Fuller v. Croston
| Decision Date | 06 December 2006 |
| Docket Number | No. 23919.,23919. |
| Citation | 2006 SD 110,725 N.W.2d 600 |
| Parties | Ivan R. FULLER, Plaintiff and Appellant, v. James CROSTON and Patricia Croston, and Coldwell Banker GKR & Associates, by and through Janey Johnson, Defendants and Appellees. |
| Court | South Dakota Supreme Court |
Patrick J. Glover of Danforth & Meierhenry, LLP, Sioux Falls, South Dakota, Attorneys for appellant.
Stephen C. Landon Michael A. Henderson of Cadwell, Sanford, Deibert & Garry, LLP, Sioux Falls, South Dakota, Attorneys for appellees, Coldwell Banker GKR & Associates/Janey Johnson.
Joel D. Vos Patrick L. Sealey of Heidman, Redmond, Fredregill, Patterson, Plaza, Dykstra & Prahl, LLP, Sioux City, Iowa, Attorneys for appellees, James & Patricia Croston.
[¶ 1.] This is an appeal from a summary judgment granted to sellers in an action by a home buyer alleging that sellers had not fully and adequately disclosed defects in the property as required by law. We affirm in part, reverse in part and remand.
[¶ 2.] In the fall of 2002, Ivan R. Fuller began looking for a house to purchase in Sioux Falls. He hired real estate agent Margo Middlen to assist him. She showed Fuller a home owned by James and Patricia Croston. Crostons had been the sole owners of the house since its construction. Being interested in purchasing the home, Fuller received from Crostons a signed and completed seller's property disclosure statement required by SDCL 43-4-38.
[¶ 3.] The disclosure statement indicated that the home had not experienced any water penetration problems. However, when Crostons signed the disclosure statement in November 2002 they were aware of two to three occasions between 1969 and 1977 when water had seeped into the basement. They maintain that they did not include this information in the disclosure statement on the recommendation of their real estate agent, Janey Johnson,1 who allegedly advised Crostons that if they believed the problem was fixed they did not have to disclose it. She denies these allegations. Crostons, believing that the water problems had been resolved, did not disclose the prior seepage on the disclosure statement. Their disclosure statement also indicated there were no cracks in the interior walls of the house. However, Crostons were aware of some cracks in the walls in the basement behind the washer and dryer. They puttied and painted over these cracks two to three years before selling the house to Fuller.
[¶ 4.] Prior to executing the purchase agreement, Fuller visited the home in company with Crostons. He noticed some flaking on one of the basement walls. According to Fuller, "the painting was kind of rough and you could tell there had been some moisture on the cement block and the paint." When he asked about this, Crostons informed Fuller of a "little bit of water there sometime back." They told him that they had experienced some water in the basement on two to three occasions between 1969-77, but they had not experienced any additional water problems since adding a sunroom to the home in 1977. Fuller also noticed some "roughness of the paneling in the family room." Crostons explained that when they added a sunroom and a garage they had some water come into the basement. As a result, they did landscaping to seal off the water and also placed wood paneling over the drywall in the basement.
[¶ 5.] On November 18, 2002, after the conversation with Crostons about water in the basement, Fuller still offered to purchase Crostons' home for $158,000. Crostons accepted this offer and a purchase agreement was finalized. The purchase agreement provided that Fuller would have ten days to complete a professional home inspection and notify Crostons of any unacceptable conditions discovered. Under the agreement, if Fuller did notify Crostons of any such concerns, the parties would have two days to negotiate a subsequent agreement concerning any issues raised by the inspection. If no such agreement could be reached, the purchase contract would terminate.
[¶ 6.] Fuller hired David Kemper of Kemper Inspection Services to perform the inspection. Kemper completed the inspection and issued a report on November 21, 2002. Fuller read through the entire inspection report and noticed several areas of concern. The Kemper report revealed that the garage roof was sagging and suggested adding a beam under the rafters. The report also noted a small horizontal crack and minor bowing at the north and south foundation walls. The report explained that the north wall had been patched and there was no new cracking. According to the inspection report, this was not unusual and was of no structural significance at the time. The inspection report further indicated some signs of past dampness in the basement which appeared to be old.
