Epple v. Clark

• Decision Date: 15 January 1991
• Docket Number: No. 89-228,89-228
• Citation: 804 P.2d 678
• Parties: Gary D. EPPLE and Peggy E. Epple, husband and wife, Appellants (Plaintiffs), v. Michael L. CLARK and H. Bernadette Clark, husband and wife, Appellees (Defendants).
• Court: Wyoming Supreme Court

Page 678

804 P.2d 678

Gary D. EPPLE and Peggy E. Epple, husband and wife, Appellants (Plaintiffs), v. Michael L. CLARK and H. Bernadette Clark, husband and wife, Appellees (Defendants).

No. 89-228.

Supreme Court of Wyoming.

Jan. 15, 1991.

H.W. Rasmussen of Badley & Rasmussen, P.C., Sheridan, for appellants.

Richard M. Davis, Jr. and Anthony T. Wendtland of Burgess & Davis, Sheridan, for appellees.

Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.

GOLDEN, Justice.

This appeal raises a question concerning the liability of a former homeowner to a subsequent homeowner for alleged misrepresentations and fraud relating to the condition of the basement of the house. The subsequent homeowners state the sole issue as:

The trial court erred by ignoring the uncontroverted evidence and applying the standard [Restatement (Second) of Torts § 353] when it should have applied [Restatement (Second) of Torts § 552C].

We affirm.

FACTS

In October, 1981, Mr. and Mrs. Michael L. Clark (Clarks) moved into their newly constructed home located in Sheridan, Wyoming. Having selected house plans from a catalog, they purchased a lot and hired a contractor to build the house based on the mail order plans.

On September 13, 1982, the Clarks found surface water in the basement of the house during a rain and snow storm. The storm caused a power outage; consequently, the Clarks' portable submersible sump pump failed to operate. This, in turn, permitted water to enter the basement through the sump pump hole. When power was restored, the pump operated and the Clarks swept the excess water into the sump pump hole, allowing the pump to remove the water from the basement. The Clarks' home insurance carrier denied their claim for wet carpet and water stained paneling due to the water.

On July 21, 1983, the Clarks found water in the basement and the pump running. They discovered their neighbor had irrigated all night in a field adjacent to the Clarks' property. The flooding irrigation water saturated the ground and migrated to the Clarks' property and into their basement. The Clarks notified their home insurance carrier of this event. The 1982 and 1983 incidents of water in the basement were the only ones that occurred while the Clarks lived there.

In early 1984, Mr. Clark's employer notified him that he was being transferred to Alaska. The Clarks listed the home with Carroll Realty; one of the provisions of the listing contract recited that there were no known defects except those which were readily visible upon inspection. When this listing expired, the home had not been sold. The Clarks, through arrangements made by Mr. Clark's employer, entered into a contract with Merrill Lynch Relocation Management, Inc. (ML). As purchaser, ML was to pay the Clarks an agreed upon price for the house and hold it for resale. One of the provisions of the contract was that any knowledge of the physical condition of the house be disclosed to ML (as purchasers) by the Clarks (as sellers). Another provision recited that ML as purchaser relied on the representations of and information supplied by the Clarks as sellers.

After selling the home to ML, the Clarks moved. Later, ML sent them a warranty deed; all of the blanks on the deed were filled out except for the name of grantee. At the request of ML the Clarks executed the deed as grantors, knowing the blank for the name of the grantee was not filled out.

In the meantime, Mr. and Mrs. Gary D. Epple (Epples) were in the process of moving to Sheridan and contacted Carroll Realty there in their search for a home. The Epples decided on the home formerly owned by the Clarks. The evidence is undisputed that the Clarks and Epples never met and never had any conversations before the Epples bought the house. It is also undisputed that the Epples had no meeting or conversation with any representative of ML before they bought the house. In their deposition testimony the Epples said they understood the Clarks had sold the house to ML and were gone.

The Epples dealt solely with Steve Carroll of Carroll Realty in the purchase of this house, and Carroll sent them a proposed contract covering the transaction. Upon advice of their lawyer, the Epples added a provision to the contract that the purchase was to be contingent upon the results of an inspection and evaluation of the house by a construction expert selected by them. They had earlier told Carroll they were not interested in any house with a history of water problems. Carroll told them he knew of no such problems with the house in question.

