James R. Jacobs v. Karlis Racevskis
| Decision Date | 14 June 1995 |
| Docket Number | 95-LW-3282,C.A. 94-CA-0066 |
| Parties | JAMES R. JACOBS, et al., Plaintiffs-Appellants v. KARLIS RACEVSKIS, et al., Defendants-Appellees C.A. CASE NO. 94-CA-0066. |
| Court | Ohio Court of Appeals |
James R. Jacobs, Ann M. Jacobs, 3057 Woods Drive, Springfield, Ohio 45506, Plaintiffs-Appellants, Pro Se.
William D. West, 200 North Fountain Avenue, Springfield, Ohio 45504 Atty. Reg. No. 0018465, Attorney for Defendants-Appellees.
Plaintiff James Jacobs appeals from a summary judgment dismissing his claims for breach of contract and fraud, which arose out of Jacobs' purchase of a parcel of residential real property from Defendant Karlis Racevskis.
On August 18, 1989, Jacobs signed a real estate sales agreement for the purchase of Racevskis' home, which is located at 3057 Woods Drive, in Springfield. Jacobs was subsequently provided with inspection reports concerning the roof, termites, septic system, and the well. Jacobs reviewed the reports on the roof and termites prior to closing. The evidence is unclear whether Jacobs received the reports on the septic system and the well before or after the closing. Jacobs and Racevskis did not speak before they met at the closing.
The inspection report for the roof indicated that it was ten to twelve years old and in good condition. The termite report indicated that termites had been found and that the home had been treated. The inspection report on the well indicated that it did not meet building code requirements. As for the septic system, the inspection report recommended annual cleaning because it is a small system.
Closing was held on October 17, 1989. Jacobs was aware at that time that the home had been treated for termites, but he declined the option of purchasing a follow-up treatment plan.
Within a few weeks after the closing, Jacobs began to experience numerous problems with this home, including a leaking roof that resulted in water damage to the ceiling in the dining room, a water leak in the basement, a backed-up septic system, problems with the well, electrical problems, rodent infestation, and termite damage. Jacobs contacted Racevskis concerning these problems, but he obtained no satisfaction. On September 11, 1992, Jacobs filed a complaint alleging that Racevskis had breached the contract of sale and had fraudulently concealed defects in the home and misrepresented the home's condition. Racevskis responded by filing an answer and third party complaints against the real estate brokers involved in the sale and persons who had performed the various inspections. Thereafter, motions for summary judgment were filed by Racevskis and the third party defendants.
After considering the depositions, affidavits, memoranda filed by the parties and the arguments of counsel, on July 27, 1994, the trial court granted summary judgment in favor of each of the defendants and dismissed the complaint. The trial court found, as a fact, that Racevskis made no representations or statements to Jacobs concerning this house. The court further found that the real estate sales agreement that Jacobs had signed included a provision which indicated that Jacobs was purchasing this home in its present physical condition, "as is." Accordingly, the trial court held:
James Jacobs has timely appealed to this court from the summary judgment in favor of Karlis Racevskis. Jacobs argues that genuine issues of material fact remain for determination regarding whether Racevskis fraudulently concealed latent defects in the house and, therefore, that summary judgment was improper. We agree, and accordingly reverse the trial court's order.
With respect to real estate sales transactions, a seller may be liable to the buyer for nondisclosure of a latent defect where the seller is under a duty to disclose facts and fails to do so. Brewer v. Brothers (1992), 82 Ohio App. 3d 148. An "as is" clause in a real estate sales contract relieves the seller of any duty to disclose and places the risk upon the buyer as to the discovery of existing defects. Brewer, supra; Kaye v. Buehrle (1983), 8 Ohio App.3d 381. A purchaser's claim of nondisclosure will not overcome an "as is" clause. However, an "as is" clause does not bar a claim by the purchaser for positive fraud, that is, a fraud of commission rather than omission, such as fraudulent misrepresentation or fraudulent concealment. Brewer, supra; Kaye, supra.
The doctrine of caveat emptor applies to real estate transactions. In Layman v. Binns (1988), 35 Ohio St.3d 176, the Ohio Supreme Court stated:
The doctrine of caveat emptor precludes recovery in an action by the purchaser for structural defects in real estate where (1) the condition complained of is open to observation or discoverable upon reasonable inspection, (2) the purchaser had the unimpeded opportunity to examine the premises, and (3) there is no fraud on the part of the vendor.
Caveat emptor will not bar recovery by a purchaser when latent defects not easily discoverable are coupled with affirmative misrepresentations or concealment. Kaye, supra; Szeman v. Williams (March 30, 1992), Greene App. No. 90-CA-129, unreported; Said v. Steger (June 17, 1991), Clermont App. No. CA90-10-107, unreported.
Civ. R. 56(C) provides in relevant part:
. . . Summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case, and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. * * * A summary judgment shall not be rendered unless it appears from such evidence or stipulation and only there from, that reasonable minds can come to but one conclusion and that conclusion is adverse to the party against whom the motion for summary judgment is made, such party being entitled to have the evidence or stipulation construed most strongly in his favor.
The burden of showing that no genuine issue exists as to any material fact falls upon the moving party. Harless v....
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