Dawson v. Hummer

• Decision Date: 18 April 1995
• Docket Number: No. 79A04-9412-CV-518,79A04-9412-CV-518
• Citation: 649 N.E.2d 653
• Parties: Stephen DAWSON, Alice Francis, and Francis Real Estate of Lafayette, Inc., Appellants (Defendants Below), v. Marvin E. HUMMER and Katherine M. Hummer, Appellees (Plaintiffs Below).
• Court: Indiana Appellate Court

Page 653

649 N.E.2d 653

Stephen DAWSON, Alice Francis, and Francis Real Estate of Lafayette, Inc., Appellants (Defendants Below), v. Marvin E. HUMMER and Katherine M. Hummer, Appellees

(Plaintiffs Below).

No. 79A04-9412-CV-518.

Court of Appeals of Indiana,

Fourth District.

April 18, 1995.

John B. Drummy, Eric D. Johnson, William L. O'Connor, Kightlinger & Gray, Indianapolis, for appellants.

James R. Schrier, Angela M. Service, Reiling, Teder, Withered & Rush, Lafayette, for appellees.

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

Stephen Dawson, Alice Francis, and Alice Francis Real Estate of Lafayette, Inc. (Realtors) appeal from the $18,000.00 verdict in favor of Marvin and Katherine Hummer.

We affirm.

ISSUES

I. Whether the trial court erred in denying Realtors' motion for summary judgment.

II. Whether the verdict is supported by sufficient evidence.

III. Whether the trial court erred in refusing Realtors' tendered jury instruction.

IV. Whether the trial court erred in denying Realtors' motion for new trial alleging prejudice because, unbeknownst to the trial court and the parties, the jury obtained a legal dictionary and looked up the definitions of several terms.

FACTS

The summary judgment facts, which are revealed in Marvin and Katherine's depositions are undisputed. Thirty-two year-old Marvin is a high school graduate who spent four years in the military where he received training to be a mechanic. He has been employed as a delivery truck driver for a venetian blind company for the last seven years. Thirty year-old Katherine is also a high school graduate. In addition, she is a licensed cosmetologist, and she has a medical assistant diploma from Ivy Tech. She currently runs an orthopedic surgeon's office where her duties include dealing with patients, office paperwork, and ordering supplies. Prior to the instant dispute, Marvin had not purchased a house, although Katherine had purchased a house through FHA during her first marriage.

In the spring of 1990, Marvin and Katherine decided to purchase a house. They contacted Stephen Dawson, a real estate agent and employee of Francis Real Estate, to assist them in their search. The Hummers told Dawson they were looking for a four-bedroom home with a usable basement in the $45,000.00 to $50,000.00 range. They also told Dawson they wanted to use "Marvin's VA privilege" in obtaining a mortgage. R. at 215. Dawson did not explain the VA loan procedure to them at that time. During the ensuing months, it was primarily Katherine who saw to the details of purchasing a house.

Eventually, Dawson showed the Hummers a house on South 24th Street upon which they made an offer. Although they filled out a purchase agreement, they did not order any inspections of the property. When the offer was accepted, Dawson told the Hummers the VA "would come through the house and look for things." R. at 220. Upon Dawson's advice, the Hummers then went to Prime Mortgage to obtain a loan where they filled out the necessary VA paperwork. Later, Dawson informed them that the garage windowsills had to be scraped and painted before closing on the house could take place. Katherine believed that it was the VA that informed Steve Dawson about the windowsills because he told the Hummers that the VA approved the loan for the house. The owner of the South 24th Street house purchased the paint, while the Hummers did the scraping and painting. Although it is not clear, Dawson apparently assisted Marvin with the windowsills one evening.

The day before closing, a pest inspection was done on the house. Although the Hummers did not order the inspection, Katherine "understood that's automatically done when you purchase a house." R. at 225-6. Dawson informed the Hummers the pest inspection inadvertently revealed water damage to the joists which would cost between $3,000.00 and $4,000.00 to repair. Because the owner refused to pay for the repair, which the Hummers could not afford, the deal fell through.