[¶ 7.] On November 29, 2002, Fuller and Crostons executed an addendum to the purchase agreement designed to address the issues raised by the inspection. In the signed addendum, Crostons specifically agreed "to jack and add support beam to garage roof before closing." Fuller claims that the intention was to have the garage roof fixed. The purchase agreement included an integration clause stating:
This purchase agreement, any attached exhibits and any addenda or amendments signed by the parties, shall constitute the entire agreement between Purchaser(s) and Seller(s), and supersedes any other written or oral agreements between Purchaser(s) and Seller(s). This Purchase Agreement can be modified only in writing signed by the Purchaser(s) and Seller(s).
The cracking and dampness issues raised by the inspection report were not addressed by the addendum, because Kemper felt these matters were not significant. Pursuant to the addendum, Crostons hired Ron Lembcke to address the sagging of the garage roof. Lembcke jacked and added a support beam to the garage roof as recommended in the inspection report. After Lembcke completed the work, Fuller personally inspected the roof and confirmed that the sagging was eliminated. Fuller did not consult a professional inspector to ensure the garage was fixed properly.
[¶ 8.] On January 17, 2003, the parties closed the sale on the home. Janey Johnson was present at the closing, but she made no representations to Fuller (then or any other time) concerning the condition of the home. By August 2003, Fuller was completely moved into the home. He did not notice anything that gave him cause for concern about the condition of the home until June 16, 2004. On that date, the total rainfall for Sioux Falls was approximately eight inches.2 At some point during or immediately after this rainfall, Fuller noticed water entering his basement, but could not determine precisely where it was coming in. He stated that the water appeared to be "seeping in around the foundation and the walls." The water created "puddles here and there" until the carpet was largely saturated.
[¶ 9.] Fuller contacted Roy Johnson, a contractor, to evaluate and remedy the water problem. When Johnson removed some of the paneling in the basement, the "stuff behind the paneling crumbled" in his hands. Johnson advised Fuller that it appeared there had been previous water penetration in the home. He blamed the water infiltration on the existence of cracks in the home's foundation and bowing of the walls. He also told Fuller that there had been major water damage in the past and that frequent water problems would persist unless action was taken. Johnson then installed drain tile around the perimeter of the basement, a sump pump and reinforced the foundation walls. Fuller also purchased and installed new padding and carpet for the basement.
[¶ 10.] At about the same time Fuller encountered the water issues, he noticed the garage roof was sagging once again. He contacted Duane Boice, an engineer, to evaluate the roof. Boice advised Fuller that installation of the support beam actually weakened the roof and made it worse. Boice explained that the roof would have to be fixed, or it would collapse. Fuller then hired Able Construction to repair the roof.
[¶ 11.] It is undisputed that prior to the purchase, based on Crostons' oral disclosures, Fuller knew about the flaking paint and some prior water penetration problems in the basement. He was also aware of minor bowing and a small horizontal crack on the north and south wall, including the small crack behind the washer and dryer that had been puttied over. These were discovered through Kemper's inspection prior to closing. Only after the heavy rain did Fuller learn of damage behind the paneling on all four walls in the basement and rust at the bottom of the support posts. Crostons contend that they were unaware of the damage behind the paneling on the basement walls, and that Fuller was aware of all the other issues before the sale. Fuller asserts he was not made aware of the extent of the previous water damage or all of the cracks in the basement walls. He also claims Crostons were aware of damage behind the paneling.
[¶ 12.] On April 29, 2005, Fuller filed a complaint against Crostons, Janey Johnson and Coldwell Banker GKR & Associates (collectively defendants). He alleged that Crostons failed to properly disclose prior water penetration in the basement, failed to disclose cracks in some of the walls, and breached an addendum to the purchase agreement relating to the garage roof.
[¶ 13.] The circuit court entered summary judgment in favor of defendants, determining that Fuller The court found "sufficient disclosure of the problems that had occurred in the house so that Fuller was aware of what the potential problems were."
[¶ 14.] Fuller appeals...
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