Groothand v. Schlueter
| Decision Date | 12 August 1997 |
| Docket Number | Nos. WD,s. WD |
| Citation | 949 S.W.2d 923 |
| Parties | M.J. "Bob" GROOTHAND and Sharon L. Groothand, Appellants, v. Kurt Duane SCHLUETER and Mary Morris Schlueter, Respondents. 52770, WD 52820. |
| Court | Missouri Court of Appeals |
Rexford H. Caruthers, St. Louis, for Appellants.
John A. Ruth, Jefferson City, for Respondents.
Before ELLIS, P.J., and LOWENSTEIN and HOWARD, JJ.
Plaintiffs M.J. "Bob" and Sharon Groothand appeal from a court-tried case in the Circuit Court of Cole County. The Groothands filed a petition seeking damages from Defendants Kurt and Mary Schlueter for breach of contract after the Schlueters refused to close on a contract for the purchase of the Groothands' home. The Schlueters counterclaimed seeking rescission of the contract, return of an earnest money deposit, and consequential damages to return them to the status quo they occupied prior to entering into the contract. They contended that the Groothands misrepresented the condition of the house to induce them to buy it. The trial court, in its findings of fact and conclusions of law, found that the Groothands falsely represented the condition of the house. It entered judgment against the Groothands on their claim for breach of contract, and granted the Schlueters' counterclaim for rescission of the contract and for return of the $5,000.00 earnest money. The court denied the Schlueters' request for damages.
On appeal, the Groothands claim the trial court erred in granting the rescission because the evidence did not support a finding that the Schlueters proved all of the elements of fraud. In a cross-appeal, the Schlueters claim the court erred in denying them consequential damages for expenses they incurred--several months rent, extra moving costs, and storage costs--when they sold their house expecting to move into the Groothands' house. We affirm the judgment of the trial court.
Since this was a court-tried case, the standard of review is governed by Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). An appellate court must affirm the trial court's judgment unless (1) there is no substantial evidence to support it; (2) the judgment is against the weight of the evidence; or (3) the trial court erroneously declared or applied the law. Id. at 32. When reviewing the sufficiency of the evidence, this Court accepts as true the evidence and inferences from the evidence favorable to the result below, and disregards all contrary evidence. T.B.G. v. C.A.G., 772 S.W.2d 653, 654 (Mo.1989). When there is conflicting evidence, the trial court determines the credibility of the witnesses, accepting or rejecting all, part or none of the testimony. Greenberg v. Dowdy, 930 S.W.2d 512, 514 (Mo.App. E.D.1996).
On September 28, 1994, the Groothands entered into a contract to sell their home to the Schlueters. Before the parties entered into the contract, the Groothands gave the Schlueters a disclosure statement dated August 7, 1994. This statement is a standard form which includes a checklist of various property conditions and improvements, such as structure, roof, plumbing, etc. Basically, it informs the buyer of any problems with the property. There is some boilerplate language that states that the statement is not a warranty of any kind by the seller, and that it is not a substitute for any inspection or warranties the buyer may wish to obtain.
There are a few disclosures in the statement that are relevant to this case. The Groothands indicated that they had fixed a structural problem that was causing water to permeate through the walls and foundation on the west side of the house during wet weather. They did not mention any other structural problems. The Groothands also indicated that the property had no settling problems and no known history of repairs to the roof. Finally, they indicated that other than a defective intercom system, there were no other facts or information relating to the property that would be of concern to a buyer, other than the information already disclosed.
After receiving the disclosure statement the Schlueters decided to buy the house. The parties agreed on a purchase price of $209,000. The Schlueters paid $5,000 earnest money to the Groothands as a down-payment, and agreed to pay the remaining balance of $204,000 by the closing date, November 1, 1994. Attached to the contract was a "Property Inspection Rider" that said the Schlueters had the right to hire independent inspectors to inspect the property. It further stated that if they found any defects unacceptable to them, they had fourteen days from the date of the contract to report the defects to the Groothands in an addendum. If the Groothands chose not to repair any reported defects, then the Schlueters could cancel the contract.
The Schlueters told their real estate agent to arrange for a termite inspection, a mechanical inspection, and a structural inspection. The first two inspections were completed, but no structural inspection was ever conducted. Also, the Schlueters' bank arranged for an appraisal. The appraised value of the house was $209,000.
