Lengyel v. Lint

• Decision Date: 30 June 1981
• Docket Number: No. 14620,14620
• Citation: 167 W.Va. 272,280 S.E.2d 66
• Court: West Virginia Supreme Court
• Parties: David F. LENGYEL and Cheryl K. Lengyel v. Walt LINT, d/b/a Walt Lint Realty, Walt Lint Realty, Inc., a West Virginia corporation, Ruth Ann Schreiner, Carl W. Costanzo and Bonnie E. Costanzo.

Page 66

280 S.E.2d 66

167 W.Va. 272

David F. LENGYEL and Cheryl K. Lengyel v. Walt LINT, d/b/a Walt Lint Realty, Walt Lint Realty, Inc., a

West Virginia corporation, Ruth Ann Schreiner,

Carl W. Costanzo and Bonnie E. Costanzo.

No. 14620.

Supreme Court of Appeals of West Virginia.

June 30, 1981.

Syllabus by the Court

1. The essential elements in an action for fraud are: "(1) that the act claimed to be fraudulent was the act of the defendant or induced by him; (2) that it was material and false; that plaintiff relied upon it and was justified under the circumstances in relying upon it; and (3) that he was damaged because he relied upon it." Horton v. Tyree, 104 W.Va. 238, 242, 139 S.E. 737 (1927).

2. "Even if the trial judge is of the opinion to direct a verdict, he should nevertheless ordinarily hear evidence and, upon a trial, direct a verdict rather than try the case in advance on a motion for summary judgment." Syl. pt. 1, Masinter v. Webco Co., 262 S.E.2d 433 (W.Va.1980).

Frankovitch & Anetakis and Robert M. Vukas, Weirton, for appellants.

McDermott & Bonenberger and Landers P. Bonenberger, Wheeling, for appellees Walt Lint, etc., et al.

Paula K. Silver, Follansbee, for appellees Carl W. Costanzo, et al.

McHUGH, Justice:

This action is an appeal by David F. and Cheryl K. Lengyel from an order of the Circuit Court of Brooke County, entered on July 24, 1978, granting motions for summary judgment made by the defendants, Walt Lint, d/b/a Walt Lint Realty, Inc., and Ruth Ann Schreiner, and Carl W. and Bonnie E. Costanzo. This appeal presents questions relating to an action for fraud arising from a real estate transaction and the appropriateness of summary judgment in such a case.

In March of 1977, Carl W. and Bonnie E. Costanzo orally contracted with Walt Lint Realty, Inc., to sell their home located on Patterson Drive in Follansbee, West Virginia. The Costanzos dealt with Ruth Ann Schreiner, an employee of the realty company.

The Costanzos, in March of 1977, authorized Ms. Schreiner and Walt Lint Realty, Inc., to advertise their property in local newspapers. An advertisement was placed in the Weirton Daily Times. It said:

HAVE A THIRST FOR LUXURY? Truly a spacious home of superb design and quality. You will love it because it's so versatile, so comfortable and roomy with 3 bedrooms plus den with fireplace. Living room with beautiful burnt orange carpet and glass sliding doors to a covered porch that overlooks your own swimming pool. Kitchen with wood cabinets, built in range, oven, dishwasher, and refrigerator, double sinks and breakfast booth. Huge dining room. Two full baths one with corner tub. Beautiful entrance foyer with skylights. Two car attached garage, circuler (sic ) driveway entrance leading to this 95' X 35' Cedar siding ranch of 4 yrs. on one acre. $59,900 No. 303.

This advertisement came to the attention of the appellants, David F. and Cheryl K. Lengyel, on May 26, 1977. They made an appointment with Ms. Schreiner to view the property the following day. On May 27, 1977, Mrs. Lengyel viewed the property on two occasions. On the first occasion Ms. Schreiner showed the home to Mrs. Lengyel; on the second occasion Mrs. Lengyel returned with her husband, David, and the Costanzos showed them the home. That evening the Lengyels signed a Purchase-Sale Agreement.

The Lengyels moved into the home on July 8, 1977. The closing of the sale of the property was held on July 11, 1977. Eight days later, on July 19, 1977, the Lengyels notified all the defendants that they wanted to rescind the contract. The defendants refused to agree to a rescission of the contract. This civil action was then commenced on August 5, 1977, when the plaintiffs, David F. and Cheryl K. Lengyel, filed a complaint in the Circuit Court of Brooke County naming Walt Lint, d/b/a Walt Lint Realty, Inc., and Ruth Ann Schreiner, and Carl W. and Bonnie E. Costanzo as defendants. The complaint, subsequently amended on November 10, 1977, alleged that the sale of the property had been procured by fraud and asked that the Circuit Court of Brooke County award damages in the amount of one hundred thousand dollars, or, in the alternative, order a rescission of the contract.