Several days later, sometime during the end of September of 1990, Dawson informed the Hummers a house fitting their needs was available on South 4th Street. Dawson met the Hummers and the group toured the house for a half hour to an hour. When they arrived in the basement, Katherine noticed that all the walls were bowed. Upon one wall were affixed metal plates from which metal rods protruded. The basement was divided into a laundry room, a workshop, and a bedroom. The floor of the bedroom was made of plywood and was built up several inches off the concrete basement floor. Although it was raining that day, Katherine did not remember if there was any water in the basement. Marvin recalled:

The walls. They're not straight like these are. They come out and bow out and bow back in, and I never seen that in a brick wall without what I would think collapse of it. But I asked him about it, and they had put some kind of anchor system on it, and that was the worst one, and it was fixed.

R. at 146. The Hummers questioned Dawson about the bowed basement walls and the wall anchor system. Dawson told the Hummers that the anchored wall had been fixed and that the other walls were fine. Nevertheless, Marvin admitted "you could look at them and tell they were bowed as bad as the one was." R. at 147. Katherine asked Dawson "if the basement was usable as far as our oldest son sleeping down there," and Dawson "said yes." R. at 238. While the group was still in the basement, Dawson also told them "the VA would do inspections of the house." R. at 247. When asked about the conversation regarding inspections of the house, Marvin stated:

I know we talked about inspections because of the way the thing--the first deal did because somebody inspected it to find that the garage and windowsills needed to be scraped and painted.

This is on the 24th Street address, okay? And somebody inspected that, then they inspected it again to find the floor joist damage.

So when we looked at the other place I asked him, man, are these okay, and trusting his word because they found at this other place that these minor things, faults, were wrong I took his word for it when he said yes, these are okay. That was what--I believed him.

He also told us that the VA did inspections. VA would inspect this place and if it was bad that it would be found. And the way the deal on 24th Street went, that's what we assumed would happen here.

R. at 148-9. When questioned, however, Marvin admitted he had no idea who performed the inspections at the 24th Street address.

The Hummers went home and later called Dawson to inform him they would make an offer on the house. He advised them to offer the list price, and they agreed. A few days later, the Hummers met Dawson at the Francis real estate offices and he told the Hummers he would draw the paperwork "up same as he did on the South 24th Street house." R. at 243. Furthermore, "[Dawson] told us that for the house to be inspected outside of the VA that we would have to pay them, meaning Alice Francis I guess, $175 extra, and then they would find an inspector for us also." R. at 243. The Hummers could not afford an inspection, however, and they therefore signed a waiver of an "additional inspection." R. at 244. Specifically, the purchase agreement contained the following pertinent clauses:

Purchaser has personally inspected the real estate and improvements, if any, and unless other inspections have been ordered or accepted in this purchase agreement, makes this offering in good faith based entirely upon the results of his own examination.

The Purchaser hereby acknowledges that, unless otherwise agreed, the selling broker, including a listing broker showing his/her own listing, is exclusively the agent of the seller, and not the agent of the purchaser. However, the Selling Broker is under a duty to treat all parties in a transaction fairly.

Purchaser has been made aware that independent inspections disclosing condition of the property are available and has been afforded the opportunity to require as a condition of the Agreement the above-mentioned inspections. However, Purchaser hereby waives inspections and relies upon the conditions of the property based upon his own examination and releases the Seller, Broker, and Salespersons from any and all liability relating to any defect or deficiency affecting the property, which waivers shall survive the closing.

R. at 28-9. Dawson told the Hummers that "if [the house] wasn't [structurally sound] the VA would find it." R. at 244.

The owners of the South 4th Street house accepted the Hummers' offer. The Hummers went back to Prime Mortgage to complete a new VA application, and Alice Francis set up the closing date. Because the Hummers were unable to come up with another loan application fee, Francis Realty loaned the Hummers $225.00. Katherine knew the "VA has something to do with" an appraisal of the property, and thought that "there is a paper that comes from the VA. That's how we found out about having to scrape and paint the windows in the other house." R. at 250. Katherine admitted that a paper came from the VA concerning the South 4th Street house which stated "they saw the fixtures in the basement wall, but [she] didn't think there was anything else that [they] had to do with the house." R. at 250.

Sometime before the closing date, Angie Newton, a friend of Katherine's, heard the Hummers were going to purchase the South 4th Street house. Angie, who is a real estate agent, told Katherine that she had taken a client through the South 4th Street property. The client's father, who is an FHA inspector, advised the client not to purchase the house under any circumstances because of the bowed basement walls. Angie told Katherine she had not yet informed Alice Francis about the FHA inspector's opinion. Thereafter, Katherine phoned Alice Francis to discuss the basement information given to her by Angie. Alice Francis told Katherine that one basement wall had...