On October 12, 1994, about two weeks after signing the contract, Mr. Schlueter received a call from a friend, Gerald Roark. Roark is an attorney who had done some legal work for Schlueter in the past. Schlueter had seen him a few days earlier and had told him that he was going to buy the Groothands' house. It turns out that Roark's law firm had defended the previous owners of the house, Dr. and Mrs. Roger Nail, in a case filed by the Groothands in 1993. The Groothands, who purchased the house for $135,000 from the Nails in September, 1992, had sued the Nails for fraudulently misrepresenting the condition of the property. In their petition against the Nails, the Groothands alleged numerous structural problems with the house, and claimed that in its true condition the house was worth not more than $75,000. Eventually the Groothands settled their case with the Nails for $6,000, but not before Mr. Groothand gave a deposition on March 29, 1994. During this deposition, Mr. Groothand testified about structural problems with the property that had been identified by various inspectors and contractors. The following are some of Mr. Groothand's responses when questioned about the alleged structural problems:
A. Let me put it this way: I have talked to a contractor in Holts Summit. Randy Mull, who told me that--he went up in the attic, I did not--because of the shifting of the house that the electrical wiring is "as tight as banjo strings."
He has told me that the house--right along where the basement meets the slab, there is a crack, and there is physically a crack, as I showed Mr. Nail in a photograph, that runs the entire length of the house, right up to the living room. The house, therefore, is on a--let me call it a tent-pole effect, that one area slopes off to the--to the east.
* * * * * *
A. Well, the hydrostatic pressure apparently--and I am not an engineer, but what I have been told by various different contractors who all sing from the same hymn book is that the massive crack that runs the entire length of the house, that I pointed out to Mr. Nail at my office visit to him, has caused a tent-pole effect for one part of the house to be leaning in one direction and the other part of the house leaning in another direction.
Roark gave a copy of the deposition to Mr. Schlueter, and told him to read it very carefully. Mr. Schlueter read the deposition that day and then immediately informed his real estate agent that they no longer wanted to buy the property. One week later, on October 19, 1994, the Schlueters gave written notice that they were rescinding the contract because the Groothands misrepresented the condition of the property in the disclosure statement. The closing date arrived and the Schlueters did not show up.
In December, 1994, the Groothands filed suit against the Schlueters for specific performance. Meanwhile, they put the house back on the market. In June they sold the house to Charles and Mary Flanigan for $120,000. Mr. Flanigan is a builder and is in the business of rehabilitating houses. After selling their house, the Groothands amended their petition to a claim for damages for breach of contract.
Several contractors have examined the house for structural problems since the Groothands purchased it from the Nails. Three of them testified as experts in the present case: Randal Mull, J.W. Callison, and Fred Giesler. Mull testified for the Schlueters, while the latter two testified for the Groothands.
Randal Mull, a general contractor, was the first to inspect the house when the Groothands noticed water problems on the west side. While examining the house, Mull discovered several other conditions that he thought were symptoms of serious structural problems. In addition to the leakage problems on the west side of the house, Mull believed that the eastern portion of the house was splitting apart from the rest of the house along a crack running through the foundation from south to north. Other than inspecting the house and providing estimates, Mull never did any work on the house.
J.W. Callison first saw the house in December, 1993. He repaired the water-leakage problem on the west side of the house and also did extensive cosmetic work throughout the house. Although Callison finished working on the house in April or May of 1994, he had told Mr. Groothand in February--several weeks before Mr. Groothand gave his deposition in the Nail case--that he felt there were no serious settling or structural problems. Mr. Groothand never mentioned this in his deposition.
The third expert to testify was Fred Giesler. The Groothands hired Giesler to inspect the house after the Schlueters rescinded the contract. His testimony was basically consistent with Callison's.
The Groothands raise four points on appeal. In a nutshell, they claim that the...
To continue reading
Request your trial
-
Zipper v. Health Midwest, WD
...being true; (8) his right to rely thereon; and (9) the hearer's consequent and proximately-caused injuries. Groothand v. Schlueter, 949 S.W.2d 923, 927 (Mo.App.1997); Slone v. Purina Mills, Inc., 927 S.W.2d 358, 371 (Mo.App.1996). Although fraud may be established by circumstantial evidence......
-
Roth v. La Societe Anonyme Turbomeca France
...the damages resulting from the fraud. Cabinet Distributors, Inc. v. Redmond, 965 S.W.2d 309, 314 (Mo.App. 1998); Groothand v. Schlueter, 949 S.W.2d 923, 927 (Mo.App.1997); Osterberger v. Hites Construction Company, 599 S.W.2d 221, 227 (Mo.App.1980). The Mackley court acknowledged Metropolit......
-
Hess v. Chase Manhattan Bank, Usa, N.A.
...to disclose where the undisclosed material information would not be discoverable through ordinary diligence. See Groothand v. Schlueter, 949 S.W.2d 923, 930 (Mo.App. W.D.1997) (buyer may rely on seller where the facts are "peculiarly within the knowledge" of seller and "the truth is difficu......
-
Droz v. Trump
...a false representation of a material fact is made with the knowledge of its falsity and with the intent to deceive. Groothand v. Schlueter, 949 S.W.2d 923, 927 (Mo.App.1997) (citing Osterberger v. Hites Const. Co., 599 S.W.2d 221, 227 (Mo.App.1980)). However, it may also be based upon a fal......