Darrisaw v. OLD COLONY REALTY CO.

• Court: West Virginia Supreme Court
• Writing for the Court: PER CURIAM
• Citation: Darrisaw v. OLD COLONY REALTY CO., 501 S.E.2d 187, 202 W.Va. 23 (W. Va. 1997)
• Decision Date: 17 December 1997
• Docket Number: No. 24085.,24085.
• Parties: William DARRISAW and Jane Darrisaw, Appellants, v. OLD COLONY REALTY COMPANY, a Real Estate Sales Corporation Doing Business in West Virginia, and Frank Giudice and Betty Jo Giudice, Individually and as Agents of Old Colony Realty Company, Appellees, v. Hersel L. COTTRILL, Doing Business as the Cottrill Agency, a Real Estate Business in the State of West Virginia, Third-Party Defendant Below, Appellee.

501 S.E.2d 187

202 W.Va. 23

William DARRISAW and Jane Darrisaw, Appellants, v. OLD COLONY REALTY COMPANY, a Real Estate Sales Corporation Doing Business in West Virginia, and Frank Giudice and Betty Jo Giudice, Individually and as Agents of Old Colony Realty Company, Appellees, v. Hersel L. COTTRILL, Doing Business as the Cottrill Agency, a Real Estate Business in the State of West Virginia, Third-Party Defendant Below, Appellee.

No. 24085.

Supreme Court of Appeals of West Virginia.

Submitted October 8, 1997.

Decided December 17, 1997.

Robert G. Wolpert, Charleston, for the Appellant.

William E. Hamb, Christopher L. Hamb, Hamb & Poffenbarger, Charleston, for Appellee Old Colony Company.

Philip B. Hereford, Hereford & Hereford, Charleston, for Appellees Giudices.

W. Bradley Sorrels, Joseph S. Beeson, Robinson & McElwee, Charleston, for Appellee Cottrill.

PER CURIAM:¹

William Darrisaw and Jane Darrisaw (hereinafter "Appellants" or "Buyers") appeal a February 23, 1996, decision of the Circuit Court of Kanawha County granting summary judgment to Frank Giudice and Betty Jo Giudice (hereinafter "Appellees" or "Sellers") and Old Colony Realty Company (hereinafter "Appellees" or "Old Colony"). The Appellants contend that the lower court erred in granting summary judgment where genuine issues of material fact exist regarding the alleged failure of the Sellers and Old Colony to disclose the existence of structural defects in a residence purchased by the Appellants. We affirm in part, reverse in part, and remand.

I.

On August 31, 1986, the Appellants purchased a twenty-year-old home located at 1382 Nottingham Road in the Sherwood Forest subdivision in Charleston, West Virginia. Mrs. Betty Jo Giudice, a co-owner of the home, functioned as the selling broker and worked as an independent contractor with Old Colony.² Mr. Hersel L. Cottrill of Cottrill Agency, served as the Buyers' agent.

During the summer of 1989, three years after the purchase of the home, the Appellants discovered a crack in the foundation.³ The Appellants thereafter contacted the Sellers and attempted to negotiate a settlement. These negotiations apparently failed, and on April 18, 1991, the Appellants initiated a civil action alleging false and intentional misrepresentation, negligent misrepresentation, negligence on the part of the selling broker to inspect, and civil conspiracy. Specifically, the Appellants alleged that a false curtain wall had been constructed in the garage over the face of the original foundation wall to conceal a structural defect in the foundation. In a March 1990 report, engineer Robert L. Wolfe noted that his examination of the foundation wall on the left side of the garage revealed a false curtain wall erected on the inside face of the original exterior block wall "in an effort to conceal what is probably a serious failure of the original wall."

The Sellers denied the allegations of the complaint and cross-claimed against Old Colony. Old Colony then cross-claimed against the Sellers and filed a third party complaint against Mr. Cottrill, the Appellants' agent. In a deposition of a construction expert, Mr. Robert Grass of Westar Construction, Mr. Grass opined that the home appeared to have been "very poorly maintained" by the Appellants, that the gutters were clogged, and that the downspout drain discharged into a splash block rather than being piped away from the house.

Ms. Marlene Cruickshank, an appraiser, testified that the home was immaculate at the time of sale, and specifically noted that the home was in "very good condition" with "quality construction." In an August 26, 1986, appraisal, Ms. Cruickshank stated, "The subject property is in very good condition and there were no signs of physical or functional inadequacy." Structural engineer Mr. William Haworth also testified regarding the condition of property at time of sale and noted that the property was in good condition as of April 21, 1986.

