Cushman v. Kirby

• Decision Date: 13 November 1987
• Docket Number: No. 85-255,85-255
• Citation: 536 A.2d 550,148 Vt. 571
• Parties: Lynn S. CUSHMAN and Julie P. Cushman v. Gregory E. KIRBY and M. Elizabeth Kirby.
• Court: Vermont Supreme Court

Page 550

536 A.2d 550

148 Vt. 571

Lynn S. CUSHMAN and Julie P. Cushman v.Gregory E. KIRBY and M. Elizabeth Kirby.

No. 85-255.

Supreme Court of Vermont.

Nov. 13, 1987.

Emily J. Joselson of Langrock Sperry Parker & Wool, Middlebury, for plaintiffs-appellees.

John R. Barrera, Middlebury, for defendants-appellants.

Before PECK and DOOLEY, JJ., BARNEY, C.J.(Ret.), COSTELLO and SPRINGER, District Judges(Ret.), Specially Assigned.

DOOLEY, Justice.

This is an appeal by the defendants-sellers of a home from a judgment entered, after a jury verdict in favor of the plaintiffs-buyers, in a suit for misrepresentation.We affirm.

In the spring of 1984, the plaintiffs, Lynn and Julie Cushman, entered into negotiations with the defendants, Gregory and Elizabeth Kirby, for the purchase of a single-family home in the Town of Waltham.After viewing the premises on two occasions, and agreeing on a purchase price of $102,500, the parties executed a purchase and sale agreement in April, 1984.The real property was conveyed by defendants to plaintiffs on June 12, 1984, for the agreed upon price.

Two months later, plaintiffs brought an action for misrepresentation claiming defendants had, during the course of negotiations, represented that there was good quality well water available on the land suitable for all household uses, when in fact the available well water was not of good quality.Trial by jury resulted in a verdict for plaintiffs in the amount of $6,600.Defendants now appeal the judgment entered on the verdict after denial of their motions for directed verdicts, to set aside the verdicts, and for a new trial.Defendants raise three claims on appeal: (1)the trial court erred in not granting their motions for directed verdicts because the evidence showed that no actionable misrepresentations were made by defendants; (2)the trial court erred in refusing to allow the jury to consider the separate acts or omissions of each defendant; (3)the court's charge on the issue of damages was incorrect as a matter of law.

A brief review of the facts, viewing the evidence in the light most favorable to the verdict, Smith v. DeMetre, 119 Vt. 73, 75, 118 A.2d 346, 349(1955), will aid an understanding of the issues presented.Through the offices of a realtor, plaintiffs briefly viewed the property once in the summer of 1983, and again in March of 1984.During the second visit, which was a much more thorough tour of the house, they discovered an apparatus for a water treatment system in the basement.Since the apparatus was labelled "water conditioner,"plaintiffs inquired from defendants: "What kind of water do you have?"Mrs. Kirby answered: "It's good.It's fine.It's a little hard, but the system downstairs takes care of it."Mr. Kirby, who was present during this exchange, remained silent.Satisfied with the representation that the water was simply hard, plaintiffs inquired no further about water quality.

While moving into the home after closing, plaintiffs first discovered that the well water was in fact sulfur water that smelled strongly of rotten eggs.Dismayed by this discovery, plaintiffs contacted Mrs. Kirby, who responded by stating that she forgot to tell plaintiffs that the basement water treatment system needed "Clorox."She said that when the "Clorox" level is too low, the water smells and tastes bad.

Following Mrs. Kirby's instruction, plaintiffs added "Clorox" to the system.Rather than solving the problem, the "Clorox" made the water taste like sulfur and chlorine.They then consulted a plumber, who confirmed that they had sulfur water, and explained that sulfur water is not the same as hard water.The plumber testified that hard water is a condition caused by calcium, which does not require treatment for drinking, or cause foul taste or smell, as does sulfur water.The plumber also informed plaintiffs that it would cost at least $1,000 to rehabilitate the existing system--exclusive of labor, regular maintenance, and repair costs.He also testified that even with a properly operating system, the end result would be treated sulfur water, which even defendants testified would bring the water only to a "tolerable level of drinkability."

