Groening v. Opsata

• Court: Michigan Supreme Court
• Writing for the Court: CARR
• Citation: Groening v. Opsata, 323 Mich. 73, 34 N.W.2d 560 (Mich. 1948)
• Decision Date: 12 November 1948
• Docket Number: No. 73.,73.
• Parties: GROENING et al. v. OPSATA et al.

323 Mich. 73

34 N.W.2d 560

GROENING et al.

v.OPSATA et al.

No. 73.

Supreme Court of Michigan.

Nov. 12, 1948.

Appeal from Circuit Court, Berrien County; Edward A. Westin, judge.

Action by Otto F. Groening and Sarah Groening against Theodore Opsata and Jennie M. Opsata for damages arising out of false and fraudulent representations in reliance upon which plaintiffs purchased realty. From an adverse judgment, defendants appeal.

Affirmed.

Before the Entire Bench.

Killian & Banyon, of St. Joseph, (Kelley & Seelye, of Lansing, of counsel), for defendants and appellants.

Robert P. Small, of Benton Harbor, for plaintiffs and appellees.

CARR, Justice.

In March, 1945, the defendants Theodore Opsata and Jennie M. Opsata, husband and wife, conveyed to plaintiffs a parcel of land in Berien County on the shore of Lake Michigan. Located on the property was a residence which defendants had built on a bluff overlooking the lake. The total consideration paid by plaintiffs was the sum of $11,000. Following the transaction the bluff, as a result of the action of the elements and of the waves from the lake, was completely eroded-finally disappearing entirely during the year 1946. Plaintiffs sued for damages, claiming that they had purchased the property in reliance on false and fraudulent representations made by defendants and by the real estate broker who had brought about the deal.

At the conclusion of their proofs plaintiffs submitted to a voluntary nonsuit as to the real estate broker. Motion for a directed verdict in favor of the other defendants was taken under advisement by the trial court. This motion was renewed at the conclusion of the testimony and was again taken under advisement. The jury returned a verdict for the plaintiffs in the full amount of the damages claimed by them, and defendants' motion for judgment notwithstanding the verdict, or in the alternative for a new trial, was denied. Defendants have appealed.

The alleged misrepresentations of which plaintiffs complained on the trial had reference to the condition of the bluff on which the house was built. It was testified, in substance, in support of the averments of the declaration, that defendants during the negotiations for the purchase represented to plaintiffs that the bluff was in sound condition and in no danger from erosion. On behalf of defendants it is insisted that whatever statements were made by them, or by the real estate broker, amounted to no more than expressions of opinion and could not under the circumstances be regarded as misrepresentations of fact. It is claimed in consequence that the trial court was in error in not directing a verdict in favor of the defendants.

Fraud may not be presumed nor may it be lightly inferred. The burden rests on those relying thereon as the basis for the recovery of damages to establish it by clear and satisfactory proofs. Baker v. Frischkorn, 271 Mich. 485, 260 N.W. 754;Kirby v. Gibson Refrigerator Co., 274 Mich. 395, 264 N.W. 840, 103 A.L.R. 1343;Grigg v. Hanna, 283 Mich. 443, 278 N.W. 125;Waldbauer v. Hoosier Casualty Co., 285 Mich. 405, 280 N.W. 807. Whether plaintiffs in the instant cases sustained the burden of proof resting on them must be determined from an examination of the testimony. It appears that plaintiffs were desirous of purchasing a home, and with that though in mind contacted the real estate broker, who showed them defendants' property. There was at the time ice and snow on the ground. According to plaintiffs' testimony the defendant Mrs. Opsata was asked if the house was not too close to the edge of the bluff and in a dangerous position in consequence. To such question it is claimed Mrs. Opsata replied:

‘No, that isn't too close here because we have lived here for so many years and nothing to fear and everything is all right. You don't have to have no fear on this and it is perfectly safe here. We are living here.’

Following their first inspection of the property, plaintiffs returned to the broker's office and signed an offer to purchase the property for $11,000, of which amount $200 was paid at the time. The offer was subsequently accepted by defendants. Shortly thereafter plaintiffs interviewed both defendants, Mr. Groening telling them that he had been warned that the bluff was breaking off and that the whole property would be down in the lake eventually. Plaintiffs claim that they asked defendants as to the situation, informing them in substance that they were relying on the experience of Mr. Opsata in building houses on the lake shore. They further claimed in their testimony that Mr. Opsata answered that he had built many houses, that he was familiar with the conditions of the bluff and that ‘* * * this is the spot I have selected and I don't see why there should be any fear. I don't see why anybody could say anything like that.’ It was also claimed that Mr. Opsata further stated to plaintiffs:

‘There are no break-offs and also this bluff is perfectly safe; there is nothing wrong with it; we have lived here for many years and nothing I can see-nothing to fear, that is absolutely safe here.’

