Jordan v. Employee Transfer Corp.
| Decision Date | 22 June 1987 |
| Docket Number | No. 87-C-0004,87-C-0004 |
| Citation | 509 So.2d 420 |
| Parties | Thomas William JORDAN and Patricia Smith Jordan v. EMPLOYEE TRANSFER CORPORATION and Equitable Relocation Management Corporation. |
| Court | Louisiana Supreme Court |
C. Daniel Street, Bruscato, Loomis & Street, Monroe, for applicant.
Lavalle Salomon, Davenport, Files & Kelly, Charles Smith, Hayes, Harkey, Smith & Cascio, Charles Trascher, III, Snellings, Breard, Sartor, Inabnett & Trascher, Monroe, for respondent.
The issue in this redhibition suit is when prescription began to run. Thomas William Jordan and his wife, Patricia Smith Jordan, bought a house on October 14, 1981 from the defendant, Employee Transfer Corporation (which later became Equitable Relocation Management Corporation). On the night of September 30, and the morning of October 1, 1982, a significant rain flooded the Jordans' den. The Jordans attempted to find and repair the leak, but on November 30, and December 1, 1982, a second rain flooded the room again. The Jordans filed suit against Equitable Transfer Corporation on December 1, 1983. Thereafter, Employee Transfer Corporation filed third party claims against the broker who sold the house (Terry Roberts, d/b/a Century 21/Robert's Realty), the realtor who arranged for the sale (David Key), and the prior owners of the house (Mr. and Mrs. Russell). After a trial on the merits the trial court maintained an exception of prescription based on C.C. 2534. The court of appeal affirmed (499 So.2d 454 (La.App. 2d Cir.1986)) and this court granted writs.
On August 7, 1981 the Jordans contacted David Key in response to a newspaper ad listing the house for sale. At about 4:00 or 5:00 p.m. that day, the Jordans met Key to see the house which at this time was owned by Mr. and Mrs. Russell. After arriving, Key first showed the house exterior to the Jordans and pointed out cracks in the wall.
The Jordans testified Key said the cracks were only cosmetic and could be repaired for about $110. Key showed them a copy of the report prepared by a civil engineer, Jerry Madden, which concluded the house was not structurally unsound. The Jordans stated that Key informed them that Madden would be liable if his report was found to be incorrect. At no time did Key mention the existence of a second report prepared by John Maroney. The Maroney report had been commissioned by Employee Transfer Corporation after Key informed its representative of both the cracks in the exterior walls and the prior owner's difficulty with water damage. Key did not tell the Jordans of the original owner's problems with water leaking into the den.
Key's version of how he showed the Russells' house differed substantially from the Jordans' rendition. Key testified that he did not discuss with the Jordans how the cracks could be repaired. He claims he simply showed the cracks to the prospective purchasers and handed them a copy of the Madden report. Key admitted he had received a copy of the Maroney report prior to showing the house to plaintiffs and claims to have informed the Jordans of the second report's existence though not its contents. Key claims to have found the conclusions reached by both engineers to have been essentially the same. Key denied that he told the plaintiffs that Madden would be responsible if his report was found to be incorrect. Key testified that he not only discussed the problems that the original owners had had with water in the den but even pulled up part of the carpet to show where sealant had been applied to keep water out. He assured the Jordans that the leak had been repaired.
The Jordans spent thirty to forty-five minutes looking at the house. They were enthusiastic about the large yard and the den that was lower than the rest of the house, giving it a sunken effect. After returning home, the Jordans decided to make an offer to purchase the house. They phoned Key's office at about 11:00 p.m. that night to arrange to make an offer. Key testified that he unsuccessfully tried to find the Maroney report when Mr. Jordan came to his office that night. The Jordans made an offer that was accepted the next day.
Before closing the sale, the Russells sold the property to a transfer corporation that would arrange for the sale of the property for a specified price and then return any other profits to the Russells. This transfer corporation, Employee Transfer Corporation, was used by Mr. Russell's employer to facilitate the sale of employees' houses that were necessary due to a job transfer. For this reason, Employee Transfer Corporation was the owner of the property at the time of the closing on October 14, 1981.
After a rainstorm that ended on October 1, 1982, Mrs. Jordan found the carpet in the sunken den soaked. Mr. Jordan called their insurer and then called Weil Cleaners to remove the wet carpet. When Donnie Weil arrived to remove the carpet, he pointed out to Mrs. Jordan that moldy sideboards indicated that the den had flooded before. Weil testified through deposition that Mrs. Jordan seemed surprised that there had been prior water damage. When the carpet was picked up, Mrs. Jordan could see where sealant had covered some cracks in the middle of the den floor. The cleaning man suggested that the water in the den could have been caused either by the flashing on the roof around the chimney, by cracks in the foundation or perhaps by a broken pipe.
After inspecting the house, the insurance adjuster concluded that the water had probably come in from a leaking flashing where the chimney met the roof. The adjuster agreed to pay for all the damage, minus the deductible.
At this point, the Jordans were confident that the foundation was sound because of both Key's reassurances and the civil engineer's report they had read. Furthermore, the insurance adjuster agreed to assume liability for the damage based on an assessment that the water had entered through the flashing. Mr. Jordan repaired the flashing with tar as the insurance company representative had instructed.
On December 1, 1982, the den flooded a second time. This time the Jordans were able to see water seeping in through the foundation.
Mr. Jordan went to Robert's Realty and met with Terry Roberts. Mr. Jordan obtained a copy of the Madden report and was also given a report prepared by John Maroney dated August 21, 1981. The Maroney report noted the cracking in the walls and found that, although the house was not in danger of collapsing, the foundation was structurally damaged. The report concluded, "If the house should be underpinned and jacked up into its original position, it would cost approximately $4000." The Jordans filed suit in redhibition on December 1, 1983 to rescind the sale and obtain damages.
A suit in redhibition must be filed within one year of the date of sale unless the seller had knowledge of the vice and neglected to inform the...
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...but rather it begins to run "when plaintiff has reasonable basis to pursue claim against specific defendant." Jordan v. Employee Transfer Corp., 509 So.2d 420, 424 (La.1987). The heart of the inquiry into constructive knowledge is the reasonableness of plaintiff's inaction. Id. Plaintiff su......
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