The Epples hired John Carroll, Steve's brother, as their construction expert to inspect the house. He reported there were "no evident structural problems that would in any way compromise the durability and livability of the home." He noted that the terrain east of the house sloped toward the foundation; however, he found no evidence of leakage. He opined that "should it become a problem in the future, it can be easily rectified * * *." He concluded "it is my opinion that there are no significant problems with the house. There are no defects in the house that would influence my purchase of the home."

After receiving John Carroll's report, the Epples bought the home from ML, with ML apparently inserting the Epples' name in the grantee blank in the deed. The Epples moved into the house in November, 1984.

In the spring of 1985, the Epples found water on the basement floor, and each year since water has seeped into the basement. After investigating the matter, locating the Clarks, and attempting unsuccessfully to resolve the matter, the Epples sued the Clarks.

In their complaint the Epples sought to impose liability on theories of intentional failure to disclose a known latent defect, fraud, and negligent failure to disclose a known latent defect. In their answer, the Clarks denied liability; they also filed third party claims against ML and Carroll Realty. After discovery, those third party defendants moved for and were granted summary judgment. The Clarks also moved for summary judgment against the Epples. After reading the parties' memoranda and submissions, and hearing argument, the trial court granted the Clarks' summary judgment on the Epples' theories of fraud and intentional failure to disclose a known latent defect. The parties tried the case on the remaining theory of negligent failure to disclose a known latent defect. The trial court found generally in favor of the Clarks and against the Epples. This appeal followed.

The Epples ask that the summary judgment entered against them be reversed on their theories of intentional failure to disclose a known latent defect and fraud. Unfortunately, in both their written brief and oral argument, they failed to provide a statement of facts relevant to those issues with appropriate page references to the record. W.R.A.P. 5.01(3). See also Jung-Leonczynska v. Steup, 782 P.2d 578, 581 (Wyo.1989); and V-1 Oil Company v. The Honorable Robert B. Ranck, 767 P.2d 612, 613 (Wyo.1989). Moreover, in oral argument Epples' counsel conceded that his written brief did not contain any statement of law regarding the theories of liability that fell when summary judgment was entered. This court found no cogent argument or authority cited that would be convincing for a reversal of the summary judgment. Under these circumstances, we shall not address the propriety of the summary judgment disposition. Prazma v. Kaehne, 768 P.2d 586, 588 (Wyo.1989); Johnston v. Conoco, Inc., 758 P.2d 566, 570 (Wyo.1988); Smith v. Ensley, 752 P.2d 1374, 1377 (Wyo.1988).

Epples' sole thrust in their brief is a challenge to the court's judgment at trial against them on their theory of negligent failure to disclose a known latent defect. We have reviewed their challenge under our usual standard. "[W]e accept the evidence of the prevailing party as true, leaving out entirely the evidence presented in conflict therewith, giving every favorable inference which may fairly and reasonably be drawn from the prevailing party's evidence." Pancratz Company, Inc. v. Kloefkorn-Ballard Construction Development, Inc., 720 P.2d 906, 908-09 (Wyo.1986).

The Epples claim the trial court erred in not applying the theory of liability of innocent misrepresentation as found in Restatement (Second) of Torts § 552C (1977). Their claim in this regard strikes us as rather curious since they presented the case to the trial court both in pleading and at trial on a negligence theory. As we understand § 552C of the Restatement, it is "a rule of strict liability for innocent misrepresentation of a material fact * * *." Id., comment a, at 142. This court has taken a dim view of a litigant trying a case on one theory and appealing it on another. Further, we will not consider for the first time on appeal an issue neither raised nor argued to the trial court. Thatcher & Sons v. Norwest Bank Casper, 750 P.2d 1324, 1328 (Wyo.1988). Parties are bound by the theories which they advanced below. We find nothing in the record to indicate that the Epples raised or argued innocent misrepresentation to the trial court; the Epples asked the trial court to look at only the negligent misrepresentation issue. They cannot now complain that the court erred in not considering innocent misrepresentation. Id.

We note in passing that § 552C, which Epples would have the trial court apply, explains that the section is limited to the immediate parties to the sale. Restatement, supra comment d at 144. The Clarks were not a party to the sale of the house to the Epples. Rather, the Epples bought the house from ML. Moreover, the Epples failed to prove that 1) the Clarks represented to them that the basement did not leak, 2) the Clarks made that representation to them for the purpose of inducing the Epples to rely upon it in acting as a part of the sale transaction, and 3) the Epples did in fact so rely on that representation. Restatement, supra comment c at...