpets throughout the house, but the smell persisted. They then discovered evidence of cat urine and feces in the dropped tile ceiling and baseboards in the basement. When they removed a ceiling tile to investigate, feces fell down on their heads, and they saw that the metal rails supporting the tile were rusted. The Conways also discovered evidence that the cats had gotten into the house's HVAC system and urinated. As a result, the Conways removed the dropped ceiling and portions of the HVAC system and had to have repairs made to the HVAC.

In addition, the Conways spent in excess of $5,000 to have an industrial odor control company remove the odors in the upstairs portion of the house and the garage. Using blacklight and with the assistance of the odor control company, the Conways began to discover evidence of cat markings throughout the house. They replaced portions of the removed upstairs carpet, but they made no repairs to the basement other than the HVAC.

Approximately one month after the closing, the Conways wrote the Romarions notifying them that they had discovered numerous defects in the house and that they wished to rescind the parties' purchase and sale agreement. The Romarions did not agree to rescind, and the Conways filed suit slightly more than two months later. The complaint asserted a claim of fraud and sought $32,000 in damages. The Romarions moved for summary judgment, and the trial court granted the motion finding that the Conways had waived their claim of rescission and failed as a matter of law to exercise due diligence to discover the alleged defects in the house.

1. The Conways assert error in the trial court's finding that they had waived their right to rescind the parties' agreement and in denying them the right to amend their complaint to assert a specific claim of rescission. We agree.

A purchaser who claims that he was fraudulently induced to enter into a sales contract has an election of remedies. The first option is to rescind the contract after discovering the fraud and sue in tort to recover the purchase price and any additional damages from the fraud. Alternatively, the purchaser may elect to affirm the contract and sue for damages resulting from the fraud. This, too, is a tort action, but it flows from the underlying contract and is subject to any defenses based upon that contract. Keller v. Henderson, 248 Ga.App. 526, 528(2), 545 S.E.2d 705 (2001). In order to effect a rescission, the purchaser must act promptly and adhere to the intent to rescind or risk waiver of his claim: "An announcement of the intent to rescind the contract must be made in a timely fashion, as soon as the facts supporting the claim for rescission are discovered. Moreover, the aggrieved party must adhere to the intent to rescind and may waive any claim for rescission by failing to do so." Buckley v. Turner Heritage Homes, 248 Ga.App. 793, 795(2), 547 S.E.2d 373 (2001). Rescission, as a forfeiture of rights under an otherwise valid contract, is not favored under the law, and courts are quick to find that the right to rescind has been waived. Holloman v. D.R. Horton, Inc., 241 Ga.App. 141, 146(3), 524 S.E.2d 790 (1999). Waiver generally is found where the intent to rescind is not asserted in a timely fashion¹ or where the purchaser has taken some action inconsistent with the intent to rescind, such as making improvements to the property or taking out a mortgage on the property.²

Here, the Conways asserted the intent to rescind in a timely fashion, less than one month after closing. And the evidence shows that the repairs the Conways made to the house were only those necessary to make it liveable until the dispute could be resolved. They removed the stained and damaged items—carpet, ceiling tile, baseboards and drywall—and took active steps to remove the odors only from the upstairs portion of the house and the garage. No repairs were made to the basement other than the HVAC, which emitted cat smells into the upstairs. There is no evidence of any cosmetic repairs unrelated to the alleged damage.

Nevertheless, the trial court found that the Conways had waived their right to rescind by suing "on the contract for damages," citing only the Holloman case. In that case, however, the Hollomans waited one year after closing before presenting the homebuilder with a list of 169 defects in the house and demanding repairs. Three months later, they sent a letter announcing the intent to rescind the contract. Approximately two months later, the Hollomans filed suit asserting claims for breach of contract and Fair Business Practices Act violations against the homebuilder, in addition to claims of fraud, negligence and Georgia Racketeer Influenced & Corrupt Organizations Act violations against the builder and others. Holloman, 241 Ga.App. at 146(3), 524 S.E.2d 790. Although the complaint contained a prayer for rescission, this Court found that the prayer was not a part of the cause of action. Id. The Holloman opinion concluded that the complaint had affirmed the contract and waived any claim for rescission. Id. at 146-147, 524 S.E.2d 790.

We find the Conways' actions and complaint are distinguishable from those of the Hollomans. As previously noted, the Conways promptly indicated their intention to rescind. And although their complaint does not assert a separate claim for rescission, neither does it express a clear election to affirm the purchase and sale agreement. There is no claim for breach of contract as there was in the Holloman c...