Plaintiffs claimed that following such statements they interviewed the real estate broker, who undertook to reassure them by telling them there was nothing wrong, that Mr. Opsata knew that the bluff was perfectly safe, and that plaintiffs had no reason to fear anything. Plaintiffs' version of the conversations was disputed by defendants, but it is apparent that the jury determined the disputed issue in favor of plaintiffs' claims. Shortly after the conversations above referred to the deal was closed, and the full consideration for the transfer was paid by plaintiffs to defendants.

In passing on the motion for a directed verdict it was the duty of the trial court to construe the testimony as strongly as possible in favor of the plaintiffs. Such being the situation the failure to grant the motion was not error. The statements made by defendants and by the real estate broker, to which plaintiffs testified, may not properly be construed as mere expressions of opinion. They were, rather, statements as to the facts concerning which the plaintiffs were inquiring. The record indicates quite clearly that defendants were fully informed as to the existing condition, that the process of erosion along the shore inquestion began in 1943, and that people having their homes along the shore were disturbed because of the changes that were taking place. In 1944 some attempt was made to procure assistance from authorities at Washington in order to prevent, if possible, further damage to property from erosion caused by waves from the lake. Mr. Opsata admitted that in that year he had signed with others a letter addressed to the President. To such request a reply was received from the Chief of Engineers of the Civil Works Division of the War Department advising, in substance, that the government could not render assistance because the public right of navigation was not imperiled.

Without discussing the proofs at greater length, it must be said that the record fully justifies the inference that defendants, knowing the actual situation that existed with reference to the property, answered plaintiffs' inquiries as to the facts in such manner as to reasonably induced the latter to believe that there was in fact no danger to the property that they were purchasing. Defendants' claim that the proofs with reference to fraud were insufficient to justify submitting the case to the jury and to support the verdict rendered is not tenable. Crook v. Ford, 249 Mich. 500, 229 N.W. 587;Curby v. Mastenbrook, 288 Mich. 676, 286 N.W. 123.

Defendants further contended that plaintiffs failed to prove with the requisite degree of certainty that they relied on the representations made as to the safety of the property. However, plaintiffs testified specifically that they did so rely, and their action in disregarding the warning that had been given to them and closing the deal after they had talked the matter over with defendants and the real estate broker, corroborates such testimony. Mr. Groening also testified that he specifically informed Mr. Opsata that he was relying on the latter's word. Having answered the questions of the plaintiffs in such manner as to naturally induce reliance thereon, defendants are scarcely in position on this record to claim that plaintiffs relied on their own observations and on the statements of others in going through with the transaction. The fact that plaintiffs might have made a more minute investigation and might have obtained information and advice from other, and presumably well informed, sources does not bar them from seeking relief in this action. Nor did the fact that they had looked over the property under the circumstances indicated by the record preclude them from relying on defendants' representations as to the facts. Smith v. Werkheiser, 152 Mich. 177, 115 N.W. 964, 15 L.R.A.,N.S., 1092, 125 Am.St.Rep. 406;Yanelli v. Littlejohn, 172 Mich. 91, 137 N.W. 723;Steele v. Banninga, 225 Mich. 547, 196 N.W. 404;Hubert v. Joslin, 285 Mich. 337, 280 N.W. 780.

In submitting the case to the jury, the trial judge charged as follows:

‘Fraud may be consummated by suppression of a material fact by either party to a contract of sale which he is in good faith bound to disclose, as well as by open, false assertions, since by such suppression there is fraudulently produced a false impression upon the mind of the other party.

‘And, whether a duty to speak exists is determinably by reference to all the circumstances of the case and by comparing the facts not disclosed with the object and end in view by the contracting parties. The facts concealed must be such as, in fair dealing, the one party has a right to expect to be disclosed, and such as the other party is bound to disclose.

‘In this case the plaintiffs claim that false and fraudulent representations were expressly made to them by the defendants...