Specifically, the complaint alleged that the advertisement in the Weirton Daily Times had been placed "falsely and fraudulently and with the intent to deceive and defraud" by Walt Lint Realty, Inc., Ruth Ann Schreiner and Carl W. and Bonnie E. Costanzo. The complaint further alleged that the Lengyels had "believed and relied" on the representations made in the advertisement and were induced thereby to enter into the Purchase-Sale Agreement. The complaint alleged that the advertisement contained five misrepresentations: (1) that the house was a "trailer with additions" and was not of "superb design and quality"; (2) that the house was a "trailer with additions" and not a "95' X 35' Cedar siding ranch"; (3) that the house was six, not four, years old; (4) that the lot upon which the house was located consisted of only .62 acres of land and not "one acre" as stated in the advertisement; and (5) that the house was not a "conventional home" as implied by the advertisement.

The complaint also alleged that, subsequent to the signing of the Purchase-Sale Agreement but prior to the closing of the sale, further oral misrepresentations were made by the defendants to the plaintiffs when the Lengyels raised questions regarding the construction of the home. Four specific misrepresentations were alleged in this regard: (1) that the residence was constructed in a good, substantial and conventional manner; (2) that the residence was in fact located on one acre of ground; (3) that the residence was not a trailer but a conventional home; and (4) that the residence did match the description in the advertisement. The complaint alleged that the defendants made the above misrepresentations either knowingly or in reckless disregard of the truth and that the plaintiffs, relying on these further misrepresentations, went through with the transaction. The defendants, by answer, denied all the material allegations of the complaint.

The defendants filed motions for summary judgment on January 24, 1978. The motions for summary judgment were argued on June 1, 1978. An order was entered on July 24, 1978, granting the defendants' motions and dismissing the plaintiffs' claim with prejudice. From that order the plaintiffs filed a petition for an appeal with this Court on March 19, 1979. The appeal was granted on September 13, 1979. The case was argued and submitted on April 19, 1981.

On this appeal the appellants argue that there were genuine issues of material fact related to whether the defendants' representations were true or false, and the amount of knowledge held by the defendants about the truth or falsity of those representations, that should have precluded the trial court from disposing of the case on a motion for summary judgment. Appellees Walt Lint Realty, Inc., and Ruth Ann Schreiner argue that, as real estate agents ¹ they did not owe any duty to the plaintiffs, or, in the alternative, that if they did owe a duty to the plaintiffs, that duty was not breached by their actions in this case and the circuit court's use of summary judgment was, therefore, proper. Appellees Carl and Bonnie Costanzo argue that the circuit court's disposition of the case on a motion for summary judgment was proper because it was clear that plaintiffs, from their own discovery depositions, had not relied on the representations made by the defendants and, therefore, as a matter of law, there was no actionable fraud.

A brief discussion of the law of fraud is necessary in order to decide whether the use of summary judgment in this case was proper. The essential elements in an action for fraud are:

(1) that the act claimed to be fraudulent was the act of the defendant or induced by him; (2) that it was material and false; that plaintiff relied upon it and was justified under the circumstances in relying upon it; and (3) that he was damaged because he relied upon it.

Horton v. Tyree, 104 W.Va. 238, 242, 139 S.E. 737 (1927). Fraud can be either in the inducement of a contract or in the execution of a contract. Tolley v. Poteet, 62 W.Va. 231, 57 S.E. 811 (1907). It has long been the law in West Virginia that a vendor of real property may be liable to the vendee in an action for fraud. Averill v. Boyer, 76 W.Va. 642, 87 S.E. 259 (1915); Stout v. Martin, 87 W.Va. 1, 104 S.E. 157 (1920). See also Bostic v. Amoco Oil Co., 553 F.2d 329 (4th Cir. 1977).

It is not essential that the defendant know for a fact that the statement or act alleged to be fraudulent is false. An action for fraud may lie where the defendant either knows the statement to be false, makes the statement without knowledge as to its truth or falsity, or makes it under circumstances such that he should have known of its falsity. State v. Berkeley, 41 W.Va. 455, 23 S.E. 608 (1895).

(I)t is very uniformly held that if it is represented that a certain state of facts is true, and this representation is made for the purpose of inducing another to act thereon, or under such circumstances as that the party making it must know that the other is likely to act thereon, he will be entitled to recover the damages suffered by him, notwithstanding the party making the representation had no actual knowledge of the real conditions at the time. He is under a duty to know that the things he represents as facts are in fact true at the time he makes the representation. It is no excuse for him to say that he did not know they were false.

Osborne v. Holt, 92 W.Va. 410, 415-416, 114 S.E. 801 (1922).

The complaining party must, generally, have relied upon the representations claimed to be false, but: "It is not necessary that the fraudulent representations complained of should be the sole consideration or inducement moving the plaintiff. If the representations...