Based on advice from their plumber, as well as information received from other people who were not satisfied with similar sulfur filtration systems, plaintiffs determined that the most cost-effective, long-term solution to their sulfur water problem was to join with two other neighbors and hookup to the Vergennes city water supply.Thereafter, they accomplished the hookup for a cost of approximately $5,000, plus annual water bills.

I.

Defendants' first argument is that, because of the absence of any evidence that either defendant made any affirmative misrepresentation to plaintiffs concerning water quality, the trial court erroneously denied their motions for directed verdicts.The premise of this argument is that the legal standard applicable to their conduct requires that they must have made intentional misrepresentations of existing fact before either of them could be held liable for fraud.We disagree.

This Court stated in Crompton v. Beedle, 83 Vt. 287, 75 A. 331(1910), that:

Where one has full information and represents that he has, if he discloses a part of his information only, and by words or conduct leads the one with whom he contracts to believe that he has made a full disclosure and does this with intent to deceive and overreach and to prevent investigation, he is guilty of fraud against which equity will relieve, if his words and conduct in consequence of reliance upon them bring about the result which he desires.

Id. at 298, 75 A. at 334-35.We think that, regardless of whether Mrs. Kirby's statement was actually false, and known by her to be false when it was made, the standard of conduct applicable to her was that stated in Crompton.

On review of the propriety of a denial of a directed verdict, this Court will view the evidence in the light most favorable to the nonmoving party, exclusive of any modifying evidence.Lattrell v. Swain, 127 Vt. 33, 38, 239 A.2d 195, 199(1968)."In so doing we are mindful of the fact that the weight of the evidence, the credibility of the witnesses, and the persuasive effect of their testimony are best left to the determination of the jury and are not to be reviewed by this Court."Currier v. Letourneau, 135 Vt. 196, 199, 373 A.2d 521, 524(1977)(citations omitted).

Mrs. Kirby testified that at the time of the sale to the Cushmans, she was aware that the well water on the property contained sulfur to an extent requiring treatment to make it of tolerable quality.It was also uncontroverted that, despite her knowledge of the presence of sulfur in the water, Mrs. Kirby represented to the Cushmans, in response to inquiries about water quality, that the water on the property was "a little hard," but that the water treatment equipment in the basement would take care of it.There was no evidence that either defendant ever disclosed the presence of sulfur in the water.The plaintiffs testified that they relied on the truth of Mrs. Kirby's statements about the extent of the water problem when they decided to buy the house.

This evidence makes out a case of actionable fraud, under the standard of Crompton, 83 Vt. at 298, 75 A. at 334-35, sufficient to carry the case to the jury.It follows that it was not error to deny Mrs. Kirby's motion for directed verdict.

A somewhat different standard of conduct applies to Mr. Kirby, however, since he made no affirmative representations to plaintiffs about the quality of water.The claim for fraud against him was based exclusively on his silence while in the company of plaintiffs and Mrs. Kirby when she made the statements about water quality referred to above.

"Silence alone is insufficient to constitute fraud unless there is a duty to speak."Cheever v. Albro, 138 Vt. 566, 571, 421 A.2d 1287, 1290(1980)(citations omitted);Newell Brothers v. Hanson, 97 Vt. 297, 303-04, 123 A. 208, 210(1924).In Cheever, we concluded that the party sued for fraud had such a duty to speak based on "superior knowledge and means of knowledge" over the plaintiff, as well as certain contract language relevant to the disputed transaction.Cheever, 138 Vt. at 571, 421 A.2d at 1290(quotingNewell Brothers, 97 Vt. at 303-04, 123 A. at 210).Although Cheever involved the sale of a corporation, rather than real estate, we think that a duty to speak based on the superior knowledge of a seller is equally present where the relationship of the parties is that of vendor and purchaser of real estate.As stated by one court:

Where material facts are accessible to the vendor only, and he knows them not to be within the reach of the diligent attention, observation and judgment of the purchaser, the vendor [of real estate] is bound to disclose such facts and make them known to the purchaser.

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