On February 23, 1996, in response to separate motions for summary judgment filed by the Sellers and Old Colony, the lower court granted both motions for summary judgment and dismissed the case. The lower court found that the Appellants had failed to establish a genuine issue of material fact regarding the existence of a latent defect in the home at the time of the sale and further held that neither the Sellers nor Old Colony made any misrepresentation concerning the physical and/or structural condition of the home.

II.

The Appellants assert that the lower court erred in ruling that there was no evidence that the Sellers or Old Colony made misrepresentation to the Appellants. Specifically, the Appellants assert that the lower court inadequately dealt with the issue of whether the Sellers or Old Colony failed to disclose any material fact. The Appellants maintain that the evidence indicated that although both Old Colony and the Sellers were aware of the prior repairs for structural problems, neither informed the Appellants. Old Colony states in its brief that certain repairs were made from 1976 to 1984. The repairs were allegedly successfully completed prior to listing the property for sale, and the engineer had reported that no additional problems would be experienced.⁴ Thus, neither Old Colony nor the Sellers had reason to suspect that a defect existed at the time of the sale to the Appellants.

The Appellants also assert that the lower court erred in failing to rule that the Sellers and Old Colony had a duty to disclose latent defects. The lower court ruled that the Appellants had failed to demonstrate a genuine question of material fact concerning the existence of a latent defect. The Appellants contend that such judgment should have been within the province of the jury.

The Appellants also contend that the lower court erred in ruling that there was proper disclosure and that the Appellants had been placed on notice regarding prior structural problems. The Appellants maintain that the only "notice" they received stemmed from the answer to a question they posed concerning a steel beam in the garage. When the Appellants asked Mr. Cottrill why such a beam existed, Mrs. Giudice apparently informed Mr. Cottrill that the beam was there for added support.⁵ Nothing more was said about the beam, other issues of structural integrity, or prior structural repairs to the home. The Appellants urge this Court to settle this issue of notice by permitting the factual issues to be placed before a jury for resolution.

III. STANDARD OF REVIEW

Syllabus point one of Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994), specifies that "[a] circuit court's entry of summary judgment is reviewed de novo." In syllabus point one of Williams v. Precision Coil, Inc., 194 W.Va. 52, 459 S.E.2d 329 (1995), we explained the appropriate use of summary judgment as follows:

"`A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.' Syllabus Point 3, Aetna Casualty & Surety Co. v. Federal Insurance Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963)." Syllabus Point 1, Andrick v. Town of Buckhannon, 187 W.Va. 706, 421 S.E.2d 247 (1992).

In syllabus point two of Williams, we continued:

Summary judgment is appropriate if, from the totality of the evidence presented, the record could not lead a rational trier of fact to find for the nonmoving party, such as where the nonmoving party has failed to make a sufficient showing on an essential element of the case that it has the burden to prove.

IV.

In syllabus point one of Teter v. Old Colony Co., 190 W.Va. 711, 441 S.E.2d 728 (1994), we explained:

A vendor's real estate broker may be liable to a purchaser if the broker makes material misrepresentations with regard to the fitness or habitability of residential property or fails to disclose defects or conditions in the property that substantially affect its value or habitability, of which the broker is aware or reasonably should be aware, but the purchaser is unaware and would not discover by a reasonably diligent inspection. It also must be shown that the misrepresentation or concealment was a substantial factor in inducing the purchaser to buy the property. (Emphasis supplied.)

See also Thomson v. McGinnis, 195 W.Va. 465, 465 S.E.2d 922 (1995).

Applying the approach utilized in Teter to the present case, three pertinent questions arise: (1) Did the Sellers and/or Old Colony fail to disclose a condition in the property which substantially affects its value? (2) Was that condition something that the Appellants would not have discovered by a reasonably diligent inspection? and (3) Was the concealment a substantial factor in inducing the Appellants to buy? The issues in questions two and three, in our opinion, are most easily resolved. Indeed, the false wall and the absence of other indicia of prior repairs made it difficult, if not impossible, to discover the condition through a reasonably diligent inspection. Additionally, Mr. Darrisaw testified that he would not have purchased the property if he had known of the prior structural repairs. Thus, the determinative issue in this case, framed in the language of Teter, is whether the Sellers and/or Old Colony failed to disclose a condition in the property that substantially affected its value. Obviously, not all prior repairs performed on a home must be disclosed to potential purchasers; it is only a condition which substantially affects the value of the property that must be disclosed pursuant to Teter. In syllabus point one of Thacker v. Tyree, 171 W.Va. 110, 297 S.E.2d 885 (1982), we stated:

Where a vendor is aware of defects or conditions which substantially affect the value or habitability of the property and the existence of which are unknown to the purchaser and would not be disclosed by a reasonably diligent inspection, then the

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